REASONABLE ADDITIONAL HOURS KNOWLEDGE BASE

An employer must not request or require a full time employee to work more than 38 hours a week unless the considerations are taken into account to determine that they are “resonable additional hours”. Part time employees cannot be requested or required to work more than the lesser of 38 hours per week or their ordinary hours, unless those additional hours are reasonable.

To put it another way, employees can refuse requests to work additional hours, unless the requirement to work those hours is reasonable.

The Fair Work Act 2009 sets out a number of factors which are to be taken into account to determine whether additional hours are reasonable.

What Factors Determine “Reasonable Additional Hours”?

In determining whether additional hours are reasonable or unreasonable, the following must be taken into account:

• Any risk to employee health and safety;
• The employee’s personal circumstances, including family responsibilities;
• The needs of the workplace or enterprise;
• 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;
• Any notice given by the employer to work the additional hours;
• Any notice given by the employee of his or her intention to refuse to work the additional hours;
• The usual patterns of work in the industry;
• The nature of the employee’s role and the employee’s level of responsibility;
• Whether the additional hours are in accordance with averaging provisions included in an award or agreement that is applicable to the employee, or an averaging arrangement agreed to by an employer and an award/agreement-free employee; and
• Any other relevant matter.

The relevance of each of these factors and the weight to be given to each of them will vary according to the particular circumstances. In some cases, a single factor will be of particular importance.

Additional Remuneration

One factor that is usually important when considering reasonableness is whether the employee receives additional remuneration for the additional hours worked. Employees covered by a Modern Award or an Enterprise Agreement may have an entitlement to overtime or penalty rates when they work additional hours. However, payment of this alone does not automatically mean that a requirement to work additional hours is reasonable – all the factors set out above should be considered.

Annualised Salaries

It is common for employees paid an annual salary to have an employment contract which states that they are required to work such reasonable additional hours over their ordinary hours as is necessary to perform the duties required by their role. The contract may also state that the annual salary is to compensate an employee for all hours they work (i.e. it includes payment for any reasonable additional hours they work).

Employers should be cautious when paying annual salaries to employees covered by Modern Awards because of the risk of underpayments. Where an annual salary is paid the employee’s employment contract should contain an offset clause i.e. a term that makes it clear that the salary has been calculated to include all entitlements under the applicable Award and that the salary sufficiently compensates the employee for these entitlements based on the hours worked.

The fact that a requirement to work additional hours is set out in the contract of employment accepted by an employee will be relevant to whether additional hours are reasonable, but not determinative.

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Disclaimer

The information provided in these knowledge base articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.

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