Alex is Sprintlaw’s co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
Casual staff can be a lifesaver for small businesses. When it’s busy, you can roster people on. When it’s quiet, you can keep costs under control.
But when it comes time to end the relationship, many employers find themselves asking the same questions: Can we just stop offering shifts? Do we need to give notice? What if they’ve been working regular hours for months?
In New Zealand, “casual” isn’t a free pass to end employment however you like. If you get it wrong, a simple decision can turn into a personal grievance risk, a pay dispute, or a Holidays Act issue.
Below, we break down what “ending casual employment” usually means in practice, when it’s lawful, and how to protect your business from day one.
What Counts As Casual Employment (And Why It Matters When Ending It)
Before you think about ending casual employment, it’s worth checking whether the arrangement is genuinely casual.
In NZ, “casual employment” generally means there’s no firm commitment from you to provide work and no firm commitment from the worker to accept work. It’s often engagement-by-engagement.
That distinction matters because if someone is not truly casual (even if the contract calls them “casual”), they may have the rights of a part-time or full-time employee - including stronger protections around termination and more predictable leave calculations.
Common Signs A “Casual” Worker Might Not Be Casual
There’s no single test, but these are common red flags:
- Regular hours over a long period (e.g. every Monday and Wednesday for 6 months).
- An ongoing pattern of work that looks like part-time employment.
- Expectation of ongoing shifts (even if not explicitly written down).
- Penalties or pressure if they decline shifts (suggesting they’re not truly free to say no).
- Availability requirements that operate like set hours.
This is why a properly drafted Casual Employment Contract is so important - it should reflect how the relationship works in real life, not just what you’d like it to be called.
Key Laws That Often Come Up
When you’re ending casual employment in NZ, some of the key legal frameworks that can be relevant include:
- Employment Relations Act 2000 (good faith, unjustified dismissal and personal grievance risk)
- Holidays Act 2003 (annual holidays, public holidays, sick leave eligibility)
- Wages Protection Act 1983 (deductions from wages must be lawful)
- Human Rights Act 1993 (anti-discrimination protections)
- Health and Safety at Work Act 2015 (ongoing duties, including at the end of employment)
It can feel like a lot, but the good news is: if you follow a fair process and keep your documents tidy, you’ll usually be in a strong position.
What Does “Ending Casual Employment” Usually Mean For A Small Business?
In practice, “ending casual employment” can happen in a few different ways. The right approach depends on what the casual arrangement actually is, and what your employment agreement says.
1) You Stop Offering Shifts
For a genuinely casual arrangement, it may be lawful to stop offering shifts. If there’s no promise of ongoing work, the relationship can sometimes simply taper off.
However, this is also where risk creeps in. If the worker can reasonably argue they were not truly casual (for example, they worked consistent hours and relied on that income), then “just stopping shifts” can look like a dismissal without process.
2) You Give Notice To End The Employment Relationship
Many casual employment agreements still include a termination clause requiring notice (for example, 1 week). If your agreement says notice is required, you should follow it.
Even where the arrangement is casual, providing clear written notice is often the cleaner, lower-risk option - especially if the person has been working with you regularly.
3) The Employee Resigns Or Stops Accepting Work
Casual employees can also end the relationship by declining further shifts or resigning. If it’s a true casual arrangement, there may be no obligation on them to accept future work.
That said, if a resignation is involved and they’ve been working regular hours, it’s still good practice to confirm the end date and final pay in writing, so there’s no confusion later.
4) You’re Ending Employment For Misconduct Or Performance Reasons
Even with casual workers, if you’re ending the relationship because of something they did (misconduct) or how they did the job (performance), you should treat it like a termination process - not simply a roster decision.
This is where small businesses can accidentally create risk: if the real reason is disciplinary, but you frame it as “no more shifts,” the worker may still raise a personal grievance for unjustified dismissal.
If you’re not sure what process fits your situation, getting advice early from an Employment Lawyer can save you a lot of time and stress later.
When Can You End Casual Employment (And When Should You Be Careful)?
