The summary

Ensuring your employees have the right employment agreements – and that changes to hours or working arrangements are documented – is critical.

Getting it wrong can be a very expensive exercise, as this case shows.

In Devi v St John of God Hauora Trust [2026] NZERA 634, the Employment Relations Authority (Authority) found that an employee who had worked regular weekend hours for more than two years remained a permanent part-time employee, despite being described and paid as casual.

The employer’s failure to document the agreed change in hours, investigate repeated questions about employment status, provide guaranteed work, and correctly administer leave resulted in orders exceeding $42,000, together with an obligation to credit annual holidays and the possibility of further costs.

The central lesson is simple: an employee’s status depends on the real nature of the working arrangement, not the label used in payroll records or day-to-day communications.

What happened

Ms Devi began permanent employment with St John of God Hauora Trust (Trust) in November 2017 as a support worker, working 30 hours per week.

In February 2022, she resigned because she could no longer commit to those hours. Rather than ending the employment relationship, the parties agreed that she would continue working from 7am to 1pm every Saturday and Sunday. This reduced-hours arrangement was not recorded in writing.

Ms Devi then worked those regular weekend hours for more than two years. However, the Trust treated her as a casual employee. It paid 8 per cent holiday pay with her wages instead of recognising her entitlement to annual holidays and did not provide paid sick leave when she was eligible for it.

Ms Devi queried her employment status in May 2022 and explained that she understood she was a permanent part-time employee and confirmed her agreed weekend hours. The Trust indicated that it would prepare an offer letter, but did not do so.

From around mid-2024, the Trust stopped routinely rostering Ms Devi for her agreed weekend shifts. Instead, she was expected to compete for available work through a group-text system, sometimes at short notice. Some of her usual shifts were assigned to other permanent employees, including newly recruited staff, before she had an opportunity to express interest in them.

Ms Devi repeatedly raised concerns about her employment status and access to shifts. She also raised a health and safety concern about repositioning a patient safely. Although the Trust reviewed the patient’s care plan, it did not adequately investigate or communicate with Ms Devi about her concerns or her requests for additional assistance and alternative equipment.

In September 2024, Ms Devi referred to herself as casual and said that she had decided to remain casual. However, she did so because the Trust had told her that she was already casual and that casual employees would receive priority for certain available shifts. She mistakenly believed accepting that label would give her a better chance of continuing to work her usual weekend hours.

Ms Devi worked her last shift on 22 September 2024. Neither party expressly ended the employment relationship. She later raised a personal grievance and brought proceedings seeking unpaid remuneration, compensation, leave entitlements, penalties and confirmation of her permanent part-time employment.

Why the Authority found

Ms Devi remained a permanent part-time employee

The Authority found that Ms Devi had been a permanent part-time employee continuously since February 2022.

The real arrangement between the parties involved fixed hours of six hours each Saturday and Sunday. She had worked that established pattern for more than two years. That was inconsistent with genuinely casual employment, where there is usually no continuing obligation on the employer to offer work or on the employee to accept it.

Ms Devi’s later statement that she wished to remain casual did not change the position. It arose from the Trust’s earlier misclassification and from her mistaken understanding that casual status would help her obtain the weekend hours to which she was already contractually entitled.

The Authority also found that Ms Devi remained employed. Neither party had resigned, dismissed the other, or engaged in sufficiently clear conduct to end the relationship. Her failure to respond to generic group-text messages did not amount to resignation or abandonment. She should not have been required to compete for ad hoc shifts when she already had guaranteed hours.

The Trust was required to pay the guaranteed hours

An employee who is ready, willing and able to work agreed hours will ordinarily remain entitled to payment where the employer fails to provide that work.

The Authority accepted that Ms Devi remained available for her Saturday and Sunday shifts. Her other casual work did not conflict with those hours. Her failure to respond to the group-text messages was also not decisive because those messages were generic invitations to express interest, rather than an allocation of her guaranteed shifts.

The Trust was therefore ordered to pay Ms Devi for the agreed hours it had failed to provide, including the period after she performed her last shift and through to the Authority’s investigation meeting on 22 April 2026.

The failure to provide agreed hours was an unjustified disadvantage

The Authority found that the Trust acted as an unfair and unreasonable employer by:

• Treating Ms Devi as casual when she was permanently employed;
• failing to provide her agreed hours;
• allocating some of those hours to other permanent employees;
• failing to investigate her repeated questions about her status; and
• failing to record or correct the agreed arrangement.

That conduct disadvantaged Ms Devi in her employment and justified compensation for humiliation, loss of dignity and injury to feelings.

The Trust did not adequately respond to the health and safety concern

The Authority did not have enough evidence to find that the Trust had breached its substantive duties under the Health and Safety at Work Act 2015.

However, it found that the Trust failed to adequately address Ms Devi’s concern. The Trust did not properly explain the outcome of its assessment, seek to understand the practical difficulties she had raised, or tell her whether her requests for additional staffing or different equipment had been considered. The response to her formal complaint also omitted the issue.

That failure amounted to a separate unjustified disadvantage.

The Trust breached its good faith obligations

Section 4 of the Employment Relations Act 2000 requires parties to be active, constructive, responsive and communicative in maintaining the employment relationship.

While the Trust met with Ms Devi and responded to some communications, it did not properly investigate the central issue: whether she was a permanent employee with guaranteed hours. The Authority therefore found a breach of good faith.

No separate penalty was imposed for that breach because the conduct was not found to be deliberate and had already been addressed through other findings and remedies.

