Australia Day pay: what about regular overtime?

Australia Day pay: what about regular overtime?

By Paul Munro on 6 February 2018 If employees regularly work overtime, should they receive the same pay when absent on a public holiday?

This question was recently sent to our Ask an Expert service.

Q Our company employs several administrative employees who regularly work two hours overtime each Friday due to operational requirements. The employees were paid their ordinary daily rate for the Australia Day public holiday, which was not worked by the employees. One has complained about his payment for the holiday and claimed he should be paid for his ‘regular’ overtime. 

As the employees receive overtime on a regular basis, are they entitled to receive two hours overtime pay for the Australia Day public holiday, despite not working on the day? They are employed under the Clerks – Private Sector Award 2010.

A Like most modern awards, the Clerks – Private Sector Award 2010 refers to the National Employment Standards in relation to public holidays. This means the relevant provisions in the Fair Work Act would apply.

The employees would NOT be entitled to payment for regular overtime usually performed on the day the public holiday falls, where no work is performed.

Under the Fair Work Act (s116), an employee is to be paid at their base rate of pay for a specified public holiday. ‘Base rate of pay’ is defined as the rate of pay for an employee's ordinary hours of work, but not including incentive-based payments and bonuses, loadings, monetary allowances, overtime or penalty rates or any other separately identifiable amounts.

This means overtime is not considered part of an employee’s ‘base rate of pay’ when paying an employee who is absent on a designated public holiday.

Modern awards

While it is possible for a modern award to contain terms that provide a more beneficial definition of ordinary pay when an employee is absent on a public holiday, the Clerks – Private Sector Award 2010 is silent on this point, therefore the provisions relating to payment for a public holiday prescribed by the Fair Work Act apply.

The bottom line: Regular overtime is not payable when an employee is absent from work due to a public holiday as it is not included in an employee’s base rate of pay.


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