Defining a Part-Time Employment Contract
A part time employment contract is a legally binding agreement between an employee and their employer that states the employee will work a specific number of hours each week. Some employees will therefore work on a permanent basis, with a guaranteed amount of weekly hours. For example, someone may work 20 hours per week at 10.50 per hour. This is what you would understand as a part time employment contract.
Of course, an employee may also work different hours each week, for example 12, 5 or 8 hours per week on a permanent basis, but it is the number of hours that is relevant here in terms of telling whether the contract is a part time or permanent employment contract. If the working hours are not guaranteed then it is not a part time employment contract, but rather a contracts for the services of a casual worker.
A part time employment contract will therefore have a restricted number of working hours – if the employee works more hours than stated in their part time employment contract then they are entitled to claim for additional pay . Particularly in light of the working time regulations, it is important that an employee’s part time employment contract is clear about the hours that are to be worked.
For example, the contact should state whether or not overtime entitles the employee to additional pay and what constitutes overtime. Does overtime include working additional hours after the employees contracted work day? Does it include working additional hours during weekends? Does it include working additional hours which are not specifically stated in the contract, which the employee works as a matter of course, anyway? Alternatively, does overtime mean working hours that are additional to the set number of hours stated in the contract, irrespective of when those hours would fall in a working day?
Limiting the number of hours that an employee will work under a part time employment contract can mean that they are more likely to find alternative employment. This is especially so if there are no restrictions on working elsewhere outside the part time employment contract.
Key Aspects of a Part-Time Employment Contract
A part-time employment contract should have many of the same components as a full-time contract. Although a part-time contract will generally be shorter, and it may be less onerous than a full-time employment contract, it still should be in writing, and it must comply with the requirements of federal and provincial employment standards legislation.
A basic part-time employment agreement should identify all parties and include the following key elements:
Employment term
Hours of work
Compensation
Aspects of the arrangement that should be expressly addressed include:
Job duties
Duration
Expectations
Termination
The term of a part-time employment contract may be perpetual or for a fixed period of time. Although a part-time contract may be for a shorter duration than a full-time employment contract, it is good practice to ensure that the duration of the contract is no shorter than the statutory notice period set out in the relevant provincial employment standards legislation. The term can be extended by agreement of the parties.
Legal Rights and Responsibilities in a Part-Time Employment Contract
Legal Entitlements and Obligations of a Part-Time Employment Contract
Where an employee is termed a ‘part-time employee’, what rights do they have to minimum wage rates, overtime and other leave entitlements? Are these the same rights as a full-time employee, or do they differ in terms of legislative entitlements?
The Fair Work Act 2009 (‘the Act’) provides as follows:
"(1) Subject to subsection (2), this Division applies to a part-time employee.
Note: For conditions attaching to employment of part-time employees, see Part 2—5 and any National Employment Standards item.
- (2) This Division does not apply to a permanent employee on paid leave who is taking the leave as continuous leave.
- (3) For the purposes of this section, a part-time employee is an employee who has ordinary hours of work that are less than the ordinary hours for full-time employees described in subsection (4).
- (4) The ordinary hours for full-time employees described in this section are the ordinary hours of work for employees generally in the employee’s particular employment and at the time the employee becomes a part-time employee." (emphasis added)
There has been some commentary regarding the ambiguity in the definition of a ‘part-time’ employee.
The term ‘part-time’ has not been further considered or defined in any case law, however it must be read in conjunction with the majority of the Fair Work Act 2009, which applies the National Employment Standards to full-time and part-time employees.
Therefore, conditions of employment applicable to full-time employees will also apply to part-time employees, including minimum wage rates, overtime and leave entitlements, if the employee meets the definition of a ‘part-time’ employee as defined in the Act above.
This means that the definition of a ‘part-time’ employee is particularly important when determining minimum wage rates under the Miscellaneous Award 2010. In addition, the taking of annual leave must always be taken in days, and also be paid at the minimum annual leave loading of 17.5%.
