Authors: Greg Robertson & James El Jalkh

On 28 October 2022, Justice Anna Katzmann handed down her penalties decision in Australasian Meat Industry Employees Union v Dick Stone Pty Ltd (No 2) [2022] FCA 1263, after finding in an earlier decision in May 2022[1] that Dick Stone, a meat wholesaler, had:

• unreasonably required or requested its employee, Mr Samuel Boateng, to work 12 hours over and above 38 hours a week in contravention of section 62 of the Fair Work Act 2009 (Cth) (“FW Act”) (38 hours being the maximum weekly hours of work under the FW Act);
• wrongly classified Mr Boateng under the Meat Industry Award 2010 (“Award”), and failed to pay him overtime rates. In Australia, an award is an instrument that operates with the force of legislation and that sets minimum rates of pay and conditions in certain industries; and
• failed to ensure that copies of the Award and the National Employment Standards (“NES”) (minimum statutory conditions applying to Australian employees) were available to Mr Boateng, and failed to post a roster on their premises and provide Mr Boateng a Fair Work Information Statement (also a FW Act requirement).

Mr Boateng was a Ghanian immigrant who was employed by Dick Stone within about three weeks of his arrival in Australia, pursuant to a written contract that required him to work 50 “ordinary hours a week” from 2.00am to 11.30am on weekdays, and from 2.00am to 7.00am on Saturdays, plus reasonable additional hours as requested.

Section 62 of the FW Act imposes a limit on the number of hours an employee may be asked or required to work, and generally, 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. Section 62(2) provides that an employee may refuse to work additional hours if they are unreasonable. The Court held that Mr Boateng was required to work 50 hours a week, notwithstanding that he voluntarily entered into the agreement (his contract of employment) to do so, noting that section 62 is part of the NES and that the parties cannot contract out of statutory minima (including the NES). The question was whether it was reasonable for Dick Stone to require or request Mr Boateng to work the 12 additional hours every week.

Section 62(3) of the Act prescribes certain factors that must be taken into account in determining whether additional hours are reasonable, and her Honour found as follows with respect to those factors (which are emboldened in summarised form):

• risks to health and safety—there were risks to Mr Boateng’s health and safety from working the additional hours, accepting his evidence that because of the start times and physical nature of the work (working with knives and machines designed to cut and dismember meat) he was often tired and exhausted, and noting that fatigue can increase the risk of accidents and contribute to disease (and that in a job requiring the use of knives and the lifting of heavy weights there are obvious risks);
• employee’s personal circumstances—little evidence was advanced about Mr Boateng’s personal circumstances, particularly his family responsibilities, although it was noted Mr Boateng was a very recent immigrant who likely possessed no knowledge of Australian law;
• relevant needs of the workplace—whilst the evidence tended to suggest that the 50-hour week aligned with Dick Stone’s business needs, that did not necessarily support the conclusion that the additional hours were reasonable;
• entitlement to receive additional compensation—whilst Mr Boateng was entitled to receive overtime/penalty rates for working the extra 12 hours, he was not paid overtime rates in accordance with the Award, meaning this factor did not assist Dick Stone’s contention that the additional hours were reasonable;
• was notice given by the employer of the request/requirement—notice was provided to Mr Boateng regarding the additional hours (it was included in the letter of offer and as a term of his contract);
• did the employee give notice of their intention to refuse to work the additional hours—Mr Boateng did not give notice, despite opportunities to do so, and he gave evidence that he did not take up an offer by Dick Stone in 2019 to employees to adjust their working hours because he was concerned that if he spoke up his employment would be terminated;
• usual patterns of work in the industry—there was no evidence of usual patterns of work in the meat industry relevant to this factor;
• nature of the employee’s role/level of responsibility—there was nothing in the nature of Mr Boateng’s role that suggested a need for him to work more than 38 hours a week, and he had no managerial/supervisory responsibilities;
• were the additional hours in accordance with averaging terms—this factor was irrelevant;
• other relevant matters—her Honour rejected Dick Stone’s submission that the fact the 2:00am start was considered “unsociable” was irrelevant, noting that the question is whether requiring or requesting Mr Boateng to work the excess hours are reasonable, and the time those hours are required to be worked has a logical bearing on the question of reasonableness. Her Honour also found that the number of additional hours was relevant, as well as the regularity and frequency of them, and the fact that, to the extent that they took Mr Boateng over the ordinary 5-day working week, they deprived him of his weekends. Whether or not the majority of Dick Stone’s workers preferred a 50-hour week (evidence was led to suggest this) did not make the hours reasonable in Mr Boateng’s case. Further, the fact that he did not question Dick Stone’s offer or attempt to negotiate its terms and made no complaint about working 50 “ordinary hours” before the union’s involvement was unsurprising, having regard to the fact that he was a recent immigrant to Australia (from a third-world country) who needed employment. Her Honour found that it was “tolerably clear” Mr Boateng had no idea of his award entitlements until he contacted the union, which she held was a factor to be taken into account along with the other relevant considerations.

On balance, her Honour was persuaded that it was unreasonable of Dick Stone to require or request Mr Boateng to work 12 hours a week every week over and above the 38 stipulated by the Award and the Act.

For contravening sections 44 and 45 of the FW Act, sections that cover contraventions of provisions of the NES and the Award, her Honour ordered Dick Stone to pay a total of $93,000 in penalties to Mr Boateng (of which, $30,000 stemmed from the breach of section 62). Her Honour considered that the breach of section 62 was deliberate and occurred over an extended period of time, with Dick Stone arranging its business on the basis that employees on the production floor like Mr Boateng were required to work a 50-hour week over six days. Her Honour was not persuaded that Dick Stone was contrite about its conduct or had taken any real corrective action, and imposed the $30,000 penalty having regard to the need for deterrence.

Key Action Points for Human Resources and In-House Counsel 

• Employers must be wary, and should generally avoid, contractually requiring workers to work more than 38 hours a week. It is preferable for employment contracts to stipulate that the ordinary hours of work for full-time employees are 38 hours (or less) per week, plus such reasonable additional hours as are required to perform the employee’s duties.
• Employers should exercise caution when requesting or requiring that a worker work in excess of 38 hours a week. An employer will not be in breach of section 62 where an employee voluntarily works additional hours, so long as the employer does not request or require that they do so, and as long as the additional hours worked (even voluntarily) do not make the work unsafe (this would involve a breach of Australia’s various work health and safety laws). If an employer does wish to request or require an employee to perform additional hours, it would be prudent for the employer to consider the factors listed in section 62(3) of the FW Act, and to consult with the relevant employee. Employers should remember, however, that additional hours may well be reasonable, especially in circumstances where the request or requirement to do so is ad hoc and infrequent (and not, like in this case, a weekly requirement under the contract). Further, and by way of example, the significant remuneration and other benefits paid to someone like a senior manager, together with the nature of the role and level of responsibility, may be sufficient to ensure that additional hours are reasonable in many cases, and also that additional hours an employee is required to work may also be reasonable if the hours are worked at a particular time and in a particular manner in order to meet the employer’s operational requirements.

If you require advice or assistance managing your contractual, award and/or enterprise agreement obligations, please contact our Harmers legal team by phone: +61 2 9267 4322.

© Copyright Harmers Workplace Lawyers 2022. All rights reserved. No part of this alert may be reproduced, in whole or in part, by any means whatsoever, without the prior written consent of Harmers Workplace Lawyers.

Disclaimer: This news alert provides a summary only of the subject matter covered without the assumption of a duty of care by the firm. No person should rely on the contents as a substitute for legal or other professional advice.