The Importance of Being Ordinary (Hours)

In a recent decision of the Fair Work Commission (FWC) in EPI Capital Pty Ltd (AM2022/8), the FWC determined this very issue. Although the decision was not related to a licensed club, it nonetheless provides an important reminder for employers. 

EPI Capital Pty Ltd made an application to the FWC requesting a variation in the Clerks Private Sector Award 2020 (the Award) on the basis that there was vagueness and uncertainty surrounding overtime provisions in the Award. The issues to be considered were:

• Whether an employee’s period of paid leave and authorised absences from work would constitute as ordinary hours
• If the employee had “worked” (including paid leave/authorised absence hours) over their maximum hours of work for the roster period, whether this would trigger overtime rates.

The FWC determined that paid leave and authorised absences that an employee is entitled to under the Award do count towards an employee’s ordinary hours when determining whether the conditions for the payment of overtime entitlements are met. 

This decision arose from an application to vary the Award and not that the employer was liable for any underpayment.

What is the position under the Registered & Licensed Clubs Award (Clubs Award)?

Firstly, let’s deal with a full-time employee example. The Clubs Award contains provisions (see section 15) which outline the various ways that ordinary hours of an average of 38 hours per week can be worked — for example, 152 ordinary hours each four-week period, four days of 9.5 hours per day, etcetera. 

Secondly, depending on the way ordinary hours are worked, the Clubs Award provides that any time worked in excess of those ordinary hours, or outside the spread of those hours, or time worked outside of the rostered hours (for example, the Clubs Award provides the employee cannot work more than 10 ordinary hours in one day) will be paid overtime rates.

Two examples to explain the general rule under the Clubs Award are as follows: 

Example 1

If an employee was employed under the ordinary hours cycle of 152 hours per four-week period, and took three weeks annual leave (114 hours) in the first three weeks of the cycle and in the fourth week of the cycle was required to work 44 hours, then this equates to 158 hours worked — and therefore 152 hours would be calculated as ordinary hours and six hours would be calculated as overtime (as it is six hours above 152 ordinary hours).

Example 2

A full-time employee is rostered to work Monday to Thursday, for 9.5 hours each day (38 ordinary hours per week). On Wednesday, the employee took annual leave. The employee is requested to work on Friday for four hours. The time worked on Friday is paid at overtime because the employee has worked four hours in excess of the ordinary hours for the week (9.5 hours of annual leave on the Wednesday counts as ordinary hours). 

It’s not for everyone

It is important to note that this approach may not apply if the employee’s employment is regulated by industrial instruments other than the Clubs Award, such as an enterprise agreement or an Individual Flexibility Agreement. It would also not apply to any employee under a 20 per cent or 50 per cent exemption rate salary under the Clubs Award or maintenance and horticultural employees under a 33 per cent exemption rate salary.

For further advice, clubs can contact the ClubsNSW WR Team to discuss their specific circumstances.