Wrapping up the year

As businesses gear up for the busy Christmas and summer period, managing rosters and staffing levels becomes a balancing act.

Flexibility is essential for employers who experience unpredictable demand, particularly those in industries where operations remain open and busy throughout the Christmas period. For example, in hospitality, retail, events and tourism.

It can be tricky to predict in those industries how many people will walk through the door or how busy a shift will be. Retaining a degree of flexibility in how hours are allocated therefore makes sense, but it must be done within the legal framework.

Getting it right starts with the employment agreement, which must set out the agreed hours of work. Employees are entitled to know what hours they will be required to work. Where no hours of work are agreed, employment agreements must provide an indication of the arrangements relating to the times the employee is to work.

For salaried employees working the traditional 8 - 5, Monday to Friday, this is usually straightforward. However, that model does not suit every business. As above, many employers rely on rosters, with hours fluctuating week to week.

In practice, employees with fluctuating hours are still to be offering employees a guaranteed number of hours of work each week. These hours are generally understood to be the baseline that employees can rely on being paid for, regardless of whether there is sufficient work available for them.

Availability Provisions

Beyond guaranteed hours, an employer’s need for flexibility cannot unreasonably intrude on an employee’s private life or their ability to plan around their working arrangements. For that reason, an employee can only be required to make themselves available for additional work if a valid availability provision is included in their employment agreement.

A valid availability provision requires employers to meet certain conditions, including having genuine reasons based on reasonable grounds for both the inclusion of the provision and the number of hours specified. The provision must also include payment of reasonable compensation, and that is because employers are expected to pay for the privilege of having employees remain available for a period of time.

Availability compensation is paid to employees purely for remaining available, should further work become available – i.e., payment for availability is distinct from hours actually worked. It is helpful to distinguish between hours an employer can require an employee to work, and hours that may be offered but which the employee is free to accept or decline.

Employers should design hours of work clauses and availability provisions carefully, ensuring they are realistic for the business, while also minimising situations where there is a wide requirement for employees to keep themselves available to work beyond their guaranteed hours.

Done properly, availability clauses can give businesses the flexibility they need during unpredictable periods like Christmas, without crossing into the territory of unlawful “zero-hour” arrangements. It is also important to note that just because an employee is on a salary does not mean that their salary sufficiently compensates them for their availability.

Practical Guidance

While each situation turns on its own facts, there are a number of practical steps that employers can take to manage fluctuating hours and the payment of availability compensation. Taking rostered employees as an example, here are some approaches to consider:

1. Publish rosters in advance – aim to give even more notice than usual in the silly season, when employees are more likely to have competing family or travel commitments.

2. Ask new employees to identify the days or times they would generally be available to be rostered.

3. Provide regular shift patterns wherever possible.

4. If backfilling shifts at short notice is unavoidable, nominate a single employee to be available and pay the appropriate compensation.

5. Check whether employees would like to be offered hours on short notice. Sometimes people are happy to pick up extra shifts. The key here is that those employees must not be required to be available for any work available and must be free to decline it.

6. Don’t forget other obligations. In the rush to fill rosters, it’s easy to overlook wider responsibilities such as health and safety. Make sure employees are given sufficient rest breaks and time between shifts, especially during busy periods when fatigue can become a real risk.

The lead up to Christmas brings all sorts of employment challenges, from close downs to seasonal hiring, public holidays, managing leave and allocating and cancelling shifts. Our specialist employment team are here to assist, please do not hesitate to reach out.