Employing casual workers

The term ‘casual worker’ describes an individual who is not part of a business’s permanent workforce. Casual workers typically supply services on a flexible or irregular basis, usually to meet varying demand for work.

It is not defined in employment law, rather, it is a catch-all phrase used to describe someone who does not have a fixed or minimum number of hours they must work each week, and with no guarantee from one day to another whether they will be engaged to do further work.

There are many different types of casual worker, which can include those engaged for:

Zero hours contracts (e.g., no minimum guaranteed hours)
Short-hour or guaranteed minimum hour contracts
Self-employed/freelance contracts
Contractor/sub-contractor agreements
Short-term/fixed contract (single assignment contract)

Determining employment status

Casual workers’ legal status, and therefore their employment rights, depend on whether they are classed as employed, self-employed or a worker. Staff who are not employees generally fall into two categories – independent contractors such as the self-employed or workers.

Workers have significant but limited rights, such as the National Minimum Wage, Working Time Regulations, and statutory annual leave, however those who are self-employed have far fewer rights. Consequently, it is essential to correctly identify an individual’s employment status.

Casual work often refers to those undertaking temporary or casual work. This has been described as:

Work that only occurs once, and for short duration
The contract uses terms such as ‘casual’, ‘freelance’, ‘zero hours’, ‘as required’, or something similar
The employee had to agree with the employer’s terms and conditions to get work (this can be either verbally or in writing)
The employee is under the control or supervision or a manager or director
There must be a requirement (whether written or implied) for the worker to provide the work personally. This means they cannot send someone else to do the work in their place.
The employer deducts tax and National Insurance Contributions from the employee’s wages
The employer provides the materials, tools, and/or equipment they need to do the work
Work which happens more often, but on an irregular or unpredictable basis
Where there is no obligation on the employer to offer work, and no obligation on the individual to accept it. This is known as ‘mutuality of obligation.’
Generally, where this is not present, the casual worker will not be deemed an employee.

The Employment Rights Act 1996 (ERA) (section 230) defines an ‘employee’ as an ‘individual who has entered into or works under (or where the employment has ceased, worked under) a contract of employment.’ The ERA defines a contract of employment as a ‘contract of service or apprenticeship, whether express or implied, and (if it is express), whether oral or in writing.’

Although the party’s intention and any written contract or agreement are influential, it does not always determine someone’s employment status. An employment tribunal will look beyond agreements and labels given by the parties and consider the reality of the arrangement.

Employees, unlike workers, have protection against unfair dismissal, protection under TUPE, the right to maternity and paternity pay and leave, and statutory sick pay (SSP). In contrast, workers have no right to a contract of employment setting out the key terms of their role and neither do they have a right to statutory minimum notice. Additionally, the statutory disciplinary and grievance procedures do not apply. Criticism has been levelled at some employers who have been accused of only engaging causal workers because they are entitled to fewer statutory rights than permanent employees.

That said, casual workers can cause a variety of issues for employers. This tends to be because employers are not always clear on the obligations that apply to casual workers, or believe they have no obligation other than to pay the worker for their time. Such misplaced confidence leads some employers to treat casual workers in a way that they would never treat a permanent employee, only to discover that their actions are unlawful.

When does a casual worker become an employee?

The employment status of casual workers depends upon the nature of the relationship between the parties. Generally speaking, if an employer engages someone on an ad hoc basis, to help out during staff shortages or busy periods, for example, and it is accepted by the employer they may not always be available, they are unlikely to be considered an employee.

However, if an employer seeks to regularise an arrangement and provides work on specified days and times of the week on the understanding the worker will turn up on those days and times, the likelihood is that the relationship between them will change to that of employer and employee. Ultimately, it is for employment tribunals and courts to determine the actual nature of the relationship, based on the facts of each individual case.

Legal implications of hiring casual workers

Casual workers must be on the company payroll

It is a common misconception that if a casual worker is employed for a week or less, it is not necessary to include them on the company payroll. This is not true. No matter how short the period of employment is, whether that is half a day to a week or longer, if a casual worker is being directly employed (not via an agency), they must be included on the payroll. Businesses that fail to do this, may find themselves on the fast track to an audit from HMRC. This includes managing deductions for PAYE (tax) and National Insurance Contributions (NICs).

