Fixed term and casual employment agreements (and when to use them)
General / 25 March 2017
All employers are required to provide employees with an individual employment agreement (IEA), but working out when to use a casual IEA and when to use a fixed term IEA may not be as straight forward as it sounds.
Fixed Term IEA?
A fixed term IEA can be used where an employer has a genuine reason, based on reasonable grounds, to employ on a fixed term basis, for example, covering for maternity leave or to complete a specific project.
Fixed term IEAs must specify:
The genuine reason for the fixed term;
The way the employment will end at the end of the fixed term; and
Why the employment will end in this way.
Where an employee is engaged for a fixed term, at the end of the fixed term, their employment will terminate. If the fixed term IEA is not correctly drafted, employment is allowed to run on and does not end at expiry of the fixed term, or if the employee is given the expectation of continuing work after the fixed term, there is a real risk that the employment relationship will be “ongoing”. In that case, the employer will only be able to end the employment relationship for “cause” (eg. redundancy, poor performance, disciplinary etc), and may also have additional obligations to the employee in terms of holidays and leave.
A casual employment relationship exists where an employee works on an “as and when required” basis only – that is, there is no expectation that work will be provided, or performed, on either party. A casual IEA should be drafted in essentially the same way as a fixed term IEA, and reflect that work is for short periods of engagement as the parties may agree from time to time. The terms of those engagements, including the reasons for the same, should also be recorded on each occasion that the employee is engaged to work.
Significant risk exists where an employee is labelled “casual”, but actually works on a regular or continuous basis, because they are often not provided minimum holiday/leave entitlements, and therefore can claim for these. Employers also cannot simply stop offering work to an employee who has been working in this way, or otherwise face possible personal grievance action. Employees who work regularly or continuously should generally be engaged as an “ongoing” employee, with an appropriate IEA reflecting this, even if they only work part-time.
If you need advice to determine which agreement your employee should be on please contact us.
Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.