As the silly season descends on us, many employers consider taking on additional staff to assist with an influx of customers over this period, or to help bridge the gap of annual leave requests from regular staff. But what is the best way to go about hiring these additional team members?
Ensuring that you are engaging employees on the correct employment agreements is crucial to ensure employers mitigate any unwanted risks down the track. There are two options that you can consider here, using a casual employment agreement, or using a fixed term agreement.
Casual Employment Agreement
A casual employee is someone who works on an “as and when needed” basis. Casual employees don’t have set hours and do not have an ongoing expectation of work.
It can often be quite easy for a casual employee to unintentionally become a part-time permanent employee, sometimes over time. Some of the criteria that must be met in order for an employee to be classified as ‘casual’ include:
- there is engagement for short periods of time for specific purposes;
- the employment relationship lacks any regular work pattern whatsoever (i.e. they do not work on a weekly or fortnightly basis);
- the employee’s employment is dependent on the availability of work demands; there is no guarantee of work from one week to the next;
- there is no obligation on the employee to accept another offer of work – so the employee can turn down work on offer; and
- employees are only engaged for the specific term of each period of employment.
A casual employment agreement therefore, can be used to assist a business over a Christmas period; however, employers will need to be careful about how long each engagement lasts for, and whether the employee’s working pattern could reflect a more permanent arrangement. For example, if an employee is working regular hours over a two/to three-month period, then, there could be risk that they are not truly a casual employee, and a fixed term arrangement may be more appropriate here.
If a business is not careful with its engagement of casual employees and their employment ends suddenly, they may be able to argue that they were actually performing the role of a permanent employee which could give rise to an unjustified dismissal grievance.
Fixed Term Employment Agreement
A fixed term employment agreement is a temporary agreement that doesn’t last for an indefinite period of time. It has to end on a specified date or when a specific event happens.
For a fixed-term employee’s employment to be effective, the parties must sign a fixed-term employment agreement, which states when, how, and why their employment will end. Employers must have “a genuine reason” for employing an employee for a fixed term, which must be based on reasonable grounds (such as additional cover over a Christmas period).
A fixed-term agreement allows the parties to have more certainty around working arrangements during this time. Specifically, an employer can schedule an employee on for regular work to ensure appropriate cover is arranged.
If your preference is to have an employee commit to specific shifts on an ongoing basis and only require them to work for a set period of time, then a fixed term agreement may be ideal.
You can also include a trial period within a fixed-term agreement (so long as the employee has not worked for the business previously) to protect the business in the event the employee is not the right fit, and you no longer wish to employ them for the duration of a fixed-term agreement. You can find more information on trial periods in our article here.
A key thing to remember when employing someone on a fixed-term agreement is to ensure that you are aware of when the agreement is due to end. In the event the employer continues to provide work to an employee following the end date set out in the agreement, the employee’s employment may automatically become permanent.
Key Points
Hiring additional staff for a seasonal period can carry some risk for a business, so it is important to ensure that you are engaging staff on appropriate employment agreements throughout this time. If you are unsure what is best for your business, get in touch with one of our team today.
Edwards Sluiters Employment Lawyers has employment lawyers NZ wide with offices in Auckland, Hamilton, Tauranga, the Hawkes Bay and Christchurch. For specialist employment advice and to speak to an employment lawyer directly, call 0800 339 002.
