CCBR Business Review

20 B U S I N E S S T I P S So…what is ‘reasonable’ overtime? The days of the 9 to 5 working week are long gone with both employers and employees often enjoying the benefits of more flexible working arrangements. These arrangements can allow employers to respond to surges in demand, and employees to enjoy the flexibility for an improved work/life balance and the additional income overtime provides. Flexible working provisions are often covered in employment overtime arrangements. Reasonable overtime clauses are something we often see included in employment contracts, but do any of us actually know what counts as ‘reasonable’? Reasonable overtime clauses ensure that an employer can request that an employee works additional hours. This can be beyond the employee’s ordinary hours, outside the agreed number of hours, or outside the usual spread of ordinary hours. However, the question often asked by both employers and employees today is what is reasonable overtime? What makes it reasonable or unreasonable, and who gets to decide? What happened? The recent decision saw the Federal Court give a rare ruling on what reasonable additional hours are. In this case, the worker was a recently arrived migrant from Ghana who had commenced employment within three weeks of arriving in Australia. The worker was employed by Sydney’s largest meat wholesaler, Dick Stone Pty Ltd., and was working 50 hour weeks, with shifts beginning at 2:00am. At the time, the employee had no knowledge of his rights under Australian employment law. The employment form and commencement pack presented to the worker contained a letter stating that his “ordinary hours” were 50 hours per week. The Court also noted that the employment document did not detail the rate of pay, nor mention any entitlement to overtime. The employer confirmed that the worker did not receive overtime payments for hours worked in excess of 38 hours per week. Instead, a “blended rate” which incorporated overtime had been utilised by the employer consistently since 2013. Ultimately, the Federal Court decided that it was unreasonable of Dick Stone to require or request that the worker completed an additional 12 hours every week, over and above the 38 hours stipulated by the Award and beyond the requirements of section 62 of the Fair Work Act 2009 (Cth), and the National Employment Standards. Can employers contract out of minimum standards? Despite the worker entering into his employment contract, the Court found that the worker had ‘no choice’ but to work the 12 additional hours per week as contracted by Dick Stone. The Court found that section 62 of the Fair Work Act 2009 was a ‘minimum standard’ and ‘parties cannot contract out of it’. Which means that, even though the signed contract allowed for 12 e additional hours per week, that clause did not override the requirements of section 62. Why was the request for additional hours ‘unreasonable’? Justice Katzmann found ‘obvious risks’ associated with the worker’s overtime. By Warwick Ryan, Partner, Hicksons Lawyers The lengthy shifts significantly increased risk due to fatigue, whereby the worker was required to use knives and lift heavy weights within the scope of his employment. Regardless of whether the 50-hour week ‘aligned with Dick Stone’s business needs’, it was held that this did not mean the additional hours were reasonable in the worker’s case. The Court also noted, pursuant to the Meat Industry Award, that the usual pattern of work in this part of the meat industry is to work from 4:00am, not 2:00am. This case was also influenced by the fact the worker was a recent migrant who did not understand Australian employment law. Reference was also made to the fact that the role required the use of sharp knives as well as other dangerous implements and considered how long working hours may have increased the risk of an accident occurring. What does this mean for employers? This recent Federal Court ruling has limited the scope of what some employers may see as ‘reasonable’ additional hours. So, it is in the interests of employers to be clear – up front – about the likely scope hours (including overtime) required as part of the role. Especially, where the worker is young or from a migrant background. Just because an employer believes that a role may require extended hours, this does not mean the court will accord to this perspective. To avoid the scrutiny of the court, ensure that you are transparent in your dealings with, and expectations of, the employees regarding the hours implicit in the role. We recommend that employers review their employment documents in relation to these developments, to reduce any underlying risk in your current employment arrangements. The Australian Taxation Office (ATO) has today announced four key focus areas for Tax Time 2022. The ATO will be focusing on: • record-keeping • work-related expenses • rental property income and deductions, and • capital gains from crypto assets, property, and shares. These ATO priority areas will ensure that there is an appropriate level of scrutiny on correct reporting of deductions and income, so that Australia continues to have a strong tax system that can support the Australian community. Taxpayers can take steps to lodge right the first time. Assistant Commissioner Tim Loh said, “The ATO is targeting problem areas where we see people making mistakes.” Four priorities for the ATO this tax time "It’s important you rethink your claims and ensure you can satisfy the 3 golden rules” Mr Loh said. 1. You must have spent the money yourself and weren’t reimbursed. 2. If the expense is for a mix of income producing and private use, you can only claim the portion that relates to producing income. 3. You must have a record to prove it.” CENTRAL COAST BUSINESS REVIEW JUNE 2022