What does a Guaranteed Hours Contract really mean?

If your employment agreement says you have guaranteed hours, it sounds simple.  You’ll get a minimum number of hours and pay each week. But in practice, things can get confusing, especially when hours fluctuate, shifts are cancelled, or you regularly work more than what’s written down.

What is a guaranteed hours contract?

A guaranteed hours clause is a part of your employment agreement that sets the minimum number of hours your employer must provide and pay you for.

For example,  if your contract says ‘the employee is guaranteed 20 hours per week’, then you must be paid for at least 20 hours each week, even if the employer doesn’t give you that work.  

This is a key protection under New Zealand employment law.  The legal foundation comes from the Employment Relations Act 2000, which requires employment agreements to clearly state agreed hours of work.

Guaranteed hours are designed to give you income certainty, prevent employers from offering unstable or unpredictable work, and ensure fairness in scheduling.

Guaranteed hours can appear in different types of agreements.

• Full-time agreements which are typically 30 to 40 hours per week guaranteed, with regular, predictable schedules.  

• Part-time agreements which include a lower number of guaranteed hours (e.g. 10 - 25 hours/week), often with fixed days or flexible shifts.  For example “Minimum 15 hours per week, rostered across 7 days.”

• Variable hours agreements include a guaranteed minimum (e.g. 20 hours) with additional hours depending on demand.  These contracts are common in retail, hospitality, and healthcare.

Guaranteed hours should not appear in casual agreements where employees work only when offered shifts. Employees should not be offered zero-hours contracts which offer no guaranteed hours as they require availability without compensation.  Under NZ law, these arrangements are effectively banned unless there are genuine availability provisions, and you are compensated for being available.  

What happens if my  employer does not provide my  guaranteed hours?

If your employer does not provide your guaranteed hours, you should still be paid for those hours.  When your contract guarantees 20 hours, the employer has agreed to provide that work and, if they don’t, it’s their risk, not yours.  

Under the Employment Relations Act 2000 employment agreements must reflect real working arrangements and employers must act in good faith.  Failing to provide guaranteed hours can amount to breach of contract and potential wage arrears.  

There are some exceptions to this.  An employer might avoid paying guaranteed hours if you agreed to take leave, there is a lawful business shutdown (e.g. Christmas closedown), or you were unavailable.  But generally, they can’t just reduce your hours because it’s quiet.

If your employer consistently fails to provide minimum hours this may be a serious breach of your employment agreement, and it may justify raising a formal complaint or grievance.  

What if I consistently work more than my  guaranteed hours?

This is the opposite problem, and it’s also very common.  For example, if your contract says 20 hours and you regularly work 35 hours, over time, your actual working pattern may override the written contract.  The law recognises the real nature of the relationship, not just what’s written down.  

So, if you consistently work more hours those extra hours may become your new normal and you could argue your guaranteed hours should increase.  This matters for sick leave entitlements, annual leave calculations, and redundancy or notice periods.  

Employers should update your agreement if hours change permanently to reflect true working arrangements.  Their failure to do this may breach good faith obligations and record-keeping requirements.  

What should I do if my guaranteed hours are not met?

If your employer isn’t meeting their obligations, you have options.  

Step 1: Check your agreement.  Look for a minimum hours clause, any wording around flexibility wording, and any availability provisions.  

Step 2: Raise it informally.  Start with a conversation with your employer, pointing out the guaranteed hours and asking for clarification.  Keep records of your hours worked, rosters and pay slips.  

Step 3: Raise a formal issue.  If things don’t improve, you can raise a formal complaint internally, outlining the breach and asking for it to be resolved.  

Step 4: Raise a personal grievance.  If the issue continues, you may be able to raise a grievance under the Employment Relations Act 2000.  Grounds may include unjustified disadvantage or breach of contract.  

Step 5: Seek advice.  You can contact Employment New Zealand, your union (if you are a member), or an employment advocate.  They can help to escalate your grievance to MBIE or the Employment Relations Authority.   If your employer is found to be in breach, you may be entitled to:

• Back pay (for missed guaranteed hours),

• Compensation,

• Contract corrections, and/or

• Penalties against the employer

FAQs

Can my employer reduce my guaranteed hours?

Not without your agreement.  Changes to hours must be negotiated and recorded in writing.  

What if my contract says “up to 40 hours”?

This is not a guarantee.  It usually means no minimum hours but a maximum cap on weekly hours.  

Can I refuse extra hours above my guarantee?

Yes, unless your contract requires flexibility, or you’ve agreed to additional hours.  

What if I’m called casual but work regular hours?

You may actually be a permanent employee depending on regularity and expectation of work.  

Do I get paid if shifts are cancelled?

Yes, If those shifts fall within your guaranteed hours.  

What if I agreed to fewer hours temporarily?

That may change your entitlement, depending on your agreement, but temporary changes shouldn’t become permanent without clarity.

Guaranteed hours are meant to provide stability, but they only work if both sides follow the agreement.  If your employer isn’t meeting your guaranteed hours it’s not just bad luck, it may be a legal issue.  On the flip side, if you’re regularly working more hours than agreed, that also matters, and could change your rights over time.  If you are concerned that your employer is not providing you with the hours you are entitled to, get in touch for a free consultation.  MathewsWalker.co.nz | 0800 612 355

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