Question: I have been reading in the news about an employee who currently has a dispute before the Fair Work Commission (FWC) complaining she was made to work unreasonable overtime. How do we make sure any overtime requested is reasonable?

This question was recently answered by our workplace advice line.

Answer: The Fair Work Act section 62 specifies a maximum of 38 ordinary hours per week as one of the National Employment Standards. However, that section does allow an employer to require their employee to work reasonable additional hours, while also giving employees the right to refuse unreasonable additional hours.

To help determine whether additional hours are reasonable or not it lists the following criteria for consideration:

(a)  Any risk to employee health and safety from working the additional hours

(b)  The employee's personal circumstances, including family responsibilities

This is especially important for those employees who are eligible to make an official flexibility request, i.e. employees who:

  • are the parent, or have responsibility for the care, of a child who is of school age or younger
  • are a carer (within the meaning of the Carer Recognition Act 2010)
  • have a disability
  • are 55 or older
  • are experiencing violence from a member of their family, or
  • provide care or support to a member of their immediate family or household, who requires care or support because they are experiencing violence from their family.

(c)  The needs of the workplace or enterprise in which the employee is employed

(d)  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.

Employees who are not covered by an award or enterprise agreement (EA) are generally not entitled to any particular overtime penalty rate as these are not provided in the Fair Work Act. However most modern awards and EAs specify a penalty rate of time and a half for the first two or three hours of overtime per day or shift, then double time for any further overtime on that same day or shift. 

These overtime penalties will normally be paid as:

  • separate hourly rates on an employee’s payslip; or
  • an employee may be paid a higher base rate to adequately compensate them for their expected overtime. This is common for salaried employees or those on ‘annualised wages’.
  • most awards/EAs also allow employees to be compensated in another way i.e. by taking paid time off at a later date as either: 
  • a paid rostered day off (RDO system, which is common in workplaces that roster overtime in a regular pattern); or
  • paid time off in lieu (TOIL), more common for irregular overtime.

In these situations, it’s easy to determine when overtime is unreasonable i.e. when it is not compensated for in accordance with the award/EA. 

Note that many awards/EAs specify that part-timers are entitled to overtime penalty rates when they exceed their agreed part-time hours, even though they may be well short of a 38-hour week.

(e)  Any notice given by the employer of any request or requirement to work the additional hours

(f)  Any notice given by the employee of his or her intention to refuse to work the additional hours

(g)  The usual patterns of work in the industry, or the part of an industry, in which the employee works

(h)  The nature of the employee's role, and the employee's level of responsibility

(i)  Whether the additional hours are in accordance with averaging terms included under section 63, or in a modern award or enterprise agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee under section 64

Many awards allow the 38 ordinary hours to be averaged over several weeks (and in some rare cases over several months). For example a pattern of working 42 hours every second week and 36 hours on the weeks in between will not incur any overtime on the long weeks so long as that workplace has established a system of averaging the ordinary hours over 2 weeks periods in accordance with their award or EA.

(j)  Any other relevant matter.

For example when the next pandemic increases the demand for overtime among toilet paper manufacturers.

The bottom line: When it comes to reasonable overtime there are many variables to consider on both sides, as well as external factors. This means that what is considered reasonable overtime today, is subject to change the next. So consultation between employees and employers, with a bit of flexibility and understanding from both sides, is key to reaching a mutual agreement on what they consider reasonable overtime in any given circumstance.

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Disclaimer: While all due care has been taken in the preparation of this information, it is believed to be accurate but no warranty of accuracy or reliability is given and no liability is accepted for errors or omissions or loss or damage suffered as a result of a person acting in reliance thereon. This information is not legal advice. If a legal opinion is sought please contact your legal advisor.