The court case against federal independent parliamentarian Monique Ryan by her former chief of staff Sally Rugg will, according to Rugg’s lawyers, open the door to legal action “by every Australian worker experiencing exploitation because of a contractual obligation to perform undefined ‘reasonable additional’ hours”.
Given the pecularities of the case, that’s unlikely. But the case will put the spotlight on an important, but rarely tested, question of what “reasonable” overtime means.
Rugg is seeking compensation in the Federal Court for “adverse action” by Ryan against her for refusing to work more than 70 hours a week. Ryan denies Rugg’s allegations. So far, it’s a classic battle of claim and counter-claim.
The outcome will turn on what “reasonable” means (as well as matters of evidence and credibility). There is no simple definition of this in Australian workplace law, even though it is pivotal to what the Fair Work Act says about working overtime.
Nor are there many tribunal or court decisions setting precedents to guide the Federal Court’s ruling.
What the Fair Work Act says
Under Section 62 of the Fair Work Act, an employer must not request or require a full-time employee to work longer than 38 hours a week, “unless the additional hours are reasonable”.
An employee may refuse to work additional hours “if the request is unreasonable”. This is essentially what Rugg says she sought to do.
What determines whether a request is reasonable or unreasonable? Section 62 sets out ten (non-exhaustive) factors that must be taken into account:
- any risk to employee health and safety from working the additional hours
- the employee’s personal circumstances, including family responsibilities
- the needs of the workplace or enterprise in which the employee is employed
- whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours
- any notice given by the employer of any request or requirement to work the additional hours
- any notice given by the employee of his or her intention to refuse to work the additional hours
- the usual patterns of work in the industry, or the part of an industry, in which the employee works
- the nature of the employee’s role, and the employee’s level of responsibility
- whether the additional hours accord with averaging terms that are applicable under an award or enterprise agreement or agreed with the individual employee
- any other relevant matter.
These considerations apply to all workers, regardless of their salary level or whether they are covered by awards or other industrial instruments.
Our culture of overtime is costing us dearly
Past court decisions
While case law is slim, one judgement almost certain to be mentioned is the Federal Court’s 2022 ruling in Australasian Meat Industry Employees Union v Dick Stone Pty Ltd.
This claim for compensation was brought by the meatworkers’ union on behalf of Samuel Boateng, a migrant from Ghana who was employed as a knife-hand and labourer by Dick Stone Meats in Sydney.
Boateng’s contract required him to work 50 “ordinary hours” a week (2am to 11.30am on weekdays, and 2am to 7am on Saturdays) plus “reasonable additional hours” as requested.
The union argued the contract contravened both the Meat Industry Award 2010 and the Fair Work Act. Justice Anna Katzmann agreed. She ruled it was possible for an employee to agree to ordinary work hours above 38 hours, but the onus was still on the employer to ensure those additional hours were reasonable.
She affirmed that:
What is reasonable in any given case depends on an evaluation of the particular circumstances of both the employee and the employer having regard to all relevant matters including those matters mandated for consideration in section 62.
In Boateng’s case, Katzmann concluded the requirement to work 12 hours more than the 38-hour standard was, in the overall circumstances, unreasonable. Three factors were given particular weight:
- the health and safety risks associated with lengthy shifts in a role requiring the use of knives
- the fact the employee did not hold a managerial or supervisory role that might warrant additional hours
- the fact the employee was not being paid overtime rates in accordance with the award.
Further, while the 50-hour week aligned with the employer’s operational needs, this did not necessarily make the additional hours reasonable from the employee’s perspective.
Rugg’s case is different
The outcome in the Boateng case has limited application to a dispute involving a white-collar worker working long hours on high wages.
As Ryan’s chief of staff, Rugg was in a managerial role. Her base salary was $136,000, with a “top-up” allowance of about $30,000 for “reasonable additional hours” (but no overtime payments).
That said, the case does confirm general principles. What is “reasonable” involves a balancing of various factors, including the needs or circumstances of each party. The “weighting” given to different indicators might also vary depending on the individual job. There is no magic touchstone.
Much will turn on matters of degree. Factors that will weigh in Rugg’s favour are the amount of work hours required relative to her income, and her personal circumstances including her family responsibilities. Health and safety risks are likely to feature also.
Factors Ryan’s lawyers will seek to highlight are the nature of her employment, level of responsibility, and established patterns and standards of work within the industry – provided these can be verified.
The distinctive nature of Rugg’s position and demands means any judgement will have limited application to “regular” employees.
Nonetheless, the case will be significant in offering some rare (and much-needed) guidance both for employers and employees on what “reasonable additional work hours” means.