ERA examines whether casual workers can be removed from roster for second jobs
The Employment Relations Authority (ERA) recently dealt with a case involving two restaurant workers who claimed they were unjustifiably dismissed after accepting positions at a competing business.
Both workers, who were secondary school students working in front-of-house roles, sought statutory remedies including lost wages and compensation for hurt, humiliation and injury to feelings, whilst also seeking penalties against their employer for failing to provide employment agreements.
The workers argued they were permanent employees who had been dismissed without justification when they informed their employer about taking additional work at another hospitality venue.
They claimed the employer's response via text messages constituted dismissal and sought compensation for the manner in which their employment ended.
The two workers were employed by a restaurant group operating three hospitality venues in Oamaru, North Otago - an upmarket restaurant, another restaurant, and a café.
The company employed approximately 28 permanent and casual employees across its operations, with permanent employees typically being chefs and managers. Some employees worked across all three sites, including both workers in this case.
The first worker commenced employment in June 2021 through responding to a Facebook advertisement seeking someone to fill a last-minute kitchen hand shift.
During the shift, the restaurant director asked if she was available to fill another shift at the café the following day.
The director said she made it clear that employment was on a "casual" basis, though the worker claimed the director told her "she did not need an employment agreement because she was a causal employee."
The second worker, also a secondary school student, learned about working shifts through a friend and her mother's connection.
She commenced working in February 2022 at the café, where she made coffee, served tables and operated the till, whilst also regularly working shifts in the two restaurants. Both workers said they found the work enjoyable and developed strong friendships with colleagues.
Both workers typically worked between 5 and 11 hours a week, increasing up to 20 hours during school holidays, with the second worker working between 30 and 40 hours during holiday periods.
The workers said rosters were prepared a month in advance and they were required to notify their availability to appear on the roster.
During winter months of 2023, when the restaurant was not able to offer enough shifts, the second worker took a job at another food outlet, which the employer approved.
In September 2023, the first worker had a conversation with the restaurant director where she indicated she needed more hours to meet financial obligations, including saving for university, and was thinking of "moving on."
The worker said some weeks she was not offered any work. The director explained she was a casual employee because she was still at school with educational and extra-curricular activities affecting her availability, but offered to increase her hourly wage and provide "fixed" shifts during the summer break.
However, the number of shifts offered was less than anticipated, and the first worker accepted a casual position at a competing cheese restaurant as a "cheese host."
On 25 November 2024, the worker messaged the director advising about her new role but confirmed the original restaurant remained her "top priority."
She said she was aware of other employees holding second jobs and assumed there would be no issue with working at the competing venue.
Initially the director was supportive, but after consulting with her husband, she sent a text message advising that the restaurant viewed working at the competing venue as a conflict due to similar hours of operation and the worker's limited availability.
The worker said before she could respond to provide assurances about any conflicts, she received two further text messages stating: "so it's ok you can work there but we will remove you from delmar's roster xxx" and "good luck with your future ventures x."
The worker said she was "completely taken aback by [her] sudden dismissal" given the director's earlier agreement and the strong friendship she thought had grown between them.
The director acknowledged her choice of words was poor but said it was a difficult matter to convey via text, and later that night restaurant managers conveyed that the worker was not "dismissed" from her casual employment, but would not be offered further shifts if she chose to work at the competing venue.
The second worker also applied for and obtained a role as a cheese host at the same competing venue, assuming that because she had previously worked at another food outlet, working at the competing restaurant would also be permissible.
She "reached out" to the director, who was initially supportive, but this changed after consultation with the director's husband. The worker was advised that the restaurant viewed working at the competing venue as a conflict.
Despite the worker's assurances about maintaining confidentiality, the director sent her a text message stating "That's okay, we will remove you from [the restaurant's] roster. Good luck, [worker], I wish you the best."
The worker said she was "taken aback and confused" by the abrupt change in position. The text exchange continued but there was no material change in the parties' positions, and despite not yet deciding whether to take up the competing position, the worker received a further text message saying "please just email me the resignation letter."
The worker was rostered to work a shift the next day but did not attend. The director sent another text message stating:
"Sorry, no I'm not telling you to go. If you choose that place, I can't have you with us. Sorry if I sound confusing."
The worker said she was confused and unsettled, thinking she had been dismissed but unsure whether she was required to attend remaining rostered shifts, so instead provided a medical certificate.
As the worker had lost "trust and confidence" in the restaurant, she decided to "focus" on her employment with the competing venue.
As with the first worker, the director acknowledged that her choice of words was poor and that restaurant managers advised the worker she was not "dismissed" but would not be offered further shifts if she chose to work at the competing venue.
The ERA noted there is no specific legal test for casual employment in New Zealand, contrasted with Australia where casual employees are defined as having no firm advance commitment to continuing work and being entitled to additional pay rates.
In New Zealand, courts have developed a test where the key feature of casual employment is that work obligations only exist during each period of employment with no ongoing commitment between parties outside these periods.
The ERA found both workers were casual employees, stating: "there was no systematic, programmed or regularised patterns of work for either with the number and spread of shifts regularly changing on a weekly and monthly basis."
Other factors included that shift patterns were variable and reliant on the workers' availability, business requirements and seasonal variations, they were paid holiday pay on a "pay as you go" basis, and "there was no mutual obligation on either to perform the work offered."
The ERA concluded both workers "were at liberty to decline work without penalty or obligation and on the evidence did so as school and extra-curricular activities came to the fore" and the restaurant "was under no obligation to offer work and, indeed, this lead both to consider, and ultimately, undertake work for other employers."
Regarding dismissal, the ERA found there was "certainly a series of confusing text messages" but no actual dismissal occurred.
For the first worker, the ERA accepted the restaurant's argument that the relevant text messages were not received until after her shift had concluded, and "having already found there was no mutual obligation beyond this shift, [the worker's] argument must fall at this insurmountable hurdle."
For the second worker, even if the director's words could be interpreted as dismissal, "the totality of [the worker's] own evidence was that, on her best case, she was confused and unsure whether there had been a dismissal or not."
The ERA concluded: "Having found [both workers] were casual employees of [the restaurant] and were not otherwise dismissed by [the restaurant], it is not necessary to consider whether such dismissals were unjustifiable and whether remedies are warranted."
However, the ERA imposed penalties for the restaurant's failure to provide employment agreements, noting the director "prepared and signed employment agreements before passing them to managers at each establishment for [the workers] to consider and execute" but "believed at all times the employment agreements were in place and it was not until personal grievances were raised that she discovered this was not the case."
The penalties were ordered to be paid directly to both workers within 14 days of the determination.
