When Casual Isn’t Casual

The Employment Relations Authority’s (ERA) decision in Stevenson v Mountain Chalets (2005) Ltd [2025] NZERA 248 is a wake-up call for employers who rely on “casual” arrangements. It shows that what happens day-to-day can override what is written in the Employment Agreement.

Mountain Chalets runs several accommodation sites. Ms Stevenson worked as a cleaner for five years, and although her Employment Agreement said she was a casual employee, her work pattern was very regular. She usually worked Monday to Thursday, starting at 9am and finishing when cleaning was done, averaging 20–25 hours per week. She asked for time off in advance, was rostered at times, and regularly received texts confirming her availability.

Holiday pay was paid as 8% on top of wages, which the employer believed complied with the Holidays Act. They also argued that the seasonal nature of hospitality justified a casual arrangement.

Things changed when Ms Stevenson was given extra duties after a colleague left, adding about eight hours per week. A few months later, those duties were removed without consultation, reducing her hours. A disagreement followed: she thought she’d been dismissed; the employer thought it had simply suggested she look elsewhere for more hours. Neither side tried to resolve the misunderstanding.

The ERA looked past the “casual” label and focused on the reality: regular hours, ongoing work, and mutual expectations. It found Ms Stevenson was effectively a permanent part-time employee, not casual. The attempt to maintain a casual status was described as “an opportunistic attempt to impose what amounted to a zero-hours agreement.”

On the dismissal, the Authority decided there was no unjustified dismissal because the misunderstanding wasn’t pursued by the employee. However, the employer’s failure to formalise her permanent status and its unilateral reduction of hours amounted to an unjustified disadvantage. The ERA awarded $8,000 compensation for hurt and humiliation.

Holiday pay was an additional issue. Under the Holidays Act, paying 8% on top of wages is only allowed for fixed-term (under 12 months) or genuinely irregular work. Ms Stevenson’s regular pattern meant she was entitled to four weeks’ annual leave. The employer was ordered to pay holiday pay for the entire five-year period, despite having paid 8% on top of the hourly pay rate for the entirety of the employee’s employment.

Lessons

• Reality beats wording: If someone works regular hours over a long period, they’re not casual—regardless of what the Agreement says.
• Consult before changing hours: Changes to terms and conditions cannot be unilaterally made. There must be agreement.
• Get holiday pay right: If there is any possibility an employment relationship could become permanent, don’t pay holiday pay as you go.
• Review your “casual” workforce: Seasonal industries often slide into permanent patterns—check your agreements and your workers work patterns.

This case shows again that casual arrangements can easily morph into permanent employment. Regular reviews and clear communication are essential.