Can employers change employee work hours?

Every business experiences busy periods and quieter times. As operational needs change, employers may wonder whether they can change an employee's working hours to better suit business requirements.

For permanent employees, changing work hours is not always straightforward. An employee's hours of work are generally a fundamental term of their employment and are often governed by their employment contract, a Modern Award, or an Enterprise Agreement.

Can an employer change an employee’s work hours?

In most cases, an employer cannot unilaterally change a permanent employee's contracted hours of work.

For full-time and part-time employees, working hours and work patterns are typically express terms of employment. Changing these hours without the employee's agreement may constitute a breach of contract and could expose the employer to legal risk.

However, employers may be able to make certain changes where:

• The employment contract expressly allows for particular variations to hours, start times or finish times.
• A Modern Award or Enterprise Agreement permits the change.
• The employee agrees to the change.
• The change relates to rostering arrangements and all relevant consultation and notice requirements have been met.

The specific circumstances of each workplace should always be considered before implementing any changes.

Can an employer reduce employee hours?

For permanent full-time and part-time employees, employers generally cannot reduce guaranteed hours without the employee's agreement.

The number of ordinary hours worked is usually a fundamental condition of employment. Unless an applicable employment contract, Modern Award or Enterprise Agreement specifically permits the change, reducing an employee's contracted hours will generally not be lawful.

This means employers cannot simply reduce permanent employees' hours as a way to lower labour costs or respond to changing business conditions.

Business reasons for reducing employee hours

While reducing contracted hours without agreement is generally not permitted, there are some circumstances where changes to working arrangements may occur lawfully.

Employee agreement

The most common and practical option is for the employer and employee to mutually agree to vary the employment arrangement.

For example, during an economic downturn, an employee may prefer a temporary reduction in hours rather than facing potential redundancy.

Any agreed change should be properly documented in writing to avoid future disputes.

Genuine stand down

Under the Fair Work Act 2009 (Cth), employers may be able to stand down employees without pay in limited circumstances where employees cannot be usefully employed because of:

• A stoppage of work for which the employer cannot reasonably be held responsible.
• A breakdown of machinery or equipment for which the employer cannot reasonably be held responsible.
• Certain forms of industrial action.

For example, a flood, fire or natural disaster may result in a genuine stoppage of work that prevents employees from performing their duties.

Genuine redundancy

Where a role is no longer required to be performed by anyone due to operational changes, restructuring or changing business needs, the appropriate course of action may be a genuine redundancy process.

Employers should ensure they follow all consultation requirements, consider redeployment opportunities where required and provide employees with any applicable notice and redundancy entitlements.

The process you must follow before changing work hours

If employees are covered by a Modern Award or Enterprise Agreement, employers will often be required to consult before making significant changes to rosters or ordinary hours of work.

Consultation requirements commonly include:

• Providing employees with information about the proposed change.
• Explaining the likely impact of the change.
• Giving employees an opportunity to express their views.
• Considering those views before a final decision is made.

Employers should also be mindful of any family, caring or personal responsibilities that may be affected by the proposed changes.

Notice requirements for roster changes

Many Modern Awards contain specific notice requirements for roster changes.

A common requirement is at least seven days' notice, although some awards require longer notice periods.

The appropriate notice period may depend on:

• The applicable Modern Award or Enterprise Agreement.
• The terms of the employment contract.
• Whether the change is temporary or permanent.
• The employee's classification and employment type.
• The operational reason for the change.
• Any specific workplace circumstances.

Where no prescribed notice period applies, employers should still provide reasonable notice wherever possible.

Agreeing to changes

Changes to working hours can sometimes benefit both employers and employees.

For example:

• Different start and finish times may assist employees with family or caring responsibilities.
• Flexible working arrangements may improve productivity and workplace satisfaction.
• Reduced hours may provide employees with greater work-life balance.

Where an employee voluntarily moves from full-time to part-time employment, accrued entitlements such as annual leave and personal/carer's leave are generally retained.

Any agreed variation should be confirmed in writing and retained on the employee's personnel file.

When an employee does not agree

If an employee does not agree to a proposed reduction in hours or change to their employment status, employers should proceed carefully.

Generally, employers cannot:

• Reduce a permanent employee's contracted hours without a lawful basis.
• Convert a full-time employee to part-time employment without agreement.
• Convert a permanent employee to casual employment without agreement.
• Remove entitlements or protections attached to an employee's employment status.

Employers must also ensure any decision is not made:

• To avoid paying employee entitlements.
• For discriminatory reasons.
• Because an employee has exercised a workplace right.
• For any other unlawful or prohibited reason.

Failure to comply with workplace laws may expose employers to claims including breach of contract, adverse action, discrimination or unfair dismissal.

What about casual employees?

Casual employment operates differently from permanent employment.

Casual employees generally do not have guaranteed ongoing hours of work. As a result, employers can usually vary the number of shifts offered to casual employees based on operational requirements.

However, employers must ensure decisions about offering or reducing work are not made for unlawful reasons, such as because an employee has made a workplace complaint, exercised a workplace right or is protected under anti-discrimination laws.

Need help managing changes to employee working hours?

Changing work hours can involve complex obligations under employment contracts, Modern Awards, Enterprise Agreements and the Fair Work Act.

Before making changes to employee hours, employers should ensure they understand their legal obligations and seek advice where appropriate.

For specialist advice on changing employee work hours and managing workplace obligations, speak with Peninsula's advice team today.

This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.