This blog is a timely reminder of the importance of correctly managing overtime hours and payments to avoid serious financial penalties.
In “A bone to pick: Assessing the “reasonableness” of additional hours” we reported on the Federal Court of Australia (the Court) decision in Australasian Meat Industry Employees Union v Dick Stone Pty Ltd  FCA 512 which found that a meat processing establishment had contravened the Fair Work Act 2009 (Cth) (FW Act) by:
- requiring the employee to work an additional 12 hours per week in excess of the maximum weekly hours of work;
- failing to provide the employee with a copy of the Fair Work Information Statement (FWIS) before or as soon as practicable after the commencement of employment;
- underpaying the employee overtime for hours worked in excess of 38 hours per week and outside of the span of hours in the Meat Industry Award 2010 (the Award);
- failing to make copies of the Award and the National Employment Standards available to employees as required by the Award; and
- failing to post the roster with the start and finishing times of ordinary hours.
In Australasian Meat Industry Employees Union v Dick Stone Pty Ltd (No 2) FCA 1263 the Court was required to determine the pecuniary penalties to be imposed on the employer for the contraventions.
The Court had regard to the nature of the contraventions and the particular circumstances of the matter including that:
- the employee was an immigrant worker who was employed shortly after his arrival into Australia and had little input into his terms and conditions of employment;
- the letter of offer had deficiencies, including stating that the ordinary hours of work were 50 hours per week and failing to state a rate of pay or refer to when overtime was to be paid;
- the contraventions occurred over more than three years;
- the contraventions were deliberate and involved senior management;
- the employer had not previously contravened the FW Act and did not have a history of breaches of workplace relations laws; and
- there was a need for specific and general deterrence.
While the employer’s apology was accepted, the Court did not place much weight in the “bare apology”. The Court considered that the employer had sought to deflect responsibility and had not appreciated the Court’s finding that requiring the employee to work an additional 12 hours per week was unreasonable and the reasons why it was unreasonable. In particular, when canvassing employees about working a 50-hour week, the employer had no regard to the finding that the additional hours were a risk to health and safety.
Further, the Court noted that while the employee’s underpayment had since been rectified, there was no evidence that the employer had conducted any assessment of whether other employees were also underpaid. For the Court, this was an expected course of action had there been genuine contrition and acknowledgement of wrongdoing by the employer.
Accordingly, the Court imposed penalties totalling $93,000 and ordered the total penalty to be paid to the Australasian Meat Industry Employees Union.
Lessons for employers
As the Court noted in this matter, generally, breaches of the NES and modern awards are treated seriously because the NES and modern awards aim to protect minimum entitlements. For requiring the employee to work an unreasonable additional 12 hours per week and failing to pay overtime, the employer was ordered to pay a total penalty of $50,000.
Employers also face significant penalties in breaching basic obligations under the NES and/or a modern award. For example, in this matter, the employer was penalised $3,000 for failing to provide a copy of the FWIS to the employee as required by the NES, $25,000 for not ensuring that copies of the Award or the NES were made readily accessible to all employees and $15,000 for failing to post at the workplace a roster of start and finish times for ordinary hours as required by the Award.
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