There are many ways we define employees in relation to their Employment Type and below we look at each one. We see many employers who employ staff on a Casual Employee Contract but in reality, when you look at the nature of their work (working every week, expected to work etc) then they are clearly not Casual.
MBIE takes a dim view of employers treating Permanent Staff as Casual and will (no discussion involved) insist that you provide all your ‘Casual’ employees their 4 Weeks Annual Leave, even if you have paid out 8% each pay….so if any doubt, then we suggest you treat them as Permanent Part-Time.
Permanent employees (full or part-time)
These are the most common type of employee. Permanent employees have the full set of employment rights and responsibilities.
Employees have to meet certain criteria to qualify for some employment entitlements, such as parental leave, parental leave payments, annual holidays, sick leave and bereavement leave. There may be small differences between full-time or part-time employees because of their work patterns.
Fixed-term employees (full or part-time)
A fixed-term (temporary) employee’s employment will end on a specified date or when a particular event occurs. A fixed-term employee might be someone who is brought in to replace another employee on parental leave, to cover a seasonal peak or to complete a project.
There must be a genuine reason based on reasonable grounds for the fixed term and the employee must be told about this reason.
Genuine reason for fixed-term
A genuine reason for ending an employment:
- on a specified date might be that the fixed-term employee was covering for another employee on parental leave. In this situation, the fixed-term employee’s employment agreement should specify that in the event that the employee on parental leave returns to work early, the date of termination of the fixed-term agreement will also move forward.
- when a particular event occurs might be the completion of a project.
You can’t use a fixed-term agreement instead of a probationary period to test whether or not an employee is right for the job. This wouldn’t be a genuine reason for a fixed term.
Rights and responsibilities of fixed-term employees
Fixed-term employees have the same employment rights and responsibilities as permanent employees, except that their jobs will finish at the end of the fixed term (and sometimes the way in which they receive their annual holiday entitlement may be different).
Rights and responsibilities has more information on this.
If an employer wants to dismiss a fixed-term employee before the specified end date or before the particular event occurs, the regular process for permanent employees must be followed (and there must be a legal reason for the dismissal, eg serious misconduct).
Casual, fixed-term or changing work patterns has information on what may be paid for annual holiday entitlements on a holiday paid as you earn basis.
Employment agreements for fixed-term employees
A fixed-term employment agreement must state:
- when or how the employment agreement will end
- the genuine reason for the fixed term.
If the fixed-term reasons and details are not included in the written employment agreement, the employee might be considered by law to be a permanent employee. Plus, if he agreement extends beyond 12 months, and you have been paying Holiday Pay each pay, you will have to give the employee their 4 Weeks Annual Leave entitlement.
Seasonal employment is generally a type of fixed-term employment where the employment agreement says that the work will finish at the end of the season. It’s commonly used in the fruit, vegetable, fishing and meat industries, for example, in a job picking apples when they ripen, after the work is completed (when all the apples are picked) the employer doesn’t need the workers and the fixed term ends. In some situations, seasonal employment can become a rolling fixed-term employment in which the employee is re-hired at the start of every season.
Part-time and full-time employees
Whether you’re considered to be part-time or full-time depends on how many hours you have to work. Employment legislation doesn’t define what full-time or part-time work is, but full-time work is often considered to be around 35 to 40 hours a week. For statistical purposes, Statistics New Zealand (external link) defines full-time as working 30 hours or more per week. You have exactly the same employment rights and responsibilities if you’re a part-time or full-time employee.
A full-time permanent employee might be someone working 9am to 5pm, five days a week. An example of a part-time permanent employee is someone who regularly works the same 3 days a week for eight hours each day, for a total of 24 hours a week.
‘Casual employee’ isn’t defined in employment legislation, but the term is usually used to refer to a situation where the employee has no guaranteed hours of work, no regular pattern of work, and no ongoing expectation of employment. The employer doesn’t have to offer work to the employee, and the employee doesn’t have to accept work if it’s offered. The employee works as and when it suits both them and the employer. This can sometimes happen because it’s hard for the employer to predict when the work needs to be done, or when the work needs to be done quickly. Each time the employee accepts an offer of work it is treated as a new period of employment.
If you are employed to do casual work, the arrangement must be made clear in your employment agreement.
Employment rights and responsibilities also apply to casual employees, but the way in which annual holidays, sick and bereavement leave are applied can vary for these employees.
Casual employees vs part-time employees
It’s important not to confuse part-time employees with casual employees. Some employees who are described as ‘casual’ are in fact part-time employees with a clear work pattern. It’s also possible for an employee to start out as casual but become a part-time permanent employee.
Vinod begins working at a café. His employment agreement describes him as a “casual” employee. Initially, he only works the odd shift here and there, however, for the next six months he begins to regularly work from 9am to 3pm on weekdays. At this point Vinod’s employment status is changing to being a permanent part-time employee. If Vinod was, suddenly without warning, told not to come into work anymore this would possibly be an unjustified dismissal as his employer failed to follow the correct process when dismissing a permanent part-time employee.
There must have been a reason why the extra shifts suddenly became available so the employer could have handled this situation differently, for example:
- if a permanent employee was off work on ACC, the employer could have offered Vinod a fixed-term employment agreement to cover the other employee until they were fit to come back to work, or
- to cover the peak summer period Vinod could have been offered a fixed-term employment agreement on this basis.
Rights and responsibilities of casual employees
Casual employees have largely the same rights and responsibilities as permanent employees with a few exceptions.
Dismissing a casual employee
Each time a casual employee accepts the offer to work it’s considered a new period of employment. If an employer decides to stop offering work, this doesn’t count as a dismissal because the employer has no responsibility to provide work. However, if an employer sends an employee home in the middle of a shift or goes back on an agreement to provide work for a shift then this could mean that they were dismissed.
Holiday and leave entitlements
Because casual employees don’t have set hours, it may be not practical for them to take annual holidays. The employee and employer can agree that an extra 8% will be paid on top of their wages or salary instead of taking annual holidays.
Casual employees are also entitled to sick leave and bereavement leave after 6 months of starting work if during that time they have worked:
- an average of at least 10 hours a week, and
- at least one hour a week or 40 hours a month.
Employment agreements for casual employees
It’s recommended that a casual employment agreement outlines the details of an employee’s work hours. This should make clear:
- that there is no guarantee of work on a specific day
- that the amount of work will fluctuate
- that each time the employee accepts an offer of work it’s considered a new period of employment. The terms of the agreement are to apply to each new period
- how the employer will let the employee know when there is work available
- that the employee doesn’t have to make themselves available for work.
Find out more about having to be available for work or shifts.
The employment status of film production workers
Workers involved with film production work are independent contractors (unless they’re covered by a written employment agreement that provides they are employees).
Film production work includes film and video game production, but it doesn’t include production work on programmes initially intended for television.
This applies to:
- actors, voice-over actors, stand-ins, body doubles, stunt performers, extras, singers, musicians, dancers or entertainers (whether as individuals or not)
- people who perform pre-production work or provide pre-production services (on-set or off-set)
- people who perform production work or provide production services (on-set or off-set)
- people who perform post-production work or provide post-production services (on-set or off-set)
- people described above who also perform promotional or advertising work, or provide promotional or advertising services (on-set or off-set) in relation to the film or video game production.