As we swiftly approach Christmas day, shops are getting busier and busier in the final rush to buy gifts. Christmas casuals are a great tool businesses can use to manage this lively period. They are beneficial as they bolster the workforce without having to commit to long-term employment. Moreover, companies may hire Christmas casuals under a casual or fixed-term contract depending on their role. However, businesses must be aware of the legalities surrounding hiring Christmas casual employees. Here is our guide on whether you should hire Christmas casuals under a casual or fixed-term contract.
What is a Casual Contract?
To begin, we should first understand the difference between the two contracts. Under a casual contract, an employee is hired on a casual basis. Therefore, this means the employees hours vary week to week and there is no guarantee of any work. Moreover, casual employees are not entitled to sick or annual leave benefits. However, they are compensated with a ‘casual loading’ rate which is generally 15-25% of the hourly rate in addition to the hourly rate. For more information, read our guide ‘What is a Casual Employee?’.
Pros
- There is no requirement to provide work
- No obligation to retain employee
- No requirement to pay sick or annual leave entitlements
- Employees can be engaged on an ad-hoc basis
Cons
- The hourly rate is higher
- Employees can reject work offered to them
- No requirement of notice when ending employment
What is a Fixed-term Contract?
Conversely, a fixed-term contract is usually provided to part-time or full-time employees. Under a fixed-term contract, employment is for a specified period of time as set out in the employee’s employment contract. Therefore, their employment lapses at the conclusion of this period. At the end of the contract, the employee can choose to extend or renew the contract, or cease employment. However, it is worth noting that employee’s terminated at the end of their contract are not entitled to redundancy payments. For more information, read our guide ‘Fixed Term Contracts: An Explainer’.
Pros
- The hourly rate is lower
- Enables business to trial employee before hiring on a full-time or part-time basis
- Often more applicants due to the guarantee of shifts
Cons
- Sick and annual leave entitlements
- Limited flexibility as employees are entitled to set hours
- Public holiday pay entitlements
Casual v Fixed-term: Which is Best?
There are pros and cons to hiring both fixed-term and casual employees. So, which is better? There is no definite answer to this. It depends on a number of things. These include the industry, the employers objectives and number of hours the employee is needed. If you would like an employee to work set, regular hours each week, then it would be best to utilise a fixed-term contract. On the other hand, if you are unsure of the consistency of work and how often the employee will get shifts, a casual contract would be preferable.
Either way, it is always best to prepare an employment contract for all Christmas casual employees. For instance, you can set out the conditions of their employment, whether notice is required, the date their employment is terminated and any clauses you wish to include.
We recommend consulting an employment lawyer to help you draft an employment contract. They can also discuss whether a casual or fixed-term contract would work best for your business.
Concluding Thoughts
Hiring Christmas casuals over the festive season can be a great asset to your business. This can bolster your workforce without the commitment of long-term employment. However, you should be aware of the pros and cons of casual and fixed-term contracts. This is important in making a decision on which structure you will hire your casuals under.