The employment variation should have been documented

The February 2022 agreement changed Ms Devi’s hours from 30 hours per week to 12 fixed hours per week. It was therefore a variation of her individual terms of employment.

The Trust failed to:

• Provide the proposed variation to Ms Devi;
• advise her that she could seek independent advice;
• give her a reasonable opportunity to obtain that advice;
• retain a signed record of her current terms;
• provide those terms when she requested them; and to
• ensure her written agreement accurately recorded her agreed hours.

The Authority found breaches of sections 63A, 64 and 65 of the Employment Relations Act 2000. Although some related penalty claims were out of time, the failure to retain and provide current employment terms was a continuing breach.

The holiday and leave arrangements were incorrect

The Trust could not lawfully use pay-as-you-go holiday pay merely because it had classified Ms Devi as casual. The actual working arrangement was permanent and regular, so she was entitled to annual holidays under the Holidays Act 2003.

The Authority also found that she had been wrongly denied paid sick leave on two dates. On 1 January 2023, which was a public holiday and otherwise a working day for her, she was entitled to payment for the day under the public holiday provisions rather than having the absence treated as sick leave.

The remedies

The Authority ordered the Trust to provide the following remedies within 28 days of its decision:

• $32,739.84 gross in unpaid remuneration, comprising:
  • $779.52 gross for missed hours between 5 May and 22 September 2024; and
  • $31,960.32 gross for guaranteed hours from 23 September 2024 to 22 April 2026.
• $7,000 compensation for unjustified disadvantage, comprising:
  • $5,000 for treating Ms Devi as casual and failing to provide her agreed hours; and
  • $2,000 for failing to meaningfully address her health and safety concerns.
• $584.64 gross for leave-related underpayments, comprising:
  • $389.76 in unpaid sick leave; and
  • $194.88 in unpaid public holiday pay.
• A $2,000 global penalty, with:
  • $1,000 payable to Ms Devi; and
  • $1,000 payable to the Crown.
• Annual holiday entitlements to be calculated and credited to Ms Devi’s leave balance. The calculation could not be less than the Trust’s previous calculation of $3,226.29 gross and had to account for the remuneration awarded by the Authority.
• Written confirmation of permanent part-time employment, recording Ms Devi’s agreed hours of 7am to 1pm on Saturdays and Sundays and confirming that the remainder of her existing employment terms continued to apply.

The Authority also directed the parties to engage in good faith about whether Ms Devi would return to her agreed hours, whether they would mutually agree on different terms, or whether either party would take steps to bring the employment relationship to an end.

Costs were reserved. This means the Trust could also face a further costs award if the parties cannot agree on costs themselves.

What should the Trust have done

When Ms Devi said that she could no longer work 30 hours per week, the Trust should have treated the proposed reduction in hours as a formal variation to her existing permanent employment.

Before implementing the change, the Trust should have:

1. Confirmed the proposed arrangement in writing, including that Ms Devi would remain a permanent part-time employee working from 7am to 1pm every Saturday and Sunday.
2. Followed the statutory process for agreeing new individual terms, including providing the proposed variation, advising Ms Devi of her right to seek independent advice, and giving her a reasonable opportunity to do so.
3. Obtained a signed variation and retained it with the employment agreement.
4. Updated payroll and leave records so that Ms Devi accrued annual holidays and received sick leave and public holiday entitlements in the same way as any other eligible permanent employee.
5. Continued rostering her guaranteed hours unless the parties agreed to vary them or the Trust followed a fair and lawful process to change or end the arrangement.
6. Investigated her queries promptly when she first challenged her classification in May 2022. That review should have compared the written records, the agreement reached in February 2022, her actual working pattern and the way she had been rostered.
7. Responded to the health and safety concern through a documented risk-management process, including speaking with Ms Devi, reviewing the task and available control measures, considering additional support or equipment, and communicating the outcome to her.

If the Trust’s operational requirements later meant it could no longer provide the agreed weekend hours, it needed to consult with Ms Devi and follow a lawful change process. It could not simply stop allocating the hours and require her to compete for casual shifts.

Practical takeaways for employers

1. Assess employment status by reference to the real working arrangement. Regular, predictable and ongoing work may establish permanent employment even if payroll records, rosters or correspondence describe the employee as casual.
2. Document every agreed change to hours or employment status. Use a written variation, provide an opportunity for independent advice, obtain signatures, and retain the updated terms with the employment agreement.
3. Do not treat guaranteed hours as optional. If an employee is ready, willing and able to work contracted hours, the employer may remain liable to pay those hours even where no work is allocated.
4. Audit pay-as-you-go holiday pay arrangements. Paying 8 per cent holiday pay is only lawful in limited circumstances. It should not be used merely because an employee has been labelled casual.
5. Close the loop when employees raise concerns. Investigate questions about employment status, pay, leave, rostering and health and safety promptly, document the outcome, and clearly communicate what has been decided and why.

 

Devi v St John of God Hauora Trust is a useful reminder that an administrative oversight can become a significant legal and financial liability when it is left unresolved. Clear written terms, accurate payroll treatment and prompt investigation of employee concerns remain some of the most effective protections available to employers.

This article discusses [2026] NZERA 634, a determination of the Employment Relations Authority, and is provided for general information. It is not legal advice. Employers reviewing the employment status of their employees should seek specific advice tailored to their circumstances.

Need support? If you would like assistance with any employment matter relating the correct employment status or the true nature of a employment relationship, please get in touch with our team. Email admin@cmalaw.co.nz or phone 03 211 0153.

Disclaimer: This update provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.