Minimum hours per week: Are waged employees entitled to be paid for hours they have not worked?
Many employment agreements for waged employees include a provision for minimum hours of work per week. However, is an employer required to pay an employee for the minimum hours when the employer provides the employee fewer than the minimum hours agreed in the employment agreement? A recent Employment Court case Happy Belly Production Limited v Harry Dawson[1] considered this question.
It is a requirement in New Zealand for every employee to have a written employment agreement that includes, among other things, either the agreed hours of work as set out in section 67C of the Employment Relations Act 2000, or, if no specific hours are agreed, information about the arrangements for when the employee is expected to work.
Section 67C(2) confirms that the “hours of work” to be specified in an employment agreement include any or all of the following:
- the number of guaranteed hours of work;
- the days of the week on which work is to be performed;
- the start and finish times of work;
- any flexibility in the matters referred to in (b) or (c).
Mr Dawson was employed as an acting duty manager in a bar and restaurant owned and operated by the plaintiff company, Happy Belly Production Limited (Happy Belly Production). Mr Dawson was a waged employee, and his employment agreement between the parties dealt with hours of work as follows:
Hours of work – As a full-time employee, you agree to work a minimum of 40 hours per week to discharge your duties. However, due to the nature of our business, your hours of work will be in accordance with our roster schedule which is decided from time to time.
He claimed that he had not been paid for the minimum contracted hours of 40 hours of work a week in accordance with the terms of his employment agreement. As such, he pursued a grievance in the Employment Relations Authority (ERA) claiming Happy Belly Production was required to pay him wages in arrears for any weeks that he was available to work and had been paid for less than 40 hours.
Happy Belly Production’s position was that Mr Dawson was a full time employee and as a full time employee, he was guaranteed a minimum of 32 hours per week, but he was offered an opportunity to work “up to” 40 hours per week.
The ERA concluded that Mr Dawson had not been paid in accordance with his contractual entitlements and ordered the company to pay him $1,726.64 by way of unpaid hours, interest on that amount, and reimbursement of the Authority lodgement fee.[2] Happy Belly Production challenged this decision in the Employment Court.
In interpreting what was agreed under Mr Dawson’s employment agreement, Employment Court Chief Judge Inglis summarised the well-established framework for interpreting an employment agreement:[3]
The approach is objective. The aim is to ascertain the meaning which the agreement would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the agreement. This objective meaning is taken to be that which the parties intended. While the meaning of a clause in an agreement may appear clear, meaning is informed by context. A provisional conclusion as to meaning is to be cross-checked against the context provided by the agreement as a whole, and any relevant background.
The Employment Court took a view that the express words in the agreement to work “a minimum” of “40 hours per week” clearly connotes a baseline of hours. The Court concluded:[4]
The natural and ordinary reading of the clause is that Mr Dawson would be rostered on for at least 40 hours per week and would be paid for that time. The natural and ordinary meaning points squarely away from the interpretation advanced by the company
The Employment Court also agreed with the ERA’s view that, in light of the express wording, paying fewer than 40 hours would be inconsistent with the common law principle obliging an employer to pay a worker for their agreed hours of work provided the worker was ready, willing and able to work those hours.[5]
As such, the Employment Court upheld the ERA’s decision and considered that Mr Dawson had been underpaid for weeks where he worked less than 40 hours per week but had been ready, willing and able to work a minimum of 40 hours.
This case is a useful reminder of the pitfalls of minimum hours of work agreed in the employment agreement. When an employee is ready, willing and able to work, they are entitled to be paid for their agreed minimum/ guaranteed hours of work.
To avoid the risks of similar wages, it is important for employers to ensure that the agreed hours of work in an employee’s employment agreement accurately reflect the intentions and expectations of the parties. However, this does not preclude the parties from mutually agreeing to fewer hours of work.
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[1] Happy Belly Production Ltd v Dawson [2025] NZEmpC 92.
[2] Dawson v Happy Belly Production Ltd [2024] NZERA 635.
[3] Happy Belly Production Ltd v Dawson [2025] at [6].
[4] At [14].
[5] The ERA has cited the cases Gate Gourmet New Zealand Ltd v Sandhu [2020] NZEmpC 237, [2020] ERNZ 561; and Mana Coach Services Ltd v New Zealand Tramways and Public Transport Employees Union Inc [2015] NZEmpC 44, [2015] ERNZ 452.
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