Casual Workers v Zero Hour Employees

In recent years we’ve seen a growing reliance on flexible staffing models, but the distinction between casual workers and zero-hour employees is still widely misunderstood. With proposed reforms on the horizon, it’s more important than ever for employers to understand how these arrangements work in practice — and what they mean for rights, risks, and responsibilities.

What is a Casual Worker?

Casual workers, often called bank staff, are individuals who work on ad hoc basis. Employers may have a “bank” of workers they can call upon to provide shift cover, respond to unexpected demand, or support fluctuating workloads.

A defining feature of a casual worker agreement, in contrast with a contract of employment, is there is no mutuality of obligation. This means the employer is not required to offer any minimum number of hours and in turn the worker is free to accept or decline work as they choose.

It is important to note that tribunals will look at the reality of the working relationship rather than the written contract alone, so regular or structured working patterns can still create an implied employment relationship over time.

Because of this flexible arrangement, casual workers are not considered employees. They are legally classified as workers, which means they do not qualify for certain employment rights such as:

• Statutory minimum notice periods for ending the relationship. In place of a notice period employers may include terms allowing them to remove workers from their bank of workers, if they repeatedly decline work. Statutory notice would not be required; the employer can simply reserve the right to remove that worker form the bank and stop offering them work.
• Make flexible working requests.
• Protection from unfair dismissal
• Time off for dependants
• Statutory redundancy pay

These limitations reflect the looser, more ad-hoc nature of casual work arrangements.

However, casual workers remain entitled to a number of statutory worker rights. These include holiday pay, the national minimum wage, and protection under discrimination, whistleblowing and health and safety legislation. They are also covered by working time rules, which provide for rest breaks and place limits on weekly working hours.

What is a Zero-Hour Employee?

Employers sometimes wish to hire individuals as employees without committing to a guaranteed number of hours each week. The term “zero-hour employee” can therefore be misleading. While the employer may intend to form a standard employment relationship, the practical operation of the contract can blur the lines around employment status.

As noted earlier, a core element of an employment relationship is mutuality of obligation, the employer must provide work, and the employee is expected to accept it. Zero-hour contracts are often drafted to give employers flexibility to offer work only when it is available but still require the individual to accept the work that is offered. Typically, employers agree the individual’s availability at the outset and then allocate shifts within that agreed availability.

This type of arrangement is usually chosen when an employer has regular work but cannot guarantee a consistent number of hours each week. However, even where the written contract suggests complete flexibility, the reality of the working pattern may tell a different story. If a zero-hour employee regularly and consistently works a certain number of hours, those hours may, over time, become an implied contractual term through custom and practice.

Proposals for Reform

The government has outlined a series of proposed reforms designed to bring greater stability and fairness to people with casual working arrangements. These proposals aim to address longstanding concerns about the unpredictability such contracts can create for workers.

A key element of the reforms is the introduction of a duty on employers to offer a guaranteed hours contract that accurately reflects the hours a qualifying worker regularly works over a specified reference period. This measure is intended to ensure that individuals who consistently work a particular pattern are provided with contractual security that matches the reality of their working life.

The government also proposes to require employers to give workers reasonable notice of their shifts. This obligation would extend to the cancellation or alteration of shifts, meaning workers would no longer face last minute changes without warning. To reinforce this protection, the reforms would entitle workers to compensation when a shift is cancelled, moved, or curtailed at short notice.

Further, the proposals include new safeguards preventing workers from being subjected to any detriment for exercising their rights. This protection would apply in situations where a worker accepts or rejects an offer of guaranteed hours, or declines to work a shift, or part of a shift, for specified legitimate reasons. The intention is to ensure that workers can make informed choices about their working arrangements without fear of negative consequences.

What Does this Mean for Employers?

Industries such as care and hospitality may face challenges if they cannot rely on casual workers. While the proposed reforms offer significant benefits and protections for employees, they could place employers in a position where they must guarantee hours that naturally fluctuate. To manage this, many employers may choose to include annualised hours clauses in their contracts. Under this arrangement, employees commit to a fixed number of hours over the course of a year rather than a set number per week. This approach enables employers to maintain flexibility while complying with the anticipated new legislation.