How can you know if implementing additional hours are 'reasonable'?
A clear and comprehensive employment contract is important for employers and employees.
Caselaw is clear that a contract should outline the number of hours expected to be worked, as well as the terms and conditions of the job, such as remuneration and other benefits. It should also specify how and when employees can be asked to work additional hours and what compensation they should receive for this extra time.
It helps ensure both parties know their rights and obligations and that the employee is properly compensated for their work.
In this case, an employer asked one of its staff to work additional hours, but the latter wanted their agreement clarified by the Fair Work Commission (FWC).
Background of the case
The employee has been working for the employer for almost 14 years. In September 2008, she was offered full-time employment as a Medical Imaging Technologist.
Under the 2010 award between parties, there is a requirement for an agreement to be in writing stating an employee’s regular pattern of work, including the number of hours to be worked each week, the days which will be worked and the starting and finishing times each day.
In September 2010, the employee and the company agreed in writing to vary the employment contract. The written offer, dated in August of the same year, refers to the employee continuing as a radiographer at the existing location.
The key changes in the employment arrangements were that the role was converted into a part-time role of 60 hours per fortnight. There was also an express reference to applying the 2010 Award if no other industrial instrument exists.
The offer did not identify the hours to be worked or the days of the week on which those hours were to be performed. In short, the employer did not comply with the requirements of the 2010 Award.
According to labour laws, establishing the days of the week and starting and finishing times of the agreed work hours is an important requirement, as it determines when (in the absence of an agreed variation to the contract of employment) overtime might be payable.
After a while or in August 2022, the parties agreed to vary the employment contract such that the hours to be worked were 45 hours per week plus “reasonable additional hours.”
In addition, the following clause was added:
“From time to time the employer may offer you extra shifts in addition to your ordinary hours of work set out above, or you may request additional shifts. In either case, acceptance by you of these additional shifts will included acceptance by you that your ordinary hours for that week will be varied to include the additional shifts and they will be paid at your ordinary rate of pay. Overtime rates will only be paid if you work in excess of 37.5 hours per week (averaged fortnightly) or 7.5 hours per day.”
The FWC said the dispute is about clarifying if the employer was “reasonable” when it allocated weekend shifts to the employee considering her circumstances and the part-time employment contract.
When are additional hours at work considered ‘reasonable’?
- According to the FWC, to determine whether additional hours are reasonable or not, 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 in a modern award or enterprise agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee;
- any other relevant matter.
“The difficulty in this matter is the lack of definition about the hours of work under the existing part-time employment contract,” the FWC said.
HRD reported about a recent case where a former manager was dismissed for misconduct because he was found “negligent” and “careless” after approving overtime payments to a worker who was not entitled to them.
The FWC’s recommendation
Since the parties could not settle the matter, they referred it to the FWC.
The Commission recommended that they agree and record, in writing, the days of the week that she will additionally work and the starting and finishing times under her part-time contract.
“The parties should then consider what the additional shift requirements are and assess whether they are reasonable or not under the Fair Work Act. This would include consideration of the application of overtime and/or penalty provisions,” the FWC said.
Find out here if HR can insist that an employee should work overtime.
