Asking or requiring staff to be available or 'on call' after the normal hours of their employment is referred to as an 'availability period', and a number of legal requirements need to be met if the law regarding 'availability' applies. Section 67D of the Employment Relations Act 2000 sets out what the legal requirements are regarding the issue of employee 'availability'.
An agreed availability provision must form part of an employee's written Employment Agreement, and it must be explicit on:
- Stating that the period of availability is in addition to the normal guaranteed hours, and what those hours are;
- There be genuine business reasons based on reasonable grounds for the inclusion of the availability provision;
- Must provide for the payment of reasonable compensation to the employee for making themselves available.
When it comes to 'reasonable compensation' there is an element of negotiation of course and having this availability arrangement recorded in writing and signed demonstrates agreement. Every scenario is potentially different of course, but the following considerations are important when evaluating reasonableness of an availability provision in terms of compensation:
- The demands & restrictions placed on the employee with the tasks involved, times and lengths of additional work;
- Inconvenience and limitations on employee while being 'on call';
- Employee's ability to decline the work.
While it is acceptable to hold (and agree) the level of an employee's salary to justify an availability provision - it may be required to demonstrate how such a provision is remunerated more than an equivalent arrangement without the same provision. Further, a salary close to minimum wage would extremely difficult to prove 'reasonable compensation' for extra availability - even if it had initially been agreed upon. An employer should not use low remunerated salary arrangements as an avenue to avoid the law regarding 'availability' and having to pay employees compensation for being available.
It's usually better to be able to demonstrate extra remuneration for extra work, and for an availability provision this is no exception. Generally we see a dollar figure being paid for simply being 'on call' (regardless of a call out or not), and then an incentivised or preferential rate for any hours actually worked (called out).
Alternatively, the legal complexity and risk regarding the issue of 'availability' can be avoided entirely simply by managing any additional hours worked by an employee over & above their guaranteed hours by agreement. However, this means an employee is free to decline additional hours, i.e. overtime, without any repercussions in terms of their employment.
Availability issues can be challenged in the Employment Relations Authority and higher. Not only do we see employers having to justify attempts to enforce an employee's availability provision, but also the defence of claims of disadvantage against poorly written or invalid clauses.
The Employment Agreement templates in all our products including the
Employers Toolbox have always had availability clause options in, along with guidance commentary to help employers with legal compliance. Availability provisions aren't included by default, so you do need to opt them in, if you use our wizard builder this is one of the questions during the build.
If you use availability provisions with your staff and are worried, please contact us for a review and recommendations.