This recent Employment Court (‘the Court’) case considered the contractual provisions of three employee’s employment agreements who were employed by the New Zealand Defence Force (‘NZDF’). Their employment agreements required the employees to work such hours as ‘reasonably necessary’ to meet the operational requirements of the NZDF, including accepting overtime outside of their core, or minimum hours of work.
The Court found that the employees were required to accept overtime when required by their employer – and they were required to be available 24/7, unless directed otherwise. This arrangement meant that each of the employees’ performance of work was conditional on the employer making that work available to them. The Court was of the view that this amounted to an ‘availability’ scenario for the purposes of the relevant provision under the Employment Relations Act 2000 (‘the Act’).
The Court ruled that the employment agreements contained an ‘availability provision’ as defined by section 67D of the Act and the arrangements did not provide for the payment of ‘reasonable compensation’ for each of the employee’s required availability.
The key issue being that each of the employees were required to be available and on-call 24/7 to perform work in addition to their guaranteed hours. However, they were not given any additional compensation outside their usual remuneration for this. Specifically, each of the employees were not provided with additional compensation for their ‘availability’ in accordance with the relevant legal obligations contained under section 67D of the Act.
The Court directed the parties to meet as soon as practicable to agree on the quantum of any ‘reasonable compensation’, which should have been paid to each of the employees in accordance with the Act. This was because of NZDF’s contractual arrangements, which were found to be an ‘availability provision’ for the purposes of the Act and therefore necessitated ‘reasonable compensation’ be paid to each of the employees for their required ‘availability’ to remedy the issue.
The Court further noted, that if the parties were unable to agree on the quantum to be paid, then they have the option of returning to the Court for the value to be determined.
The Chief of the New Zealand Defence Force v Williams [2025] NZEmpC 16
Key Takeaway for Employers: The Courts have made it clear in legal judgments that concern the issue of
‘availability’ that an employee’s time is a commodity, which has value.
Where an employer encroaches on the employee’s private life, and their private time with arrangements that require the employee to accept overtime, or additional work outside of their guaranteed hours (as opposed to it being voluntary, and the employee being free to decline to work additional hours without any adverse consequences for their employment), then the employer’s arrangement must comply with the requirements relating to ‘availability’ under the Act.
These legal requirements are sourced under section 67D of the Act, including having a legally compliant ‘availability provision’ and paying the employee ‘reasonable compensation’ for any period they are required to be available for the employer.
Factors that inform ‘reasonable compensation’ include:
- the number of hours for which the employee is required to be available:
- the proportion of the hours in (a) above in relation to the agreed hours of work:
- the nature of any restrictions resulting from the availability provision:
- the rate of payment under the employment agreement for the work for which the employee is available:
- if the employee is remunerated by way of salary, the amount of the salary.
Articles and information on this particular topic can be found via EAL’s Newsletters via the ‘quick search’ function on our
Employers Toolbox. There are also practical tools and guidance commentary within EAL’s Employment Agreement Builder to help employers put together compliant availability contractual provisions, and to aid understanding their complexity & key legal considerations.
Employers should monitor and check any overtime and on-call arrangements for compliance with ‘availability law’ considerations. If in doubt, phone EAL’s Employer Helpline on 0800 15 8000.