On 1 April 2016 a raft of new employment laws came into force in New Zealand. Several restrictions have been introduced effectively banning zero-hour contracts. These changes were introduced following union pressure and significant media coverage over the use of zero-hour contracts, particularly in the fast food industry.
Employers can no longer fail to guarantee hours of work but still require employees to make themselves available to work without compensating them. Casual employment arrangements, where the employee can choose whether to accept work offered by the employer, are not affected by these changes.
Now, only employment agreements which guarantee some hours of work may include an "availability provision" requiring the employee to be available for additional hours of work. An availability provision may only be included if the employer has genuine reasons based on reasonable grounds for including it and reasonable compensation is payable to the employee for making himself or herself available for work. Employees will not be required to work more than their guaranteed hours if their employment agreement does not include an availability provision that meets these requirements.
There is not yet any specific guidance on what level of compensation could be considered reasonable. While various factors must be considered when determining compensation, this issue will need to be tested before New Zealand's courts to provide more certainty.
It has been suggested that employers could still include an availability provision by only offering an employee one or two hours of work per week. However, an employer needs genuine reasons for justifying an availability provision. In most circumstances we consider it would be difficult to rationalise guaranteeing a nominal number of hours of work per week while still requiring an employee to be available to work significantly more hours.
Other measures have also been introduced to support these new restrictions on zero-hour contracts, including banning the cancellation of shifts without reasonable notice or reasonable compensation, and prohibiting unreasonable restrictions on employees' undertaking secondary employment.
See this briefing for more details on these changes.
Charlene Sell, Senior Associate
Wynn Williams and Mills & Reeve are both members of SCG Legal, a worldwide network of leading law firms.