This is the first case in which section 67D of the Employment Relations Act (regarding availability provisions) has been considered by the Employment Court.
The case concerned two Mc Donald’s employees who sought a declaration that their individual employment agreements contained an availability clause in terms of the new provisions in the Act, and that the availability clause was not in accordance with the Act, in that it did not provide for reasonable compensation for employee availability.
The Court set out the relevant sections in the Act and noted that an availability provision is a provision in an employment agreement under which an employee’s performance of work is conditional on an employer making work available to that employee, and under which the employee is required to be available to accept any such work.
Context to case
- Mc Donald’s hires a large number of employees to meet the demands in operating their restaurants
- Most of the employees are young and transitory, and many work part time hours
- To maintain flexibility, Mc Donald’s introduced a system where new employees were required to indicate their “agreed availability”, i.e. times they were available to work
- Mc Donald’s give employees the security of a minimum number of hours (i.e. guaranteed hours) and roster them to work at least their guaranteed hours within their periods of availability
The employees’ guaranteed hours are calculated on a quarterly basis and set at 80% of the average of the previous quarter. For example, if an employee worked an average of 20 hours in a quarter, their guaranteed hours for the next quarter would be 16 hours.
The clause in the employment agreements
From time to time you may be requested to work hours in addition to [your] work schedule.
Following the posting of your schedule by Tuesday, if your schedule includes hours over and above your security of hours number, you have 24 hours from the posting of your schedule to advise you are not able to work these additional hours. If you are unable to work these additional hours, we may either reduce these additional hours or reissue your schedule at our discretion. We will continue to ensure that your security of hours conditions are met and that all shifts offered meet with your pre-agreed availability.
The principal issue in the case
- Were the employees required to be available for the additional rostered hours beyond their guaranteed hours?
- If they were required to be available then the employment agreement would need to have an availability provision that complies with s67D.
The employees position
The Plaintiffs were saying that Mc Donald’s had created a right for itself to require an employee to accept any work scheduled and that the rostering scheme forced workers to take on employment beyond guaranteed hours.
Council for the plaintiff submitted that employees had to write down their availability and their contracts provided for high availability and low hours, which was a disproportionate advantage to the employer. However, the defendants argued that employees write down when they are available and are rostered between those times of availability. The hours of work and additional hours are not imposed on employees through a unilateral decision made by the employer. If it was, then an availability provision would be required.
Employees have flexibility, and can swap shifts etc with other employees. It was established by witness evidence that when employees were offered extra work they could turn it down without being penalised. There was a mutuality of obligations which is what this section wanted to achieve after zero hour contracts were banned (flexibility being a two-way street).
Employees argued that the provisions were unlawful because it meant that they were required to be available to accept any work the employer made available that was additional to their guaranteed hours because the words “requested” in standard terms means contractually “required”.
Counsel for plaintiffs also argued that for the employer to “re-issue your schedule at our discretion” means that any variation requested by the employee because they are unable to work will be declined and the hours will be given to another employee. This forces employees to take on employment beyond their guaranteed hours and therefore suits the employer’s needs without making payments to the employees for their availability.
The employees also claimed they were compelled to work additional hours because of the operational provisions, which provided that employees’ guaranteed hours would be 80% of their average hours worked in the previous quarter. The employees argued they would need to work 20% more than their guaranteed hours in order to keep their guaranteed hours the same for the next quarter, which introduced an element of compulsion.
What did the court say?
“You may be requested”
The Court found that employees who were offered extra work above their stated minimum hours were not penalised if they turned down extra work.
The Court found that the word requested in the clause meant that employees could be asked but not compelled to be available for the hours rostered beyond their guaranteed minimum hours (compared with the word “required”).
“Reduce those additional hours”
The Courts found that this meant where the employees were unable to work the additional hours the employer could reduce those additional hours which were over and above the guaranteed minimum hours.
The 24-hour notice period for rejecting additional hours was not unreasonable as the employer needs to arrange alternative employees to perform the work.
The arrangement where employees guaranteed hours would be 80% of their average hours for the previous quarter may incentivise employees to work additional hours however it did not require them to work additional hours.
The Court’s conclusion
The Court concluded that under these circumstances, the employment agreements did not include an availability provision and declined to make the declaration sought by the Plaintiffs.
Lessons from this case
This serves as a reminder that employers need to understand an employee’s right to turn down any hours of work that fall outside their guaranteed hours – unless the employee’s employment agreement contains an availability provision that meet the s67D requirements.
This case shows that an employer may ask an employee to work additional hours from time to time and may even incentivise the employee to accept those additional hours. However, employers must not treat employees adversely if they turn down additional work offered.
Employers who operate irregular and variable rostering systems may wish to consider whether there is a fair balance in the way their system operates. In this case, the Court acknowledged mutual benefit to both employer and employee in flexible rostering system.
The Court made a clear distinction between the words “requested” and “required”. Employers should be aware of the importance of wording in employment agreements. Employment agreements that require additional hours of work must meet the stringent availability provision requirements including compensation for the employee’s availability to work those additional hours.