Are you ready (willing and able) for it?
One of the fundamental principles of the employment relationship in New Zealand is the work-wages bargain – an employer pays an employee wages in exchange for work performed. The work-wages bargain assumes that employees are ready, willing, and able to perform the work requested by the employer.
This assumption is challenged when an employee is unable to perform the required work due to limitations such as the loss or suspension of an essential qualification, like a driver's license.
The question of the impact of such a limitation was recently explored by a client as they sought resolution from the Employment Relations Authority (ERA) to determine whether an employee should have been paid wages in circumstances where they could not perform the required work due to the disqualification of their driver's license (and inability to obtain a limited or work license).
This employee was employed by the organisation in a role that involved operating vehicles and mobile equipment. The organisation had established standard operating procedures that required all vehicle and mobile equipment operators to hold a valid New Zealand driver's license. Any loss of license was to be immediately reported to the employer.
In March last year, the employee's driver's license was suspended, and they duly reported the suspension to their employer as required. Consequently, the employer determined that the employee was unable to fulfill their duties and informed them that there was no other work available. The employee was advised not to return to work until they regained their license and was informed that they could use their accrued annual leave and/or take unpaid leave during the suspension period.
The employee did not return to work and was not paid during the period of license suspension. Subsequently, the employee, through their union, claimed that they should have been paid during this period and should not have been required to take annual leave or unpaid leave.
The matter was referred to the Employment Relations Authority (ERA) for resolution.
The employer argued that the issue to be determined was whether the employment contract required the employee to be ready and able to drive vehicles and mobile equipment in order to receive a wage (the work-wages bargain).
The ERA considered that, contractually, the employee did not have an entitlement to be paid for the period in which they were not willing or able to perform the required work. The ERA held:
In short, although the employee might have been willing to do so, they were not ready and able to perform the service required by their employment contract for the period of the suspension of their driver's license, and they did not do so. In those circumstances, they had no contractual entitlement to the payment of wages since actual service is required for wages to be earned.
Lessons for employers
Employers in New Zealand may encounter situations where employees are unable to perform their duties due to a temporary loss or suspension of an essential qualification such as a driver's license.
Under common law, where an employee is not "ready, willing, or able" to work due to the loss of an essential license or qualification, there is no obligation on employers to provide alternative duties or pay the employee for work not performed.
However, it is important for employers to adopt a common-sense approach and consider whether the loss or suspension of the license or qualification affects the employee's ability to fulfill the inherent requirements of their position. Employers should also assess whether the employee can still adequately perform the job during the interim period, even if not perfectly.
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.