That's the way to go. On-call is bearable if you get paid for it. As a contractor who charged by the hour I was perfectly fine with sitting in useless meetings or fixing things at night that weren't even my fault. Doing this without extra compensation is just not OK.

And of course it should be that way: if they want your time (you not being able to do other jobs, you not being able to relax, etc) they should pay for it.

Forcing them to think in your hours can also have the nice side effect that they get their communications in order.