There are plenty of legitimate reasons a small business might end casual employment. The key is to make sure your reason is lawful and your process is fair.
Common Legitimate Reasons
- Genuine drop in work (e.g. seasonal slowdown, lost contract, quieter trading period)
- Role no longer needed (e.g. you’ve automated a task or changed operating hours)
- Availability mismatch (they can’t work the shifts you need and there’s no alternative work)
- Performance issues (with a fair process)
- Misconduct (with a fair process)
Situations That Can Trigger Disputes
You’ll want to slow down and get advice if:
- The worker has been working regular, predictable hours for a long time
- You previously indicated their work would be ongoing
- You’re ending shifts soon after they raised a complaint (e.g. pay, safety, bullying)
- There’s a potential discrimination factor (e.g. pregnancy, injury, disability, religion)
- Other staff are being treated differently and you can’t clearly explain why
Even if you’re confident the relationship is casual, it’s still smart to document what’s happening and why - because personal grievance claims often come down to what was communicated and whether the process was fair.
Is It Redundancy If You Stop Offering Shifts?
For a genuinely casual employee with no ongoing commitment to provide (or accept) work, simply not offering further shifts is not usually a “redundancy” in the traditional sense.
However, if the person’s work pattern is regular and the role is effectively ongoing (even if you’ve called them “casual”), then reducing or ending their work may need to be handled more like a permanent employment change - which can include consultation, exploring alternatives, and fair decision-making.
If redundancy is on the table, it’s worth getting Redundancy advice before you communicate a final decision.
A Practical Checklist For Ending Casual Employment Fairly
Here’s a practical, employer-focused checklist you can use when ending casual employment. The goal is to make sure you’re acting in good faith and reducing the risk of disputes.
Step 1: Re-Check The Employment Status And Agreement
- Confirm whether they’re genuinely casual or effectively part-time/full-time in practice.
- Review the termination clause (notice periods, process requirements, “no guaranteed hours” wording).
- Check whether there are any policies that apply (disciplinary process, code of conduct, etc.).
If your casual arrangements have been running for a while, you might also want to review your broader Employment Contract templates to ensure they still reflect how your business operates.
Step 2: Be Clear On The Reason (And Make Sure It’s Lawful)
Decide what the real reason is and don’t muddy the waters.
- If it’s business downturn, gather basic evidence (rosters, sales trends, reduced bookings).
- If it’s performance, note examples and consider a simple improvement plan.
- If it’s misconduct, document what happened and what policies were breached.
A common mistake is trying to avoid a “hard conversation” by quietly stopping shifts when the real issue is performance. If performance is the issue, a proper process is usually the safer path.
Step 3: Communicate Early And In Writing
Even for casual staff, clarity helps. Where appropriate, consider:
- Having a short meeting or phone call to explain what’s happening
- Following up with an email confirming the outcome (end date, any notice, final pay)
- Keeping your tone neutral and professional
In NZ, employers also have good faith obligations - and clear communication is a big part of that.
Step 4: If It’s Disciplinary, Follow A Fair Process
If you’re ending casual employment for misconduct or poor performance, you should usually follow a fair disciplinary process. That often includes:
- Explaining the concerns and providing relevant information
- Giving the employee an opportunity to respond
- Considering their response with an open mind
- Confirming the decision and reasons in writing
This is where having the right documents ready makes a big difference. Many employers choose to use a structured suite like Termination documents so the process is consistent and properly recorded.
Step 5: Think About Alternatives Where Reasonable
Especially where the worker has been working regular hours, it can be worth considering if there’s a reasonable alternative, such as:
- Offering fewer shifts (with clear communication)
- Offering different shifts that fit business needs
- Moving them into a different role (if available and suitable)
You don’t have to create work that doesn’t exist - but showing you’ve thought about options can help demonstrate fairness.
Final Pay, Leave, And Record-Keeping When Ending Casual Employment
Once you’ve decided to end casual employment, the “admin” side matters more than many businesses realise. Final pay mistakes are one of the easiest ways to trigger a dispute.
What Should Be Included In Final Pay?
