Payroll

Excessive Hours – do you have a Duty of Care to your Employees?

The question as to what is considered to be reasonable hours is a question that is often posed to us by or clients. Indeed there are many employers who have contracts with salaried staff which provide a “cover all” clause which states that “the employee shall work whatever reasonable hours are required to perform their role”…or words to that effect.

Therefore, there is an expectation from employers that employees often have to work longer hours to get a job done. But where is the line drawn between what are reasonable hours and what is excessive? What are the consequences for employers if employees work excessive or unreasonable hours?

The Laws Around Unreasonable Additional Hours

There is no “hard and fast rule” which decides what number of additional hours is reasonable or unreasonable. Much depends on the occupation the employee is engaged in and the Fair Work Commission has declined in the past to precisely determine such an amount. However, the Fair Work Act does provide some broad guidance in determining whether additional hours are reasonable including taking into consideration factors such as:

  • any risk to an employee’s health and safety from working additional hours
  • the employee’s personal circumstances, including family responsibilities
  • the needs of the workplace in which the employee is employed
  • whether the employee is entitled to receive overtime payments, penalty rates or other compensation
  • if the employer gave the employee notice of any request or requirement to work the additional hours and conversely, if the employee gave notice of his or her intention to refuse to work the additional hours
  • the usual patterns of work in the industry in which the employee works
  • the nature of the employee’s role, and the employee’s level of responsibility, and
  • whether the additional hours are in accordance with averaging terms included in a modern award or enterprise agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee.

The above guidance demonstrates that it largely depends upon the vocation of the employee which determines reasonable or unreasonable additional hours. For example, additional hours for an employee in the construction industry would be different to an employee working in an office. Similarly, the hours for employees who are transport drivers or airline pilots would be treated differently because of the inherent dangers associated with fatigue.

Pay Increase Didn’t Prevent Being Worked to the Point of Collapse

A recent case in Victoria involved an abattoir employee who was required to work 24-hour on call shifts to deal with machine breakdowns. He collapsed twice from stress and exhaustion and also developed depression, anxiety and insomnia from working excessive hours.

He was successful in suing the employer in the Victorian Supreme Court, which ruled that the employer had breached its duty of care obligations to him. The Court found the employer had not taken “reasonable care to avoid any foreseeable risk of psychiatric injury” when the employee made regular complaints about the increased work pressures he faced, despite agreement to work extended hours for a significant pay increase.

Because of the complaints that had been made by the employee, the employer should have known, there was a reasonably foreseeable risk of a psychiatric injury.

The Court found that the hours worked by the employee increased well beyond what was anticipated at the time the contract was signed. The Court also found that that measures the Company took to mitigate against the impact of the excessive hours – including providing an employee assistance program, reducing the employee’s workload, asking other managers to provide assistance and assigning the management of the maintenance of the rendering plant over to another company – were inadequate and insufficient.

The amount of damages is yet to be decided by the Court.

What are the Risks?

Working excessive hours often contributes to fatigue, stress and mental health issues for an employee, which can have a disastrous impact in the workplace, as illustrated in the above case. Employers should be mindful of their duty of care under the relevant WHS legislation to ensure a safe and healthy work environment. Therefore, employers and managers need to be mindful of the guidance provided in the Fair Work Act in determining whether additional hours are reasonable.

Finally, consideration should be given as to whether the ‘over-award’ payment adequately compensates the employee for the additional hours worked. Many modern Awards have a requirement for an annual reconciliation to be performed to ensure that the employee is not being underpaid when a comparison is done with what they would have earned if they were paid in accordance with the Award. Many employers are surprised at how quickly the ‘over-award’ salary is subsumed when overtime and allowances are calculated for the employee.

Should you have any questions in relation to the above article, please do not hesitate to contact us at Effective Workplace Solutions.

By Greg Arnold, Director & Consultant

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Duty of Care, employment contract, employment law tweed heads, excessive hours, overtime

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