Earlier this year, junior doctors in Canberra reached a record breaking $31.5 million settlement with the ACT Government and Calvary Health Care, compensating them for unpaid overtime and excessive hours worked over the span of eight years.
On a smaller scale, in 2023 Federal MP Monique Ryan’s former chief of staff Sally Rugg received a settlement of $100,000, following allegations that she was dismissed for refusing to work 70 hour plus work weeks.
These cases, and other ongoing proceedings, have underscored wider concerns about workplace cultures and the reasonableness of excess working hours in Australia. Such concerns have been heightened following recent decided litigation, and the enactment of the right to disconnect in the Fair Work Act 2009 (Cth). However, uncertainty persists – what are reasonable additional hours that an employer can expect an employee to work?
These are issues of acute relevance to the legal profession – both as employer lawyers advising other workplaces, and because of the culture of over-work within the law. It is timely, then, to consider the current legislative framework and recent cases on how many hours an employee can be expected to work.
Today, it may be commonplace – particularly in what are traditionally considered white collar sectors – to accept lengthy (and unpaid) overtime hours. That stands in stark contrast to the historical fight for fairer working conditions that began in Australia over 150 years ago.
In 1856, stonemasons in Melbourne walked off the job in protest of their employer’s refusal to accept their demands for a shorter working day. At the time, many Australians worked up to 14-hour days, 6 days a week and were not afforded leave for illness or holidays.
This protest would define the working landscape over the next two decades. As the union argued for “eight hours labour, eight hours recreation, eight hours rest”, the eight-hour movement was ignited. 60 years later, the Eight Hours Act passed in Victoria and New South Wales. It was not for another 30 years that the Commonwealth Court of Conciliation and Arbitration approved 40-hour, 5-day working weeks for all Australians, a landmark decision that shaped workplace relations in the country for decades to come.
Since then, Australia’s industrial landscape has transformed dramatically. There is now greater flexibility in part time and casual employment, increased wages, improved work health and safety regulations and improvements towards gender equality at work.
However, Australians find themselves increasingly working long hours, without sufficient compensation. Often justified by way of higher salaries or career advancement, an 8-hour working day has become an exception rather than the norm, with the international organisation the OECD reporting Australians work considerably more overtime than the global average.[1]
A recent report conducted by the Australian Institute, Short Changed: Unsatisfactory Working Hours and Unpaid Overtime found that employees perform an average of 5.4 hours of unpaid overtime per week, amounting to $11,055 per year of forgone salary. Collectively, this unpaid labour is worth annually over $130 billion nationwide.
It is clear that many Australians are suffering as a result. Burn out rates are high, and the rise in legal action signals widespread dissatisfaction. Despite this, unclear legislation makes regulating and addressing this issue a complex challenge, leaving both employees and employers in the dark.
The current legislative framework, as outlined in section 62 of the Fair Work Act, provides 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.
What is reasonable? Therein lies the problem. As Justice Mortimer (now Chief Justice of the Federal Court) noted in interlocutory proceedings in the Rugg case, ‘the construction and operation of s 62 of the Fair Work Act has rarely been the subject of any judicial analysis and has a number of complexities.’[2]
The Fair Work Act sets out 10 factors which a court must take into consideration in assessing whether additional hours are reasonable. These factors are, at s 62(2):
The limited case law on the operation of these provisions means there is little judicial guidance. Those cases that have been decided are therefore valuable in the insight they offer employers (and their advisors).
One such case is Australasian Meat Industry Employees Union v Dick Stone Pty Ltd,[3] in which the Federal Court considered whether the additional hours worked by Mr Boateng, an employee of a NSW meatworks were unreasonable and therefore contravened s 62.
Mr Boateng commenced work as a newly arrived immigrant in Australia. Unfamiliar with Australian law, his employment contract described his ordinary hours of work to be 50 hours per week, from the hours of 2 am to 11:30 am on weekdays and 2 am to 7 am on Saturdays. The contract failed to mention overtime rates and the relevant award. Mr Boateng was paid somewhere between the ordinary rate and the overtime rate for the additional hours he worked.
Justice Katzmann outlined 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].’