Final pay often includes (depending on the situation and contract terms):
- Any hours worked up to the end date (including approved training time)
- Any applicable notice period payments (if notice is required and being paid out)
- Payment for entitled but unused annual holidays (where applicable)
- Any public holiday entitlements that fall within their final period (depending on working pattern)
Casual arrangements can be especially tricky under the Holidays Act. In some cases, it may be lawful to pay holiday pay as “pay-as-you-go” (commonly 8% of gross earnings) on top of the hourly rate - but only if the employee is genuinely casual (or on a genuine fixed-term of less than 12 months), the agreement meets the legal requirements, and the holiday pay is clearly identified and paid with their wages. If those requirements aren’t met, annual holidays generally need to accrue and be paid out when the employment ends.
If you’re unsure what the employee is entitled to, it’s worth checking early - fixing payroll after the fact is often harder (and more expensive) than getting it right upfront.
Do Casual Employees Get Sick Leave?
Often, yes - if they meet the eligibility requirements under the Holidays Act 2003. Generally, an employee becomes entitled to sick leave after 6 months’ employment, provided they meet the relevant work pattern threshold (for example, having worked an average of at least 10 hours per week and at least 1 hour in every week or 40 hours in every month).
The key point is: casual employees aren’t automatically excluded from sick leave or other minimum entitlements.
This is another reason why it’s important not to assume “casual” means “no obligations.”
Keep Your Records
Even for casual employment, you should keep good records, including:
- Signed employment agreement
- Timesheets/rosters
- Pay records and holiday pay calculations
- Key communications about shifts and the end of employment
If a dispute arises, your records are often your best protection.
Common Tricky Areas (And How To Reduce Risk)
Ending casual employment can become complicated quickly when the arrangement isn’t being managed consistently. Here are a few common pressure points we see for small businesses.
“Casual” Staff Who Look Like Permanent Staff
If someone has effectively become part-time in practice, you may need to treat the end of the relationship like ending employment for a permanent employee. That generally means notice and a fair process.
If you’re relying heavily on casual staff week-to-week, it can be worth reviewing whether some roles should shift to part-time agreements instead, to reduce uncertainty on both sides.
Ending Casual Employment While Also Cutting Costs
When businesses are tightening budgets, they might reduce shifts across the board. That’s often lawful - but you should still apply decisions consistently and avoid targeting individuals for inappropriate reasons.
If you’re restructuring, reducing staff, or removing roles, you may be stepping into redundancy territory, particularly where a “casual” role has become regular and ongoing in practice. This is where upfront advice can prevent a messy process later.
Confusing Employees And Contractors
Sometimes a business thinks someone is a casual employee when they’re actually a contractor, or vice versa.
Ending a contractor relationship looks different legally (it’s governed by the contract for services, not employment law). If you engage contractors regularly, it’s worth having the right documents in place, such as a Contractors Agreement, so you can end the relationship in line with the contract and avoid misclassification issues.
Relying On “No More Shifts” Instead Of A Process
As a general rule, if the reason relates to the worker’s conduct or performance, follow a disciplinary-style process. If the reason relates to business needs and there’s genuinely no work, communicate clearly and document the decision.
That extra 30 minutes spent on a fair process can save you weeks of back-and-forth later.
Key Takeaways
- “Ending casual employment” isn’t always as simple as stopping shifts - if the worker has regular hours and an expectation of ongoing work, they may not be truly casual.
- Always check the employment agreement for termination clauses, notice requirements, and how the casual relationship is described.
- If the real issue is performance or misconduct, follow a fair disciplinary process and document each step to reduce personal grievance risk.
- If the reason is a business downturn or the role is no longer needed, communicate clearly, act consistently, and consider whether a redundancy-style process is required (particularly if the role is regular and ongoing in practice).
- Final pay and leave entitlements (especially under the Holidays Act 2003) can be complex for casual workers, so it’s worth checking calculations before processing the last pay.
- Strong legal foundations - especially a well-drafted casual employment agreement - help you stay protected from day one.
If you’d like help with ending casual employment the right way (or tightening up your casual contracts and processes), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.
