Availability provisions

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While the introduction of tighter rules around availability provisions and zero hours contracts is not new, the first decision to consider this issue has provided some interesting guidance around how availability can be approached.

An “availability provision” is a clause in an employment agreement to the effect that: whether an employee works or not is conditional on the employer making work available; and the employee is required to be available to accept work. These provisions have typically been used in sectors where a degree of flexibility is required in rostering, such as the retail sector.

Since the new rules came into effect in 2016, employers making use of availability provisions must provide guaranteed hours and ‘reasonable compensation’ in the employment agreement, for the employee being available.

The case of Fraser v McDonald’s Restaurants (NZ) Limited [2017] was the first case to assess whether availability provision rules were engaged or infringed.

Two Auckland McDonald’s employees sought a declaration that their individual employment agreements contained availability provisions that were not in accordance with statutory requirements. McDonald’s was rostering employees based on their agreed availability, for a set number of guaranteed hours which was calculated on a quarterly basis and set at 80% of the average from the previous quarter. Additional hours were offered on occasion to employees and they were given 24 hours to decline these additional hours if they were no longer available. The issue for the court was whether the employees were required to be available during the additional hours, and if they were, whether it was necessary to include an availability provision in their contracts.

The Employment Court concluded that a request to work hours in addition to an employee’s work schedule was not a requirement, and such a request could be rejected without penalty. This meant it operated lawfully and was not an availability provision.

This case provides a useful example of how employers could operate a rostering systems which provides an element of flexibility, within the rules applying to availability provisions.


Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

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