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Cancelled shifts may be costly for employers without cancellation clauses

Employers who employ shift workers should consider including a cancellation clause in their employment agreements if they want to avoid paying the full cost of cancelled shifts.

New legislation coming into effect on 1 April 2017 means staff whose shifts are cancelled will be entitled to be paid what they would have earned if they had worked the shift.

However, this new requirement will not apply if the employment agreement includes a cancellation clause that specifies:

  • a reasonable period of notice that must be given before the shift is cancelled
  • a reasonable level of compensation if the specified notice is not given

In that case, an employer will only have to pay the full amount of a cancelled shift if:

  • the shift is cancelled and the employment agreement does not include a cancellation clause
  • the employee is not told about the cancellation until the shift begins
  • the remainder of a shift is cancelled after it has already started

There is no legislative penalty for not having a cancellation clause. However, employees can raise a personal grievance if they are disadvantaged by the lack of a cancellation clause. And the new  legislation means they will also be able to claim full remuneration for any cancelled shift.

If you employ shift workers and there is a chance you may have to cancel their shifts, we recommend that you include a cancellation clause in your employment agreements to avoid having to pay the full cost of any cancelled shifts.

Also coming into effect on 1 April 2017 are new rules regarding:

  1. an employer’s ability to prohibit an employee’s engagement in secondary employment
  2. the inclusion of an employee's agreed working hours in their employee agreement

Please contact Anthony Drake, Greg Cain or Michael O’Brien for advice on these new laws



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