Availability comes at a price – Employment Lawyer – Business Lawyer – Dukesons Business Law

May 2019

This Blog isn't legal advice – if you need legal advice on any employment law issue or any other business law or commercial law issue, please contact me. I'm a business lawyer (commercial lawyer) who provides advice on a wide range of business law or commercial law issues including employment law issues.

Employment law is still currently giving rise to more noteworthy issues than other areas of commercial law. This recent Employment Court case sounds a warning for employers who have ignored changes in employment law.

NZ Post employees were required to be available for overtime work on any normal working day but received no compensation for this. (NZ Post argued that as salaried workers, reasonable compensation was paid through the salaries. This was rejected on the facts.) The relevant provision in the collective employment agreement was unenforceable. (The position would be the same in relation to any similar provision in an individual employment agreement.)

The Employment Relations Act now contains availability provisions, which are triggered when the obligation of an employee to work is conditional on the employer providing work and the employee is required to be available to do the work if it’s available. That was held to be the case here – the obligation to work extra hours was in effect conditional on the work being available.

Such a requirement is valid where the employer has a genuine reason to have included the provision in the employment agreement (the legislation sets out some criteria here), the employment agreement specifies guaranteed hours to be worked (which was held to be the case here, by the agreement stating what the normal working hours were), and reasonable compensation will be paid to the employee for making sure that they will be available to work. A provision that doesn’t meet these requirements is unenforceable against the employee.

The legislation doesn’t specify what is or could be reasonable compensation though it includes some relevant criteria, all of which are unremarkable. What’s reasonable may have to bear some relationship to the number of hours that an employee has to be available but just what that may mean might require some judicial pronouncements.

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