Are your staff working unpaid hours?

If your staff are working unpaid hours, your company could face legal backlash as well as reputational damage, says one employment law expert.

With new research suggesting full-time employees are working around 4 hours more than the regular hours specified on their employment contracts, employers must take care that their requests for employees to work additional hours are “reasonable”, says Benjamin Marshall, Senior Associate at Arnold Bloch Leibler.

Recent employer branding research conducted by HR and recruitment agency Randstad found that full-time employees were working, on average, 42.25 hours per week – 4.25 hours more than the contracted 38 hours per week they are supposed to work – equating to up to $71.2b in overpaid overtime each year.

Marshall says that under the National Employment Standards (section 62 of the Fair Work Act), employers cannot request or require full time employees to work more than 38 hours per week, unless the additional hours are reasonable.

“The Act prescribes a number of factors that must be taken into account in determining whether additional hours are “reasonable” or not,” he told HC Online. 

However, he says the workplace right in relation to maximum weekly hours is rarely relied upon by employees, who may be concerned about the potential career consequences of refusing to work additional hours.

Employers are commonly required to pay employees for working additional hours, either through a right to paid overtime or through a total salary that is specified to compensate for additional hours. 

“If there is no payment, then it is important that employees are volunteering their time of their own volition, otherwise, they may be entitled to be compensated for that time,” Marshall says.

Ideally, he says employment contracts should address the issue of compensation for additional hours.

Aside from any need to compensate for the time worked, Marshall says HR professionals also need to be conscious of the employer’s health and safety obligations.

“Although an additional four to five hours spread across a week is unlikely to pose a significant safety risk, fatigue from excessive hours is a genuine hazard that needs to managed,” he says.

He says HR professionals should look beyond these legal considerations and consider the attributes the organisation wants to portray to attract and retain staff. 

Are your requests to work extra hours reasonable? Have you considered:

1. The risk to health and safety from working the additional hours;
2. The employee’s personal circumstances, including family responsibilities;
3. The needs of the workplace or enterprise;
4. 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;
5. Any notice given by the employer of any request or requirement to work the additional hours;
6. Any notice given by the employee of his or her intention to refuse to work the additional hours;
7. The usual patterns of work in the industry;
8. The nature of the employee’s role, and the level of responsibility;
9. Whether the additional hours are in accordance with averaging terms in any applicable industrial instrument; and
10. Any other relevant matter