The Employment Court in Postal Workers Union of Aotearoa v New Zealand Post Limited highlights that an employee’s time is a valuable commodity. When an employee is required to be on call to work or is required to work overtime, they are foregoing opportunities in their private life. The Employment Court holds that this time should be compensated for.
The reform of the Employment Relations Act 2000 (the Act) aims to combat availability provisions being used to the detriment of employees. Sections 67D and 67E were added into the Employment Relations Act 2000 to prevent an employer intruding on an employee’s time when it is not consented to or compensated for.
New Zealand Post highlights how the new sections work in practice. The issue at the heart of the case was whether New Zealand Post could require delivery agents to perform extra hours of work, in addition to their standard hours, without compensating them for their availability.
An availability provision sets out that an employee needs to be available at particular times to work hours but the hours are conditional on an employer making work available. This definition is found in section 67D of the Act.
Zero-hour contracts are an example of an availability provision. These require an employee to be available to work whenever an employer asks them to work. Employees under these terms have no guaranteed hours of work, so they must remain alert to a request from any employer, at any time, to work. These contracts impact employees’ personal time as they must remain continuously alert to the prospect of work, without reasonable compensation. This is why the government intervened.
The Act now sets out that availability provisions are enforceable only if the employment agreement contains guaranteed hours of work and reasonable compensation for giving up time for any availability provision. This explicitly stops zero-hour contracts from being lawful. In New Zealand Post, the Employment Court clarified the regulation of availability provisions applying beyond zero-hour contracts. For a waged worker the compensation must be in addition to their specified wage. The Act does allow an employment agreement to provide that for a salaried worker, the compensation is included in the salary, but this must be expressly stated.
In New Zealand Post, it was found that the minimum hours stated in the employment agreement amounted to guaranteed hours for delivery agents. As a result, an availability provision could be included. The provision in question required an employee to work overtime when it was available on rostered days. This was deemed unenforceable as it did not provide reasonable compensation for employees who were giving up their time as a requirement to the company. As a result, section 67E was engaged and employees could decline to make themselves available for the overtime work.
The employer must have a genuine reason to include an availability provision. The nature of New Zealand Post’s work was regarded as a suitable context to allow for availability provisions as the amount of work available varied depending on the time of year. Inputting these provisions would allow the employer sufficient flexibility to delegate the workload and the employee would get compensated for giving up their time. New Zealand Post did not shed light on what is regarded as reasonable compensation.
The Employment Court in New Zealand Post details that the purpose of the amendments to the Act, as set out in sections 67D-67H, is to protect employees who are under flexible models of employment.
It is clear that when interpreting section 67D the court was concerned to make sure that the benefit of availability provisions flows both ways. In New Zealand Post, the benefit flowed only to the employer as they received labour to cater to their constantly changing business needs, whilst the employee gave up their personal time with no recompense. As such, the greater the span of availability, the greater the level of compensation should be.
It is evident that both parties should benefit from arrangements, and the regulation of availability provisions aims to ensure this.
For further information, contact the employment lawyers at Bell & Co on (04) 499 4014.