Under the Fair Work Act 2009, an employer must not require employees to work more than 38 hours per week or their rostered hours (whichever is greater) unless the additional hours are ‘reasonable’. If the additional hours are unreasonable, an employee may refuse to work them. This raises the question “what are ‘reasonable’ additional hours?”
In determining whether additional hours are reasonable (or unreasonable), the following factors must be taken into account:
- any risk to employee health and safety from working the additional hours;
- the employee’s personal circumstances, including family responsibilities;
- the needs of the workplace or enterprise in which the employee is employed;
- whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;
- any notice given by the employer of any request or requirement to work the additional hours;
- any notice given by the employee of his or her intention to refuse to work the additional hours;
- the usual patterns of work in the industry, or the part of an industry, in which the employee works;
- the nature of the employee’s role, and the employee’s level of responsibility;
- whether the additional hours are in accordance with averaging terms included under section 63 in a modern award or enterprise agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee under section 64;
- any other relevant matter.
In the recent case of Australasian Meat Industry v Dick Stone Pty Ltd, Dick Stone Pty Ltd employed an immigrant employee for 50 hours per week and made no mention of overtime rates under the relevant award. These hours were found to be unreasonable for various reasons including risks to safety from working with knives and other machinery while fatigued despite no substantial injuries occurring; the increased risk of injuries was sufficient.
Dick Stone argued that although the pay slips did not record payments for overtime, since his pay rate was greater than the award rates including overtime (and it had chosen to pay him that way to cover Award entitlements) it was able to set off the amount against the Award rates. This argument was unsuccessful because of contractual principals which mean an employer cannot later reallocate an amount agreed to be paid to an employee in respect of one matter (e.g. ordinary hours of work) to meet a claim in respect of another matter (e.g. overtime).
As a result, Dick Stone Pty Ltd was ordered to pay $93,000 after it was found to have contravened the Fair Work Act. This case is a good reminder that just paying above the Award rate will not necessarily save a business from claims – there needs to be a clear agreement as to what the payments cover.
If you need help updating your employment contracts (or have any other employment law questions), please contact Aspen ([email protected]) or Matthew ([email protected]) or call our office on (07) 5479 2457.
Disclaimer: please note that this article is provided for general information purposes only and does not constitute legal advice. Australian law is complex and ever changing, and you should always obtain advice specific to your circumstances from a qualified legal practitioner. The value of penalty units also changes from time to time. If you require advice, please contact us on (07) 5479 2457 or at [email protected] to see how we can help.
 Fair Work Act 2009 (Cth) s 62(3).