DavidBates headshotEach month, David Bates (aka DB) from Workforce Guardian will answer one of our Members’ HR questions. This month, DB answers a question from Member Trish in South Australia:

I am a sole trader with one employee working in my small retail business near Adelaide. My employee has worked here for just over two years. She’s not a casual because I’ve told her she will always be given a minimum of 15 hours’ work each week, so I consider her permanent part-time and don’t pay the casual loading. Her days and hours vary a bit from week to week.
We had a particularly busy time before Christmas, so I needed her to work quite a few more hours than usual. Some weeks in December she worked between 20 and 30 hours. I paid her the usual hourly rate for all these hours. She’s now told me she wants to be paid at the overtime rates for all the hours she did over and above her usual 15 hours each week. Do I have to pay it?

DB Responds:
Unfortunately Trish, the answer is yes. And I’m sorry to say I have some even worse news for you too.

Given you operate a retail business in South Australia, it’s almost certain your employee is covered by the General Retail Industry Award 2010. Modern Awards apply as a matter of law and not choice or preference, so you don’t get a say on whether or not it applies to your employee.

This particular Modern Award imposes a number of very strict rules relating to part-time employees. The two which are particularly relevant in this current situation are these:

12.2 At the time of first being employed, the employer and the part-time employee will agree, in writing, on a regular pattern of work, specifying at least:

  • the hours worked each day;
  • which days of the week the employee will work;
  • the actual starting and finishing times of each day;
  • that any variation will be in writing;
  • minimum daily engagement is three hours; and
  • the times of taking and the duration of meal breaks.

12.7… all time worked in excess of the hours as agreed under clause 12.2…will be overtime and paid for at the rates prescribed in clause 29.2

  1. As you can see, your current working arrangements breach these strict obligations in two important ways:
    You clearly don’t have the mandatory written agreement in place because, if you did, this employee’s days and hours of work wouldn’t be ‘varying a bit’ from week to week. You can be prosecuted for non-compliance with the Award if you don’t have this written agreement on file.
  2. All hours worked over and above the employee’s minimum guaranteed hours (15 per week in your case) must be paid at the applicable overtime rate of rate.

Employees are able to bring underpayment claims going back up to six years so, in theory, your employee could ask to be back-paid all the unpaid overtime for the 2+ years she’s been employed in your business.

For now, your best bet is to immediately draft up the written agreement required by the Award, and pay her the overtime rates she’s now requested.