Can a Casual be Unjustifiably Dismissed?

This Employment Relations Authority (ERA) case considered whether a casual employee can be dismissed, or, because of the casual nature of the relationship, does the employee’s employment simply quietly come to an end?

Justin Ford applied for and was successful in obtaining a position with Haven Falls Funeral Home. The offer of employment was labelled   “Casual”. Mr Ford was flown to Auckland and Whangarei for training, for an agreed period of eight weeks.  After a couple of incidents, and three weeks into his training, Mr Ford returned home to Whanganui and was there when Haven Falls ended his employment.

There was a preliminary issue between Mr Ford and Haven Falls as to whether Mr Ford was ‘in fact’ a casual employee, or whether he was actually a permanent employee.  The Law has recognised for some years, that the issue of permanent/casual is not determined just because of the way it is labelled. In other words, a casual employment agreement can, in fact, still be permanent employment.

‘Casual’ employment is not defined in legislation, however it has been established in the Employment Court that a genuine casual relationship lacks an obligation on the employer to offer ongoing work, or for the employee to accept it when offered. The Employment Court has previously set a number of indications for determining whether or not an employment  relationship is permanent or casual:

(a) the number of hours worked each week;

(b) whether work is allocated in advance by a roster;

(c) whether there is a regular pattern of work;

(d) whether there is a mutual expectation of continuity of employment;

(e) whether the employer requires notice before an employee is absent or on

leave; and

(f) whether the employee works to consistent starting and finishing times.

The terms in Mr Ford’s  Employment Agreement in some respects were clear about the casual nature of the relationship. The hours of work, the training clause and the annual leave clauses (ie 8% on a pay as you go basis) were all consistent with being casual employment.  However, other clauses suggested that it was permanent, including sick leave, overtime, on call, termination for redundancy or medical grounds on notice, rostering and a restraint of trade.

The employer claimed they had used the MBIE Employment Agreement builder specifically for casuals, and the clauses that were included in the builder.  However, the termination clauses relating to redundancy and medical incapacity were cut and pasted from elsewhere.

Ultimately the Authority decided the Employment Agreement supported the nature of the relationship being casual, and again emphasised that the label on the Employment Agreement was not determinative of the employment status, and other factors have to be considered.

Mr Ford was rostered for the first eight weeks of his employment with the specific purpose of training. The employer claimed that after the training, should Mr Ford have finished it, he would have been on an as required basis.

Mr Ford submitted that the position was advertised as permanent, however the employer said that although that was correct, they made it clear at the interview that the position was casual. The Authority concluded there was no mutual understanding about the nature of employment after the training.

Ultimately the Authority concluded that the employment relationship was casual rather than permanent, with an initial engagement for an eight week training period.

Unfortunately for the employer, that was not the end of the matter. Mr Ford’s employment only lasted three weeks, but he was engaged for an initial eight weeks for training and induction, which still raises the question of whether his employment was terminated unjustifiably.

Previous Employment Court decisions have established that while a casual employee is working during an agreed period, and employment is terminated by the employer during that period of engagement, that would constitute a dismissal.

In this case the employer hadn’t sufficiently investigated the concerns with Mr Ford’s behaviour, they only informally raised the matters with him and didn’t sufficiently provide him with a reasonable opportunity to respond, and they didn’t consider his explanation before making a decision to dismiss him. On this basis the Authority determined Mr Ford was unjustifiably dismissed, even though he was a casual.

Mr Ford was awarded lost wages for the period of the eight weeks training he did not complete and a further $20,000 in compensation.

The lessons from this case:

1. Make sure the Employment Agreements you are using are fit for purpose. Merely labelling it ‘casual’ is not determinative, and the Employment courts may still find employment is ‘in fact’ permanent.
2. If you have engaged a casual employee for a ‘set period of engagement’, while the employee is working during that ‘set period of engagement’ they have the same entitlements in relation to managing their performance and behaviour as a permanent employee, for the entire duration of that engagement.