New Zealand Post employs delivery agents to deliver mail, under a collective agreement. This provides for a standard working week of 37 hours and 40 minutes, and states that delivery agents can be required to work reasonable overtime in excess of those hours (with limited exceptions).
The Postal Workers Union claimed that this requirement was an availability provision covered by the rules set out in the Employment Relations Act. These were introduced with effect from 1 April 2016, in part as a response to a public furore over workers signed up to ‘zero hours’ contracts (meaning a contract requiring workers to make themselves available to perform work, but providing no guarantee of any actual hours).
The availability rules in essence provide that if an employer wants to be able to require an employee to work over and above their minimum hours, they must have a clause in the employment agreement specifying guaranteed hours of work, and that relates to a period the employee must be available on top of those hours.
There must be ‘genuine reasons based on reasonable grounds’ supporting the clause and the hours of work specified. There must also be provision for reasonable compensation for the availability requirement, although that can be contracted out of in relation to salaried workers.
There has long been a debate about whether these rules apply beyond so called ‘zero hours’ workers and instead apply to all employees. The Employment Court has ruled emphatically that they do.
The collective agreement in this case had no provision for reasonable compensation, and the workers were waged rather than salaried. Consequently, it was unenforceable and the delivery agents were entitled to refuse to perform work in addition to their guaranteed hours.
The Court observed that the legislation reflected a recognition that an employee’s time is a ‘commodity which has a value’, and that that was not a ‘startling or novel proposition’.
This decision, while it will not be welcome to employers, does at least provide some clarity in relation to this difficult area of the law. Employers who want to be able to require their employers to work over and above their standard hours must have a compliant availability provision in their employment agreements.
This requirement extends to salaried workers: while employers can contract out of the requirement to pay them for their additional availability, they cannot evade the requirement to have a compliant clause in the first place.
The statutory framework relating to the contents of these clauses is complex. Most agreements we see do not comply with the rules. Employers should not hesitate to take advice on these clauses if they want to avoid the same outcome as that suffered by New Zealand Post.
It will be interesting to see whether the need to negotiate availability clauses and, for waged workers, reasonable compensation, has an impact on the ‘long hours culture’ prevalent in many industries and sectors in New Zealand.