Justine is a content writer at Sprintlaw. She has experience in civil law and human rights law with a double degree in law and media production. Justine has an interest in intellectual property and employment law.
Sometimes your business changes pace. Maybe you’re heading into a quieter season, you’ve lost a key client, or you’re restructuring how you roster your team.
In those situations, it can feel tempting to “just switch” an employee from full time to casual. But in New Zealand, a change like this isn’t just an admin update - it’s a fundamental change to the employment relationship, and it needs to be handled carefully (and fairly).
This guide is updated to reflect current expectations and best practice, so you can approach the process with confidence and reduce the risk of a personal grievance later on.
What Does “Full Time” Vs “Casual” Actually Mean In NZ?
Before you make changes, it’s worth getting clear on what you’re really changing.
Full Time Employees
A full time employee usually has:
- Regular and ongoing work
- Set or predictable hours (often around 30–40 hours per week, depending on the agreement)
- Ongoing employment with an expectation of continued work
Full time is more about the nature of the ongoing relationship than a single number of hours. Many employment agreements will also include guaranteed minimum hours.
Casual Employees
A casual employee generally has:
- No guaranteed hours of work
- Work offered on an “as needed” basis
- The ability to accept or decline shifts (in a genuine casual arrangement)
In a true casual setup, there isn’t an ongoing commitment from either party. That’s the key point: casual work is intermittent and uncertain by design.
If you’re routinely rostering someone the same way every week, calling them “casual” won’t magically make it so - their working pattern and the reality of the relationship can matter as much as the label in the contract.
Can You Change An Employee From Full Time To Casual?
You can, but you generally can’t force it.
Moving someone from full time to casual usually means removing the certainty of ongoing work and guaranteed income. Because that’s a significant change, you’ll typically need:
- The employee’s agreement (ideally in writing), and
- A process that is substantively and procedurally fair
Even where you have a strong business reason, the “how” matters as much as the “why”. In NZ employment law, a fair process is a big deal - and skipping it can create legal risk even if your underlying reason is genuine.
Common Scenarios Where This Comes Up
We often see this question when:
- A business is experiencing a downturn and wants flexibility with staffing costs
- You’re reducing opening hours or operating days
- You’re moving from fixed rosters to a demand-based roster
- An employee asks for more flexibility and suggests casual work
Some of these situations can be handled as a mutual variation to the employment agreement. Others may raise issues of role change, restructure, or even redundancy if the original full time role is no longer required.
What’s The Correct Legal Process To Make The Change (Without Getting Burnt)?
There’s no single “magic template” for changing someone from full time to casual. It depends on your contracts, your operational needs, and how the employee is impacted.
That said, there’s a process you should generally follow to stay on solid ground.
1) Check The Current Employment Agreement First
Start by reviewing what the employee currently signed. Key clauses to look for include:
- Guaranteed hours (or minimum hours)
- Days of work / roster expectations
- Any flexibility clauses (and how they’re worded)
- Variation clauses (how changes must be agreed)
If you don’t already have a clear, tailored Employment Contract, it’s worth fixing that early - employment agreements are your legal foundation for making any changes properly.
2) Be Clear On The Business Reason
If the reason is “we want more flexibility”, that’s not necessarily wrong - but it needs to connect to a genuine business need.
Examples of clearer reasons include:
- Trading conditions have changed and you can’t sustain guaranteed hours
- Customer demand is variable and staffing needs fluctuate
- Budget constraints mean you must reduce fixed wage commitments
Write it down. If you can’t explain it clearly, it’s harder to consult meaningfully - and harder to defend later if the change is challenged.
3) Consult With The Employee (Don’t Present It As A Done Deal)
Consultation means you:
- Raise the proposal early
- Share the reason and relevant information (where appropriate)
- Give the employee a real opportunity to respond
- Genuinely consider their feedback before making a decision
If you go in saying “this is happening from next week,” you’re not consulting - you’re notifying. That’s where many businesses get into trouble.
4) Consider Alternatives (And Be Open About Them)
Switching to casual isn’t the only way to create flexibility. Depending on what’s happening in your business, options may include:
- Reducing hours while keeping the employee part time (with agreement)
- Changing roster patterns but keeping guaranteed minimum hours
- Offering a fixed-term arrangement for a specific peak period (where lawful and properly documented)
- Restructuring roles (if the business genuinely needs that)
If your real goal is fewer hours (not truly “casual”), that’s often better dealt with as a change to hours rather than a total reclassification. In that situation, guidance on Reducing Staff Hours is particularly relevant.
