What is the definition of casual labour?

There is no strict definition of a casual worker or casual contract in UK law. A casual worker is somebody whom your company engages on a flexible, non-fixed basis, often under a casual worker contract. Sometimes, these workers transition to permanent employment through a formal process, if this is what both sides want and can accommodate.  

The main types of employment status are:

• Worker
• Employee
• Self-employed/contractor

According to UK employment law, employment status helps determine an individual’s rights and your responsibilities as an employer. Regardless of their status, all workers are entitled to fair treatment, and you are responsible for making sure that casual staff receive their legal entitlements, including holiday pay and sick pay, for the hours they work.

What is a worker?

A person is typically classed as a worker if:

• They have a contract or arrangement to do work personally for a reward (the contract doesn’t have to be written)
• They are rewarded for their work with money or a benefit in kind
• They have only a limited right to subcontract the work
• They are expected to turn up for work even if they don’t want to
• The company must have work for them for the duration of their contract
• They aren’t doing the work as part of their own company in an agreement where the employer is a customer or client

On the other hand, according to UK law, an employee is someone who works under a formal employment contract.

Employees have the same rights as workers, but they also have additional entitlements, such as:

• Protection against unfair dismissal: the right not to be dismissed without a fair reason is a key protection for employees, typically after two years of service.
• Statutory redundancy pay: this is only available to employees who have been with their employer for a minimum of two years.
• Minimum notice periods: employees are entitled to a statutory minimum notice period from their employer before their contract is terminated.
• The right to request flexible working: the statutory right to request flexible working arrangements is an entitlement for employees from day one of their employment.
• Time off for emergencies (dependants): the right to take unpaid time off to deal with an emergency involving a dependant is an employee right.
• Statutory maternity, paternity, adoption and shared parental leave: this is an important distinction. The right to take extended leave and be guaranteed a return to your job is an employee-only right

What are the different types of casual employment?

Let’s take a look at the various types of casual employment, the contracts involved and the rights workers are afforded under UK employment law.

1. Zero-hours contracts

A zero-hours contract is a type of employment contract where you as the employer are not required to provide a minimum or set number of working hours for the worker. These types of contracts are typically used in industries that experience fluctuations in demand, such as tourism, product or service delivery or seasonal businesses.

2. Guaranteed minimum hour contracts

Unlike a zero-hours contract, a guaranteed minimum hour contract offers a worker a number of guaranteed hours of work in a defined period.

3. Variable hour contracts

Variable hour contracts are a contract category under which zero-hours contracts also fall, as you are not obligated to provide a set number of working hours. Instead, work is offered on an ad hoc basis, and the worker can choose whether to accept or decline each offer. The second point doesn’t apply to the zero-hours subcategory, as these workers may be expected to take up any offers of work. 

A variable hours arrangement is particularly useful for businesses that need to adjust staffing levels quickly in response to changing demand. For workers, variable hour contracts can provide flexibility, allowing them to fit work around other commitments. However, the unpredictable nature of these contracts can make it difficult for them to rely on a steady income or plan ahead financially.  

4. Self-employed or freelance contracts

Freelance or self-employed contracts are made when work is agreed to be carried out by someone operating independently and not for the employer as an employee. These people are not considered workers under UK law. Freelancers may be engaged for a set period of time or continue to work for you over a longer period on an as-needed basis. Freelancers are considered self-employed under UK law and are responsible for handling their own taxes.

5. Contractor and subcontractor agreements

Contractor and subcontractor agreements are distinct from other casual employment contracts, as they typically involve hiring individuals or companies to complete a specific task or project. These agreements are common in industries like construction, IT and consulting, where work is often project-based and requires specialist skills. Contractors and subcontractors are usually considered self-employed, so like freelancers, they are not workers and are responsible for managing their own tax and national insurance contributions.

Contractors and subcontractors do not have the same employment rights as casual workers or employees, like statutory sick pay, holiday entitlement or redundancy pay. Their employment status is defined by the terms of their contracts and the degree of control they have over how and when the work is done. 

While contractors enjoy greater independence and flexibility than employees, they also bear the risks associated with self-employment, including lack of guaranteed work and fewer legal protections.

