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Video

When does the requirement to work excess hours become unreasonable?

Mathew Reiman provides a summary of the recent case decision of Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512 (6 May 2022).

Here we have a Federal Court case looking at the concept of reasonable additional hours in the context of the National Employment Standards, which is especially relevant for our clients in the meat processing sector.

The employee was a Ghanian immigrant who secured work with Dick Stone within three weeks of arrival in Australia. His employment contract had him working 50 ordinary hours per week, did not mention any pay rates, and did not address any entitlement to overtime. The Australian Meat Industry Union brought an application alleging:

  • the employer had failed to pay overtime for hours in excess of 38 hours per week and outside of the span of hours; and
  • it was an unreasonable request to require the employee to work 50 ordinary hours per week.

Key lessons for employers

  • Any request for reasonable additional hours needs to pass the test under s 62 – employers should apply the factors in considering what is an appropriate number of hours.
  • What is considered reasonable for the majority of employees might not be reasonable for every employee taking into account an employee’s personal circumstances.
  • Employers should not use a blended rate, they should always instead opt to do an over-award salary using a properly drafted offset clause. The offset clause must specify all entitlements the salary can be offset against to ensure the ‘contractual principle’ and ‘designation principle’ will apply.
  • Avoid doing an annualised salary arrangement as failure to comply with strict rules under Award will lead to breaches.

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