The Employment Court has confirmed the broad application of availability provisions
The Employment Court has held that the availability provision rules in the ERA apply broadly to ensure all employees who make themselves available for work outside of their normal hours are compensated for that availability.
An availability provision is a provision in an employment agreement where the performance of work is conditional on the employer making that work available to the employee, and where the employee is required to accept that work. Availability provisions are only lawful if:
- the employment agreement provides agreed hours of work including guaranteed hours; and
- the employment agreement provides reasonable compensation to the employee for making themselves available for additional work; and
- the reason for including the availability provision is genuine and based on reasonable grounds.
Where an availability provision does not provide reasonable compensation for availability the employee may refuse to be available to perform work additional to the guaranteed hours.
In the case before the Employment Court, the employment agreement stated that employees may be required to work reasonable overtime in excess of their standard hours. The agreement did not provide compensation for this requirement to be available to work overtime.
The Court held this was an availability provision but as it did not provide compensation for availability it was not enforceable,
i.e. the employees could refuse to perform overtime. The Court also rejected the employer’s arguments that the availability provision rules only apply to “zero-hour” contracts.
Take away points
Any clause in an employment agreement that requires employees to agree to additional hours is an availability provision. The employee will be entitled to refuse to be available if they are not paid compensation for their availability (this is in addition to payment for the hours where actual work was performed). Where an employee is salaried, the parties can agree that the salary is in compensation for availability under an availability provision. This should be clearly stated in the employment agreement.