A recent case was heard by the Employment Relations Authority (ERA) examining the issue of a supposed causal employee allegedly constructively dismissed through a unilateral reduction of hours by the employer (
Stevenson v Mountain Chalets (2005) Ltd [2025] NZERA 248).
The employee was employed as a cleaner on a casual basis since Aug 2018. The employer contended a casual employment agreement was provided but a signed copy was never returned. 2 years later another casual agreement was offered and signed. Throughout the entire period holiday pay was paid on an ongoing basis at 8% on top of gross wages, as is normal for casual employment.
Upon examination it was determined that the work patterns and hours undertaken by the employee were 20-25 hours 5 days a week and it wasn't until Sept 2023 when some recently added extra duties got similarly retracted when things went awry. A grievance from the employee's representative claimed unilateral reduction in hours was a dismissal and incorrect holiday pay over the entire period as the employee was a permanent part-time.
While the Employment Relations Act 2000 does not define exactly what 'casual employment' is, we have had plenty of case law over the years to guide us on what is acceptable and where the line is between casual and permanent. A shortlist of considerations being:
- The number of hours worked each week.
- Whether work is allocated in advance by a roster.
- Whether there is a regular pattern of work.
- Whether there is a mutual expectation of continuity of employment.
- Whether the employer requires notice before an employee is absent or
on leave.
- Whether the employee works to consistent starting and finish times.
In this case, the regular pattern and expectation of ongoing work was the issue. Just because an employee has signed a casual employment agreement and is paid as a casual does not override the nature of the relationship.
If it can be argued that the nature of role is permanent rather than casual, then the reduction in hours can then be proved as disadvantaging the worker as is not providing annual leave which thus puts the employer in breach of minimum standards. Which is what happened in this case.
The ERA member went on to say that labelling a worker a casual employee if the true nature of the arrangement is permanent is an "opportunistic attempt to
impose what amounted to a flexible ‘zero hours’ agreement".
Remedies awarded in this case were $8000.00 in compensation plus holiday pay for the entire period of employment despite the 8% paid on top throughout.
If you need further information on types of employment agreements and their use please see our webinar video below:
Alternatively don't hesitate to get in touch with us if you need advice on your scenario.