In determining reasonableness, the court considered the health and safety risks associated with Mr Boateng’s job, where the use of knifes was a requirement and thus, fatigue from long shifts posed a significant danger. Ultimately the court decided that Dick Stone had unreasonably required Mr Boateng to work an additional 12 hours from the recognised national standard and consequently ordered the payment of $93,000 in penalties.
This decision demonstrates that even in instances where an employee agrees to work additional hours, they may be unreasonable. Additionally, employers should take care in ensuring the health and safety of employees is paramount – especially with recent changes to legislation under the Work Health and Safety Amendment (Managing Psychosocial Risk and Other Measures) Regulations 2022.
In a contrasting outcome, the 2016 case of Gorval v Employsure[4] involved full time lawyers seeking compensation for unpaid overtime. Their contract required them to work hours which were “reasonably necessary to fulfill the requirements of [their] role.” The lawyers argued that they were entitled to compensation for unpaid overtime as they were regularly working 45-hour weeks.
However, the employer countered that as the employees took a one-hour lunch break, they effectively worked 40 hours per week – only two hours more than the standard 38 hour week. Given the nature of the work and the culture of the legal industry, the Federal Circuit Court judge did not consider working two additional hours to be unreasonable.
These disparate outcomes underscore the context-specific analysis which must be undertaken in determining the reasonableness or otherwise of excess hours.
Also of note are a number of high-profile cases that are yet to be determined, but may – if decided – shed important new light on the question. In March last year, the Finance Sector Union launched a test case pertaining to excessive hours against the National Bank of Australia on behalf of four managers who were allegedly made to work 55-80 hours a week. The union secretary said at the time that ‘the excessive hours are having a profound impact on the lives of our members, affecting their health, their relationships, the time available to spend with their families and overall quality of life,’[5] which the union argued was a serious contravention of the Fair Work Act.
Similarly, the Public Service Association of NSW lodged a statement of claim in December 2023 that contends that Rural Fire Services employees were not paid overtime loading rates for their work on weekends and outside of normal work hours, in contravention of the award. The Shop Distributive and Allied Employees union have also filed a statement of claim alleging that McDonalds owe $25,000 to managers and supervisors for work they undertook before and after their rostered shift for free.
This surge in litigation around what constitutes reasonable additional hours is only likely to increase, while a new front will open with the right to disconnect enacted this year by the Albanese government with amendments to the Fair Work Act.
Conclusion
What is reasonable at work is a socially-informed question, and in a constant state of evolution – as the stonemasons demonstrated all those years ago. Further litigation, and judicial guidance, is to be anticipated in the years ago as Australia grapples with appropriate working hours and boundaries around being online and offline.
In the interim, both employers and employees should be mindful of this growing issue. Establishing clear policies and open communication regarding expectations is essential. Where an employer does require an employee to perform additional hours, care should be taken to avoid potential liability, not to mention WH&S and workers’ compensation risk.
Lawyers and law firms should be particularly mindful. In a speech at the Minds Count Annual Lecture, Justice Jayne Jagot of the High Court noted that ‘if the main driver of profit is the leveraging of the time of others, particularly young lawyers who cost far less than they make, you need to take care to avoid a culture of exploitation developing.’[6] Excess work hours raise difficult legal questions, in light of the uncertainty in the Fair Work Act. They raise even more difficult cultural questions, within professions and individual workplaces.
If you have any questions or queries about the information in this summary, please contact the BAL Lawyers Employment Law & Investigations team on 02 6274 0999.
First Published 2024 ACT Law Society Journal – ‘Reasonable working hours: our culture of overwork’
[1] Work-life balance OECD Better Life Index. Available at: https://www.oecdbetterlifeindex.org/topics/work-life-balance/ (Accessed: 21 October 2024).
[2] Rugg v Commonwealth of Australia as represented by the Department of Finance [2023] FCA 179 (7 March 2023) at [58]
[3] [2022] FCA 512.
[4] Gorval & Ors v Employsure [2016] FCCA 231
[5] David Marin-Guzman, ‘NAB faces big test case over excessive work hours’, Australian Financial Review (8 March 2023).
[6] Remarks of the Hon Justice Jagot at the Mind Counts Annual Lecture 2023.