Your legal obligations: Part-time vs casual workers
In today’s competitive job market, more employers are utilising different employment arrangements to attract and retain the workers they need, while also managing cost and maximising operational efficiency. In some cases, this includes hiring part-time or casual employees – but what’s the difference between these two types of employment?
The rights of all employees are protected in law, but their benefits and entitlements depend on how they’re employed.
We’ve asked an employment lawyer to explain the differences between part-time and casual employees to help you understand your legal obligations.
Here’s what you need to know.
Part-time versus casual
Joshua Kimpton, a Senior Associate at MinterEllisonRuddWatts, explains that a part-time employee is essentially a permanent or fixed-term employee, who doesn’t work full-time hours. A ‘casual employee’, on the other hand, usually refers to an employee who works on a ‘casual basis’ with no guaranteed hours of work, no regular pattern of work, and no ongoing expectation of employment.
“Casual employees work on an ‘as and when requested’ basis. This means that casual employees are only required to work when they accept a work assignment that is offered to them,” says Kimpton. “An employer is under no obligation to offer work to a causal employee, and a casual employee has no obligation to accept the work that is offered.”
How do hours and pay differ?
While part-time employees usually work a set number of hours per week, the hours that casuals work typically vary, depending on the length of the casual assignment - and employers are not required to guarantee the hours of each assignment. This can create more flexibility, especially during busy periods when you need more workers on an ad-hoc basis.
“Unlike casual employees, part-time employees have guaranteed hours or days of work, and they are expected to work those hours or days,” says Kimpton. “The employment relationship is ongoing until it is otherwise terminated in accordance with the terms of the relevant employment agreement.”
“The situation for casual employees is different. Each time a casual employee accepts work, they are only employed for the period of that work assignment. Each assignment is a new period of employment. When the assignmentends, the employment relationship ends.”
Part-time employees earn a consistent wage or salary in accordance with the terms of their employment agreement, and, in most cases, they’ll be automatically enrolled in a KiwiSaver scheme.
Casual employees are usually paid on an hourly basis and are not automatically enrolled in a KiwiSaver scheme, unless their assignment is for more than 28 continuous days, or they let the employer know that they want to opt in to KiwiSaver.
Kimpton adds that there are no legal requirements around length of shifts for casuals and part-timers, except when health and safety considerations come into play (or when the employee works in an industry, or a safety sensitive role, with specific shift limitations).
“Employers have the same health and safety obligations for casuals and part-time employees as they do for full-time employees. Employers also owe health and safety obligations to other workers, such as contractors,” he says.
What are the leave entitlements?
One of the key differences between part-timers and casuals is leave entitlements.
Kimpton explains that part-time workers become entitled to four weeks’ annual leave after each period of 12 months’ continuous service with their employer – and a ‘week’ is based on what an ordinary working week is for them.
“However, casuals, on the other hand, are typically paid holiday pay at a rate of 8% of their gross earnings,” says Kimpton.
“This must be a separate identifiable component of their wages. The reason for this arrangement is because casual work is so intermittent or irregular that it is usually impracticable for the employer to provide the employee with four weeks’ annual leave.”
You are required to provide sick leave, bereavement leave and family violence leave, if an employee has either completed six months’ continuous employment, or if they work a certain pattern of hours in the preceding six months (at least an average of 10 hours a week, and at least one hour each week or at least 40 hours each month).
“Part-timer employees will typically become eligible for these types of leave after being employed for six months,” says Kimpton.
“However, as employment is not continuous for casual employees, they are unlikely to become eligible for sick, bereavement, or family violence leave. A casual employee would only be eligible for these types of leave if they work the qualifying pattern of hours.”
How is dismissal different?
In New Zealand, an employer must be able to justify the reasons or cause of a dismissal and follow a fair process. An employer must act as a fair and reasonable employer in all the circumstances.
“What is justifiable will depend on the facts of each case. However, the same statutory test applies to dismissing a full-time employee, part-time employee and a casual employee who has accepted a work assignment” says Kimpton.
“A dismissal will not be lawful unless it is substantively justified and carried out in a procedurally fair manner. The dismissal must be, action that a fair and reasonable employer could have taken in all the circumstances at the time the dismissal occurred.”
Kimpton adds that the situation is different for casual employees who are not in the middle of a work assignment and have not accepted an offer of work.
“In this case, there’s no need to undertake a formal dismissal process as there is no active employment relationship. Instead, the employer could simply choose not to offer further work to the person.”
Your other legal obligations
Employers are required to give employees a copy of their employment agreement in writing. It must include terms and conditions that are at least as good as the minimum rights in the law.
Kimpton adds that employers can’t require casuals to accept offers of work.
“If you require acasual to accept work, but do not provide them guaranteed hours of work, this would constitute a ‘zero-hour contract’, which is unlawful in New Zealand,” he says.
As an employer, you are required to provide all employees with appropriate training and information to enable them to work safely. You also have a legal responsibility to ensure that everyone who works for you is treated fairly and with respect.
If any employee feels they have been unlawfully discriminated against, they can bring a claim before the Employment Relations Authority if informal discussions and/or mediation are unsuccessful.
“Alternatively, the employee could make a complaint to the Human Rights Commission, but will need to choose whether to bring a claim before the Authority or make a complaint to the Commission — they won’t be able to do both for the same matter,” says Callister-Baker.
More information about part-time versus casual employment can be found at Business New Zealand or employment.govt.nz. Kimpton says, employment lawyers can also provide support.
Hiring part-time or casual employees can add valuable skills to a team and bring greater flexibility to a business’ staffing needs. Understanding the difference between these two employment types can help you meet your obligations and source the employees you need.
Information provided in this article is general only and it does not constitute legal advice and should not be relied upon as such. SEEK provides no warranty as to its accuracy, reliability or completeness. Before taking any course of action related to this article you should make your own inquiries and seek independent advice (including the appropriate legal advice) on whether it is suitable for your circumstances.