6. Fixed term contracts

A fixed-term contract is an agreement between an employer and employee that work will be provided for a specific amount of time. The contract will end after an agreed period or upon completion of a defined amount of work. These contracts are often used seasonally by industries that experience increased demand. They may also be used for workers who are covering the role of an employee on maternity/parental leave or long-term sick leave.

Determining employment status

Ensuring you correctly classify your casual staff is an important step for legal compliance. As the details of the working arrangement ultimately define an individual’s status, the label on a contract is not conclusive. 

A court or tribunal may look beyond the agreement to the day-to-day reality of the role. Misclassifying someone, for instance by treating an employee as a self-employed contractor, can lead to significant legal and financial risk. Therefore, a clear understanding of these distinctions is important for providing clarity, fulfilling your legal duties and preventing disputes over rights and entitlements.

Casual worker’s rights 

The below rights are typically reserved for employees and not usually extended to workers on casual contracts: 

• Minimum notice periods
• Protection against unfair dismissal
• The right to request flexible working
• Time off for emergencies
• Statutory redundancy pay

So, what exactly are casual workers entitled to? The UK is known for its robust employment laws, protections and entitlements, and even casual workers benefit from this to a certain degree. Below is an overview of casual contract rights and terms:

1. The right to a written statement of terms

Both employees and workers have the right to a written document detailing the fundamental terms of their employment from the first day that they engage in work. 

2. Holidays and holiday pay

Employees and most workers are entitled to 5.6 weeks statutory annual leave, as outlined in the Working Time Regulations Act 1998. This does not include self-employed workers. The statutory holiday entitlement applies to workers on fixed-term, minimum-hour and zero-hours/variable hour contracts. Annual leave for casual employees is calculated in the same way as for other employees, based on the number of hours worked and calculated on a prorated basis.

3. Working hours

Like employees, workers are entitled to defined daily and weekly rest periods. They also operate under the maximum weekly working time limits, unless they have signed an opt-out.

4. Part-time worker terms

Part-time workers, or those on minimum guaranteed hours contracts, have the right not to be treated less favourably than those working full-time hours, unless the difference in treatment can be justified.

5. Fixed-term worker terms

Fixed-term contract workers are entitled to the same rights as a permanent employee after they have completed the necessary length of service – in most cases, twelve weeks.

6. Sickness and sick pay

Statutory sick pay rules still apply to workers on casual contracts. Individuals classified as self-employed (freelancers, contractors and subcontractors) are not entitled to sick pay.

7. Maternity, paternity, adoption and parental leave pay

While casual workers are not entitled to statutory family-related leave (the right to extended time off), they can be eligible for statutory pay if they meet the required conditions for service and earnings. For example, a qualifying worker can receive Statutory Maternity Pay (SMP), which is 90% of their average weekly earnings for the first six weeks, followed by £187.18 per week or 90% of their average weekly pay (whichever is lower) for the next thirty-three weeks.

Support is also available for self-employed individuals, who must arrange the payments themselves. Most self-employed people, such as sole traders, can apply for Maternity Allowance from the government. Separately, if a person is a director of their own limited company and pays themselves a salary through PAYE, they are classed as an employee of their company and can therefore be eligible for Statutory Maternity Pay.

8. Pension

All employers in the UK are legally required to automatically enrol qualifying employees and workers into a pension scheme and pay the required minimum contributions, unless the worker chooses to opt out. The minimum employer input is 3% of the worker’s monthly income. To learn more about your pension obligations, you can read our dedicated guide to pensions.

Casual workers and unfair dismissal

Casual workers may have the right to claim unfair dismissal, but this depends on their employment status and the circumstances surrounding their dismissal. Generally, to claim unfair dismissal, a worker must be classified as an employee and have at least two years of continuous employment with the same employer. 

Casual workers aren’t eligible for the same level of protection against unfair dismissal, but it’s still recommended to follow fair procedures when ending a casual worker’s engagement, including providing a reasonable notice period and a justification for your decision. If a casual worker feels they have been treated unfairly or discriminated against, they may seek advice from an employment tribunal or a legal professional to understand their rights and potential next steps.