1
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
4 yearly review of modern awards – reasonable overtime
(AM2016/15)
JUSTICE ROSS, PRESIDENT
VICE PRESIDENT HATCHER
COMMISSIONER HUNT MELBOURNE, 29 OCTOBER 2018
4 yearly review of modern awards – plain language re-drafting – reasonable overtime.
Background
[1] During proceedings related to the plain language re-drafting of the General Retail
Industry Award 2010 (the Retail award) an issue arose regarding the interaction between the
‘reasonable overtime’ provisions in clause 29.1 of that award and s.62 of the Fair Work Act
2009 (Cth) (the Act). Clause 29.1 provides as follows:
‘29.1 Reasonable overtime
(a) Subject to clause 29.1(b) an employer may require an employee other than a casual to work
reasonable overtime at overtime rates in accordance with the provisions of this clause.
(b) An employee may refuse to work overtime in circumstances where the working of such
overtime would result in the employee working hours which are unreasonable having regard
to:
(i) any risk to employee health and safety;
(ii) the employee’s personal circumstances including any family responsibilities;
(iii) the needs of the workplace or enterprise;
(iv) the notice (if any) given by the employer of the overtime and by the employee of
their intention to refuse it; and
(v) any other relevant matter.’
[2] The Commission issued statements on 22 December 20171 and 28 February 20182
identifying an additional 11 awards that contained the same (or substantially the same)
‘reasonable overtime’ provisions as in the Retail award (see Attachment A).
1 [2017] FWCFB 6884.
2 [2018] FWC 1244.
[2018] FWCFB 6680
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2018fwc1244.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb6884.htm
[2018] FWCFB 6680
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[3] The current reasonable overtime clauses are based on the model clause arising from
the July 2002 working hours case,3 which is as follows:
‘1.1 Subject to clause 1.2 an employer may require an employee to work reasonable overtime
at overtime rates.
1.2 An employee may refuse to work overtime in circumstances where the working of such
overtime would result in the employee working hours which are unreasonable having regard
to:
1.2.1 any risk to employee health and safety;
1.2.2 the employee’s personal circumstances including any family responsibilities;
1.2.3 the needs of the workplace or enterprise;
1.2.4 the notice (if any) given by the employer of the overtime and by the employee of
his or her intention to refuse it; and
1.2.5 any other relevant matter.’
[4] When determining the model clause a Full Bench of the Australian Industrial
Relations Commission decided that the clause should:
balance considerations of both employers and employees in determining whether
additional hours are reasonable; and
include a reference to the ‘well-established’ right of an employer to require an
employee to work reasonable overtime.4
[5] The July 2002 working hours case was determined under a different legislative
regime. Maximum weekly hours are now dealt with in s.62 of the Act, as follows:
‘62 Maximum weekly hours
Maximum weekly hours of work
(1) An employer must not request or require an employee to work more than the following
number of hours in a week unless the additional hours are reasonable:
(a) for a full-time employee – 38 hours; or
(b) for an employee who is not a full-time employee – the lesser of:
(i) 38 hours; and
3 Re Working Hours Case July 2002 (2002) 114 IR 390 at 394.
4 Re Working Hours Case July 2002 (2002) 114 IR 390 at 430 and 394.
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(ii) the employee's ordinary hours of work in a week.
Employee may refuse to work unreasonable additional hours
(2) The employee may refuse to work additional hours (beyond those referred to in paragraph
(1)(a) or (b)) if they are unreasonable.
Determining whether additional hours are reasonable
(3) In determining whether additional hours are reasonable or unreasonable for the purposes of
subsections (1) and (2), the following must be taken into account:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates or
other compensation for, or a level of remuneration that reflects an expectation of,
working additional hours;
(e) any notice given by the employer of any request or requirement to work the
additional hours;
(f) any notice given by the employee of his or her intention to refuse to work the
additional hours;
(g) the usual patterns of work in the industry, or the part of an industry, in which the
employee works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms included under
section 63 in a modern award or enterprise agreement that applies to the employee, or
with an averaging arrangement agreed to by the employer and employee under section
64;
(j) any other relevant matter.
…’
[6] The Commission expressed a provisional5 view that the reasonable overtime
provisions in the awards listed at Attachment A be deleted and a note in the following terms
be inserted:
‘NOTE: Under the NES (see section 62 of the Act) an employee may refuse to work additional
hours if they are unreasonable. Section 62 sets out factors to be taken into account in
determining whether the additional hours are reasonable or unreasonable.’6
5 [2018] FWCFB 6884 at [7]
6 [2017] FWCFB 344 at [205]-[209], [2017] FWCFB 3337 at [3].
