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Should periods of authorised leave be counted toward “hours worked” when calculating whether overtime is payable? A recent Fair Work Commission decision confirms that it depends on the wording of the award or enterprise agreement, but there is no general principle that authorised leave counts as “time worked” for this purpose.

In Transport Workers’ Union of Australia v Jetstar Services Pty Limited,¹ the Commission was asked to arbitrate a dispute between the parties under their enterprise agreement.²

The relevant overtime provisions of the agreement provide as follows:

17. OVERTIME

17.1. Where a full time employee works for:

17.1.1 a longer period than his or her rostered shift period; or
17.1.2 an average of more than 38 hours per week, averaged over a roster cycle (and taking into account RDO entitlements);

the additional time worked will be treated as overtime.

17.2. Where a part-time employee works more than 8 hours per day or 38 hours in a pay week the additional time worked over 8 hours per day or 38 hours per week will be treated as overtime.

17.3. Where an employee works on 7 consecutive days they will be paid overtime for all hours worked on the 7th day.

17.4. Where a casual employee works for more than 7.6 hours on any day, the time over 7.6 hours will be treated as overtime.

The union argued that periods of authorised leave count as “work”. It relied on various sections of the Fair Work Act 2009, which states that paid leave counts as service, and toward maximum working hours under the National Employment Standards, and for the accrual of entitlements. It also relied on past practice at some Jetstar locations.

Deputy President Sams ruled that the agreement is not ambiguous, and that “work” has a plain meaning. He considered that the industrial purposes of leave were “the antithesis to being at work” (i.e. rest, recreation away from work, or inability to attend work)³ and decided that “work” in the overtime clause should not be interpreted to include periods of leave.

It is critical to remember that this decision was a dispute arbitration about specifically-worded provisions in an enterprise agreement. The Deputy President considered the agreement as a whole, and how the term “work” was used throughout many clauses. Every instrument will be drafted differently. There may be other limitations on when ordinary hours may be worked before incurring overtime (for example outside a nominated span of hours, or on certain days of the week).

Any employer who is currently counting authorised leave toward overtime thresholds and who is considering a change should take specific advice about the facts and risks in their own case.

Require further information/assistance?
If you require further information or advice, please contact your local consultant at either our Adelaide or Melbourne offices.

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¹ [2017] FWC 2535, 29 May 2017
² Jetstar Services Agreement 2016
³ Para 53 and 54

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