Are you entitled to overtime and penalty rates?

Gordon Legal are expert employment lawyers in Sydney and Melbourne. Whether you are starting a new job, already working, or have recently departed your employment, Gordon Legal are able to advise you on what your rights and entitlements might be to ensure that you are afforded a fair go and that you are paid according to your employment contract and according to the Law. Gordon Legal takes pride in the fact its employment lawyers focus on employees and their rights in the workplace and our employment lawyers are experienced in overtime and penalty rate employment law disputes.

Some employees are entitled to be paid overtime when they work in addition to their standard ordinary hours. If you work on a Saturday, Sunday or other irregular hours you might also be entitled to the payment of a penalty rates. Overtime and penalty rates can be important employment rights and here we discuss a definition of overtime and penalty rates and a recent employment dispute about the interaction between overtime and penalty rates.  

Let’s start with some basics. What is overtime? What are penalty rates?

A definition of overtime is where an employee works outside the ordinary hours listed in a contract, award or enterprise agreement. For example you might be scheduled to work 38 hours per week but for a few weeks your employer asks you to work 42 hours. This would ordinarily be overtime and overtime is usually paid at a higher rate than your standard hourly rate.

A definition of penalty rates are special rates of pay which an employer must pay to an employee to compensate them for working during certain specified times. The concept originally developed to compensate employees for working unsociable hours. The penalty rates entitlement usually arises from an Award, Enterprise Agreement or your employment contract. The classic case of when penalty rates are payable is when an employee is scheduled to work on a weekend, late night, early morning or on public holidays. Each industry and entitlement is different.  

So what happens when an employee works overtime on a Sunday where they might be entitled to both overtime pay and penalty rates at the same time? This issue was recently considered by the Federal Court in the context of the Security Industry.

Norman Davis was a security guard with Wilson Security. Mr Davis’ overtime shifts were allocated to Sundays. Since there was already a Sunday penalty rate of 100% pursuant to his Award, and only one loading had to be paid at any one time, no overtime was payable under the Award. The result of this was that Mr Davis’ pay, superannuation contributions and leave accruals were reduced whilst the number of hours he worked remained the same. 

The Court determined that rostering and overtime arrangements were within the discretion of the employer. In other words, it was not wrongful for Wilson Security to roster overtime to Sundays to reduce the amount of overtime payable to its employees. In essence he was not entitled to be paid both the penalty rate and the overtime rate together.

The circumstances of this case are unique and when checking your employee entitlements it is important to get advice especially as the definition of overtime and the definition of penalty rates can vary. The interaction between employment contracts, awards and where applicable enterprise agreements, can often be complex and lead to workplace disputes.

Gordon Legal are experienced employment lawyers in advising employees on employment law rights including under payment issues, penalty rate and overtime rates. It is important that employees know what they are entitled to and do not miss out. If you think you are being underpaid or have questions about how overtime penalty rates work please get in touch.