Australia: Refusal to work overtime leads to dismissal, adverse action claim and reinstatement

Industrial and Employment Law Alert: 29 Nov 2012
Last Updated: 2 December 2012
Article by Andrew Tobin

The Federal Magistrates' Court has ordered an employer to reinstate a worker who was dismissed after he refused to work compulsory rostered overtime.

The decision, handed down earlier this month, appears to put some significant qualifications around parts of the Fair Work Act and similar modern award provisions, which, at face value, allow an employer to require workers to work 'reasonable' additional hours.

Partner Andrew Tobin discusses this decision and outlines the important lessons employers can learn from this case.

Key points

  • In Brown v Premier Pet t/a Bay Fish [2012] FMCA 1089, a worker was dismissed after he refused to comply with his employer's requirement to work three hours additional overtime, outside of normal trading hours, once every seven to 10 non-trading days.
  • The decision in this case shows that the statutory restraints on employers to dictate what hours their staff work are potentially more significant than they are often presumed to be. An employer's right to require an employee to work 'reasonable additional hours' should be exercised with caution.
  • Where a dispute arises - at least in the context of a dispute under the general protections provisions of the Fair Work Act 2009 - the onus will not be on the worker to show that a requirement to work additional hours is unreasonable. Rather, the employer will need to show that the requirement is reasonable.
  • When intractable disputes arise about a requirement to work additional hours, the employer should first explore options to resolve the dispute other than dismissing the employee for misconduct. The options available will vary according to the circumstances and the applicable industrial arrangements.

The facts of Brown v Premier Pet

The case in question concerned a claim by Adam Brown against his former employer, Premier Pet, for relief from what was alleged to be adverse action - his dismissal from employment - said to have been taken against him as the result of his exercise of workplace rights.

As of mid-2011, Mr Brown was employed as a fish keeper in the employer's business as a distributor of live aquarium fish and related products.

Premier Pet decided to introduce a compulsory overtime roster in its Brisbane fish room for employees to perform required routine maintenance work on non-trading days, including weekends and public holidays. Until that point, the work had been performed by a few individuals on a regular basis, but management wanted to spread the burden of the work across all employees. If implemented, the roster would have seen Mr Brown required to work for three hours on a non-trading day once every seven to 10 non-trading days.

Mr Brown was given 14 days notice of the proposed roster, but objected to the compulsory overtime requirement. He was not unwilling to work some overtime and already did so on a weekly basis, but generally his position was that he wanted a 38 hour a week job, with only occasional overtime. He was prepared to work some weekends in exchange for time in lieu (as authorised by the applicable award), but after discussions the parties were unable to reach agreement.

The Court found that Mr Brown refused to work additional overtime for legitimate reasons, including a desire to spend his own time in a private business in which he was involved, and because as a bankrupt, he was concerned about the impact that the additional work might have on his liability to make contributions to his bankrupt estate.

At a meeting on 14 July 2011, Mr Brown was told that if he refused to comply with the new roster, his employment would be in jeopardy. Later that day, he lodged an application with Fair Work Australia to deal with a general protections dispute. He claimed to have served notice of that application on the employer the next day, 15 July, prior to his dismissal.

On 15 July, Premier Pet dismissed Mr Brown from their employment on the basis that he had refused to conform to the new overtime roster. There was no dispute that Mr Brown's dismissal was 'adverse action' for the purposes of the general protections provisions in the Fair Work Act.

In his claim, Mr Brown alleged that his dismissal - the adverse action taken against him - was the result of his exercise of two workplace rights, meaning that his dismissal was unlawful. The first was his right to refuse to work unreasonable overtime, and the second was his right to take his dispute about being required to work overtime to Fair Work Australia.

He sought compensation, reinstatement and the imposition of a civil penalty on the employer.

The decision in this case

Federal Magistrate Jarrett dismissed the claim to the extent that Mr Brown alleged he had been dismissed because he had given Premier Pet notice of his application to Fair Work Australia. The Court found that, at the time of Mr Brown's dismissal, Premier Pet had not received notice of that application.

However, the Court upheld the claim to the extent that it relied on the allegation that Mr Brown had been dismissed because he had refused, as was his right under the Fair Work Act, to work 'unreasonable' overtime. The reasons for this included the following:

  • While section 62 of the Act permits an employer to request or require an employee to work reasonable additional hours, it also provides employees with a workplace right to refuse to work additional hours that are unreasonable.
  • Mr Brown had established a sufficient prima facie case so that, under the reverse onus of proof provisions of the Act applicable to general protections disputes:
    • it was presumed that the alleged adverse action taken against Mr Brown (his dismissal) was taken for the reason he alleged, namely because of his refusal to work unreasonable additional hours; and
    • Premier Pet bore the onus to prove that it had not dismissed Mr Brown for a prohibited reason.

    In other words, the Court proceeded on the basis that Premier Pet's overtime requirements of Mr Brown would be presumed to be unreasonable, unless it could prove otherwise.

