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Employment Court Confirms Availability Requirements Extend Beyond “Zero-Hour Contracts”

Postal Workers Union of Aotearoa Inc v New Zealand Post Limited [2019] NZEmpC 47 EMPC 114/2018</h2

In a recent Employment Court case, the Court confirmed that employers who seek to require an employee to be available for additional hours of work outside those set out in their employment agreement will need to:

  • Ensure they have genuine reasons for requiring the employee’s additional availability;
  • Include an availability provision in their employment agreement; and
  • Ensure the employee receives reasonable compensation for the required availability.

The Court confirmed that where the above criteria have not been met, the employee is entitled to decline to be available for additional hours of work or turn down additional work that may be offered outside of their ordinary hours of work, as stated in their employment agreement.

In this particular case, New Zealand Post, supported by Business New Zealand, set out several arguments as to why the availability requirements should not be applicable.  These included:

  1. The legislation was intended to protect employees who were required to be available for work but had no guarantee of work also known as “zero-hour contracts”.

The Court rejected this argument on the basis that the legislation recognises an employee’s time is a commodity which has a value.  The Court saw no distinction in the law between an employee who is restricted in their personal life because they may be required to work some hours, from an employee who has work but is restricted in their personal life because they may have to perform additional hours beyond what has been agreed.

  1. If the clause requiring the employees to be available for additional work was an availability provision, then it was enforceable as the employees were on a salary rather than an hourly wage and reasonable compensation for their availability was already part of the salary.

The Court rejected this argument on the basis that the relevant clause did not specifically refer to any compensation or component of salary which was directly related to compensating the employees for their availability.  The Court found the clause was an availability provision but was unenforceable because it did not provide for reasonable compensation.

What does this mean for employers?

  • Unfortunately, there are many employment situations which do not fit into a simple model of agreed hours. It is important that any employer which may need employees to regularly, or on occasion, work additional hours or be available to do so, need to ensure their employment agreements adequately and lawfully reflect this requirement.
  • The Court interpreted the legislation as focusing on balancing power in employment relationships and will be looking to ensure the agreements demonstrate mutuality. This can be done in a number of ways.  However, the underlying requirement is that an employee’s time, whether they are working or remaining available to work, is reasonably compensated for and is appropriately articulated in the employment agreement.
  • Where an employer seeks to enforce a “requirement” to be available without taking the above into account, the employee has grounds to refuse to be available and has access to consequential remedies in response to an employer’s action that is detrimental to the employee.
  • Worker availability can be addressed in different ways depending on whether an employee is a salaried worker or a waged worker, but without the availability arrangement and compensation being articulated in the agreement, the employee may decline to be available or to undertake additional work.

How can we assist?

Please get in contact with us if you are unsure about the impact of availability provisions in your business, you would like to discuss options to address availability, or if you would like us to review your current employment agreement for suitability.

Email:  [email protected]

Phone:  09 273 8590

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

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