Casual workers are entitled to holiday pay

Every casual worker is entitled to paid holiday entitlement. This must be calculated as a proportion of the 5.6 weeks’ statutory holiday that workers are entitled to each year. For many, this will require working out what the annual entitlement is as a percentage of hourly pay.

Casual workers are entitled to limited protection from unfair dismissal

Although casual workers cannot make a claim for unfair dismissal if they are no longer required to work, that does not mean they can be treated with complete impunity. If the working relationship breaks down because of gender or race discrimination, indeed any form of discrimination under the Equality Act 2010, or because of the worker reporting a specific issue of malpractice by the employer (e.g. a breach of health and safety), the employee will be able to make a claim.

Casual workers have basic employment rights

Even the briefest of working relationships creates entitlements, such as:

The National Minimum Wage – most workers are entitled to receive this, no matter what their contractual arrangement. The amount of entitlement depends on the age of the worker and whether they are an apprentice.
Rest breaks – in line with any other employee, casual workers are entitled to take statutory minimum rest breaks, although it does not have to be paid. Workers are entitled to one uninterrupted rest break of 20 minutes when they work over six hours in a day.
Weekly working maximums – under the Working Time Regulations, casual workers have the right not to work for more than 48 hours per week (on average).
They also retain the right to opt out of this requirement if they choose to do so.
Statutory sick pay (SSP) – if a casual worker is paying Class 1 National Insurance Contributions, they will be eligible for SSP.
Protection for whistleblowing – if an employee reports wrongdoing by the employer in the workplace they should not be penalised or dismissed for it.
To not be treated less favourably if they work part-time – that is, unless the treatment can be objectively justified. The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (SI 2000/1551) stipulate that part-time workers must not be treated less favourably than full-time workers regarding their contract of employment or being subjected to any other detrimental treatment by the employer because they work part-time. This includes pay, overtime payments, holiday entitlement and holiday pay, sickness benefits, selection for redundancy, access to pension schemes and other contractual benefits.

Casual workers may also be entitled to family related benefits

There are some situations where casual workers may be entitled to statutory family related benefits. These are things such as statutory maternity pay, statutory adoption and paternity pay, statutory sick pay or shared parental pay, for example. Eligibility depends on the circumstances and situation of the case and the individual in question.

Casual workers are not usually entitled to:

Minimum notice periods if their employment is ending. For example, upon dismissal.
Protection against unfair dismissal
The right to request flexible working
Time off for emergencies
Statutory redundancy pay

Supporting casual workers

While casual workers may be accepting of the flexible terms of their engagement, there are steps employers can take to provide assurance that they value casual workers’ contribution and role within the organisation:

Offer learning and development opportunities – whilst this isn’t the typical remit for those employing causal workers, it is a mutually beneficial practice because it builds a robust employee value proposition (EVP), although they are not permanent employees.
Keep it flexible – it is essential that employers respect the flexibility such an arrangement offers. Employers should resist the temptation to treat casual workers as they would a regular 9 -5 workforce.
Give meaning and structure – by creating meaning, employers are moving away from transactional relationships, and this in turn encourages casual workers to deliver a better service.
Create a sense of belonging – build a community around casual workers and create a sense of togetherness. This not only opens up a support network for causal employees, it can also create an affinity with a particular brand.

Future changes impacting casual working

The Good Work Review published in 2017 is an independent study into contemporary ways of working, and the broad use by employers of flexible workers. In 2018, the government, following consultation on this matter, released the ‘Good Work Plan’ and confirmed their commitment to introduce legislation creating a new right for all workers to request a more stable and predictable contract of employment. This would allow the worker to decide whether they wish to request a fixed working pattern after they have 26 weeks’ continuous service with one employer. However, it has not been confirmed when this is likely to come into force.

Additionally, a government consultation which closed in October 2019, examined whether new laws should be introduced to protect flexible workers. This included casual workers and the prevention of ‘one-sided flexibility’. The consultation considered:

Introducing compensation payments for those workers who have shifts cancelled at short notice
Providing workers with a reasonable period of notice of shifts assigned to them
Protecting workers against any detrimental action if they refuse shifts which have been offered on short notice.