Are your workers available? – Update on Availability Provisions
General, Agreements, Cases / 22 May 2019
Many employers are grappling with what availability requirements mean for their workplace, and a recent Employment Court case, discussed below, offers further guidance on this including the concept of “reasonable compensation” for availability.
We previously discussed availability provisions in our article here.
Case Summary: Postal Workers Union of Aotearoa Inc v New Zealand Post Limited  NZEmpC 47
Here, New Zealand Post Limited (NZ Post) delivery agents’ collective agreement included the following clause, requiring them to work reasonable overtime in excess of their standard hours: –
“Delivery Agents may be required to work reasonable overtime in excess of their standard hours (subject to safe operating procedures) provided that work is voluntary on days which are otherwise non-rostered days for an individual employee.”
The issue was whether NZ Post could require workers to perform extra hours of work.
Workers paid on an hourly basis argued the clause was an availability provision, but because no availability compensation was paid, it was unenforceable.
NZ Post argued, unsuccessfully, that:
- the Employment Relations Act 2000 (Act) provisions regarding availability were intended to be limited to (colloquially known) “zero hour” agreements; and
- if the clause was an availability provision, it was enforceable because it provided for reasonable compensation by way of salary (as the Act provides salary may incorporate reasonable compensation for availability, as distinct from wages).
The Employment Court found that the clause is an availability provision but cannot be enforced as there is no reference to compensation for availability or to guaranteed hours of work. Accordingly, workers are entitled to refuse to perform work in addition to their guaranteed hours on rostered days. It commented that the purpose of the Act in this respect was to ensure that reasonable compensation is provided where employees make themselves available for the employer’s benefit, thereby making themselves unavailable to accept other work or engage in personal activities. Further, that the workers were not paid salary so this aspect of the argument failed.
The Court also observed that the way in which compensation is to be calculated suggests that the greater the span of agreed availability, the larger the compensatory payment should be. Other relevant factors include the nature of any resulting restrictions. However, no specific guidance on this was given, as the Court commented the particular wording of an agreement will likely be pivotal in any analysis and will need to be carefully assessed in determining whether a clause is an availability provision.
Message for Employers
Where an employer requires an employee to be available to work additional hours, it must:
- have a genuine reason based on reasonable grounds for that;
- specify the requirement in the relevant employment agreement, including the:
- guaranteed hours of work;
- period of availability required; and
- reasonable compensation payable for the availability.
An availability provision that does not comply with the above cannot be enforced, meaning that employees are entitled to decline any additional hours and they cannot be treated adversely for doing so.
It is crucial that if you require your employees to be available to work in addition to their normal hours, you have a carefully drafted availability provision which complies with the above requirements. Our team can assist in drafting these or review any existing clauses you may have.
Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.