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When do employees need to be paid for pre-work activities?

A female cashier using a calculator at a supermarket or store check-out counter. She is wearing a khaki apron.

The Federal Circuit and Family Court recently handed down its decision in Shop, Distributive & Allied Employees' Association v Aldi Foods Pty Ltd [2022] FedCFamC2G 799. The case dealt with whether employees' "pre-work activities" constituted "work" for which they were required to be paid.

The Court determined in this case that the pre-work activities performed by the relevant employees, prior to the commencement of their rostered shift, nonetheless constituted work, and the employees were entitled to be paid for these activities.

Overview of the decision

The Shop, Distributive & Allied Employees' Association (SDA) commenced proceedings against Aldi Foods Pty Ltd (Aldi) on behalf of Aldi employees based at one of its distribution centres, for failing to pay the employees in accordance with the applicable enterprise agreement, and "payment for work" requirements under the Fair Work Act 2009 (Cth) (FW Act).

The SDA claimed that from August 2018 onwards, Aldi had continuously directed these employees, after clocking on at the workplace, to commence work 15 minutes prior to their rostered starting time to undertake several tasks (pre-commencement tasks) and therefore work in excess of their contract hours. These pre-commencement tasks included:

  • performing safety checks and tests on equipment to be utilised during the employees' shifts
  • driving stock pickers (similar to a forklift) to a central location
  • completing a checklist, which included recording details of the stock pickers and communications devices to be used during the employees' shifts

In defence of the claim, Aldi asserted that it had not been underpaying its employees, and that employees are only expected to be ready to commence work at the start of their rostered shift and that this expectation was not in breach of its obligations under the FW Act. Aldi also claimed that it was entitled to "set off" payments made to employees at the end of their shifts where work was not performed, against any amounts that may have been payable for the performance of the pre-commencement tasks.

The Court ultimately found in favour of the SDA and held that, in this case:

  • there was an implied direction from Aldi that employees had to arrive early prior to the commencement of their shift to undertake the pre-commencement tasks (for example, an "expectation" on employees to do this, as well as potential consequence management outcomes such as formal warnings if employees were not ready to commence work at the beginning of their rostered shift); and
  • the pre-commencement tasks listed above could not be characterised as private activity of the employees, as each activity was solely for the benefit of Aldi, with no personal benefit to the employees. Therefore, the Court was satisfied that the activities carried out constituted work; and
  • accordingly, Aldi had breached the enterprise agreement and the "payment for work" requirements in the FW Act for failing to pay the employees in relation to the performance of the pre-commencement tasks (which constituted work)

The Court also rejected Aldi's argument that it was entitled to "set off" time paid at the end of the employees' shifts against the pre-commencement tasks undertaken prior to the rostered shifts (which was not paid).

The Court directed the SDA and Aldi to confer, and agree if possible, on appropriate calculations for compensation to be paid by Aldi to its affected employees, in respect of Aldi's breaches of its enterprise agreement and the FW Act. If the SDA and Aldi cannot agree on these compensation calculations, then the Court will determine the appropriate manner to calculate compensation.

The Court will also now proceed to determine appropriate civil penalties to be paid by Aldi, in respect of its breaches of its enterprise agreement and the FW Act.

When may pre-work activities constitute work (or not)?

Whilst this decision dealt with the specific pre-work activities of particular employees, employers should consider the following guiding principles from this case in assessing whether pre-work activities undertaken by employees constitute work or not, and hence whether they are entitled to be paid for these activities.

  • Do any modern award/s and/or enterprise agreement/s apply to the employees? If so, do these instrument/s specify activities that constitute work that is payable (or alternatively, expressly state task/s that aren’t work and are unpaid)?
  • Are the pre-work activities performed by the employees to the benefit of the employer? If so, this may lead to a finding that the activities are work. Conversely, private activities that benefit the employees, such as storing personal effects, putting on uniforms or PPE, storing or consuming food, or socially engaging with colleagues prior to scheduled work, may be less likely to be considered work.
  • Are the employees required (directly or indirectly) to be at their workplace at a specific time prior to the commencement of their shift to be available to provide service for the employer? If so, this may lead to a finding that that the employee should be paid for this time. Conversely, are there employees "clocking in" to the workplace prior to the commencement of their scheduled work time, engaging in non-work activities, but still being paid from the time they clocked in?
  • Will the employees face disciplinary action if they do not perform the pre-work activities or meet the requirement to be at work for a period of time before commencing their shift? Again, if so, this may lead to a finding that the activity is work (and hence payable).
  • Do you have robust "set off" arrangements in place, where it may be defensible that any payments made to employees can be apportioned against any unpaid pre-work activities?

If you would like more information about what constitutes pre-work activities or any other points raised in this article, please contact Lander & Rogers' Workplace Relations & Safety team.

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