Posted on: May 02, 2017

In Sanderson v South Canterbury District Health Board [2017] NZERA Christchurch 37, the Employment Relations Authority has determined that being “on-call” constitutes “work”, which means the Minimum Wage Act will apply.  As such, these employees must be paid at a rate no less than the minimum wage for every hour that they are on-call.

This is a very important determination and is the first time that being on-call has been considered work in our employment jurisdiction.  Until now, case law in New Zealand regarding what constitutes work under the Minimum Wage Act has developed by what is known as the “sleepover cases”. These are cases where an employee stays overnight on the employer’s premises and remains available and responsible for duties, such as providing care for residents.

What constitutes work under section 6 of the Minimum Wage Act 1983

The factors to be considered when assessing what constitutes “work” were confirmed by the Court of Appeal in Idea Services Ltd v Dixon. [1]

 The three factors are:

  • The constraints placed on the freedom the employee would otherwise have, to do as she or he pleases;
  • The nature and extent of the responsibilities placed on the employee, and
  • The benefit to the employer of having the employee perform the role.

In Idea Services Ltd v Dixon the Court of Appeal stated:[2]
The greater the degree or extent to which each factor applied (i.e. the greater the constraints, the greater the responsibility, the greater the benefit to the employer), the more likely it was that the activity in question ought to be regarded as work….

The circumstances of this case

This determination involved six applicants who were employed as anaesthetic technicians by the South Canterbury District Health Board (“SCDHB”). The applicants were required to work on-call weekday nights and weekends, and were paid $4.04 per hour for each hour spent on-call.  In addition they were paid an overtime rate for any work performed if they were called in. If required to work while on-call, the applicants had to be able to report to work within 10 minutes of being called in.

The constraints placed on the applicants’ freedom

The applicants’ evidence was that constraints placed on their freedom because of the 10 minute reporting time were substantial and significant.  The reporting time required the applicants to be away from family for extended periods although family and friends could visit the applicants without restrictions being imposed by SCDHB. The applicants did not drink alcohol when on-call as they considered that it would not be professional and they needed to remain ready for work. The Authority accepted that they could not carry on their normal family activities or socialise in the normal way while on-call. The activities they did undertake most often were of a limited nature such as watching a DVD, television, reading or use of technology.

Because of the requirement to report within 10 minutes of being called in, the Authority considered that the time on-call is much less the applicants own in those circumstances, and therefore regarded that the constraints on the applicants’ freedom to do as they please while on call were “substantial and significant in the circumstances”.

The nature and extent of responsibilities placed on the employee

The Authority considered that the facts of this matter were different to that in Idea Services with Mr Dickson. However, what the Authority found similar, was the responsibility for the anaesthetic technicians to be alert and remain vigilant so as to be able to report within a very limited time frame if called on.  Meeting the required report time of 10 minutes ready to work is a very important responsibility in the context of the 24/7 operation of the hospital. It limits what the applicants can do during the day and if awoken from sleep then they are responsible for getting themselves ready for reporting to work, dressing and attending to ablutions within that time. Ten minutes is not an immediate response but it requires a state of readiness for response during the time spent on-call that a longer period of time would not. The call outs were unpredictable and not able to be controlled or limited.

The Authority therefore found that the nature and extent of responsibilities placed on the applicants on call to be ready for work and to report to work within 10 minutes were “significant in the circumstances”.

Benefit to the employer of having the employee assume the role in question

The Authority found that there was a benefit to SCDHB as the volume did not warrant having the theatre rostered 24/7.  Having anaesthetic technicians on-call and available to report within 10 minutes enabled an acute emergency situation to be dealt with outside of normal hours.  The Authority also found that the report time of 10 minutes was clearly important and critical. There was therefore a considerable benefit in having the anaesthetic technicians assume the on-call role on that basis.

Determination

When the Authority assessed the factors approved by the Court of Appeal in Idea Services, it determined that all three applied to a significant degree and therefore found in the circumstances of this case that the time spent on-call should be regarded as work.

It should be noted that a significant factor in this matter was the requirement that the applicants, if called on, report within 10 minutes. As a result, they were subject to greater constraints because in order to meet the report time they had to stay away from their families. While we think this determination will be clearly distinguishable from most typical on-call work arrangements, it is important that your on-call arrangements are reviewed and your risks in this area are assessed.  If you have any doubt, give us a call and we can work through these tests and apply them to the unique circumstances of your organisation.

To read the Authority’s determination click here

[1] Idea Services Ltd v Dixon [2011] NZCA 14 at [7].

[2] At [8].



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.