According to The Australia Institute, the average Australian worker performs 6 weeks of unpaid overtime a year, worth over $8,000 per worker per year. Managers and professionals experience the highest rates of unpaid overtime and excessive or unreasonable hours, followed by community and personal service workers.
In this article, we look at:
- what is "reasonable" when assessing additional hours;
- employee rights to refuse to work additional hours;
- the practice of averaging hours of work; and
- a case review that saw significant penalties imposed on the employer for unreasonable additional hours.
Recent high-profile cases alleging unreasonable additional hours
In March 2023, the Finance Sector Union, represented by Hall Payne Lawyers, issued proceedings in the Federal Court against one of the big-four financial institutions on behalf of managers it alleges were required to work 55 to 80-hour working weeks: NAB faces big test case over excessive work hours.
Sally Rugg, former Chief of Staff to Independent MP Dr Monique Ryan also issued proceedings earlier in the year seeking compensation for adverse action for refusing to work "unreasonable" additional hours.
What constitutes "reasonable" or "unreasonable" additional hours, particularly in professional services, can be difficult to define. For a salaried, white-collar worker earning a relatively high income (and who may not necessarily be entitled to payment for working additional hours), existing case law has only limited application.
What are the maximum weekly hours of work?
The National Employment Standards (NES) are 11 minimum employment standards that have to be provided to all employees.
The NES impose a limit on the number of hours an employee may be asked or required to work. In terms of maximum weekly hours, the NES provides (at section 62(1) of the Fair Work Act) that an employer must not request or require a full-time employee to work more than 38 hours in a week unless the additional hours are reasonable.
The NES further provides (at section 62(2) of the Fair Work Act) that an employee may refuse to work additional hours, but only if the additional hours are unreasonable.
What are "reasonable" additional hours?
What are "reasonable" additional hours isn't always clear and is to be determined on a case-by-case basis.
It is important to note that while section 62(2) provides that an employee may refuse to work additional hours, it does not confer an unfettered right of an employee to refuse to work additional hours. The additional hours must be objectively unreasonable.
In determining whether additional hours are reasonable, there are a number of factors to be taken into account. No single factor is determinative as to whether additional hours are reasonable or not.
These factors are set out at section 62(3) of the Fair Work Act and include:
- any risk to employee health and safety from working the additional hours;
- the employee's personal circumstances, including family responsibilities;
- the needs of the workplace or enterprise in which the employee is employed;
- whether the employee is entitled to receive payment for working additional hours, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;
- any notice given by the employer of any request or requirement to work the additional hours;
- any notice given by the employee of his or her intention to refuse to work the additional hours;
- the usual patterns of work in the industry, or the part of an industry, in which the employee works;
- the nature of the employee's role and the employee's level of responsibility; and
- whether any applicable enterprise agreement, award, or agreement between the employer and employee provides for averaging of hours worked, and whether the additional hours are in accordance with those terms.
Refusing a request to work additional hours
An employee may refuse to work additional hours, but only if the additional hours are unreasonable.
An employer must not take adverse action against an employee because the employee has made a complaint or enquiry in relation to their employment, or has exercised a workplace right, or has the benefit of a workplace law. If an employer takes adverse action against an employee (such as demotion, docking the employee's pay, or termination of employment) for refusing a request to work unreasonable additional hours, the employee may have a general protections or other claim.
Conversely, an employee should be careful not to unreasonably refuse a request to work additional hours. A direction from an employer to work additional hours could be a lawful and reasonable direction. Failure to comply with a lawful and reasonable direction may amount to serious misconduct, for which there can be significant consequences up to and including termination of employment.
If your employer proposes to discipline you or terminate your employment for refusing a request to work additional hours, you should act quickly and seek legal advice. If your employment has been terminated, strict time limits may apply.
Case review - significant penalties imposed on employer for unreasonable hours
In Australasian Meat Industry Employees Union v Dick Stone Pty Ltd, the Federal Court considered the factors set out at section 62(3) of the Fair Work Act. The Court ordered the employer to pay a total of $93,000 in penalties to the employee for contraventions of the Fair Work Act and relevant award, including contravention of the maximum weekly hours prescribed by the NES.
