Many businesses rely on shift workers to keep things running seamlessly 24 hours a day, 7 days a week. Some roles that may involve shift work include customer service, hospitality, healthcare, and security.
What is shift work?
Shift work in Australia is defined as work outside of ‘ordinary hours of work as defined in an award, registered agreement, or employment contract.’
Depending upon the operations of the business, shifts may be arranged in any number of different ways. It is not uncommon to observe shifts being arranged as follows:
- Morning shift.
- Night shift.
- Afternoon shift.
- Weekend shift.
These schedules may be fixed (the employee is expected to work the same schedule each week) or variable (the employee is expected to work a rotating schedule of different shifts at different times of the day). They may also be required to be available to work upon request at any time of day (on-call).
The nature of the schedule – and what an award, agreement, or contract deems as ‘ordinary hours’ – may affect the type of penalties an employee receives, including annual leave loading.
Who are shift workers?
According to Australian legislation, under the Fair Work Act 2009, an employee is considered to be a shift worker if they:
- Work for a business where shifts are rostered 24-hours a day, seven days a week
- Are regularly rostered to work those shifts
- Regularly work Sundays and public holidays
- Employees defined as a ‘shiftworker’ in the applicable Modern Award or Enterprise Agreement
Shift workers have different annual leave entitlements than regular employees.
Shift penalties
Many awards and agreements in Australia provide shift workers with increased pay rates. The increased pay rates are referred to as shift penalties, penalty rates or shift loading.
Whether or not a penalty will be applied and how it will be applied depends on the modern award, enterprise agreement, or employment contract.
Some workplace arrangements may affect the payment of penalty rates.
Employees may be entitled to penalty rates when working particular hours or days. This can include:
- Public holidays.
- Weekends.
- Overtime.
- Early morning shifts.
- Late night shifts.
Night shift penalty rates
Whether night shift workers are entitled to penalty rates depends on how a ‘night shift’ is defined in the award or agreement. Employers should refer to their respective award or registered agreement for clarity on night shift penalty rates. Some employees get paid a permanent night shift loading if they always work night shifts.
Allowances
An allowance is an extra payment made to employees who do certain tasks or use their own tools at work or work in hazardous conditions or incur an expense for doing their job.
Depending on the nature of the work, employers may also need to include allowances to reimburse shift workers for additional expenses incurred during their employment – such as meals, travel, and accommodation. Specific allowances or penalty rates depend on the award, agreement, or industrial instrument that applies.
Employees may be eligible for allowances in circumstances where they:
- Use their own vehicle for work
- Spend time travelling for work
- Need to wear special clothing at work
- Work in an environment that may damage their clothes or footwear
They might also be required to give shift workers additional breaks, which might be paid.
Overtime rates
Overtime refers to work performed outside of ordinary hours. The spread of ordinary hours should be reflected in the respective award, registered agreement, or employment contracts. The spread of ordinary hours is the times of the day the ordinary hours can be worked.
Overtime can include:
- Work done beyond their maximum daily or weekly ordinary hours of work.
- Outside a part-time employee’s agreed number of hours.
- Outside the spread of ordinary hours.
As the rate of pay for overtime may differ depending on when it is worked, the applicable rate should also be specified.
Full-time employees are typically considered to be working overtime if they work beyond 38 hours for the week. While this is conventionally the understanding of ‘overtime’, there may still be variations depending on the nature of the job and modern award, which may specify the maximum ordinary hours an employee can work per day and times within which the employee can work those ordinary hours, in which case any time worked outside those hours may be payable as overtime.
You can only request or require your employees to work more than their maximum weekly hours where the additional hours are reasonable. Your employees can refuse any overtime that unreasonably exceeds maximum weekly hours. Please note that you also need to manage fatigue and other health and safety issues when requesting overtime.
Some agreements may allow employees to take paid time off instead of receiving overtime pay. This is commonly known as ‘time off in lieu.’ If employers opt for this approach, it needs to be established in writing with the employee’s consent and meet any award requirements.
Peninsula can help you understand shift penalties and overtime in your business and industry. Call 1300761935 for advice.
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.
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