The availability provisions of the Employment Relations Act 2000 are not only directed at zero-hour contracts, an important new case has decided. Importantly, they can also catch more traditional overtime situations. Employees may refuse to do work beyond their guaranteed hours of work if their employment agreements do not contain an availability provision that provides for the payment of “reasonable compensation” to the employees for making themselves available to perform work under the clause. Salaried employees can agree that their remuneration includes compensation for their availability to perform work under their availability provision. An availability provision can only be included in an employment agreement that specifies agreed hours of work and includes guaranteed hours of work among those agreed hours, and the availability pertains to the time over and above the guaranteed hours. There must be genuine reasons based on reasonable grounds for having such a provision.
New Zealand Post’s delivery agents were subject to a provision that required them to work reasonable overtime in excess of their standard hours on the days they were rostered. The intention behind this was to cover various eventualities that are partly within the delivery agent’s control, and partly not. But was it an availability provision that failed to provide for compensation for the agents making themselves available to perform the work? If so, they were entitled to refuse to perform it.
The Court found that the agents had guaranteed hours per week and that they were not salaried. It observed that agreements purporting to reserve to an employer the unilateral ability to require an employee to work past their usual hours materially constrained a worker’s ability to plan their life away from work. The Court considered that it was just such an imbalance that the legislation sought to address. The fact that the agents weren’t on standby waiting for a call to come into work but were performing the work at the end of their day was a distinction not drawn by the legislation. The Court said:
"The point to be emphasised is this. The availability provisions appear simply to reflect a statutory recognition that an employee’s time is a commodity which has a value. That ought not to be regarded as a startling or novel proposition. And, as Mr Mitchell points out, payment for availability has been a feature of collective agreements for many years, including in respect of allowances for call-back. It seems to us to be self-evident that the value of an employee’s otherwise private time applies equally whether they are waiting to be called in for work or on the off-chance they might be required to undertake additional hours of work at the end of their usual working day. In either case the employee is forgoing opportunities in their private life. We do not interpret s 67D as differentiating between the two scenarios."
The result of the Court’s conclusions was that the clause was found to be an availability provision but an unenforceable one because there was no provision for reasonable compensation. Delivery agents were, therefore, entitled to refuse to perform work in addition to their guaranteed hours on rostered days. As the Court said:
"If an employer wishes to rely on being able to require an employee to work overtime, as opposed to it being a voluntary exercise, it must comply with the requirements of the Act, including by providing reasonable compensation for the availability the employee has committed to providing for the employer’s benefit."
Reproduced with the permission of Wolters Kluwer NZ