McDonalds Staff Not "Available"

In April 2016, the Government amended the Employment Relations Act to get rid of “zero hour” contracts – the sort of contracts that required the employee to be available for work, but did not obligate the employer to offer any guaranteed hours. The first application to test “availability” has been heard in the Employment Court by a full bench of 3 judges and the case provides some guidance about what availability isn’t. 

Applications with the Court were lodged by two workers (Doran and Fraser) who are employed in two different McDonalds restaurants. The workers were represented by E tū Union. 

Background 

Prior to commencing employment, the employee would fill in a chart to indicate their availability to work. 

Mr Fraser agreed to minimum hours of 16 hours per week, and Ms Doran agreed to minimum hours of 20 per week. In the chart setting out their agreed availability to be rostered, they each inserted the times for each day of the week when they could start and finish. In Mr Fraser's case, he indicated 24-hour availability to accept rostered duties Monday to Saturday and 7 am Sunday to 1 am Monday. Ms Doran indicated narrower time-frames of availability to accept rostered shifts. 

The Individual Employment Agreement (IEA) set out a guaranteed number of hours of work and stated that where additional hours of work were offered, they did not have to be accepted by the employee. The offer to the employee also contained the agreement that the employee would be rostered according to the employee's availability. 

E tū argued that the employees should be paid an availability allowance of $5.00 per hour for the hours they had indicated they were available to work and then not rostered to work. 

The Court’s decision 

The Court determined there was no availability provision in the IEAs and one was not required. 

This is because the employees, when applying for a position, indicated when they could be available to work.  Shifts were then rostered only within these times. The IEAs provided for guaranteed hours within the periods of pre-indicated availability (as indicated by the employee not the employer) and any extra hours to be worked by mutual agreement. The Court noted this approach worked well for not only the employer but also for the employees, many of whom had a maximum hours threshold due to studying or work visas. 

It is significant in the context of this case that the availability times are referred to as “agreed availability”. This confirms that the employees are nominating availability for themselves rather than being asked to meet the employer's unilaterally stated expectations as to when the employees must be available. 

The Court said agreed availability met the mutuality of obligations for both parties – something the Employment Standards Legislation Bill set out to ensure. 

The Court also said that while the existence of an availability provision requires guaranteed hours, a guarantee of hours in itself does not necessarily require an availability provision. 

This is a complex issue and if your business operates rosters; is a 24/7 operation; has workers that are required to be “on-call” or available outside their normal hours, please contact one of the team to talk through your current arrangements to ensure your business isn’t at risk of breaching current legislation.