The Full Bench of the Fair Work Commission (FWC) recently determined that the time spent by an employee putting on and taking off personal protective equipment (PPE) during their unpaid meal break needs to be paid by the employer.
The decision highlights the risk that employees must be paid for any substantive task required by the employer in what may otherwise be considered unpaid time. It also demonstrates the value of a well-drafted set-off clause when employees are paid above the award.
Mr Seo is employed as a production line worker, whose role is to prepare meat for packaging on a processing line. Mr Seo raised a dispute with his employer that he was not receiving a full 30-minute unpaid meal break required under clause 15.1(a) of the Meat Industry Award 2020 (Award).
Under this clause, subject to alternative arrangements mutually agreed between relevant parties, an employee is required to be given a 30-minute unpaid meal break before completing five hours' work. Any employee called upon to work during a meal break is entitled to be paid at overtime rates for that period.
My Seo claimed he was not receiving his full break because his employer required him to complete a range of activities, including putting on and removing various items of PPE during his break. Mr Seo applied to the FWC under a dispute resolution procedure and sought to be back-paid at overtime rates for the work done during his unpaid breaks, being 10 minutes work per day, over two years.
First instance decision
At first instance, Deputy President Asbury found the time spent by Mr Seo putting on and removing his PPE was not work for which he was entitled to payment under the Award or his contract of employment. In the alternative, the Deputy President found the employee was properly compensated for these activities because he was paid more than the minimum award rates and his contract allowed additional benefits to be set off against any claim for unpaid award entitlements.
Mr Seo sought and was granted permission to appeal the decision.
On appeal, the Full Bench rejected the employer's argument that the purpose of the unpaid break clause was to provide a 30-minute break away from “productive work”. The Full Bench found there was nothing in the text of the Award that suggests breaks are only from “productive work” and that this would likely lead to inequitable outcomes between difficult occupations.
The Full Bench found in Mr Seo's favour, stating that if an employer requires an employee to undertake substantive activities before or after their break, then a reasonable time spent undertaking those activities is “work” and not part of the employee's unpaid break. However, the Full Bench said this case should be contrasted with many other employees in different workplaces who choose to “wash their hands or remove an item of PPE before eating on a meal break” or employees undertaking meal break activities that could be regarded as trivial.
The Full Bench also appeared to attempt to limit the potential for similar claims in other industries, such as building and construction, making clear that this decision was not dealing with a requirement that an employee “put on a safety helmet, safety glasses and a hi-vis vest on their way out of the crib room at the end of a meal break”.
The Full Bench agreed with the Deputy President that Mr Seo's contract contained a clause that allowed the employer to set off remuneration paid to him under the contract against a claim for entitlements under clause 15.1 of the Award. However, whether the amounts paid to Mr Seo were sufficient to set off his entitlement to be paid overtime for time worked during his meal break depended on a range of matters.
Findings would need to be made about the amount of time it took (or ought reasonable of taken) Mr Seo to undertake the break activities to determine whether he was entitled to any back pay. The matter was remitted back to the Deputy President for determination.
Mandatory steps in a dispute resolution procedure must be followed
Separately, the Full Bench found the FWC did not have jurisdiction to determine whether the employee was entitled to payment for time putting on and taking off PPE before and after his shifts. Mr Seo sought to agitate this additional claim for the first time at the hearing of the matter at first instance and the Deputy President found the employer “did not dispute” the broadening of the dispute and subsequently dealt with the matter.
On appeal, the Full Bench found the employer did not consent to the FWC arbitrating this aspect of the dispute (as required under the dispute settlement procedure in the award) and that “more than complete silence” is required to indicate consent to arbitration.
Lessons for employers
Employers should ensure their current practices regarding break times meet the requirements in any modern awards or enterprise agreements that apply to them to avoid exposure to claims for unpaid overtime.
Employers should consider whether they are requiring employees to undertake any substantial tasks or activities during their unpaid breaks before they commence work and after they finish work. Any substantial tasks required by the employer may be considered “work” and employees may be entitled to be paid for this time under an industrial instrument.
Employers relying on overpayments of minimum wages to compensate for underpayments of modern award entitlements should also ensure they have appropriate contracts and mechanisms in place to safeguard against potential claims.
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