Employment contracts these days usually carry a provision under the Hours of Work heading that go something like this: “The employer may also require you to work reasonable additional hours from time to time (including on weekends and public holidays)…”
So, what is “reasonable additional hours” and how does one interpret this in terms of hours in addition to the standard 38 hours per week that employees work?
The employee is award-free
Because an employee is not covered by an award, therefore not subject to penalty rates and overtime, it does not give an employer the latitude to demand “all hours necessary” (see: Sagona v R & C Piccoli Investments Pty Ltd  FCCA 875).
If your employee is a manager with executive authority within the business his/her salary package is usually designed to take this into consideration and any reasonable extra hours worked is unpaid.
The employee is covered by an award or enterprise agreement
In this scenario, it is essential that the overtime provision in the award or agreement be read and understood in terms of overtime, penalty rates and other allowances for time worked outside of, or in addition to, ordinary hours of work. This is where a lot of businesses in the services sector come unstuck.
What employers should know about reasonable additional hours
Before asking an employee to work those extra hours, an employer needs to ensure whether:
- The request is reasonable
- Overtime, penalty rates or loadings are to be paid
When an employee is engaged, employers are required to provide them a copy of the National Employment Standards (NES) which states that an employer cannot request or require a full time or part-time employee to work more than 38 hours per week – unless that request is reasonable.
It is not unreasonable to request 40 hours per week from an employee because of operational requirements. The additional two hours are compensated at the overtime rate and the employee agrees to work the 40 hours. The employee can refuse to work the additional hours if it is unreasonable.
What is “reasonable additional hours”?
To understand what is reasonable, Fair Work outlines a range of factors that need to be taken into consideration in order to determine what is “reasonable”. These include:
- 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;
- whether the employee receives compensation for working the additional hours, for example, by way of overtime payments, penalty rates or their level of remuneration;
- the notice given by the employer of the request or requirement to work the additional hours;
- the usual patterns of work in the industry, or the part of an industry, in which the employee works; and
- the nature of the employee’s role and the employee’s level of responsibility.
Accordingly, what is “reasonable” will be assessed on a case-by-case basis. However, requiring an employee to work “whatever hours it takes” is not reasonable, even when that employee is paid a base salary that exceeds the statutory minimum.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Please contact Lauren Morrison at Lauren@lmhr.com.au or Mob: 0400 225 499 if you would like to learn more about how LM HR Consulting can assist your business with your HRM requirements.