Business owners want their employees to be ready to work when there is work to be done, but at the same time they do not want to be stuck paying for an employee when there is no work.  Knowing how to use different types of employment agreements can help business owners to be more efficient and not spend more on staff than is needed.

The desire of employers to have flexibility must be balanced with employee protections.  If both parties are clear about the terms of employment, it is less likely to result in disputes.

Often employees are happy to work less than full-time hours, on an ‘as-needed’ basis, or for a fixed period of time.  Where the parties are up front about their goals and desires (both the employee and the employer), there is the potential to create an agreement that is mutually beneficial. 

What are the options in terms of the types of employment agreements that can be used?

Casual employees

Casual employees are great for businesses where workflow is difficult to predict.  Casual staff can be offered work as and when they are needed, for instance during unexpected busy times, without creating obligations for employers to offer future work.   This gives business owners a great level of flexibility.

Things to know about casual employees:

  • Employers have no obligation to continue offering work. 
  • Casual employees can be paid their holiday pay on an ‘as-you-go’ basis (8%).
  • An employer can only terminate a casual employment agreement for good reason and after following a fair process.  If not, the employee might be entitled to raise a personal grievance
  • Casual staff have no obligation to accept work when it is offered. 
  • Casual employees must have a written employment agreement. 

A potential pitfall to avoid is casual staff unintentionally becoming permanent employees by always having the same shifts on the same days so they are not truly casual.  In that case, the employee may be considered permanent regardless of what is stated in an employment agreement.


Fixed term employees

Fixed term employment has a defined start date and end date or reason for ending.  This type of employment is perfect for foreseeable, but non-permanent, staffing needs like providing cover for someone on maternity leave, getting someone to help out on a short term-campaign, or to do seasonal work.  The end of employment can be defined by a calendar date, or upon a fixed event (for instance, at the completion of a project). 

In order to have an employee on a fixed term agreement, the business owner must have a genuine reason on reasonable grounds (other than to test out their suitability), and the reason must be recorded in the employment agreement. 

Things to know about fixed term employees:

  • Fixed term employees may be paid their holiday pay on an ‘as-you-go’ basis (8%), provided that the term of employment is less than 12 months or the work is intermittent and unpredictable. 
  • Fixed term employees will qualify for sick leave or bereavement leave if their agreements allows it, or they are current employees who have been working continuously for the employer for a six-month period, and for an average of at least 10 hours per week, and 1 hour each week / 40 hours every month).
  • If an employer terminates a fixed term employment agreement early, without good reason or without following a fair process, the employee might be entitled to raise a personal grievance
  • Coming to the end of the fixed term is a justified reason for the employment ending at that time.


Permanent employees

Permanent employees can be either full-time or part-time and their employment carries on indefinitely until the employee resigns, or the employment is otherwise terminated.   

If an employer terminates a permanent employee without good reason, or without following a fair process, the employee might be entitled to raise a personal grievance.

Permanent employees have the following minimum entitlements:

  • 4 weeks’ of annual leave after 12 months of employment;
  • 5 days of sick leave (that can be accumulated to 20 days) after 6 months of continuous employment;
  • either 1 or 3 days of bereavement leave (depending on the bereavement) after 6 months of continuous employment;
  • parental leave in accordance with the Parental Leave and Employment Protection Act; and
  • 10 days of paid domestic violence leave.

To read more about employee rights click here


Jaenine Badenhorst
Employment Lawyer