A frequent debate between employees and employers is whether employees are obliged to work overtime if asked, and whether they should be paid anything for being available for any overtime work.

This debate can be easily answered through an availability clause in any employment agreement.

An availability clause provides the employer with the right to ask the employee to be available to accept work outside the normal hours of work and sets out what compensation will be given to the employee for making themselves available.

This is similar to the traditional "oncall" arrangement.

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Without an availability provision, the employee only needs to be present at work for the
agreed in an employment agreement.

It is then up to the employee whether they accept any work outside of these hours.

Since the availability clause provision was introduced to the legislation in 2016 there has been some uncertainty as to whether employees need to be paid to be available to work extra hours, or whether employees are simply expected to work overtime when needed.

Now, thanks to a recent decision of the Employment Court, some light has been shed. In
considering whether employees need to be paid for their availability, the court concluded
that having employees available has an opportunity cost.

Any employee who makes themselves available to work is foregoing other opportunities e.g. secondary employment or enjoyment of their private life.

Hannah Cox from Treadwell Gordon.
Hannah Cox from Treadwell Gordon.

Employees cannot be expected to always be available to their employer, without any compensation, just because there may be an off-chance that extra work may come up.

Employees need to either have freedom outside of their agreed hours of work (for leisure or secondary employment), or, be compensated for making themselves available to their employer.

To include an availability clause in an employment agreement, the agreement needs to state the set hours of work and days the employee is expected to be working, as well as when and on what occasions the employer might need the employee to work overtime e.g. seasonal demands.

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For waged employees, the employment agreement will generally set an hourly rate which
covers the hours which the employee is required to be available.

This rate can be less than the standard hourly rate the employee is paid during working hours (as long as it is reasonable). If the employee is called in to work then the standard rate will then apply for the time worked.

Alternatively, for salaried employees the salary will generally cover the employee's hours of work and their availability periods.

This compensation is often captured in a clause stating "The employee's salary reflects compensation for the employee making themselves available". On other occasions a mixture of a salary and an availability rate are used.

An important point for employees and employers to remember is that, if an employment
agreement doesn't have a valid availability clause which provides reasonable compensation, then an employee can say "no" to any work that doesn't fall part of any guaranteed hours in their employment agreement.

An employer can also not disadvantage an employee if they turn down the work (e.g. disciplinary, offers of further work).

It also means that employees must get paid overtime for attending meetings, seminars, or any extracurricular activities that fall outside of their regular working hours. Perhaps it is time to rethink that compulsory, but unpaid, staff meeting?

Treadwell Gordon.
Treadwell Gordon.