It has recently come to light that an Australian employer has been fined $90,000 after the Federal Court found it had asked its employee to work an unreasonable number of hours.
The case against the meat industry employer found that they had required an employee to work 50 ordinary hours per week and "reasonable" additional hours as requested. This was considered unreasonable and as a result, the employer was fined $90,000 by the Federal Court.
According to the Fair Work Act 2009, employers must not require an employee to work more than 38 hours per week, unless additional hours are deemed reasonable. This begs the question - what is considered 'reasonable' overtime?
In order to satisfy Fair Work requirements, when determining whether additional hours are in fact “reasonable” employers should consider if the additional hours are suitable and necessary in light of all relevant factors. This includes:
If it is determined that the additional overtime is reasonable, the applicable Award will outline the applicable overtime and or penalty rates where an employee works outside the ordinary hours. These provisions are intended to make sure employees are compensated adequately and fairly for the extra hours they work.
Overtime and penalty rates must be paid in addition to ordinary hourly rates or can be incorporated into the employee’s salary calculation in accordance with the applicable Award. If you are incorporating overtime and penalties into the employee’s salary you need to regularly review the salary to ensure the actual hours worked are being compensated correctly.
It is important for employers to be mindful when asking or requiring their employees to complete overtime hours, as failing to comply with the relevant legislation can result in hefty fines such as in this recent case highlighted above. Therefore it is crucial that any overtime requests adhere to Award requirements and have due consideration as to what could be considered reasonable in relation to particular workplace conditions.
Article by Bianca Brattoli
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