Employment Law, Government & Legislation

Casual employees v zero hours

Zero-hour contracts seem to be popping up everywhere or rather, they have been. Now, with the changes under the Employment Standards Legislation Bill in force (1 April 2016), they will probably disappear and everyone will go back to casual agreements.

What is the difference?

Zero hour contracts give the employee no guaranteed hours of work, but the employee has to accept any hours when and if required. Casual agreements by contrast are agreements entered into when the employer offers work and the employee accepts it.

So the main difference is that zero hour contracts are employment agreements which are already in place. Its just that the employee might not have any work to do. Casual agreements are entered into when the employer offers employment and its accepted (by the casual worker). To put it another way: the ‘offer’ to work under a zero-hour contract is not an offer, instead an instruction (because the employment relationship already exists). The offer to work under a casual agreement is an offer because the employment agreement is entered into at the time the offer is accepted, not before.

Makes sense? That also explains why the unions were so opposed to zero-hour contracts. It has pretty much no advantages for the employee and provides only benefits to the employer. Plus it makes impossible for the employee to accept any other employment as they would breach their zero-hour contract if they dont follow an instruction to work (whereas it has no consequences under a casual agreement).

Note that sometimes employer enter into casual agreements with prospective employees separately before any work opportunity arises. Those are overarching framework agreements, similar to Statements of Work under a Master Services Agreement (MSA). Those MSAs only establish the framework under which the parties will work together. The actual contractual relationship is then entered into at the time the employment agreement/ SoW is offered.

http://www.minterellison.co.nz/Legislative_changes__Zero_Hour_Contracts_Cancellation_of_Shifts_Paid_Parental_Leave_and_Enforcement_of_Employment_Standards_04-01-2016/