Casual Contract

Publication Date :

24 Mar, 2025

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Table of Contents

Casual Contract Definition

A casual contract refers to a work agreement where employers engage casual workers on an as-needed basis, having no set guarantees or hours of ongoing work. It gives flexibility to employers for adjusting staffing based on business demand and allows employees to accept shifts as per their time availability.

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Workers have no fixed schedule and no guarantee that their work will be safe for a long time. It is used mostly in information technology, hospitality, or the medical sector, requiring project-based or seasonal employment. While casual workers have certain rights guaranteed by the UK government, they do not enjoy the same benefits as full-time employees.

Key Takeaways

A casual contract permits employers to employ casual workers on an as-needed basis without set hours or guarantees for flexibility in staff adjustments and employee availability.
The contract must include leaving terms, sick pay, pension, employer and worker names, engagement date, work hours, holidays, job description, workplace information, etc.
It allows flexible work timings to take on personal responsibilities, concurrent jobs, and pursue hobbies while not giving workers the entitlements to sick, holiday, or personal paid leaves.
It relieves employers of any obligation to offer work to workers. In contrast, zero hours put a full obligation on the employees to accept the work offered.

Casual Contract Explained

A casual contract can be stated as the hiring of an employee under an agreement to work as and when the work is allocated without any permanence to frequency and consistency of work. It does not make the worker liable to accept the work every time, so they are also called casual workers. Employers can terminate casual workers at any time without notice. These contracts add freedom to hire as per increased demand of work received by employer and availability of free time of workers.

Casual contract employment workers are free to work for any number of companies as long as they can provide quality work and satisfy their clients. Remuneration generally gets calculated based on the number of hours worked or as noted in the agreement. It can create inequalities in the labor market as it affects workers' financial well-being and hinders long-term financial decisions. It helps employers to meet their seasonal or project-based workload at minimum cost. Furthermore, it enables employers to avoid additional expenses related to staff welfare, such as insurance.

In addition, these contracts help employers cut costs and increase revenue, but they can also lead to income instability and decreased access to loan facilities for workers. Hence, these contracts can significantly affect markets by exploiting workers and lowering purchasing power parity.

What To Include In A Casual Contract?

Every employee must receive a written casual contract agreement having the requirements as per UK law before or on their first day of work, as shown in the table below:

Sl. No.	Mandatory inclusions in the contract
1	Employer and worker names
2	Starting date of engagement
3	How pay will be calculated and the amount of remuneration
4	Frequency of payment: monthly or weekly
5	Total number of working hours, including normal days and hours of the week
6	Any variation in hours or days of work and how do they vary
7	Holiday entitlement and pay
8	Job description of the worker
9	Place of work containing employer’s address
10	Permission regarding other paid leaves besides holiday and sickness pay
11	Terms related to sick pay or incapacity of the worker
12	Holiday entitlement, including holiday and public holiday pay
13	Pension schemes terms
14	Terms concerning foreign work of more than one month and its end date
15	Duration and end date of the temporary work
16	details on grievance and disciplinary procedures comprising grievance and appeal contacts
17	Disclosure of collective agreements related to trade unions impacting worker engagement directly
18	Any other benefits not mentioned anywhere
19	Conditions and duration of a probationary period
20	Terms on training entitlement and whether it is mandatory and the person who will pay for it
21	Statement of declaration on no terms set out in any of the above subjects
22	Miscellaneous terms and conditions going beyond the purview of legal minimum

Examples

Let us use a few examples to understand the topic.

Example #1

Let us assume that John, who works as a freelance graphic designer, signed a casual contract with UK Infographics Ltd. The agreement hires John to create promotional design materials as needed. The agreement also specifies that John has to confirm the availability of work for all assignments notified to him through email within 24 hours. His payment has been set at $50 per hour from the commencement of the work, and John has no obligation to accept every work offered to him.

The UK Infographics Ltd. has not offered any welfare coverage to John, like health insurance, sick leave, or paid leaves, stressing the ad-hoc nature of the work. John has gladly accepted the contract as he enjoys working as a freelancer with multiple companies on his time in a flexible manner.

Example #2

The Department for Enterprise on the Isle of Man has stated that employment legislation about casual workers, including those on zero-hour contracts, will be reinforced as of April 1, 2024. All employees will have to obtain an itemized pay statement and a written employment statement as a result of the reforms.

According to Enterprise Minister Tim Johnston, the updates address concerns about irregular working arrangements. Moreover, they are intended to improve openness and justice. Following similar UK standards, the revisions include revealing paid leave, benefits, and hours in employment papers. These changes are part of broader upgrades meant to guarantee the labor force's safety on the island.

Advantages And Disadvantages

Although such contracts are widely prevalent in the job market, they come with certain pros and cons, including:

Advantages	Disadvantages
It allows flexible work timings to take on personal responsibilities, concurrent jobs, and pursue hobbies.	Fluctuating work hours and quantum leads to inconsistent earnings.
Workers can adjust their working hours and timings as per their availability and company needs.	It always lacks job security for staff as the employers do not have to give them regular work or pay.
Companies have to spend more funds on the casual worker as their rates per hour are higher than those of permanent staff.	Workers do not get the entitlements to sick, holiday, or personal paid leave.
Helps in skill maintenance and upgradation, adding to the employability of the worker.	The work hours are heavily tilted towards holidays, weekends, or evenings, causing mental stress.

Casual Contract Vs. Zero Hours Contract

Although both are considered unethical, they have a lot of differences between them, as per the table below:

Casual Contract	Zero Hours Contract
Employers without any obligation to offer work to workers.	The employer has no obligation to provide work for the employee but establishes indirect contact between them.
The employee has no obligation to accept the offered work.	The employee has a full obligation to accept the work offered.
No action can be taken for refusing to work.	Acton be taken against the worker for continuous refusal to work without proper reason.
Autonomous to create ties with multiple employers.	Creates a tie with only one employer.
No job guarantees for workers until they enter a pattern of set work.	Can be treated as if they were full-time workers.