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Casual Employment: Recent decisions

May 2011

Introduction

Casual employment can be defined as where an employee is employed when and if needed, and where there is no particular expectation of continuing employment.

Whether an employee is employed on a casual basis is a regularly contested matter. This is because casual employment is an employment relationship that only exists during periods of work and the parties have no obligations to each other in between such periods.[1] Therefore a casual employee cannot pursue a personal grievance for unjustified dismissal during periods when they are simply not engaged to work. The courts have noted that this system is open to abuse as an employer could be tempted to classify employment as casual to minimise any obligations they have to employees, while at the same time seeking to maximise the obligations on employees to work regularly. For example, for employees to be available when required and to seek leave to be absent from work. Therefore, it is important to determine whether an employee can be described as casual.

The Legislation

According to section 102 Employment Relations Act 2000 (the Act), employees may pursue personal grievances. This is because parties have rights and obligations to one another where the employment relationship is ongoing.[2] Casual employees do not have the same rights and obligations, so it is therefore necessary to determine whether an employee is casual for the purposes of the Act. Casual employment is not defined in legislation and employees are often described as casual in employment agreements even where the nature of the relationship does not reflect this. Therefore, the courts must take into account various factors in determining the real nature of the relationship between an employer and employee,[3] thus determining whether the relationship is casual or ongoing.

Section 6 of the Act sets out the parameters of how the courts or the Employment Relations Authority will determine the nature of the relationship between employer and employee.

Employment Relations Act 2000

6. Meaning of employee

    1. In this Act, unless the context otherwise requires, employee

    1. means any person of any age employed by an employer to do any work for hire or reward under a contract of service; and
    2. includes —
      1. a homeworker; or
      2. a person intending to work: but
    3. excludes a volunteer who —
      1. does not expect to be rewarded for work to be performed as a volunteer; and
      2. receives no reward for work performed as a volunteer.

2. In deciding for the purposes of subsection (1)(a) whether a person is employed by another person under a contract of service, the court or the Authority (as the case may be) must determine the real nature of the relationship between them.

    3. For the purposes of subsection (2), the courts or the Authority  —

    1. must consider all relevant matters, including any matters that indicate the intention of the persons; and
    2. is not to treat as a determining matter any statement by the persons that describes the nature of their relationship.

Another relevant piece of legislation to casual employees is the Holidays Act 2003. It is important to note that the Holidays Act 2003 does not differentiate between types of employment. The only exception to this is pay as you go holiday pay arrangements.[4] Although the legislation does not refer to casual employment, it is clear that pay as you go holiday pay relates to casual employees as it applies to employees who work “…for the employer on a basis that is so intermittent or irregular that it is impractical for the employer to provide the employee with four weeks annual holiday”.[5] This means that an employer can pay holiday pay as an identifiable part of the employee’s pay, rather than providing four weeks annual holidays.[6] Therefore, it is also important for the purposes of the Holidays Act 2003 to identify whether an employee is casual or permanent.

Jinkinson v Oceana Gold (NZ) Ltd

Jinkinson v Oceana Gold (NZ) Ltd is the leading New Zealand case on casual employment. In that case the parties described the employment relationship as “casual”.[7] It was found that this is a relevant matter to be taken into account. However, it will not be determinative. The most important inquiry is into the real nature of the relationship.[8] It is significant to note that the nature of the relationship may change over time. It may begin as a casual employment relationship but later become a permanent employment arrangement. It is relevant what the nature of the relationship was at the time of dismissal.[9] In Jinkinson, Couch J discussed the obligations between employers and employees;

“Whatever the nature of the employment relationship, the parties will have mutual obligations during periods of actual work or engagement. The distinction between casual employment and ongoing employment lies in the extent to which the parties have mutual employment related obligations between periods of work. If those obligations only exist during periods of work, the employment will be regarded as casual. If there are mutual obligations which continue between periods of work, there will be an ongoing employment relationship.”[10]

Couch J stated that the strongest indicator of ongoing employment is that the employer has an obligation to offer the employee further work and the employee has an obligation to carry out that work.[11] Other indicators of ongoing employment include regularity of work and continuity of the employment relationship as discussed by Horn CJ in Canterbury Hotel etc IUOW v Fell.[12]

In Jinkinson Couch J considered the approaches taken in Australia and Canada in determining whether an employee is casual.[13] In Australian cases, a series of indicia were developed to determine whether there was an ongoing employment relationship in an employment arrangement described as casual. These included;

In Canada, similar considerations have been taken into account but the emphasis has been on the regularity of work as opposed to the amount of work done.[15] In Bank of Montreal v United Steelworkers of America the unpredictability of work was considered an attribute of casual employment.[16]

