Availability Law – A Quick Guide for N.Z Employers
Employers sometimes need employees to be available to work outside their normal hours of work – such as being ‘on-call’ or ready to work additional shifts.
Section 67D of the Employment Relations Act 2000, provides that an ‘availability provision’ can only be included in an employment agreement if specific legal requirements are met, including a specific contractual clause and payment of ‘reasonable compensation’ for any period of availability required by an employer. Failing to comply can expose employers to successful personal grievances and financial remedies.
What Is an Availability Provision?
An availability provision is a clause in an employment agreement under which:
The employee’s work is conditional on the employer offering work, and
The employee is required to be available to accept work when offered.
This typically applies where employees are required to work outside their guaranteed hours, e.g. be on-call or required to accept extra shifts that are in addition to their usual hours of work. Availability considerations are triggered where the employee cannot decline an employer’s request to perform additional work and must be available for work.
When Can an Availability Provision Be Included?
An availability provision can only be included in an employment agreement if all the following legal requirements are met:
Guaranteed hours are specified in the employment agreement.
The provision relates to an employee’s availability in addition to those guaranteed hours.
The employer has genuine reasons, based on reasonable grounds, for including the availability provision and for the number of hours of availability required. These features must be prescribed in the applicable availability clause in the employee’s employment agreement.
The employment agreement provides for ‘reasonable compensation’ for the employee making themselves available, irrespective of whether the employee is actually called into work.
If any requirement is missing, the availability provision is not enforceable. An employee who refuses to work additional hours in these circumstances cannot be penalised or treated adversely – this is expressly written into the legislation.
What Does ‘Reasonable Compensation’ Mean?
Compensation is not the same as ordinary pay for hours worked. It must be a separate and additional payment for the fact that the employee is required to be available outside their guaranteed hours to perform work, if required to by the employer.
For salaried employees, this can be agreed as part of total remuneration, provided it clearly covers availability. However, the law on availability and salaried arrangements is not well-tested in case law, so caution applies. There is the potential of becoming a test case, e.g. if an employee is remunerated via a modest salary but required to perform significant overtime beyond what their salary reasonably compensates them for.
For waged employees, a separate allowance or availability payment is required and must reasonably compensate the employee for any time they are required to be available to work for the employer (irrespective of whether the employee works or not). The law does not expressly state that time spent being available must be paid at the applicable minimum wage rate, so it is open to the parties to negotiate what is reasonable compensation depending on the required level of availability. Usually, this is best place for a separate and identifiable payment, which must reasonably compensate the employee for any period they are required to available for the employer.
The Courts have made it clear that an employee’s time is a commodity, so even if an employee is not called into work during a period of availability – the mere fact that the employer requires their availability will trigger legal obligations in terms of the law on this point, including payment.
Case Law Snapshot – What Recent Decisions Tell Employers
Chief of the New Zealand Defence Force v Williams [2025] NZEmpC 16
NZDF had an agreement requiring managers to be available beyond their guaranteed hours. The Court found:
Their hours of work clause was an availability provision because they were expected to be available to work outside core hours.
There was no evidence that reasonable compensation had been agreed for this availability.
The Court ordered the parties to negotiate appropriate compensation, with a return to Court if they could not agree since NZDF’s arrangement was non-compliant with the law on availability.
Employer Takeaway: This case confirms that requiring on-call availability without clear compensation terms will not meet section 67D requirements.
AXE v QVM [2025] NZERA 689
In this case, an employer’s on-call roster was challenged because there was no availability provision that complied with section 67D. The employee’s employment agreement specified 40 hours of work per week but had no provisions for dealing with the requirement of employees to perform additional work.
In practice, the employer expected employees to work 50 hours per week and required a roster to make employees available if another employee was unable to work. No payment was provided for employees for their corresponding availability under the employer’s roster.
A disagreement arose between the employee and the employer after the employee tried to discuss their concerns, including their availability required under the employer’s roster. This resulted in the employee raising a claim for unjustified disadvantage and constructive dismissal.
The Authority ruled in favour of the employee’s personal grievance claims awarding him compensation of a stand-by payment of $40 per day for the periods when they were rostered to be on-call, along with over $26,000 in financial remedies for their constructive dismissal claim.
Employer Takeaway: Even where a roster exists, if an employee is required to be available to work outside or in addition to their usual hours of work, then if the arrangement it is not supported by an availability provision, successful challenges may occur. Further, not complying with the law regarding availability may lead to disputes with employees who are aware of their legal rights regarding this area of employment law that can result in additional legal claims.
Stewart v AFFCO New Zealand Limited [2022] NZEmpC 200
The Court found an availability clause did not comply with section 67D because it lacked payment of compensation. The employer’s later offer of minimal wage increases as compensation for the employee’s required availability was not accepted by the employee and challenged.
The Court found the employee was disadvantaged by the inclusion of a non-compliant availability provision and that no consideration was provided for the employee’s availability. The parties were directed to resolve the matter of compensation between themselves or return to the Court and have a decision imposed on them.
Employer Takeaway: Ensure compliance with section 67D of the Employment Relations Act 2000, including having a compliant availability clause and reasonably compensating an employee via a separate and identifiable payment for any period they are required to be available for work.
Key Employer Considerations and Takeaways
Compliant Clause: Ensure employment agreements clearly set out guaranteed hours of work and any availability requirements. Compliant drafting and understanding of the law regarding this area is key.
Genuine Grounds: Have reasonable business reasons for requiring availability (e.g. operational needs) and record them in the employment agreement. The employer’s reason(s) for requiring availability must be specified and meet section 67D requirements.
Compensation: Agree on and document ‘reasonable compensation’ for any period of availability before relying on the clause. Ensure the payment is reasonable based on any period of required availability.
Refusal Rights: Be aware that employees can refuse additional work if the provision is non-compliant and must not be treated adversely for refusing additional work outside their usual contractual hours of work where there is no legally compliant availability clause in their employment agreement.
Compliance Warning
Availability law under section 67D is not simply about requiring employees to work extra hours. It requires a compliant contractual provision, genuine business justification, and reasonable compensation for time spent being available.
Failure to meet these criteria can lead to successful legal claims and compensation orders being imposed on the employer. Employers should review their employment agreements and practices to ensure compliance and seek professional advice if there is uncertainty.
The complexities regarding this area of employment law can be avoided by an employer by simply not requiring an employee’s availability to work additional hours. However, this means that an employee is not obligated to perform additional work for the employer, so if an employee declines an offer to work extra hours, or overtime, then they are legally entitled to do without any adverse treatment in response by the employer.
This article is provided for general information only and does not replace professional advice. Employers should seek advice specific to their circumstances from Employer Pro if in doubt on their legal obligations associated with the law on ‘availability’. Employer Pro has a range of employer focused resources and services available through our competitive Employer Protection Packages.
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