A recent Employment Relations Authority determination is a reminder that employers need to look beyond labels to the true nature of the employment relationship.
When hours become regular and there are expectations of ongoing work, the law will treat the relationship as permanent.
This was again set out in a case called Stevenson v Mountain Chalets (2005) Limited. This is not new law and these types of arguments happen regularly.
The employee Ms Stevenson worked as a cleaner for Mountain Chalets (2005) Limited. Ms Stevenson was on a casual employment agreement; however, she consistently worked 20 – 25 hours per week, Mondays to Thursdays.
Ms Stevenson’s hours were reduced after a management reorganisation, and she was told that she would no longer have her hours guaranteed hours. Ms Stevenson believed she had been dismissed, whereas Mountain Chalets (2005) Limited argued she remained a casual employee and was not dismissed. Ms Stevenson raised a personal grievance for unjustified dismissal.
The parties ended up having their argument resolved in the Employment Relations Authority. In assessing the true nature of the employment relationship, the Authority considered:
- The regularity and predictability of Ms Stevenson’s hours.
- The mutual expectation of continuing work.
- The degree of control MCL exercised over her availability and duties.
The Authority determined that Ms Stevenson was a permanent employee, because:
- She had consistent hours of work, even during quieter winter periods.
- There was a mutual expectation of continuing employment.
- She was expected to request time off in advance.
- She often received texts from the employer expecting her to be available.
The Authority agreed that Ms Stevenson had not been formally dismissed, but that Mountain Chalets (2005) Limited actions in failing to communicate or meet with her, and not paying her annual leave, amounted to an unjustified disadvantage.
Mountain Chalets (2005) Limited was ordered by the Employment Relations Authority to:
- Pay Ms Stevenson $8,000 in compensation for hurt and humiliation.
- Recalculate and pay Ms Stevenson all outstanding annual leave for the duration of employment (five years).
This determination of the Authority is good reminder of making sure your employment agreement match your relationship.
Regular and predictable work is likely to create a continuous employment relationship, regardless of how you as an employer describe the employment relationship. Failing to offer work could be seen as a dismissal or a disadvantage.