Ms Jinkinson’s employment was terminated by reason of redundancy. Ms Jinkinson wished to pursue a personal grievance claiming she was unjustifiably dismissed. In order to do so, she had to be an employee. Couch J found that Ms Jinkinson worked every week and was entitled to the reasonable expectation of continuing employment. Her pattern of work was consistent and highly predictable. Ms Jinkinson’s work was allocated through a roster. It was found that if rosters were allocated in advance it would render Ms Jinkinson an employee at all times. The roster constituted an offer to work and once it was accepted by Ms Jinkinson, she became a person intending to work. Ms Jinkinson was paid quarterly bonuses and when her position was made redundant she received wages in lieu of notice and redundancy compensation. Couch J found that these factors and the parties’ conduct were consistent with an ongoing employment relationship.[17] It was found that the essence of casual work lies in a series of engagements which are complete in themselves, whilst ongoing employment contemplated a continuing pattern of regular and continuous work.[18]

Kaye v North Beach Limited

Kaye v North Beach Limited was decided following Jinkinson. It was found that in determining whether there is a contract of service, all relevant matters must be considered including the intention of the parties. Ms Kaye was dismissed after being told that there were no more shifts available because she had been replaced by a new employee. It was found that this was inconsistent with a term in her employment agreement which stated that the “…term of employment ceases at the end of each period for which you are engaged to work”. The description of the employment agreement as casual was not consistent with the provisions of the employment agreement or the way in which the parties dealt with one another in relation to work. Ms Kaye provided medical certificates for illness. This was unusual for casual employees. Hours were allocated to Ms Kaye in advance by roster. Ms Kaye had a regular pattern of working. Taking these factors into account, it was found that there was a mutual expectation of continuity of employment.[19] Kaye applied Jinkinson and it was found that Ms Kaye was a permanent part time employee.[20]

Lee v Minor Developments Ltd t/a Before Six Childcare Centre

Shaw J in Lee v Minor Developments Ltd t/a Before Six Childcare Centre also discussed the characteristics of casual employment given that it is not defined in the Act. These characteristics 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; and employees only engaged for the specific term of each period of employment. Shaw J also discussed the concept of casual employees being employed for a specific task and on an as required basis. She likened this to periods of fixed term employment.[21] It was asserted that the question of whether or not a person has been employed as a casual employee depended on the mutuality of the intention at the outset of the employment and the nature of the work including its regularity, its hours and the obligations imposed on the employee.

Mrs Lee worked part time hours and although she was available for extra hours over and above those agreed, the hours that she worked were fixed and regularly performed. They were not linked to specific events or projects. It was found that Mrs Lee had an ongoing expectation of permanent employment and the centre’s director had an ongoing expectation that she would turn up for work each day. It was not a casual employment situation where she was occasionally and irregularly called in for some limited or purely casual purpose. Mrs Lee was not a casual employee but a permanent part timer. Her employment was therefore not terminable at will. If circumstances meant that her position was redundant, she was entitled to be treated fairly and reasonably with appropriate consultation.[22]

Conclusion

It is important to determine whether an employee is in fact casual in order to establish their rights and obligations in employment, including the method of payment for annual holidays. Even if the employment agreement states that an employee is engaged on a casual basis, the dealings between the parties in relation to work will be taken into account in determining whether they are in fact a casual employee. Therefore an employer cannot simply classify employment as casual to lessen any obligations they have to employees, while at the same capitalise on the obligations on employees to work regularly. The decision in Jinkinson v Oceana Gold (NZ) Ltd has cemented the law in this area by outlining the various factors that should be taken into account in determining whether an employee is employed on a casual basis.


Footnotes

[1] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225

[2] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225

[3] Employment Relations Act 2000 s6(2)

[4] Holidays Act 2003 s28

[5] Holidays Act 2003 s28(1)(a)(ii)

[6] Holidays Act 2003 s28(1)(a)(ii)

[7] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225

[8] Employment Relations Act 2000 s6(2)

[9] Ready Mixed Concrete (South East) Ltd v Minister of Pensions & National Insurance [1968] 1 All ER 433 (QB)

[10] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225 p.10

[11] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225

[12] Canterbury Hotel etc IUOW v Fell [1982] ACJ 285

[13] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225

[14 Licensed Clubs Assn of Victoria v Higgins (1988) 30 AILR 497

[15] Roussy v Minister of National Revenue (1992) 148 NR 74

[16] Bank of Montreal v United Steelworkers of America 87 CLLC 16,044 (CLRB)

[17] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225

[18] Jinkinson v Oceana Gold (NZ) Ltd [2009] ERNZ 225

[19] Kaye v North Beach Limited unreported, E Robinson, 26 Aug 2010, AA 386/10

[20] Kaye v North Beach Limited unreported, E Robinson, 26 Aug 2010, AA 386/10

[21] Lee v Minor Developments Ltd t/a Before Six Childcare Centre unreported, Shaw J, 23 Dec 2008, AC 52/08

[22] Lee v Minor Developments Ltd t/a Before Six Childcare Centre unreported, Shaw J, 23 Dec 2008, AC 52/08