In a development that will be welcome to retail employers and might pave the way for changes in other industries, the Fair Work Commission (FWC) has amended the General Retail Industry Award 2020 (Retail Award) to provide greater flexibility in rostering and managing part-time workers.
Under the amendments, which came into effect on 1 July 2021:
- an employer and a part-time employee can vary the employee’s regular pattern of work (now called ‘guaranteed hours’) on a temporary or continuing basis (including part-way through a shift) through email or text message, with the effect that a part-time employee can work agreed additional hours, up to 38 hours in a week, without the payment of overtime rates; and
- a part-time employee can ask their employer to review (increase) the employee’s guaranteed hours because they have worked in excess of their guaranteed hours over the previous 12 months.
The changes provide employers in the retail industry with a much needed ability to extend or rearrange part-time employees’ hours, without enlivening significant overtime payments. The changes should also help employers manage the impact of casual conversion for affected employees.
Temporary or ongoing variation to regular pattern of work
Perhaps most importantly, the changes mean that employers can now ask part-time employees to agree to work additional hours outside of their guaranteed hours without having to pay overtime rates. Provided the agreement to work extra hours at ordinary pay is made in writing (which includes text message and email) before the start of the extra hours to be worked, the variation will be lawful.
For example if an employee is currently in the middle of a guaranteed five hour shift on a Monday morning, the employer can send a text asking the employee to work an additional two hours after that shift ends at ordinary rates of pay. As long as the employee responds to the text message agreeing to the variation before the two extra hours are scheduled to start, the additional two hours can be paid at ordinary rates of pay. The same process applies for asking an employee to work an additional shift on a day in the future that is not part of the employee’s guaranteed hours.
The new variation process cannot result in the employee working more than 38 hours in a week. Any agreed additional hours beyond 38 hours in a week will still attract overtime rates.
The FWC has cautioned employers that the variation process should not be used week to week or fortnight to fortnight to avoid Retail Award entitlements – see clause 10.10(b) of the Retail Award. However, there is nothing else in the Retail Award which specifically regulates how frequently the variation process can be used.
Worker request for review of guaranteed hours
Employers should be very conscious that regular variation of a part-time employee’s hours may now enable the employee to request a review of guaranteed hours.
If a part-time employee finds they have often worked ordinary hours that are above their guaranteed hours over the past 12 months (because the new temporary or ongoing variation process is being used), the employee can now ask the employer to review their hours with a view to have guaranteed hours increased.
Once an employee makes this request, the employer must consider the request and discuss it with the employee to genuinely try to reach an agreement. An employer who is inclined to reject a request may do so on reasonable business grounds. The Retail Award gives, as an example of reasonable business grounds, the need for extra hours being only temporary (for example due to another employee being on extended leave).
The FWC has power to deal with disputes about requests for a review of guaranteed hours.
Tips for employers
The amendments provide employers with the long sought ability to offer part-time workers extra hours outside of their guaranteed hours without the requirement to pay overtime. As a result, employers will now have more flexibility to manage the ups and downs of retail trade without having to fall back on engaging casual employees. Further, the amendments are also likely to have the added benefit of helping employers manage casual conversion insofar as they will now (subject to meeting the requirements) be able to vary the guaranteed hours of a converted casual (now part-time) employee. This is useful because there are many circumstances in which the employer might set an employee’s guaranteed hours after conversion without really knowing how many hours they are going to need the employee to work each week.
Employers should be careful to ensure that any temporary variation is recorded in writing before the variation is to take effect, to avoid the requirement to pay overtime. Employers should also be prepared to respond to requests from part-time employees to review their guaranteed hours.
For further information or advice about the amendments to the Award please contact our national Employment, Workplace Relations and Safety team.
Megan Bowman | Associate | +61 8 8236 1449 | email@example.com