Q.  Our company has a manufacturing plant which operates on a 24-hour seven-day per week basis, with three shifts day, afternoon and night. Casual employees are called in as required if an employee is away ill or on annual leave. 
 
One casual employee has claimed they were paid overtime rates for performing similar hours with another employer, rather than being paid at the appropriate afternoon shift penalty rate. 
 
Can a casual employee work shift work (and be paid the appropriate shift penalty)? Or does the award consider casual employees to be day workers only and therefore must be paid at the appropriate overtime rate when work is performed outside of day hours? 
 
The employee is covered under the Manufacturing and Associated Industries and Occupations Award 2020. 
 


A.  Yes. A casual employee can perform shift work and receive the appropriate shift penalties under the Manufacturing and Associated Industries and Occupations Award 2020. The Award does not prohibit casual employees from working shifts. 
In the circumstances described, the casual employees are being engaged to work within an existing shiftwork operation that runs continuously across day, afternoon and night shifts. 

Provided the casual employee is engaged as part of that genuine shiftwork arrangement, the employee may be treated as a shiftworker and paid the applicable shift penalties under the Award.

 

What is shift work?

In industrial relations, shift work generally involves recurring work patterns where different groups of employees perform the same or similar work in rotation or relay across different periods of the day or night.

The key issue is not whether the employee is casual, full-time or part-time. Rather, it is whether the employee is engaged as part of a genuine shiftwork system operating under the Award. 

Accordingly, a casual employee will generally be regarded as a shiftworker where they are engaged to work within an established shift roster, rather than simply working isolated hours outside ordinary day-work arrangements.

The Award also recognises rostered shifts and contains minimum engagement provisions for casual employees, including minimum engagement periods in specified circumstances. Employers should always check the current Award provisions when rostering casual shiftworkers.

 

Shift penalties versus overtime

A common misconception is that work performed outside normal daytime hours automatically attracts overtime rates.That is not the case.Where an employee is working an afternoon, night or other rostered shift under a shiftwork arrangement, the applicable shift penalties will generally apply. Overtime will only apply where the Award's overtime provisions are triggered. Working afternoon or night shifts alone does not automatically create an entitlement to overtime.

For example, under the Manufacturing Award, afternoon and night shift penalties apply to eligible shiftworkers. These shift penalties are separate from overtime entitlements and are intended to compensate employees for working outside ordinary daytime hours. 

 

Calculation of shift penalties for casual employees

Under the current Manufacturing Award, the casual loading forms part of the casual employee's ordinary hourly rate. As a result, shift penalties are generally calculated on the loaded casual rate rather than the underlying permanent employee rate. 

Therefore, where a casual employee works an afternoon or night shift as part of a valid shiftwork arrangement, the applicable shift loading will generally be applied to the employee's loaded casual hourly rate in accordance with the Award. 

 

Why another employer may have paid overtime

The fact that another employer paid overtime for similar hours does not necessarily mean the same entitlement applies in your workplace.Different awards, enterprise agreements and employment arrangements contain different provisions dealing with:

  • shiftwork;

  • ordinary hours of work;

  • casual employment; and

  • overtime. 

Accordingly, the entitlement must be determined by reference to the industrial instrument that applies to the particular workplace. A payment practice under one award cannot automatically be applied to another award. 

 

Bottom line

A casual employee can work shift work under the Manufacturing and Associated Industries and Occupations Award 2020 and receive the applicable shift penalties. Working afternoon or night shifts does not automatically entitle a casual employee to overtime rates. Provided the employee is engaged as part of a genuine shiftwork arrangement operating under the Award, the relevant shift penalties will generally apply and be calculated on the employee's loaded casual rate. Entitlements paid by another employer may differ depending on the award or enterprise agreement that applied in that workplace.