Overtime: does annual leave count as time worked?

Overtime: does annual leave count as time worked?
By Paul Munro on 7 March 2017 If someone has taken annual leave during the week and is then asked to work on a Saturday, should they be paid at overtime rates? 

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Q Our company has an enterprise agreement that defines ordinary hours as 38 per week, including Saturdays. An employee may work up to 10 hours on any day before overtime applies. An employee, whose ordinary hours are Monday to Friday, was on annual leave for three days, worked Thursday and Friday and was then directed to work on the Saturday.

The employee is claiming the day should be paid at overtime rates as it is not a day that falls within their span of ordinary hours. The company view is the employee hadn’t worked their 38 hours that week, therefore the Saturday work, which falls within the agreement’s span of ordinary hours, is ordinary time.

Would the Saturday work in this instance be considered ordinary time or overtime?

A In this case, the work on Saturday would attract the appropriate overtime penalty rate. The general principle applicable in such circumstances is that the employee is considered to have worked their ordinary hours for the period of the paid annual leave. This would also be the case if the employee had been absent on paid personal/carer’s leave,  any other form of paid leave, such as compassionate leave or long service leave or a public holiday had fallen during the week, 

This means if an employee’s ordinary hours are Monday to Friday, and the employee takes annual leave from Monday to Wednesday, the employee is deemed to have worked their ordinary hours on those days, despite being absent on paid annual leave. If, in that week, the employee works Saturday, the employee would be entitled to the appropriate overtime penalty rate prescribed by the applicable modern award or enterprise agreement.

Working during annual leave

While not raised as an issue in this question, it would seem the employee has been called in to work during a period of annual leave. An employee is entitled to four weeks’ annual leave each year, a week includes non-working days. The Concise Oxford Dictionary defines a ‘week’ to mean a period of seven successive days that begins with or includes an indicated day.

In this case, it would have been considered reasonable for the employee to refuse to work overtime on the Saturday as the employee was still absent on a period of paid annual leave. The Fair Work Commission has noted that employees are entitled to annual leave without interruption. See S v Hazeldene's Chicken Farm Pty Ltd [2014] FWC 5820 (25 August 2014).

The bottom line: A period of paid leave counts for hours, as if worked by the employee, for the period of the paid absence. Work performed outside the employee’s contracted ordinary hours, or the span of ordinary hours prescribed by the applicable modern award or enterprise agreement will usually attract the appropriate overtime penalty rate.
 

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