Many awards and enterprise agreements entitle employees to overtime payments for hours worked in excess of ordinary or rostered hours. What if an employee takes paid personal level or paid annual leave at a time when they would otherwise be performing work during ordinary hours? Can this employee claim overtime if they are then required or requested to work outside those ordinary hours?
Take for example a part time employee who is ordinarily rostered on Monday to Thursday shifts, but is sick from Monday to Wednesday and is called in on the Friday to work an additional shift. Does the employee receive overtime for that shift?
This issue was considered by Deputy President Sams of the Fair Work Commission (FWC) in a decision published on 29 May 2017 ( FWC 2535). The question to be resolved was whether Jetstar ground crew employees were entitled to have periods of personal and other leave, which fall during a pay week or roster cycle, taken into account when calculating overtime payments. The matter was referred to the FWC for determination pursuant to the dispute resolution procedure under the Jetstar Services enterprise agreement.
The relevant overtime clause stated:
Where a full time employee works for a longer period than his or her rostered shift period, or an average of more than 38 hours per week, averaged over a roster cycle (and taking into account RDO entitlements) the additional time worked will be treated as overtime. Similar provisions were made for casuals and part-timers, in which a threshold of daily or weekly hours was stipulated and provision made for overtime payments when the employee worked more than the threshold.
The Union applicant argued overtime should be payable, irrespective of any leave entitlements accessed during the pay week or roster period. This interpretation was said to be supported by section 62 of the Fair Work Act 2009 (Cth), which prescribes maximum hours of work as part of the National Employment Standards. Section 62(4) defines hours of work as including ‘any hours of leave, or absence, whether paid or unpaid, that the employee takes in the week and that are authorised...’. The Union argued that the enterprise agreement should be interpreted on the basis the parties to it intended ‘work time’ to have the same meaning as in s 62 of the Act.
The employer argued ‘work’ means the actual performance of duties and is a different concept to ‘ordinary time’, ‘ordinary hours of work’ or ‘rostered hours’. Moreover, section 62(4) of the Act had no application because that provision is for the specific purpose of calculating maximum hours; not for any other purpose.
The FWC accepted the employer’s arguments and ruled that the word ‘works’ or ‘worked’ must mean being physically at work and performing work or other functions associated with work, at the employer’s direction. Work did not include periods where no tasks are undertaken and nothing is made or done for the benefit of the employer, such as periods of annual leave, personal leave and other leave.
Lessons for employers
This ruling is based on an interpretation of a particular enterprise agreement provision, albeit one that commonly appears in similar terms in other enterprise agreements. Employers should beware assuming this decision has universal impact. The author is aware the Fair Work Ombudsman has adopted a contrary construction of overtime provisions that deploy similar wording.