Can your employees refuse to work additional hours?

IRHR 15/03b

If your employees are working additional hours, you need to make sure that those hours are reasonable according to the Fair Work Act 2009.

Additional hours are usually treated as overtime hours, under awards and agreements i.e. hours worked in excess of the ordinary daily hours or average weekly hours.  In the case of the Employee Collective Agreements or Enterprise Agreements in place at a number of market businesses, it lists an exemption rate that is in compensation for additional hours, overtime rates, penalties etc.

However, it is important that these additional hours are considered ‘reasonable’ by the legislation.  Fair Work Inspectors use an averaging period to assess reasonable additional hours – ‘an averaging of 45 hours per week over a six month period’.  There may be peak periods when more than these hours are done and times when less may be done.  It is important to ensure that when there are long periods of extended hours, employees are treated fairly and receive additional remuneration or other accepted alternatives i.e. time in lieu, to compensate.

Employees can refuse to work additional hours that are considered ‘unreasonable’ by definition these include:

• They would pose a threat to the employee’s health and safety i.e. fatigue, stress
• They would affect the employee’s personal circumstances i.e. preventing a parent picking up a child from school
• They exceed the maximum ordinary working hours and no averaging period is in place or no remuneration in compensation
• You have not provided the employee with reasonable notice

Award/Agreement free employees

In the case of Award or Agreement free employees e.g. managers, professionals or employees above the high income threshold, the business needs to ensure that the salary calculated has taken into account the need for regular additional hours that are considered reasonable and the contract of employment states this fact.  For example:

‘Your remuneration package has been determined with due regard for the necessity to work reasonable additional hours on occasions, therefore overtime will not be payable.  Your salary and benefits have been calculated so that the higher rate is in compensation for the provision of overtime, penalty rates & annual leave loading.

In reference to the above paragraph, the averaging of work hours has been applied under which hours of work over a period not greater than 6 months are averaged.  The calculation of your salary has been based on the maximum reasonable hours over this period in order to ensure appropriate compensation.  If at any time additional hours exceed or fall outside of the averaged maximum reasonable hours, this will be reviewed and additional payment or time off in lieu may be granted as decided by (insert business name) Management.’

For more information please refer to this Fact Sheet from the Fair Work Ombudsman.