Explaining the intricacies under the Timber Industry Award 2010.

This month I’m going for a deep dive into some of the common workplace myths regarding overtime in the Timber Industry Award 2010. This information may not be relevant to employees covered by other awards, or by enterprise agreements approved by the Fair Work Commission. Any employee who has made an Individual Flexibility Agreement regarding overtime penalties may be subject to different rules. Employers should make an effort to familiarise themselves with the details of those rules.

Myth: We have a general policy that no double time overtime is payable

Overtime is payable at time and a half for the first two hours of overtime each day, and double time thereafter. Sunday overtime is all paid at double time, and on public holidays, it is double time and a half.

Under the award, it is usually not lawful to have a general policy in the workplace that double time overtime is never paid, if employees are asked to work overtime that would meet the requirements for double time under the award.

There are two situations where an employer could say with confidence that they are not required to pay double time, even if an employee works more than two hours of overtime in a day.

One is that they have an approved enterprise agreement in place that specifies that all overtime is paid at time and a half.

The other is that the employer and an employee have made an Individual Flexibility Agreement that rules out the payment of double time overtime.

In both situations, the employee must still be Better Off Overall (the term in the Fair Work Act 2009) when compared to the award.

Myth: Overtime is only payable when an employee has worked more than 38 hours in a week

There are a number of circumstances in which a full-time employee might be required to be paid overtime, even though they may have worked fewer than 38 ordinary hours in a week.

Any time an employee works outside the spread of hours, they are likely to be entitled to overtime payments. The spread of hours is 6.30am to 6pm, Monday to Friday – these are the times within which an employee can be asked to work ordinary hours. If an employee works outside these hours, then usually overtime penalties apply.

If an employee works over their ordinary daily number of hours, then they are entitled to overtime penalties. Your employees would have normal starting and finishing times, to make up their 38-hour week – work before or after those times is likely to be overtime.

Myth: Part time employees only get overtime if they have worked at least 38 hours in a week

When you engage someone on a part-time basis, you are required to agree in writing with them:

  • Days they will work; and
  • Starting and finishing times on those days.

Any change to this agreement must be in writing. If an employee works outside these days or times, then overtime is payable. If, for example, you have a part-time employee who is working full-time for a couple of weeks to cover someone else who is on leave, you would need to have an agreement with them in writing that for those weeks, their ordinary hours are as specified, i.e. full time.

Myth: only the first two hours each week is paid at time and a half

Overtime is calculated on a daily basis, so the first two hours of overtime each day (Monday to Saturday) is paid at time and a half.

Myth: casuals don’t get paid overtime

Under this award, casual employees are paid overtime if they work in excess of the ordinary hours fixed for weekly employees on any day. And the penalty is paid on the casual employee’s actual rate of pay, including the casual loading. Effectively this means that for a casual employee, time and a half is 1.875 times the ordinary rate for a full-time employee, and double time is 2.5 times the ordinary rate.

Myth: shiftworkers get paid overtime on their shift loadings

The award expressly states that overtime penalties are instead of not as well as, shift allowances. An employee who is entitled to a 30% shift loading, and who works overtime, will have overtime calculated on the ordinary time rate of pay, without the shift loading.

Myth: Saturday work is all paid at time and a half

The Saturday penalty of time and a half all day only applies if the Saturday work is part of the employee’s ordinary hours of work, i.e. their 38 hours (or agreed part time hours).

An employee might work 38 hours, Tuesday through Saturday. Tuesday to Friday is paid at the ordinary time rate of pay, while Saturday is paid at time and a half all day. Superannuation is paid on all ordinary time earnings, including on the loaded Saturday rate of pay.

Overtime worked on a Saturday, i.e. not part of the employee’s 38 hours, or agreed part time hours, is paid at time and a half for the first two hours, and double time thereafter. Superannuation is not payable on overtime.

Myth: any break between ordinary time and overtime is unpaid

If overtime worked after ordinary hours is two hours or less, no paid break is required between ordinary hours and overtime. Once overtime after ordinary hours is more than two hours, a 20-minute break paid at ordinary rates is required before overtime commences.

Myth: employees don’t have to perform overtime

The award states that an employer may require an employee to work reasonable overtime hours at overtime rates. An employee may refuse to work overtime if it is unreasonable.

The argument comes when people ask, what is reasonable overtime?

Helpfully, the award sets out the factors to be pondered when considering whether a particular request to work overtime, or a particular refusal to work overtime, is reasonable. These include any risk to health and safety the additional hours will pose; the employee’s personal circumstances (including family responsibilities); the needs of the workplace; whether overtime penalties will be paid; and how much notice is given of the need to work overtime, or the refusal to work overtime.

Myth: employees can agree to a shorter break between shifts

Unless specific shiftwork circumstances exist, employees must have at least 10 consecutive hours off duty between finishing work on one day and commencing work on the next day. Employees would be unable to agree to modify this unless the agreement was an Individual Flexibility Arrangement, or an enterprise agreement.