  • Section 62(3) of the Act sets out a list of non-exhaustive considerations applicable to a determination of whether additional hours are reasonable. Not all of them were relevant, and there was no evidence about some of them. However, relevant factors raised by the evidence from the list included:
    • Mr Brown's "personal circumstances, including his family responsibilities".
    • The Court held that "any or all of the employee's personal circumstances may be taken into account" and the "fact that there is no need to attend to childcare responsibilities, or that somebody does not have the care and control of another person... is not determinative".
    • In Mr Brown's case - he was single without dependants - his desire to spend time in his private business interests and his concern about earning extra income in relation to his bankruptcy obligations were found to be legitimate 'circumstances'.
    • The needs of the workplace. There was insufficient evidence for the Court to determine what any relevant needs of the workplace might have been. At best, there was evidence of complaints to the effect that Mr Brown was 'not pulling his weight' and that the new rostering arrangements were not introduced to accommodate particular business issues but, rather, to deal with issues applicable only to Mr Brown.
  • Other matters found to be relevant included the following:
    • Premier Pet had made no attempt to negotiate the proposed roster arrangements with Mr Brown. Rather, it was 'the employer's way or the highway'. The Court indicated that the employer could have had resort to the dispute resolution provision in the applicable award as a means of resolving Mr Brown's issues with the roster, rather than simply dismissing him on account of his refusal to work to the roster.
    • There was no evidence that the additional hours required of Mr Brown were not unreasonable, having regard to his circumstances, including the overtime he was already working on a regular basis. The onus was on the employer to prove that its requirements were not unreasonable by, for example, calling evidence about Mr Brown's current working hours and arrangements (something it had not done).
    • While the amount of overtime was modest, the requirement that it be worked on weekends and public holidays had the potential to be particularly inconvenient. It is not the additional number of hours that is important but, rather, the surrounding circumstances in which the overtime is required to be worked that is the key consideration.

Taking these matters into account, the Court found that Premier Pet had failed to discharge the onus on it to demonstrate that it did not terminate Mr Brown's employment unlawfully.

The remedy imposed

In a previous decision between the same parties ([2012] FMCA 830), Federal Magistrate Jarrett had held that, because of his bankruptcy, the only remedy Mr Brown could pursue was reinstatement. See our previous Alert for more details on this decision.

Because of this, no compensation could be recovered, nor any civil penalty imposed.

The Court ordered that Premier Pet reinstate Mr Brown immediately, taking the following considerations into account:

  • According to previous authorities, where reinstatement is sought for proven unlawful termination of employment, it should generally be regarded as the primary remedy and awarded, except where it would be impracticable or there are just and compelling reasons not to do so.
  • A central consideration in deciding whether to order reinstatement is whether a satisfactory working relationship between the parties could be re-established. In this case, the Court was satisfied that there was no evidence of any significant impediments to the parties being able to re-establish their working relationship, having regard, among other things, to changes in the employer's staff since Mr Brown's dismissal and the geographic arrangement of Premier Pet's business operations.
  • While there was some evidence about changes to the employer's business and staffing arrangements following the dismissal, this was insufficient to provide any compelling reason not to order reinstatement.
  • Further, while there was some evidence to the effect that there was not enough work in the employer's business to accommodate an additional full time employee, the fact that a position no longer exists is not a basis to resist a claim for reinstatement.

The decision is now subject to an appeal.

What employers can learn from this case

This decision makes it clear that the statutory restraints on employers to dictate what hours their staff will work are, potentially, more significant than they are often presumed to be. Short of major and obvious impediments to workers' ability to work overtime arising out of OH&S considerations, childcare responsibilities or the like, many employers assume that they have broad powers to dictate what hours their staff will work.

The result in Premier Pet makes it clear that those powers should be exercised with a considerable degree of caution. But for Mr Brown's bankruptcy, his employer could have been ordered to pay unlimited compensation and a civil penalty, in addition to the requirement to reinstate Mr Brown.

The decision also indicates that, where a dispute arises, the onus is not on the worker to show that the requirement to work the additional hours in question is unreasonable but, rather, the onus is on the employer to show that the requirement is reasonable. According to one reading of the decision, it treats the statutory right of a worker to refuse to work 'unreasonable' additional hours under the Fair Work Act as, in fact, a right merely to assert that a request or requirement to work additional hours is unreasonable.

In other words, all an employee faced with a request or requirement to work additional hours must do to legitimately object to that request or requirement, and thus exercise a workplace right, is to assert that the request or requirement is unreasonable. From there, to justify the requirement - at least in the face of a general protections claim - the onus will be on the employer to prove otherwise.

In practical terms, to meet their statutory obligations, employers seeking to impose additional working hours on their employees may have to:

  • develop and document a business case for the change, in order to establish a relevant business need for the request or requirement to work additional hours; and
  • enquire broadly into the personal circumstances of affected employees, so that no factors potentially relevant to the issue of whether the requirement is reasonable are overlooked.

Employers who want to maximise the flexibility of their workforces, including by being able to direct that reasonable additional hours be worked from time to time, should ensure that their industrial arrangements, including their recruitment processes, are appropriately adapted for this purpose.

Some employers will be able to rely on the dispute resolution procedures provided for in applicable awards or other agreement-based industrial instruments. Others could consider incorporating such processes into their common-law employment contracts, using the dispute resolution provisions of the Fair Work Act relating to disputes about matters concerning the National Employment Standards. Either way, it is crucial that employers give this matter some thought to avoid potential legal proceedings.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Andrew Tobin
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