Many South Australian employers face challenges when navigating the rules of part-time employment. While part-time contracts provide core stability for your workforce, not being able to identify ordinary hours and overtime can lead to substantial back-pay liabilities and leave businesses exposed.
Employees are also entitled to reasonably refuse to work overtime.
Triggers for Part-Time Overtime
A frequent misconception is that overtime only applies after an employee exceeds 38 hours in a week. For part-time staff, overtime penalty rates are frequently triggered when they work:
Agreed Pattern of Work
Under most modern awards, when you engage a part-time employee, you must agree in writing:
Any subsequent variation to these hours must be by written agreement between the employer and the employee. That agreement can be ongoing or for a specified period of time.
If you are finding it difficult to understand the part-time rostering provisions in an award or to roster your part-time employees in a way that works for your business, please reach out for advice.
The Span of Ordinary Hours
The span of hours is set in each modern award’s ordinary hours clause.
It’s the period of time each day when ordinary hours can be worked. A common span is 7:00 am to 7:00 pm, Monday to Friday.
Work outside this span cannot be treated as ordinary hours unless it meets the definition of a shift in the applicable award (e.g. early morning, afternoon or night shift).
For example, in the Manufacturing Award an afternoon shift finishes after 6pm and at or before midnight. A shift that meets that definition can be treated as ordinary hours and paid with the shift penalty.
Daily maximum ordinary hours
Awards will set a maximum number of ordinary hours that an employee can work on any day.
Usually, that amount is 8 or 10 ordinary hours per day. Any work exceeding that must be treated and paid as overtime.
Sometimes an award lets you reach an agreement to increase daily limits on ordinary hours up to 12 hours. Ensure you comply with the requirements of that clause before trying to roster employees to work 12 ordinary hours a day.
Facilitative Provisions and IFAs
Most modern awards provide that some of their rules can be changed by individual or majority agreement with employees.
Whenever those phrases appear in a modern award, check whether the award contains a clause of facilitative provisions, because those clauses will prescribe how that agreement can be reached.
Otherwise, if there are no facilitative provisions, ensure you check the award for requirements on how to reach that agreement or seek advice.
An Individual Flexibility Arrangement (IFA) also allows for an employer and employee to change the application of the terms of the award in order to meet their genuine needs. Including when overtime is triggered.
However, IFAs have specific requirements, including that the employee be better off overall under the IFA, so use them carefully.
Contract Set Off
It’s worth noting that if you are paying an employee above their minimum rate and have a properly drafted set-off clause in their contract, you may not be exposed to underpayments.
But you must be able to identify when hours are ordinary or overtime to ensure you are sufficiently paying employees in each pay period.
Action Plan for Businesses
If you need assistance with part-time hour variations, employment contracts, assistance reviewing existing documents or understanding specific awards, please contact the Chamber’s Workplace Relations team on 8300 0106.
