What is reasonable overtime?

In this age of skill shortage and labour issues employers are asking their employees to work much longer hours than a full-time (or other) employee should reasonably doing over the 38 hours per-week provided for as maximum hours under the Fair Work Act. Employees can be asked to work “reasonable additional hours” under some circumstances. What are they exactly?

A recent Federal Court decision has provided guidance on reasonable additional hours of work finding that a migrant worker being required to work 50 hours per week was unreasonable.

In Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512 it was held that Sydney’s largest meat wholesaler, Dick Stone Pty Ltd, was found to have breached sections 62 and 125 of the Fair Work Act 2009 (Cth), in addition to various clauses of the Meat Industry Award 2010, for unreasonably requiring its employee to work in excess of 38 hours.

Section 62 of the Fair Work Act 2009 (Cth) says that an employer must not request or require the weekly hours of a full-time employee to exceed 38 hours, unless the additional hours are reasonable.

There are several considerations determining the reasonable nature of additional hours. As per section 62(2) Act, the following must be considered:

  • 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; and
  • any other relevant matter.

In 2016, the meat wholesaler employed a migrant, who had arrived from Ghana just 3 weeks prior. Upon the commencement of his employment, the employee was provided with documentation including a ‘employment form’ & ‘employment commencement pack’ (Employment Contract).

The Employment Contract distinguished the employee’s ‘ordinary hours’ as 50 hours per week, but failed to refer to overtime, or mention the relevant award.

The employer argued that while the employee did not receive traditional overtime payments for the additional hours he worked per week, he received a ‘blended rate’ which incorporated overtime. Not the strongest of arguments I would have thought.

The employee said that he was simply instructed to work from 2:00am to 11:30am Monday to Friday, and from 2:00am to 7:00am on Saturdays. He described the work hours as ‘very draining and tiring’. Emphasising his vulnerable situation of only living in Australia for a mere few weeks and having no knowledge of Australian law or employee rights at the time he insisted that, if he were given a choice, he would not have chosen to work those hours.

Justice Katzmann highlighted there were several of deficiencies in the Employment Contract particularly given that none of the documents mentioned what the employee would be remunerated. Ultimately, although a 50-hour week “aligned with Dick Stone’s business needs”, Justice Katzmann found that this did not necessarily mean the additional hours were reasonable. The worker was not given a choice.

In considering the factors under section 62(2) of the Fair Work Act 2009 (Cth), including the work health and safety risks associated with long shifts in a role where an employee was to use knives, Justice Katzmann held that it was unreasonable to require the employee to perform 12 extra hours per week.

Lessons

This case highlighted that notwithstanding employees freely agreeing to an employment contract which establishes a requirement to work additional hours, this will not deem those additional hours to be reasonable in each individual worker’s case. The legislation sets out the criteria to be me.

Overtime cannot be pre-agreed. It is a day-by-day assessment. So, even if an employee says yes to overtime on one day, they can say no on another. There should never be an expectation that overtime can be performed.

Likewise, it is an individual decision for each employee. Groups or sections cannot be forced to work overtime, and nor should an employee be guilted into it by the group.

Carefully balance the business needs, against the employees’ additional hours. Yes, you may need additional hours performed but ultimately an employee can say no based on family responsibilities, safety and whether they will be paid or not.


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