Look to the EBA rather than the NES when determining what reasonable overtime is

By Charles Power on January 29th, 2020
  1. Industrial Instruments
  2. Enterprise Agreements

The National Employment Standards (NES) in the Fair Work Act 2009 (Cth) entitles employees to refuse to work hours of work in addition to their ordinary hours (i.e. overtime) that are unreasonable. The NES sets out a range of factors that are relevant to the question of whether a requirement to work overtime is reasonable. These include:

  • any risk to employee health and safety from working the overtime;
  • the employee’s personal circumstances, including family responsibilities;
  • the needs of the employer’s business;
  • whether the employee is compensated for the overtime;
  • notice given by the employer of the requirement to work the overtime (or in the employee’s case his or her intention to refuse to work it);
  • 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 level of responsibility.

However, in Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services (2019) the Court ruled that where an enterprise agreement specifies what is reasonable overtime in terms more generous than the NES, the NES factors are not to be considered when assessing whether a requirement to work overtime is reasonable.

In that case, employees working 35 ordinary hours a week at a coal terminal were being required to work an additional 8.75 hours of rostered overtime per week, or 455 hours of overtime per year (although the employer argued that when the employees’ entitlement to 6 weeks’ annual leave was taken into account, the annual overtime hours would be 402.5 hours).

The enterprise agreement provided that the employer ‘may’ require an employee to work reasonable overtime and the employee will work such overtime as required. The Court ultimately ruled that, in addition to giving the employer the right to require employees to work reasonable overtime, this provision was also protective of the interests of employees. In other words, the employer would breach the clause if it required employees to work unreasonable overtime.

If the employer wanted overtime work it had to assess whether it would be reasonable to impose that requirement. The Court decided that the employer couldn’t assume that if it rostered the overtime it was reasonable so long as the employee did not refuse to work the hours. Refusal may be perceived by the employee as jeopardising or likely to prejudicially affect the employee’s employment.

What is ‘reasonable overtime’ depends on the employee’s circumstances and the employer’s business. The Court noted that the Australian Industrial Relations Commission accepted in a 2006 test case that the borderline between reasonableness and unreasonableness existed somewhere between an overall working week of 44 and 48 hours.

The agreement provided that 104 hours overtime in a year is generally considered reasonable (although it made it clear that every employee should not expect to be offered or to be required work this level of overtime).

The Court ruled that, because the parties to the enterprise agreement had specifically agreed that 104 was the benchmark of overtime hours generally considered reasonable in a year, a requirement to work more than 4 times that benchmark – on average an extra 8.75 hours per week overtime, on top of their ordinary 35 hours per week was unreasonable.

 





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