"Availability" still an issue

28 September 2017

The legislative response to “zero hours” contracts which came into effect on 1 April 2016 continues to cause problems. The Government got itself confused about this matter and left us with many unintended consequences to deal with.

For now, collective bargaining results in long discussions about the employer’s obligations. 

That starts with claims about the manner in which the “agreed” hours of work will be included in the employment agreement (more on this below). 

When it comes to "availability", on the face of it an employer may no longer require employees to work “reasonable overtime” unless there is an agreed "availability payment" – and there are a raft of factors to consider in establishing such a payment. A recent experience involved a union seeking $10 per week day for the right to have employees work up to 2 hours overtime and $20 on a Saturday for up to 4 hours overtime, which was equivalent to a further 3.5% pay increase in this case.  Even the well-established standby payment regimes are coming under pressure with unions wanting significant increases to the traditional levels, which in many cases are already relatively high at around $200 to $300 per week.

Most organisations can't function without some commitment from employees to work additional time when necessary. In the past if employees did not want to work overtime for any reason, in practical terms an employer couldn't compel them to do so.  However, as a condition of employment employees accepted that overtime was needed from time to time and usually sufficient employees would be available when needed.  However, it seems to be part of the current power play in bargaining that unions want overtime to be entirely voluntary unless there is an availability provision negotiated (at more cost).  At present we are ending up with weakened obligations in the employment agreement around an “expectation” that employees will work reasonable overtime when “requested”.  In most situations that is likely to be manageable.

As far as the hours of work are concerned, the Act provides that the "agreed" hours may be described as any or all of the following (ie not necessarily all of them):

  • The number of guaranteed hours of work (eg 40 per week),
  • The days of the week on which work is to be performed (eg Monday to Friday).
  • The start and finish times (eg 7.30am to 4.30pm)
  • Any flexibility in the days of work and start and finish times (such as 40 hours per week according to a roster published 2 weeks in advance; or start and finish times being able to be varied up to one hour either way ).

Unions seem to think the above requires the start and finish times and days of the week to be specified and guaranteed, but that’s not the case.   The Court stated in Fraser v Carrick Holdings Limited  (the first case decided by the Court since the amendments came into effect) that "section 67C(2) defining hours of work does not make the inclusion of guaranteed hours of work in an employment agreement mandatory. If the employment agreement does not contain an availability provision as defined in the Act, there is no need to provide guaranteed hours. If the parties choose not to agree to an availability provision, they could nonetheless set out mutually agreed rostered hours".

To be clear if you do want to have an availability provision there must be guaranteed hours of work in the employment agreement.

Most employers, wisely, are not prepared to agree to any availability provisions until such time as the Court clarifies their obligations.  In any event, a non-compliant availability provision is not enforceable against an employee, so there is no real problem unless adverse action is taken against the employee for not making him/herself available for work.