No overtime pay: FWC okays 10-hour shifts

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No overtime pay: FWC okays 10-hour shifts

An employer was entitled to roster employees to work 10-hour shifts on weekdays without paying overtime after 7.5 hours, a court has ruled.

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An employer was entitled to roster employees to work 10-hour shifts on weekdays without paying overtime after 7.5 hours, instead paying the overtime during weekend shifts.

The Federal Court interpreted an award provision that way to reject a challenge by employees who claimed that overtime should be paid for 2.5 hours of every shift.

Facts of case


The case involved interpreting a clause in the Black Coal Mining Industry Award 2010, relating to payment for ordinary hours and overtime in a roster cycle. The question was whether the award required ordinary hours to be divided evenly over each shift in the roster. Ordinary hours were 35 per week.

Maintenance employees worked 14 shifts of 10 hours each over a three-week cycle. The 140 hours worked comprised 105 ordinary hours and 35 overtime hours. Work was performed on 10 weekdays, two Saturdays and two Sundays. The employer paid 10 hours at ordinary pay for the weekday shifts, Saturday shifts at 2.5 hours ordinary pay and 7.5 hours overtime, and Sunday shifts at 10 hours overtime. 

Employees claimed that the award required hours to be rostered so that payment for each of the 14 shifts was 7.5 hours at ordinary pay and 2.5 hours of overtime. The Federal Court rejected this claim.

The award set overtime rates at time-and-a-half for the first three hours on Monday to Saturday and double time after that, and double time for whole shift on Sunday.

Payment for ordinary hours was at standard rate for whole shifts Monday to Friday, time-and-a-half for first four hours and double time after that on Saturday, and double time for whole shift on Sunday. Shift payment loadings applied to shifts that finished between 6pm and 8am. The award allowed the employer to decide shift start and finish times. 

The arguments


The employees argued that the award’s averaging provisions required every shift to comprise 7.5 hours of ordinary pay and 2.5 hours of rostered overtime. They claimed “averaged” meant “divided evenly”. This would mean that every hour worked per shift that resulted in the number of hours in a week exceeding 35 would attract overtime payment. This would put an “implicit brake” on the employer’s power to determine shifts, shift lengths, and whether shifts were comprised wholly of ordinary hours.

They claimed that rostering all overtime on weekends reduced the total amount of overtime payments received by employees.

The employer claimed that the award allowed it to arrange shifts so that the hours worked in a given week could exceed 35, provided that the average over each three-week cycle did not exceed 35. The only limits it was subject to were that one, plus a maximum shift length of 10 hours. The employees’ interpretation would restrict its award-allowed powers to arrange shifts.

The employees claimed their position was supported by the award modernisation decision of the former Australian Industrial Relations Commission., in particular its references to “reasonable extra hours”. 

The employer argued that case law on the meaning of “overtime” should not be construed into the award, and only the actual wording of the award provisions should be considered. An award is not “legislation”. The principles for setting modern awards in sec 576(j) of the former Workplace Relations Act 1996 (which operated when this award was made) included provisions that they promote flexible work practices and productive work performance, and are “simple to understand and easy to apply”. Averaging hours of work was within the scope of those provisions.

Decision


The court found that the relevant award clause was an “averaging of hours” provision within the meaning of sec 63 of the Fair Work Act 2009. These provisions were not intended to regulate daily hours of work or shift lengths, so cannot prescribe that ordinary hours must be allocated equally across each shift. Therefore, the employer was entitled to allocate shifts of 10 ordinary hours, provided it complied with the overall averaging provisions.

Ordinary work hours can fall anywhere within a roster, but the employer must identify which are the ordinary hours. “Overtime” referred to time worked in excess of the ordinary hours in any shift.  

The court upheld the employer’s practices and rejected the employees’ interpretation of the provisions.

The bottom line: The individual wording of an award or agreement will have to be studied in each case. But, in general, if averaging work hours over a period of two or more weeks is allowed, an employer can set different hours each week and is not required to pay overtime during an individual shift if its hours happen to exceed “ordinary” working hours (typically 7.5) – provided that at the end of the averaging period all ordinary hours and overtime provisions are complied with. 
The above is in line with the principle behind modern awards of allowing greater flexibility. 

Read the judgment


B v The Griffin Coal Mining Company Pty Ltd [2018} FCA 899, 14 June 2018 
 
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