Casual on Paper, Permanent in Reality

Published 09 June 2026 | 3 min read

A recent Employment Relations Authority (ERA) decision is a timely reminder for New Zealand employers about the risks of misclassifying long-term casual employees — and the importance of following a fair process when workplace issues arise.

The case involved a Dunedin bus driver employed by Ritchies Transport Holdings Ltd, who was awarded more than $22,000 after the ERA found she had been unjustifiably dismissed.

What Happened?

The employment dispute began after the driver failed to complete the final two stops on her scheduled bus route. Instead, she drove the empty bus to her nearby home to use the bathroom before returning the vehicle.

The employee later argued that the toilet facilities available at the route terminus and the depot were unsuitable. The employer investigated the incident and issued the driver with a first written warning for failing to complete the service and for using the company vehicle for personal reasons.

Importantly, the ERA agreed the written warning itself was reasonable in the circumstances.

However, following the disciplinary meeting, the driver stopped receiving shifts through the employer’s rostering system. While the company stated this was due to technical issues, the ERA concluded that the removal of shifts was connected to the disciplinary process.

Why the Employer Lost the Case

A key issue in the case was the driver’s employment status.

Although the company considered her a casual employee, the ERA found that her work pattern over approximately 15 months showed regular and ongoing employment. In practice, the relationship had evolved into permanent employment.

Because of this, the employer could not simply stop allocating shifts without following a proper dismissal process.

The ERA ultimately ruled the worker had been unjustifiably dismissed and ordered the employer to pay:

• $10,000 in compensation for humiliation, distress, and loss of dignity
• $12,870 in lost wages

What Employers Can Learn From This

This decision highlights a common risk for businesses operating with flexible or shift-based workforces.

Many employers rely on casual employment arrangements to support operational flexibility. However, under New Zealand employment law, the reality of the working relationship will often carry more weight than the wording in the employment agreement.

Some indicators that a casual role may have become permanent include:

• Regular and predictable hours
• Ongoing expectations of availability
• Consistent work over a long period
• Little to no genuine break between shifts

The case also reinforces the importance of following a fair and documented process before ending any employment relationship — regardless of whether an employee is labelled as “casual”.

Practical Steps for Employers

To reduce risk, employers should regularly review their casual workforce arrangements and ensure:

• Employment agreements accurately reflect actual work patterns
• Casual employees are genuinely engaged on an intermittent basis
• Managers understand when a casual arrangement may shift into permanent employment
• Disciplinary and termination processes follow good faith obligations and procedural fairness requirements

Proactively reviewing these arrangements can help businesses avoid costly personal grievance claims and protect both operational stability and workplace culture.

Stuff (June 2026). Read the full article here: https://www.stuff.co.nz/business/360988477/bus-driver-who-left-route-use-toilet-home-paid-out-over-22000-employment-dispute