Is your employee employed in the right way?

There are many different ways to engage an employee. They could be employed under casual, permanent or fixed term employment agreements and they may have set or flexible/no guaranteed hours.

It is important that this is correct from the outset, because the nature of employment determines their entitlements to things like annual leave and public holidays. It is equally as important that if the nature of employment changes over time, for example from casual to permanent, that this is reflected in a new offer of employment to the employee,

If you and your employee disagree over entitlements at some future point, the Employment Relations Authority and Employment Court will look at the reality of the employment arrangement to determine what their entitlements should be. The Authority and Court will not rely solely on the employment agreement to determine an employee’s entitlements. This could be particularly relevant if your employee believes they are entitled to be paid for a public holiday and you believe they aren’t!

To help you tell the difference we have given a brief description of each type of employment arrangement below.

Casual employee
A casual employee has no set hours or days of work, and while they might know they are likely to be called upon if the employer is busy, they must have no ongoing expectation of work. A casual employee is engaged ‘as and when required’. Casual employees may become entitled to sick and bereavement leave as set out in the Holidays Act.

Fixed term employee
Employees can be hired for a fixed period that ends:

  • at the close of a specified date or period; or
  • on the occurrence of a specified event; or
  • at the conclusion of a specified project.

There needs to be a genuine reason for employment being fixed term and the fixed term employee needs to be informed in the employment agreement of how and why their employment will end.

We recommend calling Grow HR on (06) 878 5454 for advice if you are considering taking on someone on a fixed term agreement as it is important the fixed term clause is very carefully drafted. Leave entitlements for fixed term employees will depend on the length of the agreement.

Permanent employee
A permanent employee is someone who has an ongoing expectation of employment. They will most likely have set hours and days they work but may have flexible hours, or no guaranteed hours. A permanent employee is entitled to annual leave after 12 months, and sick and bereavement leave after six months as set out in the Holidays Act.

It is critical that when employing staff you have the correct type of employment agreement depending on the nature of employment being offered. There are significant differences as explained above, and different entitlements and provisions will apply in each situation. If you’re still not sure give us a call on (06) 878 5454 and we can help you work through your own specific scenario.