5) Document The Outcome Properly
If the employee agrees to the change, document it properly. That might be:
- A deed or letter of variation, plus
- A new employment agreement reflecting casual terms
A casual agreement should be drafted to match how you’ll actually use the employee - including what “casual” means in practice, how shifts are offered, and how pay works. If your documentation doesn’t reflect reality, that’s where disputes can start.
What Are The Biggest Legal Risks When Switching To Casual?
Changing an employee from full time to casual can create risk if it’s handled too quickly, or if the “casual” label doesn’t match the real working arrangement.
Risk 1: Unjustified Disadvantage Or Constructive Dismissal Claims
If a change is imposed (or the employee feels they have no real choice), they may argue they’ve been unjustifiably disadvantaged, or in some cases, that they were effectively forced out.
This is especially sensitive if:
- The employee relies on stable income (for example, rent or mortgage commitments)
- The change is sudden
- The employee is told “accept casual or there’s no job” without a fair process
Risk 2: The Employee Isn’t Really Casual (Despite The Contract)
Even if a contract says “casual,” if you roster the employee regularly with predictable hours, they may be treated in practice as permanent (for example, part time). That can impact entitlements and your obligations.
To keep the arrangement genuinely casual, you generally need:
- No guaranteed hours
- Genuine ability to decline work (in practice, not just on paper)
- Work offered intermittently based on demand
Risk 3: Problems With Leave And Holiday Pay
Leave entitlements can work differently depending on the type of employment and working pattern. If you’re not sure how the change affects entitlements, get advice early.
It’s also worth being careful with annual leave. Employers sometimes try to “use up leave” as part of reducing staffing costs or changing arrangements, but there are rules around how and when annual leave can be directed. If this is part of your plan, the guide on Annual Leave is helpful context.
Risk 4: Getting Notice And Termination Wrong
If the full time role is ending and you’re offering casual work instead, you may be heading into a restructure/redundancy scenario (rather than a simple variation).
In those cases, notice, process, and final pay can become complex quickly - including issues like whether Payment In Lieu Of Notice is allowed and how it should be handled.
This is a common point where businesses think they’re doing a “simple change,” but legally it looks more like ending one role and offering another.
How Should You Update The Employment Agreement And Workplace Documents?
If the change goes ahead, make sure your paperwork reflects what you’re actually doing. This isn’t about being overly formal - it’s about being protected from day one if there’s confusion later.
Key Clauses To Get Right In A Casual Arrangement
A well-drafted casual agreement should usually cover:
- No guaranteed hours (and what that means)
- How shifts are offered (text, roster app, email) and the lead time
- Whether the employee can decline shifts and how they communicate that
- Pay rates and how holiday pay is handled
- Cancellation of shifts (and whether any compensation applies)
- Confidentiality and return of property
- Health and safety expectations
If you’re unsure whether your “casual” setup is actually casual, getting a contract reviewed can save you a lot of stress later. It’s usually far easier (and cheaper) to tidy up documentation upfront than to fix it during a dispute.
Check Your Policies And Expectations Too
If you have policies or a staff handbook, check that they still make sense for casual workers - especially around:
- Roster and availability expectations
- Time recording and breaks
- Performance management and conduct processes
- Confidentiality and privacy
Where you’re dealing with employee information (like payroll details, medical certificates, or emergency contacts), your internal privacy practices matter too. Having a clear Privacy Policy (and actually following it) is a practical way to show you take your obligations seriously.
Key Takeaways
- Changing an employee from full time to casual is usually a significant change, and you’ll generally need the employee’s agreement plus a fair process.
- A genuine casual arrangement typically means no guaranteed hours and genuine flexibility for both you and the employee.
- If you’re really trying to reduce guaranteed hours (not create intermittent work), it may be more appropriate to change hours or move to part time rather than “making them casual”.
- Consultation is crucial - you should raise the proposal early, give the employee a chance to respond, and genuinely consider alternatives.
- Document the change properly with updated agreements, and make sure the contract reflects how the arrangement will work in practice.
- If the change involves ending the original role, you may be moving into restructure/redundancy territory, where notice, process, and final pay need extra care.
If you’d like help changing staff from full time to casual (or you’re not sure whether you need a variation, a restructure process, or a new agreement), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.