Overtime VS Reasonable Additional Hours

It’s not unusual to skip a lunch break or stay back every so often to get a task finished, help a colleague with their project or respond to a client’s urgent request. But when does the occasional late-night turn into overtime?

If an employee is covered by an award or enterprise agreement and they work outside of, or in addition to, their usual hours of work, then they may be entitled to be paid overtime, penalty rates or other allowances for this time.

On 1 March 2020, modern award changes will come into effect that means employees who are covered by a range of different awards will be protected against what is commonly known as ‘wage theft’ and non-compliance with those awards.

These changes will put more pressure on both employees to record their hours properly and employers to ensure they have effective time recording policies in place, as well as employment contracts that are revised regularly to ensure compliance.

What are reasonable additional hours?

One of the 10 minimum standards that make up the National Employment Standards states that the maximum weekly hours’ someone may work is 38 hours. This is unless the request to work additional hours is reasonable.

Before requesting or requiring that an employee must work additional hours, employers should consider whether their request or requirement is entirely within reason and whether they will meet their obligations to pay employees overtime, penalty rates or loadings.

So, what deems the request to be reasonable or unreasonable?

Well, unfortunately, there is no black and white answer. What is reasonable will be determined on a case-by-case basis, however, a straightforward way to measure the request in most cases would be to simply use common sense.

For example, if a project is not due for completion for another fortnight and there are no outstanding tasks for that day, would it be considered reasonable to request that an employee stays back until midnight to complete a task that could be finalised the following day instead? Probably not.

On the other hand, if a presentation was taking place at 10:00 am on a Thursday morning and at 4:00pm on a Wednesday afternoon it was not near completion, would it be reasonable to ask a team member to stay back for a few hours to finish it? In most instances, yes.

When can an employee refuse the request to work additional hours?

If an employer’s request to work additional hours is unreasonable, an employee may refuse to work additional hours. What is deemed to be ‘reasonable’ will depend on a range of factors, including:

• Whether or not working the extra hours poses a risk to the employee’s health and safety;
• If this request would typically be deemed acceptable in the industry in which the employee works;
• The nature of the employee’s role, their responsibilities and whether or not someone else is more suited to work the additional hours;
• The needs of the workplace;
• How much notice the employer has given to the employee when making the request;
• Whether the employee is entitled to compensation for working the requested additional hours or their remuneration rate;
• The personal circumstances of the employee.

What should an employer do before requesting an employee work additional hours?

Employees who are covered by a modern award or an enterprise agreement may already be entitled to receive payment for additional hours worked outside of their ordinary hours. Unless any of the factors above are applicable to the employee, then the request to work additional hours would generally be deemed reasonable.

Due to the changes taking place on 1 March 2020, it is more crucial now than ever that employers ensure, if they wish to pay all-inclusive salaries rather than ad hoc overtime and penalty rates, they regularly check that they are in compliance with the most up-to-date rates and hours worked by the staff member. To fail to do so could mean they are inadvertently committing ‘wage theft’ which would put them in breach of the Fair Work Act 2009 (Cth) and may incur penalties.