Advantages and Disadvantages of Part-Time Employment
Part-time employment can be beneficial for both employees and employers. For employees, a part-time arrangement can facilitate the ability to balance personal interests or time commitments and can also provide increased job flexibility. For employers, a part-time employee can mean reduced wage and benefits costs; flexibility in scheduling; expedited hiring; and the ability to utilize technology and training to assist with the training of new employees. But, there are of course disadvantages to both the employee and employer with part-time employment.
An employee may have a number of personal reasons that they prefer a part-time arrangement. Some of the obvious advantages to part-time employment include a shorter commute to work (if such commute is further than their home) and increased time to engage in personal commitments. A part-time employee also has the ability to engage in entrepreneurial pursuits outside of the hours they are expected to work. In other words, a part-time employee is generally free to pursue another job (or jobs) outside of his or her hours of work. So long as the employee does not use any trade secrets or otherwise confidential information in working two jobs simultaneously, he or she is free to work at two places of employment with no adverse legal consequences.
Conversely, the employee incurs some disadvantages by working part-time. For example, the employee will receive fewer wages if he or she works less than full-time. And, employment benefits and advancement opportunities may be limited. The former can be offset by the fact that a part-time employee has more time to spend "earning" additional money through other employment. And the latter can perhaps be offset by the fact that a part-time employee may be eligible to advance (such as achieving greater seniority) once he or she becomes a full-time employee. In terms of the employer, the disadvantages include some statutory obligations and the likelihood that the company may have to hire and train more individuals over time. The employer may also be required to provide certain employment benefits and protections to the employee. For example, in California, the California Labor Code has certain requirements related to providing a meal and rest breaks and an employer may also be liable under the California Family Rights Act to offer protected time off from work in certain circumstances. Further, an employer may not be able to hire additional part-time employees in one tax year if that employer has 50 or more employees, and may become subject to IRS penalties if the employer offers no minimal essential health care coverage or offers it only to part-time employees.
Therefore, it is important for both employees and employers to understand their respective potential benefits and drawbacks prior to making a part-time employment arrangement.
Common Challenges and Resolutions in Part-Time Employment Contracts
Contracts for part-time employment may seem straightforward, but they are regularly the cause of disputes between employers and employees. Common issues faced by both parties include a lack of clarity regarding worker availability, holiday allowance, working arrangements, and termination notice periods.
Availability
When discussing the specifics of a part-time worker’s contract, an employer should be clear from the outset about the requirements of the role, and regular times that a worker is expected to work. However, it is not uncommon for issues to arise even when agreements had initially been made regarding an employee’s availability. Where this happens, clear communication is key – let the employee know that their attendance is needed on particular days, and be frank about the issues caused by their absence. Equally, if it is necessary for a part-time employee to take leave during a period of availability, the employer should give as much notice as possible to the other employees (if appropriate) to ensure that any disruption is minimised.
Working from home
Until recently, many employers automatically assumed that part-time contracts would involve some element of working from home, and that this would be acceptable to the employee. However, the pandemic forced many employers to rely on their workers to fulfil their roles in this way. For employers and employees, coming to an agreement about where work will be conducted is paramount , in order to avoid confusion and miscommunication. An agreement should be clear about what equipment, such as laptops, office supplies, and phone bills, the company will supply and what expenses will be reimbursed.
Holiday entitlement
Continuous confusion about how holiday entitlement works when a part-time employee has a different working week to colleagues who work full time has persisted for years. The following calculations are frequently misunderstood:
– If a worker works for three days per week, e.g. Monday to Wednesday, leaving Thursday and Friday as rest days, this will mean that he or she is entitled to 24 days of holiday a year, although this may accrue proportionately if the individual has not been employed for a full 12 months.
– Sometimes an employee may have a different holiday allowance calculated at an hourly rate. If this does not exceed his contractual entitlement, then it is lawful.