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb3337.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb344.htm#P311_30525
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[7] Interested parties were invited to make submissions in relation to our provisional
view. In subsequent submissions the Employer groups opposed the removal of sub-clause (a)
of the existing clauses on the basis that this would remove the employer right to require an
employee to work reasonable overtime and would result in a substantive change in award
conditions for employers. They supported the deletion of sub-clause (b) on the basis that it
replicates the NES entitlement. Ai Group proposed that the following clause and note be
inserted into the overtime clauses of the awards listed in Attachment A:
‘XX. Subject to section 62 of the Act, an employer may require an employee to work reasonable
overtime at overtime rates.
NOTE: Under section 62 of the Act an employee may refuse to work additional hours if they
are unreasonable. Section 62 sets out factors to be taken into account in determining whether
the additional hours are reasonable or unreasonable.’7
[8] The AMWU and CFMMEU opposed the deletion of sub-clause (b) on the basis that
additional ‘employer friendly’ factors that appear in the NES but not sub-clause (b) would
result in more weight being given to employer friendly factors when determining the
reasonableness of additional hours under the NES than there currently would be under the
award. They also submitted that sub-clause (a) should be deleted because it has the practical
effect of displacing the NES and would result in an imbalance of rights in favour of the
employer as employees would be unlikely to know that they could refuse to work
unreasonable additional hours.
[9] In a decision published on 17 September 20188 (the September 2018 decision) we
provisionally determined the issue arising from the interaction between the reasonable
overtime clauses at Attachment A and s.62 of the Act. In that decision we rejected the clause
and accompanying note proposed by Ai Group on the basis that it did not provide a ‘fair and
relevant minimum safety net’ within the meaning of the modern awards objective; in short,
the proposed clause lacked the requisite balance.
[10] Nor were we attracted to the retention of sub-clause (b) in its current form – it refers
only some of the s.62(3) considerations and its retention is apt to confuse. The AMWU’s
proposal was no better as it simply sought to excise what it characterised as ‘employer
friendly’ factors.
[11] We concluded that there was a need to formulate a term which makes explicit both the
employers right to require an employee to work reasonable overtime and an employee’s right
to refuse to work unreasonable additional hours. In our view a clause in the following terms
satisfied that need:
x. Reasonable overtime – model term
x.1 Subject to s.62 of the Act and this clause, an employer may require an employee -
other than a casual - to work reasonable overtime hours at overtime rates.
x.2 An employee may refuse to work overtime hours if they are unreasonable.
7 Ai Group Submission – 22 February 2018 at paragraph [6]; Ai Group Submission – 9 March 2018.
8 [2018] FWCFB 5749
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-aig-hospitality-090318.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am201615-sub-aig-220218.pdf
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x.3 Options 1, 2 or 3
[12] Options 1, 2 and 3 are set out at Attachment B. Interested parties were invited to
comment on whether option 1, 2 or 3 should be included in the model term.
[13] Submissions were received from:
Australian Industry Group (Ai Group);
Australian Business Industrial and NSW Business Chamber (ABI);
Australian Hotels Association (AHA);
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
known as the Australian Manufacturing Workers’ Union (AMWU);
Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU);
Electrical Trades Union of Australia (ETUA);
Health Services Union (HSU);
Housing Industry Association (HIA);
National Retail Association (NRA);
The Pharmacy Guild of Australia (PGA);
Shop, Distributive and Allied Employees’ Association (SDA); and
United Voice.
[14] A summary of the submissions received was published on 18 October 2018 and a short
oral hearing was held on 23 October 2018 to finalise the issue.
[15] United Voice, ETUA, AMWU, HIA, HSU, SDA and CFMMEU submitted Option 1
should be adopted. ABI, AHA, Ai Group, PGA and NRA submitted Option 3 should be
adopted. No party supported the adoption of Option 2.
