What is ‘reasonable’ overtime?

Whether you are required or expected to work overtime will depend greatly on your job, your salary and the industry you work in — as evidenced by two recent court decisions in Australia.

Sally Rugg, a former chief of staff for Dr Monique Ryan, the independent parliamentary member for Kooyong in Victoria, lost an interlocutory application to get her job back on the basis she was terminated for working 70 hours a week. The judge found the working hours not ‘unfair’ given the nature of her position.

The parties were ordered to decide a timeline for trial and meet before March 20 for a case management hearing.

Rugg is seeking compensation and pecuniary penalties and has added serious contraventions of the Fair Work Act against the Commonwealth to her dispute.

But in the case of Samuel Boateng taking the Australian Meat Industry Employees Union to court, Justice Anna Katzmann ruled that Boateng be paid $90,000 in compensation for working 12 hours a week over his allocated 38-hour week contract.

Justice Katzmann ruled that the extra overtime was a contravention of section 62 of the Fair Work Act 2009 and that Boateng had been wrongly classified under the Meat Industry Award of 2010, resulting in a failure to pay overtime rates.

Where does that leave employers?

Determining whether someone can work overtime will be dependent upon whether they are covered by an award or not.

“This will depend upon whether an employee is covered by an award or enterprise agreement,” Robin Young, Holman Webb Lawyers, partner and team leader, said. “The instrument will determine what overtime rates apply.  The Fair Work Act prescribes maximum hours of work which for a full-time employee is 38 hours.”

Young points out that it also includes these factors in determining whether “additional hours” are reasonable, which are:

• any risk to employee health and safety
• employee's personal circumstances, including family responsibilities
• needs of the workplace
• the employee is entitled to compensation that reflects an expectation of additional hours
• any request by the employer to work additional hours
• any refusal by the employee to refuse additional hours
• usual patterns of work in the industry
• the employee's role and responsibility
• whether additional hours accord with averaging terms or an averaging arrangement
• any other relevant matter.

‘Reasonable directions’ for overtime

Further to that list comes the quandary of what employers can ask employees to do. It can’t be anything out of the ordinary constraints of work, or anything illegal.

“An employer may only require an employee to do overtime within the scope of contractual obligations, award or enterprise agreement provisions and the Fair Work Act,” Young said.

“Employees may refuse overtime if the request is unreasonable.”

Any attempt to force the employee to perform additional hours in the face of refusal “may result in internal disharmony, legal action such as unfair dismissal and general protection claims for constructive dismissal, or investigation by the Fair Work Ombudsman,” he said.

Further, an employer may give “lawful and reasonable directions” to employees when it comes to matters such as performance of specific roles or duties and locations, Young said.

“However, this must be within the scope of the terms and conditions of employment. An employer can’t unilaterally change the employment substantially such as a significant change of location or role, as this may be a repudiation or breach of contract, or constructive dismissal.”

The request from the employer has to come down to reasonableness and section 62 of the Fair Work Act describes this sufficiently.

“Most commonly, this is where health and safety is put at risk, or where the request would interfere with a personal or family responsibility,” Young said.

“It would also apply where there was no remuneration or penalty entitlement, or insufficient notice was given.”

Agreement on employee overtime

First, and foremost, there has to be an agreement between the employer and employee to do overtime and work within the confines of the employment contract.

“An employer can’t ask an employee to perform a role that would amount to a demotion or substantial change in the nature of the role for which the employee is experienced/qualified to perform,” Young said.

“And an employer can’t ask an employee to relocate to a workplace that would cause severe hardship or which may interfere with factors such as carer responsibilities, which may give rise to indirect discrimination.”

Employers also can’t ask an employee to take a pay cut or do something illegal or unsafe, he said.

“Changing a role substantially may also have the effect of making the role redundant.”

If in doubt, employers should seek out legal advice, in order to ensure that they don’t end up in court cases like the two examples mentioned above.