Do I’ve to pay for work exterior of working hours?
The full bank of the Fair Work Commission (FWC) has recently determined that the time it takes a worker to put on and take off personal protective equipment (PPE) during the unpaid meal break must be paid for by the employer.
The decision highlights the risk that employees will have to be paid in otherwise unpaid time for any substantial activity required by the employer. It also shows the value of a well-crafted set-off clause when employees are paid over and above the mark-up.
Mr. Seo is employed as a production line worker whose job it is to prepare meat for packaging on a processing line. Mr Seo brought a dispute with his employer that he was not given a full 30-minute unpaid meal break required under Clause 15.1 (a) of the Meat Industry Award 2020 (Forgive).
Under this clause, an employee must take a 30-minute unpaid meal break before doing five hours of work, subject to alternative arrangements mutually agreed between the relevant parties. Every employee who is called to work during a meal break is entitled to overtime pay for this period.
My seo claimed he didn’t get his full break because his employer asked him to do a number of activities, including putting on and taking off various PPE items during his break. As part of a dispute settlement procedure, Mr Seo applied to the FWC for back payment of the overtime rates for the work performed during his unpaid breaks, ie 10 minutes of work per day over two years.
Decision in the first instance
In the first instance, Vice President Asbury stated that the time Mr Seo spent putting on and taking off his PPE was not work for which he was entitled to payment under the award or his employment contract. In the alternative, the Deputy President noted that the employee was adequately remunerated for these activities because he was paid above the minimum premium rates and his contract enabled additional benefits to be offset against any entitlement to unpaid premium claims.
Mr. Seo applied for and was given permission to appeal the decision.
On appeal, the Full Bench rejected the employer’s argument that the unpaid break clause intended a 30-minute break from “productive work”. The Full Bench noted that there is nothing in the text of the award to suggest that breaks are only from “productive work” and that this would likely lead to unfair outcomes between difficult jobs.
The Full Bench ruled in Mr Seo’s favor that if an employer requires an employee to do substantial work before or after his break, a reasonable amount of time spent on those work is “work” and not part of the work unpaid break of the employee. However, according to The Full Bench, this case should be compared to many other employees in different workplaces who choose to “wash their hands or remove PPE before eating during a meal break” or employees who engage in meal-break activities as could be viewed as trivial.
The Full Bench also appeared to be trying to limit the potential for similar claims in other industries such as construction, and made it clear that this decision was not a requirement that an employee “wear a hard hat, goggles, and hi -vis vest on the way out of the children’s bed room at the end of a meal break ”.
The Full Bench agreed with the Vice President that Mr. Seo’s contract contained a clause that allowed the employer to offset the remuneration paid to him under the contract against an entitlement to claims under Clause 15.1 of the award. However, whether the amounts paid to Mr. Seo were sufficient to offset his entitlement to overtime pay for time spent on lunch break depended on a number of factors.
Determinations would need to be made as to how much time Mr Seo took (or should be reasonable) to conduct the break activities to determine if he is entitled to back payments. The matter was referred back to the Vice President for clarification.
Mandatory steps in a dispute settlement procedure must be followed
Separately, the Full Bench found that the FWC was not competent to determine whether the employee was entitled to compensation for the time it took to put on and take off the PPE before and after his shift. Mr Seo first attempted to agitate this additional request at the first instance hearing and the Vice President noted that the employer “did not contest” the broadening of the dispute and subsequently addressed the matter.
On appeal, Full Bench found that the employer has not consented to the FWC’s arbitration on this aspect of the dispute (as required in the arbitration’s dispute settlement procedure) and that “more than complete silence” is required to indicate consent to the arbitration.
Lessons for employers
Employers should ensure that their current break time practices comply with any modern award or corporate agreement that applies to them to avoid claims for unpaid overtime.
Employers should check whether they require their employees to perform essential tasks or activities during their unpaid breaks before and after work. All essential tasks required by the employer can be considered “work” and employees can be entitled to remuneration under an employment contract for this period.
Employers who rely on overpayments of minimum wages to make up for underpayments of modern premium entitlements should also ensure that they have appropriate contracts and mechanisms in place to protect against potential claims.