Notice Periods
Under normal circumstances, there is no statutory notice period for either employers or employees. If, however, an employee has worked for the company for more than a month, then the statutory notice will be either a week or a month. Under three months of employment, the required notice period is one week per employment month. An employer who gives less than the statutory amount can be liable for damages (which in most cases amounts to salary payment during the period of notice). If an employee does not give the correct notice period, the employer can deduct the notice period from the final month’s salary.
Formulating a Part-Time Employment Contract
Although it is quite common for employees to work part-time hours under a flexible working arrangement, in some cases such arrangements can be formalised with a part-time employment contract. This is an employment contract that amends the standard contract agreements between employer and employee to reflect the arrangements agreed. A part-time employment contract will usually include clauses setting out: In situations where part-time work is required but not suitable on an ongoing basis, a part-time employment contract may be more appropriate. For example, employers may look to engage employees on a part-time basis to fill a transitional period of short to medium-term work. It is not sufficient for an employer to simply inform an employee that their hours will be reduced, nor is it appropriate for the employee to agree to this reduction. As employment changes must be consented to, the best practice is to enter into a part-time employment contract at the outset rather than an amended standard contract. Although employers are permitted to issue a part-time employment contract to all employees, it is essential that they maintain open lines of communication to discover which employees are interested in working directly with an employer. Further, the employer must conduct a full analysis of any workload which requires to be filled without over-saturating that work with unnecessary part-time employment contracts. Part-time employment contracts may have other unexpected ramifications, including an increase in staff turnover, potentially requiring the hiring of further members, changes to the business’ services and processes and a potential reduction in the organisation’s profits. This is especially true in retail, where part-time work contracts can be common, and employees may leave the particular organisation for another that offers better part-time employment conditions. The process for creating a part-time employment contract is fairly straightforward. As with any other employment contract, it is considered best practice to provide the employee with the contract in good time before the proposed start date and in sufficient time as to allow both parties to fully consider the terms and ask any questions prior to commencing under its terms. Thereafter, if both parties are agreed (and the contract does not suffer from mistakes or failings) the contract may be signed with the part-time employment contract starting on the mutually agreed date.
Commonly Asked Questions About Part-Time Employment
Common questions about part time contracts
Can a contract of employment for part time hours be a zero hours employment contract?
A zero hours employment contract for part time employment is possible. Zero hours contracts for full time staff are less common than part time zero hours employment contracts. As the name suggests, a zero hours employment contract does not guarantee any hours of work. Part time workers on zero hours employment contracts are expected to work only when they are required to do so. There is no mutuality of obligation binding the employer and the worker to an employment contract.
Are part time workers entitled to the same rights as full time employees?
Part time employees are entitled to paid time off so that they can take holidays. Ideally statutory paid annual leave should be taken as paid holiday or alternatively paid in lieu if there is no possibility of taking holiday. Part time employees are also entitled to receive sick pay. If an employee is entitled to sick pay , any sickness absence must be paid. Payment for sickness absence for part time employees who are not entitled to sick pay would be at the part time employee’s normal hourly rate.
The entitlement to paid holidays and statutory sick pay accrue pro rata on the part time employee’s normal hours of work. The amount of paid holidays and sick leave to which the employee is entitled should be detailed in the employee’s contract of employment.
Part time employees who have a contract of employment which has not been drafted properly do not necessarily have the same rights as full time employees. If a full time employee is entitled to a fixed number of paid holidays or sick leave, then a part time employee may also be entitled to the same amount of paid holidays or sick leave even though the part time employee works for less hours and days. Part time employees have the same minimum rest breaks and time off for health and safety purposes as full time employees.
Are part time employees entitled to rest breaks and time off for health and safety?
Part time employees are entitled to the same minimum breaks and time off for health and safety reasons as full time employees. Part time employees who do not have more than 20 employees in their business or who do not work more than 3 hours per day are not entitled to paid breaks. When a part time employee works more than 3 hours per day, they must be given a minimum 20 minutes paid break.