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Casual or fixed-term employment? Be careful

Published: 12th December 2017

Author: Sarah Heald, Dorrington Poole

The summer holiday period often sees a mix of casual and fixed-term employees working on the farm. You must have a written employment agreement in place from the outset for both types of employees. The consequences of getting it wrong can be expensive as you will see from a recent case below.

Farm hand, Phil Stewart, had been employed on a temporary basis for two weeks, and the job was then renewed for two more periods of two weeks. When his employers, David Lee-Jones and Cathy Douglas, let him go Mr Stewart claimed unjustified dismissal.

Mr Stewart had originally claimed he had been given a permanent job. He had signed a casual employment agreement but said he did not notice it was a casual agreement.

The Employment Relations Authority endeavoured to find the true nature of the employment relationship.

If the agreement had been casual then Mr Stewart could have had no expectation of ongoing employment. If it was not casual, the employment relationship must have been either for a fixed term or ongoing. Mr Lee-Jones gave evidence that the job was always temporary. When faced with the evidence of his ex-girlfriend, Mr Stewart accepted he had known the arrangement was temporary while his employers looked for a permanent farm employee. He said he thought his temporary job should have been considered a trial for the permanent position. The Authority considered that, on this basis, the job was not intended to be ongoing.

In order for a job to be a valid fixed-term arrangement, there must be a written employment agreement specifying the way the employment will end and the reasons for ending the employment that way, in accordance with s66 of the Employment Relations Act 2000. If there is failure to comply, the employer cannot rely on the fixed-term nature of the agreement to bring it to an end. The agreement signed by the parties in this particular case contained no such clauses.

In considering whether the arrangement was casual or fixed-term the Authority reviewed case law. While both are temporary in nature, casual employment has irregular and short engagements whereas fixed-term employment has set hours and days of work. Fixed-term work must relate to a specified project or situation such as coverage for parental leave.

In this case, while Mr Stewart’s position was described as casual, it bore little relation to that type of employment arrangement described on page 4. Each engagement was for two weeks for the purpose of filling in while a permanent worker was found; that indicated it was something other than a casual job. That Mr Stewart referred to the position as ‘temporary’ also indicated it was of a fixed term nature.

The Authority concluded the position was a fixed-term one but, because the agreement did not comply with s66 of the Act, the dismissal was unjustified. In this case no compensation was awarded because Mr Stewart gave little evidence to support such a claim. As well, the Authority found it difficult to find how Mr Stewart would have been hurt or humiliated by the occurrence of an event he accepted he knew was both intended and coming.

The Authority ordered Mr Lee Jones and Ms Douglas to pay $7,705 gross in lost wages.
As you can see, this area of employment law is tricky. If you need help with your employment agreements, please give us a call at the outset.


[1]    Stewart v Lee-Jones and Douglas [2017] NZERA Wellington 100, 6 October 2017

 

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