Employer groups have welcomed a Fair Work Australia decision that appears to pave the way for workers to volunteer to work extra hours without being paid overtime.
The decision, which some employers have labelled as a “landmark”, involves a company in Queensland called Fairview Orchards that employs fruit pickers at over 100 sites across the state.
Fair Work Australia senior deputy president Peter Richards allowed a clause to be entered in the agreements covering these sites that will allow fruit pickers to voluntarily work extra hours outside the standard 38-hour week without receiving penalty rates for overtime.
“Voluntary additional hours clauses in the agreements have tangible value to the employees to be covered by the agreements, particularly so where the arrangements are only able to be initiated by the employee and where there is no meaningful loss of an opportunity for paid overtime… That is, the voluntary additional hours clauses only allow employees voluntarily to take advantage of hours of work which would otherwise not be accessible to them,” Richards wrote.
While the case relates specifically to this group of fruit picking employees, some business lobby groups are hoping the case will have implications for a wider range of industries.
National Retailers Association Gary Black has hailed the decision will help restore the faith of employers who had become concerned that the Rudd Government’s Fair Work Act had created a system that was “nurturing inflexibility”.
“This decision is welcomed by employers and supports the view of the Rudd Government that the new IR legislation does incorporate reasonable flexibility,” he said.
However, the Australian Workers Union has announced that it will appeal the decision with the support of the Australian Council of Trade Unions.
AWU national secretary Paul Howes argues the decision fails the key Fair Work Act test that workers must be left better off overall by any changes to award conditions that are introduced under an enterprise agreement.
“Any moves to have employees work more than 38 hours immediately puts a worker at a disadvantage, and they should be adequately compensated through overtime penalty rates,” Howes said.
“This decision contradicts the legislation and clearly disadvantages the workers when compared to the award for their industry.”
However the fruit pickers case has caused some confusion in the IR community.
IR expect Peter Vitale of CCI Lawyers points out that the decision in the fruit pickers case would seem to contradict a recent decision in case involving healthcare group Bupa Care Services, in which Fair Work Australia rejected an agreement that would have allowed staff to work extra hours without overtime.
“You’ve got three or four decision going one way and two or three decision going another way. I guess the Full Bench will work it out. “
But regardless of the decision by the Full Bench, Vitale says it is highly likely that either employer groups or the unions will be unhappy with the result and could appeal to the Federal Court.
He also says the Government will have to weigh up whether the Full Bench’s decision reflects its intentions and whether it may have to consider legislative changes to remove uncertainty around the issue.
“Either way it’s not an issue that’s going to go away.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
