Additional agreed hours and flexible working directions proposed for 12 modern awards

Posted by on Jan 25, 2021

Simplified additional hours agreements

Currently, under certain modern awards, part-time employees are entitled to overtime rates where they work more than their ordinary hours of work, or if they work outside of their agreed hours or days of work.

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (IR Bill) proposes to amend 12 specific modern awards, including the General Retail Award 2020 and Commercial Sales Award 2020 (relevant modern awards). If passed, the proposed changes will allow employers and part-time employees to enter into an agreement for the employee to work additional hours that are paid at ordinary rates (simplified additional hours agreement or SAHA), rather than at overtime rates.

However, overtime rates will continue to be payable in other circumstances where overtime is usually payable such as where the part-time employee works outside of the span or spread of hours in the relevant modern award or over 38 hours per week. Before entering into a SAHA, the IR Bill requires that the employer inform the employee that the agreement is a SAHA. A SAHA must also identify additional agreed hours to be worked on one or more days. The employer and employee must enter into the agreement before the first period of the additional agreed hours are worked.

The SAHA itself does not have to be in writing. However, where a verbal agreement is made, the employer will need to make a record of the SAHA in writing before the end of the first period of additional agreed hours worked under the agreement.

An employer cannot force an employee to enter into a SAHA.

If this change comes into force, employers will need to ensure that they meet the requirements for implementing a SAHA, and that either the agreement or a record of the agreement is captured in writing. If the agreement does not meet the requirements then the SAHA will not be valid and the additional hours worked by the part-time employee will continue to attract overtime rates.

Flexible working directions

The IR Bill also proposes to modify the relevant modern awards to allow employers to give flexible work directions. This proposed amendment is intended to be in place for up to two years from when it becomes operational and the intention is to retain some of the flexibility that was permitted under JobKeeper amendments to manage the COVID-19 pandemic. These work directions are limited to a direction to an employee to perform any duties:

  1. that are within their skill and competency (but need not fall within the scope of the employee’s regular position); and
  2. at a place that is different from the employee’s normal place of work, such as the employee’s home.

These flexible work directions to vary duties or work location must be safe having regard to the nature and spread of COVID-19 and reasonable in all the circumstances and within the scope of the employer’s business operations.

In order to give a flexible work direction, the employer must reasonably believe that the direction is a necessary part of a reasonable strategy to help revive the organisation. Flexible work directions can only be issued after providing at least three days’ written notice of the direction (unless the employee agrees to a lesser period), and employers must consult with the employee first.

These proposed changes are intended to support businesses in the most distressed sectors in Australia, which is why these proposed changes are only intended to apply to 12 named modern awards. For more information on the changes proposed under the IR Bill, see our blog proposed changes to agreements in new IR Bill.