Availability Provisions Clarified

Thursday 20 June, 2019

A recent decision of the Employment Court has clarified the reach of availability provisions.  This decision has an impact for all employers who require their employees to be available to work overtime. 

The case of Postal Workers Union of Aotearoa Inc v New Zealand Post Limited [2019] NZEmpC 47, considered the question of whether a clause in the employment agreement requiring employees to perform extra hours of work in addition to their standard hours (overtime) constitutes an availability provision for the purposes of s 67D of the Employment Relations Act 2000.  The Employment Court held that it did.

The consequences of this are that all employers in New Zealand will need to ensure their employees are reasonably compensated for their availability to work overtime where they are required to be available – whether or not they are ever in fact called upon to work additional hours.  For waged employees, this will mean that an extra monetary amount must be paid to the employee as compensation.  For salaried employees, this compensation may be built into the employee’s salary.  In this case, the salary will need to be at a level such as to pay the employee for both for all hours worked (at least minimum wage) and their availability (at a reasonable additional amount). 

What exactly constitutes “reasonable compensation” for availability to work has not been defined and will depend on the circumstances surrounding the employee’s employment, the amount of remuneration, the agreed hours of work, and the hours of availability.

Employers should take legal advice as to how to respond to this decision in their own workplaces.  What is the most reasonable and appropriate response will depend on many factors, including the nature of the employer’s business, the characteristics of the workforce and the purpose for which overtime may be required.

New Zealand Post has a right to appeal this decision, and we think an appeal is likely based on the significance of the decision both to New Zealand Post and to other employers.    In the meantime, however, employers will need to revisit their employment agreements and overtime policies to ensure compliance with the law as it currently stands. 

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