Concept of ‘reasonable additional hours’ considered by South Australian Employment Court

C.S.S.P Pty Ltd (C.S.S.P), a software development firm, was ordered to pay one of its employees, Mr Fella, additional remuneration following the decision of the South Australian Employment Court (the Court) in Fella v C.S.S.P Pty Ltd [2022] SAET 82.

The dispute arose in relation to a six-month consultancy assignment Mr Fella was completing for a client of his employer, Hansen & Yuncken. Despite starting the assignment in July 2021, Mr Fella did not sign a contract stipulating the terms of the assignment until 16 August 2021 (the Contract). The Contract provided Mr Fella with higher remuneration while undertaking duties at Hansen & Yuncken. A dispute arose in relation to whether Mr Fella was entitled to this higher remuneration from the start of his assignment, or from the date the Contract was signed.

Additionally, the Contract provided that no additional remuneration would be provided to him for ‘reasonable additional hours worked from time-to-time’. Mr Fella found that he was having to work approximately half an hour of overtime per day to complete his duties at Hansen & Yuncken. The Court rejected that half an hour a day of overtime worked every day over a six-month period constituted reasonable additional hours.

Facts

Mr Fella had been employed by C.S.S.P since March 2018. From 28 July 2021, for a six month period, Mr Fella was required to perform consultancy work, on behalf of C.S.S.P for Hansen & Yuncken. Mr Fella was primarily responsible for the management of a payroll consisting of 600 employees.

Mr Fella did not sign any written contract upon the commencement of the assignment. However, following a meeting with C.S.S.P on 13 August 2021, Mr Fella signed the Contract covering his assignment on 16 August 2021, which contained the following terms:

• a higher rate of remuneration whilst performing duties at Hansen & Yuncken; and
• no additional remuneration would be provided for ‘reasonable additional hours worked from time to time’, outside of the standard 38 hours worked per week.

Disputes arose in relation to both clauses in the Contract. First, in relation to the start date of when the higher rate of remuneration should be paid, and additionally, whether the frequency of the overtime being worked was from ‘time to time’, such that no additional remuneration was payable.

C.S.S.P submitted that the increased remuneration should only be payable from the time Mr Fella signed the Contract, on 16 August. Mr Fella, however, submitted that the Contract provided for the increased remuneration from the beginning of his assignment with Hansen & Yuncken, on 28 July.

Additionally, Mr Fella found his role at Hansen & Yuncken to be quite demanding, and was unable to perform the duties required of him within 7.5 hours per day. Accordingly, Mr Fella worked eight hours per day for the remainder of his assignment to complete all his tasks and submitted that those additional hours were not ‘from time to time’, and that he should be paid accordingly.

C.S.S.P on the other hand submitted that there was no obligation for Mr Fella to work these additional hours, and that even if there was, daily overtime for six months was considered to be ‘reasonable additional hours’ from ‘time to time’.

Decision

Start date of increased remuneration

The Court was required to consider whether the clause of the Contract providing for a higher rate of remuneration was ambiguous. If it was, the Court would have scope to consider extrinsic evidence. C.S.S.P submitted that the term was ambiguous, namely in relation to the stated term of the pay rise, and what Mr Fella was required to do to receive it. In response, Mr Fella submitted that there was no ambiguity, as the contract stated that the pay rise was effective for the term of the Hansen & Yuncken contract, and will be paid while performing those duties.

The Court ultimately held that there was no ambiguity regarding the terms of the Contract. The Court was satisfied that the wording ‘for the term of the Hansen & Yuncken Contract’ made it clear that the increased remuneration covered the entirety of Mr Fella’s assignment, including the work completed prior to signing the contract on 16 August 2022. Accordingly, Mr Fella was entitled to the higher salary and resulting superannuation from 28 July 2021, plus interest.

Entitlement to payment for hours above 38 per week

The Court rejected C.S.S.P’s argument that Mr Fella was not required to work the overtime hours. It was determined that Mr Fella did not need to be expressly directed to perform the extra hours, and was, in fact, implicitly directed to perform the extra hours, as a result of the pressures of his allocated duties. The Court was satisfied that C.S.S.P was aware of the extra hours being worked by Mr Fella, and was happy to accept the benefits that arose from this.

As a result, the key issue for the Court to consider was whether daily overtime for six months constituted working reasonable additional hours ‘from time to time’. The Court considered that the terms of the Contract (‘may be required’) merely contemplated the possibility of Mr Fella having to work overtime, and in context, this meant some frequency less than every day. In light of this interpretation, it was concluded that having to work overtime every workday for over six months is far more than ‘from time to time’, and therefore inconsistent with that description. The additional hours worked by Mr Fella were therefore not reasonable additional hours performed during the assignment. Accordingly, Mr Fella was entitled to payment at the agreed Contract rate for the additional hours of work.

The Court resolved to hear from the parties within seven days of the decision to determine the monetary entitlements Mr Fella was owed.

Take Home Messages

Importantly, an employer can require an employee to undertake additional hours of work, as long as those hours are considered reasonable. An employee cannot refuse to work reasonable additional hours.

What is ‘reasonable’ must be assessed on a case-by-case basis, in consideration of the employee’s circumstances, and the employer’s requirements. These considerations include, but are not limited to, work health and safety obligations, the personal circumstances of the employee, any remuneration provided to the employee for working additional hours, and any other relevant factors pursuant to a modern award or enterprise bargaining agreement applicable to the employee.

Should you have any queries in relation to this article, please contact Lincoln Smith on +61 8 8210 1203 or lsmith@normans.com.au, Ganesh Krishnan on +61 8 8210 1395 or gkrishnan@normans.com.au or Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au.