The employee was a knife hand/labourer. Relevantly, his employment contract stated he was expected to work 50 "ordinary work hours" per week - between 2/00 am and 11.00 am on weekdays and between 2.00 am and 7.00 am on Saturdays - plus reasonable additional hours as requested. The employee was covered by the Meat Industry Award 2010 (Award).
What are "reasonable" and relevant factors
On the operation of section 62, the Court said:
.Section 62 is part of the NES. As s 61(1) makes explicit, it is a minimum standard which cannot be displaced. Its effect, as Dick Stone conceded in argument, is that the parties cannot contract out of it. It is unnecessary, at least at this point, to decide whether a condition of a contract of employment that requires an employee to work in excess of 38 hours is a "requirement" for the purposes of s 62(1) because it is enough that the employer requests the employee to work the excess hours. The only circumstances in which the FW Act sanctions work by an employee in excess of 38 hours is if the additional hours are reasonable.
In considering whether it was reasonable for the employer to require the employee to work 50 hours a week, the Court remarked that:
 What is reasonable in any given case depends on an evaluation of the particular circumstances of both the employee and the employer having regard to all relevant matters including those matters mandated for consideration in s 62(2)...
The Court considered the factors set out at section 62(3), and gave particular regard to the health impacts of the additional hours, the employee's personal circumstances (including being a recent migrant to Australia), as well as the needs of the employer:
 .It is a fact of life that fatigue can affect alertness and concentration. It is common knowledge that fatigue, particularly physical or mental exhaustion, can increase the risk of accidents at the workplace and, over the long term, contribute to a variety of diseases. In a job requiring the use of knives and the lifting of heavy weights there are obvious risks.
. Mr Boateng was a very recent immigrant to Australia when he accepted Dick Stone's offer of employment. In all likelihood he had no knowledge of Australian law. The evidence also discloses that Mr Boateng was a married man and that his wife gave birth to their first child on 1 December 2017.
The Court found there was no evidence from the employer that there existed circumstances which made it necessary for the employer to structure its work practices in such a way that the employee had to work an additional 12 hours a week.
Contraventions and penalties imposed on the employer
Courts can make orders imposing penalties for contraventions and compensation. The maximum penalty for an employer found to have contravened a National Employment Standard (including section 62 "maximum weekly hours") on or after 1 January 2023 is $82,500 and up to $165,000 for serious contraventions.
The employer in this case was found to have contravened the Fair Work Act by requiring the employee to work 12 hours a week in excess of the maximum prescribed by s 62(1) of the Fair Work Act (38 hours for a full-time employee). The Court ordered the employer to pay a $30,000 penalty for this contravention.
The Court also found the employer engaged in several other contraventions of the Fair Work Act and the Meat Industry Award, for which penalties were also ordered:
- failing to provide the employee with a Fair Work Information Statement as prescribed by the Fair Work Act ($3000);
- failing to pay overtime rates as required by the Award ($20,000);
- failing to make copies of the Award and National Employment Standards available to employees as required the Award ($25,000); and
- failing to post a roster showing the start and finishing times for ordinary hours as required in the Award ($15,000).
The Court ordered the penalties be paid to the employee. The employer also paid the employee $13,271.34, being the agreed amount of unpaid wages.
Averaging of hours
Modern awards and enterprise agreements can provide for "averaging" of hours of work, which allows for an employee's average weekly hours to exceed 38 hours, provided the excess hours are reasonable.
An employer and an award/agreement-free employee may agree to an averaging arrangement under which hours of work over a specified period are averaged. For full-time employees, the average weekly hours under such an arrangement must not exceed 38 hours a week.
Lessons for employees
- For full-time employees, the NES provides for maximum weekly hours of 38 hours a week. However, an employer can require an employee to work additional hours beyond 38 hours a week, provided those hours are reasonable.
- If the additional hours are not reasonable, an employee can refuse to work the additional hours.
- What is reasonable (or unreasonable) is to be determined on a case-by-case basis.
- Employees should be careful not to refuse a reasonable request to work additional hours.
- Employers are prohibited from taking adverse action against an employee for refusing a request to work unreasonable additional hours.
Get help from an employment lawyer
If your employer is requiring you to work additional hours, or you think your working hours are excessive, or you've not been paid appropriately for working additional hours, you should seek advice from one of our employment lawyers. We can provide you with expert advice on your rights and entitlements.
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.