[16] The submissions in support of Option 1 may be summarised as follows:
it has the benefit of clarity and removes the need to refer to another instrument, the
need to refer to another instrument to determine whether overtime hours are
reasonable or unreasonable ‘provides added complexities for small businesses’;9
and
9 AHA submission 2 October 2018 at para 2.2.1
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the need for overtime to be worked can arise at short notice and may require quick
access to the applicable laws: ‘inclusion of the factors in an express term in the
modern award means it will be a single step process thereby minimising delays’.10
[17] Those opposing Option 1 (and supporting Option 3) submit that:
Option 1 replicates the factors listed in s.62(3) and has the effect of ‘entrenching a
legislative standard in the modern awards system’ and ‘this is neither necessary (in
the sense contemplated by s.138 of the Act) nor appropriate’;11
in the event that s.62(3) was amended ‘then the provisions of the modern awards
affected would no longer be harmonious with the provisions of the Act’;12
Option 3 has the benefit of brevity and ensures that the relevant awards are simple
and easy to understand, while it may require a reader of the award to refer to
another instrument ‘that is not an uncommon feature of the modern awards system’
and ‘is an inevitable feature of the scheme of the Act and the modern awards
system’.13
[18] We have decided to adopt Option 1. While the Commission has generally not
reproduced the terms of the NES in modern awards the circumstances here warrant a different
approach. The model term provides employers with a right to require an employee to work
reasonable overtime hours; that right is subject to the terms of s.62. Given these
circumstances and the history of these terms it is appropriate to replicate the terms of s.62(3)
in these modern awards. The adoption of this course will ensure that the employers and
employees covered by these awards will not need to refer to another instrument to determine
whether overtime hours are reasonable or unreasonable. Option 1 provides clarity and
ensures that these modern awards are simple and easy to understand. Further, as submitted by
the HIA, Option 1 will reduce complexity for small businesses.
[19] We accept that s.62(3) may be subject to amendment, but that provides no impediment
to the adoption of Option 1. In the event of legislative amendment it will be a simple matter
to vary the terms of the relevant awards to reflect any such amendment.
[20] In the event we decide to adopt Option 1, it was generally agreed that the reference to
‘an averaging arrangement agreed to by the employer and employee under s.64’ be deleted
from clause X.3(i) of the model term and that an additional paragraph, clause X.3(j) ‘any
other relevant matter’, be added to the model term. We agree with the proposed changes and
will amend the model term accordingly. The revised model term is as follows:
x. Reasonable overtime – model term
x.1 Subject to s.62 of the Act and this clause, an employer may require an employee
- other than a casual - to work reasonable overtime hours at overtime rates.
10 HSU submission 2 October 2018 at para 5
11 Ai Group submission 2 October 2018 at para 2
12 NRA submission 20 September 2018 page 3
13 Ai Group submission 2 October 2018 at para 2(c)
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x.2 An employee may refuse to work overtime hours if they are unreasonable.
x.3 In determining whether overtime hours are reasonable or unreasonable for the
purpose of this clause the following must be taken into account:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates
or other compensation for, or a level of remuneration that reflects an expectation
of, working additional hours;
(e) any notice given by the employer of any request or requirement to work the
additional hours;
(f) any notice given by the employee of his or her intention to refuse to work the
additional hours;
(g) the usual patterns of work in the industry, or the part of an industry, in which
the employee works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms in this
award inserted pursuant to section 63 of the Act, that applies to the employee;
and
(j) any other relevant matter.
[21] Further, in its submission the NRA drew our attention to the fact that the words ‘other
than a casual’ in clause X.1 of the model term are not a feature of the current term in the
Retail Award; the Fast Food Industry Award 2010 or the Hair And Beauty Industry Award
2010. These awards were varied by the Part-time and Casuals Full Bench14 to remove the
words ‘other than a casual’ from the reasonable overtime term. These variations came into
effect on 1 January 2018.
[22] We propose to issue draft variation determinations in respect to all the awards in
Attachment A, in the same terms as the revised model term. The issues raised by the NRA
can be addressed in the settlement of the relevant variations. We note that a similar issue is
said to arise in the Hospitality Industry Award 2010. ‘Tailoring’ may also be required in
relation to the reference to ‘averaging terms’ in clause X.3(i).
[23] We would observe that the extension of the reasonable overtime term to casuals
requires further consideration. It appears that the matter was not the subject of any real debate
14 [2017] FWCFB 3541
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in the Part-time and Casuals proceedings and that the variations made by that Full Bench were
simply consequent upon the decision to provide that casuals were to be paid overtime rates in
certain circumstances. It seems to us that this issue is one of some complexity. The capacity
for an employer to require a causal to work reasonable overtime seems inimicable to the
nature of casual employment. There is also a question about whether s.62 applies to casual
employees. These issues can be further explored in the settlement of the variation
determinations in respect of the relevant awards.
