As we have seen with the Ports of Auckland dispute, changing an employee’s legal status to ‘casual’ can have severe consequences, both legal and personal. This article will hopefully clarify what it means to shift a full or part time employee into a casual position, and what the legal ramifications of that decision can be.
As opposed to full time work, where the employee works set days and hours regardless of the amount of work the company has at the time, casual workers are employed if and when needed, and there is no guarantee of ongoing work. Casual employment has been likened to shifts of fixed term employment, with the employment relationship only existing for the period the employee is at work. When they leave for the day, they say goodbye to their rights and can have no expectation of more offers of work. In between periods of work, the parties do not have any obligations towards each other, and employees cannot bring personal grievance claims for periods when they were not working.
Correspondingly, employers lose some of their rights too. They have no right to demand notice of leave, cannot demand that an employee be available for work, and have no control over whether or not an employee accepts an offer of work. There have been noted instances of employers abusing a casual relationship by trying to claim full rights but no responsibilities, such as asking for notice of upcoming leave. Judges usually give such employers very short shrift.
A casual worker’s entitlement to holidays is also affected. Under s 28(1) of the Holidays Act, casual employees essentially forgo the normal 4 weeks annual leave in exchange for 8% “holiday pay” added to their wages. This means that they have no statutory entitlements to holidays.
An employee’s legal description is therefore very important. Although the Employment Relations Act does not define a casual employee, there are certain ways of determining whether an employee is indeed casual. Simply using the term ‘casual’ in the employment agreement is far from determinative. Courts must look at a range of factors in order to determine the true nature of the employment relationship. In Lee v Minor Developments Ltd t/a Before Six Childcare Centre, Justice Shaw gave a list of characteristics of casual work. These included
• engagement for short periods of time for specific purposes
• a lack of regular work pattern or expectation of ongoing employment
• employment dependent on the availability of work demands
• no guarantee of work from one week to the next
• employment as and when needed
• the lack of an obligation on the employer to offer employment or on the employee to accept any other engagement
• employees only engaged for the specific term of each period of employment.
The Ports of Auckland dispute essentially boils down to this important issue. Tony Gibson and the Ports Board were offering a 10% increase in wages, in exchange for workers agreeing to become casual staff, working only as required. While the Ports of Auckland is attempting to save on labour costs by only having workers onsite when there are actually containers to unload, the wharfies argued that this unpredictable situation would result in disruption to family life and a possible pay cut in real terms because of reduced hours. Although the lockout has ended and the Port bosses have filed an application for facilitation, it remains to be seen who will have the final say in this very important employment matter.