Does "handover" time constitute part of an employee's working hours? Can an unpaid meal break be split into blocks over a shift? When is "voluntary" overtime truly voluntary? A Full Federal Court of Australia decision provides guidance on the appropriate payment of employee entitlements.
The proceedings in question concerned an employee, Mr Mathew, who was employed part-time as a console operator at one of Adelaide's On The Run petrol stations. This particular station was owned by Shahin Enterprises Pty Ltd (Shahin).
At first instance, the South Australian Employment Court (SAEC) found that Shahin had underpaid Mr Mathew in contravention of the relevant collective agreement and the Fair Work Act 2009 (Cth) by not appropriately accounting for his time worked.
In short, this was because the SAEC found Mr Mathew was required to:
- attend work 15 minutes before his rostered start time for handover;
- work through his meal breaks; and
- complete overtime at ordinary rates of pay.
We note that the claimed underpayments were relatively modest in the scheme of underpayment cases ($2,341.81) and there was a suggestion that the proceedings were brought as a "test case" to seek guidance from the courts in relation to the three issues identified by Mr Mathew.
Shahin challenged the findings of the SAEC on each of the three issues, bringing an appeal to the Full Federal Court. This outcome of the appeal is discussed below.
There was no dispute in the proceedings that Mr Mathew had been requested to arrive at work prior to his rostered start time to complete "handover" tasks at the beginning of each shift. This included completing a task referred to as the "dips" where the incoming employee would check the amount of fuel in each of the station's tanks (a task which took between 7-15 minutes to complete). Mr Mathew believed that he was required to attend 15 minutes early to complete the handover (likely because his "buddy trainer" had told him so), whereas there was evidence from Shahin that he was only requested to attend 10 minutes early. The SAEC accepted Mr Mathew's evidence and found that he was entitled to be paid for the full 15 minutes of handover time.
On appeal, Shahin argued that Mr Mathew was, at most, entitled to be paid for 10 minutes of handover work per shift because the site manager, and the induction manual, had only told Mr Mathew to start work 10 minutes early. However, the Full Federal Court dismissed this argument. When Mr Mathew's reasonable belief was combined with the fact that there was evidence that the handover tasks generally took in the vicinity of 15 minutes to complete, the Full Federal Court's view was that there was sufficient evidence for the SAEC to find Shahin was entitled to pay equalling an additional 15 minutes of work per shift.
The collective agreement in operation at the workplace entitled Mr Mathew to an unpaid 30-minute meal break when he worked a shift longer than six hours. Mr Mathew was required to take his "breaks" while standing at the shop counter and he served any customers that entered the store during that time. While there was some opportunity for Mr Mathew to take smaller break-like periods when there were no customers to serve, the SAEC did not view this as justifying Mr Mathew having the 30 minutes deducted from his pay in circumstances where he could be expected to serve a customer at any time.
The Full Federal Court similarly found that Mr Mathew's "breaks" did not constitute breaks at all, and he was entitled to be paid for this time. The Full Federal Court noted that meal breaks will generally have an identified starting and finishing time. This was confirmed by the collective agreement, which referred to an entitlement to a "scheduled meal break".
The Full Federal Court held that if Mr Mathew's meal break was interrupted by a customer, then the time spent serving a customer should have been paid, and the meal break should have been extended to make up for the interruption. There was no evidence of this occurring.
The collective agreement entitled Mr Mathew to be paid a 50% loading in respect of time worked in excess of 38 hours per week when directed to do so by Shahin. The collective agreement also allowed in certain circumstances for an employee to work "voluntary overtime" at ordinary rates of pay. Voluntary overtime could be rostered where an employee genuinely requested in writing to work the overtime, in which case the employee would not receive any additional pay loading.
Mr Mathew claimed he was entitled to overtime payments which he never received. Shahin argued that any overtime worked was "voluntary overtime" because, when he commenced his employment, Mr Mathew had ticked a box on a form which read "I wish to work voluntary overtime for such hours as I request." However, there was no evidence of Mr Mathew actually requesting overtime, rather it was rostered at Shahin's initiative.
The Full Federal Court agreed with the SAEC's finding that, while the ticking of the box indicated a general willingness to work voluntary overtime, it could not reasonably be understood as a request to work particular hours of voluntary overtime for the purposes of the agreement. The consequence of this was that Mr Mathew was entitled to be paid a 50% overtime loading for the overtime worked.
- Start times — When an employer requires an employee to be at work before their rostered start time to complete hand-over style tasks, then an employee will generally be entitled to payment for that time. Therefore, if an employer requires employees to perform work before their rostered start time, they should clearly communicate to employees the time they are expected to arrive. Employers should also ensure that employees are not receiving inconsistent messages about when they need to arrive at work. This will mitigate the risk of employees falling under the potentially mistaken but genuine belief that they are required to commence work earlier than the employer intends.
- Breaks (coffee/tea breaks, lunch breaks, etc.) — Employers should endeavour to ensure that employees' breaks have an identified start and finish time. Where possible, employers should avoid requiring employees to complete work during their scheduled break time. If the circumstances of a business require meal breaks to be interrupted, then any interruptions should be paid, and breaks should be extended to ensure that an employee receives their minimum break entitlement. If employees do not receive a break with identified starting and finishing times, or if employees are required to perform work during an unpaid break, then there is a risk that courts will not recognise this time as a break at all.
- Overtime and standing consent — While voluntary overtime provisions like those in the Shahin collective agreement are relatively rare, the case shows the importance of employers distinguishing between instances where specific or standing consent is appropriate in managing a workforce. This is because courts will generally be reluctant to accept a general expression of willingness in place of a specific one where it comes to employees "giving up" entitlements they may otherwise have.
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