[24] In the September 2018 decision we said that, subject to the finalisation of clause X.3,
it was our provisional view that the variation of the awards in Attachment A to insert the
model term to replace the existing reasonable overtime provisions is necessary to achieve the
modern awards objective. In reaching that view we took into account the considerations in
s.134(1)(a) to (h). The matters in s.134(1)(a), (b), (c), (d), (e) and (h) are not relevant to the
variation of these awards to insert the model term. We also indicated that the variation was
consistent with s.134(1)(da), insofar as it refers to the working of additional hours at overtime
rates. As to s.134(1)(f), we accepted that such a variation will give rise to some, albeit not
significant, increase in regulatory burden. As to s.134(1)(g) we were of the view that the
variation of these awards in the manner proposed will make them simpler and easier to
understand by providing greater consistency between the award term and the NES. We adhere
to these provisional views.
[25] Draft variation determinations will now be published. Our provisional view will only
be displaced in respect of any particular award if it is demonstrated that there are matters or
circumstances particular to that award which compel the conclusion that the achievement of
the modern award objective for that award does not necessitate the variation of the award to
insert the model term. One such matter may be the interaction between the model term and
other provisions in that award.
PRESIDENT
Printed by authority of the Commonwealth Government Printer
PR701857
Appearances:
L Hogg for Australian Business Lawyers, Australian Business Industrial and the New South
Wales Business Chamber.
P Ryan for the Australian Hotels Association.
R Bhatt for the Australian Industry Group.
M Nguyen for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU).
[2018] FWCFB 6680
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A Ambihaipahar for the Communications, Electrical, Electronic, Energy, Information, Postal,
Plumbing and Allied Services Union of Australia.
L Regan for the Housing Industry Association.
Z Blandfort for The Pharmacy Guild of Australia.
N Dabarera for United Voice.
Hearing details:
2018.
Brisbane, Sydney, Melbourne, Canberra (video hearing).
23 October.
10
ATTACHMENT A
Building and Construction General On-site Award 2010, cl 36.1;
Cleaning Services Award 2010, cl 28.1;
Electrical, Electronic and Communications Contracting Award 2010, cl 26.1;
Fast Food Industry Award 2010, cl 26.4;
General Retail Industry Award 2010, cl 29.1;
Graphic Arts, Printing and Publishing Award 2010, cl 33.1;
Hair and Beauty Industry Award 2010, cl 31.1;
Hospitality Industry (General) Award 2010, cl 33.1
Joinery and Building Trades Award 2010, cl 30.1;
Manufacturing and Associated Industries and Occupations Award 2010, cl 40.2;
Pharmacy Industry Award 2010, note at cl 26;
Timber Industry Award 2010, cl 30.11.
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ATTACHMENT B—Options for model term clause X.3
Option 1
X.3 In determining whether overtime hours are reasonable or unreasonable for the purpose of this
clause the following must be taken into account:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates or other
compensation for, or a level of remuneration that reflects an expectation of, working
additional hours;
(e) any notice given by the employer of any request or requirement to work the additional
hours;
(f) any notice given by the employee of his or her intention to refuse to work the additional
hours;
(g) the usual patterns of work in the industry, or the part of an industry, in which the employee
works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms included under
section 63 in a modern award or enterprise agreement that applies to the employee, or with an
averaging arrangement agreed to by the employer and employee under section 64.
Option 2
X.3 In determining whether overtime hours are reasonable or unreasonable for the purpose of this
clause the factors set out in s.62(3) of the Act are to be taken into account.
NOTE: The factors in s.62(3) are:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates or other
compensation for, or a level of remuneration that reflects an expectation of, working
additional hours;
(e) any notice given by the employer of any request or requirement to work the additional
hours;
(f) any notice given by the employee of his or her intention to refuse to work the additional
hours;
[2018] FWCFB 6680
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(g) the usual patterns of work in the industry, or the part of an industry, in which the employee
works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms included under
section 63 in a modern award or enterprise agreement that applies to the employee, or with an
averaging arrangement agreed to by the employer and employee under section 64.
(j) any other relevant matter.
Option 3
X.3 In determining whether overtime hours are reasonable or unreasonable for the purpose of this
clause the factors set out in s.62(3) of the Act are to be taken into account.
