Understanding Employee Availability
In the dynamic landscape of modern workplaces, flexibility is often key to meet business demands. One way employers achieve this is by asking or requiring their employees to be available or 'on call' outside their regular working hours. However, it's essential to be aware that there are specific legal requirements that need to be met when dealing with employee availability in New Zealand.
Understanding the Legal Framework
The legal framework for managing employee availability in New Zealand is outlined in Section 67D of the Employment Relations Act 2000. To ensure compliance with the law, employers must pay close attention to the following key requirements:
Inclusion in Employment Agreement
Genuine Business Reasons There must be genuine business reasons based on reasonable grounds for including the availability provision in the Employment Agreement. This requirement ensures that employers do not misuse availability clauses.
Compensation for Availability Employers are obligated to provide reasonable compensation to employees for making themselves available during the specified period. The concept of "reasonable compensation" may vary, but it's crucial to establish a fair arrangement. The negotiation process is vital in determining this compensation, and having the availability provision documented and signed by both parties demonstrates mutual agreement.
Determining Reasonable Compensation
Evaluating what constitutes reasonable compensation for availability can be complex and depends on various factors.
Here are some key considerations:
The demands and restrictions placed on the employee during the availability period, including the nature of tasks, timing, and duration of additional work.
The inconvenience and limitations on the employee while being 'on call.'
The employee's ability to decline the additional work without facing repercussions.
While it's acceptable to link an employee's salary to justify an availability provision, employers must be prepared to demonstrate how this provision offers more than an equivalent arrangement without it. A low remuneration, particularly close to the minimum wage, is unlikely to be considered reasonable compensation, even if it was initially agreed upon. Employers should not use low salaries as a way to circumvent legal requirements regarding employee availability.
Preferred Compensation Approach
To ensure compliance and a fair arrangement, many employers opt for a two-tiered compensation approach. This typically involves paying a fixed amount for merely being 'on call' (whether or not a call-out occurs) and an incentivised or preferential rate for any hours actually worked during the availability period.
Alternatives to Availability Provisions
For employers seeking to avoid the legal complexities and risks associated with availability provisions, an alternative approach is to manage any additional hours worked by employees through mutual agreement. However, this means that employees have the freedom to decline additional hours, such as overtime, without facing employment-related consequences.
Navigating Challenges
It's important to be aware that availability issues can be challenged in the Employment Relations Authority and higher. Employers may need to justify the enforcement of availability provisions, and poorly written or invalid clauses could lead to claims of disadvantage by employees.
In conclusion, understanding the legal requirements regarding employee availability is crucial for employers. By ensuring that availability provisions are clearly documented, reasonable compensation is offered, and fair practices are maintained, you can strike the right balance between business needs and employee rights. Navigating these legal aspects effectively can lead to a more harmonious and compliant work environment.
Disclaimer This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.