Can employees be forced to work long hours and can additional payment be recovered for those hours? This is mainly but not solely a concern for salaried employees. There are 2 aspects to the issue. Firstly, the Fair Work Act establishes the standard of 38 maximum ordinary hours of work (subject to applicable averaging arrangements). Additional hours can be worked if they are not unreasonable having regard to relevant matters including:
a. risks to employee health and safety;
b. employee personal circumstances;
c. the employer’s needs;
d. whether the employee is entitled to compensation for, or receives remuneration that reflects an expectation of, additional hours;
e. any notice from the employer of a request/requirement to work additional hours;
f. any notice from the employee of their intention to refuse to work the additional hours;
g. usual patterns of work in the applicable industry;
h. the nature and responsibility level of the employee’s role;
i. whether the additional hours are in accordance with a modern award/enterprise agreement or averaging arrangement under the Fair Work Act.
Employees are entitled to refuse to work unreasonable additional hours. Award/enterprise agreement employees may be able to raise a dispute under their award/enterprise agreement. There is a right not to be treated adversely by an employer for reasonably refusing to work unreasonable additional hours and legal action can be taken but whether the requirement is reasonable or unreasonable is not always clear. Employees should also be cautious about award individual flexibility arrangements which require additional hours of work for little benefit.
The second issue relates to payment. Award/enterprise agreement employees are generally entitled to overtime and penalty rates for additional hours so there is a financial disincentive for employers. Where a salary is paid with a contractual offset clause (or award annualised wage arrangements), it is necessary for employers to compare the salary paid against award/enterprise agreement entitlements to ensure employees are not being underpaid.
What about non award/enterprise agreement employees though, such as managers and professionals? Most employment contracts provide that employees will work 38 hours a week plus reasonable additional hours, without specifying what those hours are. Non award/enterprise agreement employees are entitled to the minimum hourly wage for all hours of work but have no entitlement to overtime/penalty rates (unless provided by contract). Employers will normally say that the salary takes into account the need to work more than 38 hours per week. So, the question is when do reasonable additional hours become unreasonable? Unfortunately the answer depends on the facts of each case such as the type of position and level of responsibility, the salary paid, what expectations were established prior to commencement and industry practice.
As a general rule of thumb, up to an additional 2 – 3 hours a day may not be unreasonable depending on the above factors. Unfortunately there are no hard and fast rules for non award/enterprise agreement salaried employees. Generally the Fair Work Ombudsman will not assist with these matters. There are several legal avenues open to aggrieved employees seeking extra payment and decisions need to be made about the most efficient, cost effective and practical avenue to address the issue. As a general rule, it is best to avoid jurisdictions where costs orders are automatically made against the losing party.
These are of course general comments only. Please contact us if you would like any further information or help.