Commission finds that it was unreasonable for an employer to require an employee to work a 40-hour week

Background

In Chin v Visual Thing Australia Pty Ltd [2024] FedCFamC2G 896, the Federal Circuit and Family Court of Australia determined that it was unreasonable for an employer to require one of its employees to work a 40-hour week.

Ms Chin was employed on a full-time basis as a creative retouching specialist by Visual Thing Australia, a post‑production company. Ms Chin’s employment commenced in 2014 and was terminated in 2022.

At the time of termination, Ms Chin was paid an annual salary of $75,000 per year, plus superannuation. The Graphic Arts, Printing and Publishing Award 2020 applied to Ms Chin’s employment.

Ms Chin was required to work 40 hours per week for her entire period of employment, with her employment contract stating, ‘standard hours of work are 40 hours per week, Monday to Friday, 9.00am sharp to 6.00pm’. Ms Chin did not receive any payment for overtime.

Under section 62 of the Fair Work Act 2009 (Cth), an employer must not request or require a full-time employee to work more than 38 hours in a week unless the additional hours are reasonable. An employee may refuse to work additional hours if they are unreasonable.

Ms Chin claimed that her employer had breached section 62 of the Act by requiring her to work unreasonable additional hours throughout her employment.

The Court’s findings

When a court determines whether or not additional hours are reasonable, it is assumed in the first instance that it is unreasonable to require a full-time employee to work more than 38 hours per week. The burden is on the employer to prove that any additional hours are reasonable.

In this case, Ms Chin had worked two hours of overtime per week for her entire period of employment. The burden was on Ms Chin’s employer to prove that this overtime was reasonable.

The Court accepted that Ms Chin’s employer operated in a fast-paced industry that was subject to external deadlines and that there was a usual pattern of working 40-hours per week in the industry. There was also no barrier that prevented Ms Chin from raising a complaint about the additional hours during her employment.

However, there was nothing in the nature of Ms Chin’s role that required her to permanently work more than 38 hours per week. Ms Chin did not have a senior position and did not have managerial or supervisory responsibilities. While there may have been occasions where it would have been reasonable for Ms Chin to work additional hours to meet client demands, this did not mean it was reasonable for her to work additional hours throughout the entirety of her employment.

Further, despite being entitled to overtime payments under the Award, Ms Chin did not receive any payments for the overtime she performed during her employment. Ms Chin was only paid her annual salary.

The Court accepted that two hours of overtime in a week is not itself unreasonable. However, due to the frequency, regularity and length of time over which this overtime was worked, it became unreasonable.

The Court concluded that Ms Chin’s employer had failed to prove that it was reasonable to require Ms Chin to work the two hours of overtime each week. Ms Chin’s employer contravened section 62 of the Act by requiring her to work unreasonable additional hours.

What does this mean for employers?

Many employers require employees to work a 40-hour week. However, an employer may not be able to justify this practice by demonstrating that they operate in a fast-paced industry with tight deadlines or that this is a common practice in their industry. There must be a legitimate need for requiring employees to consistently work more than 38 hours per week.

This case also shows that employers need to ensure that employees are being paid overtime rates in accordance with any applicable industrial instrument. If employees are paid an annual salary, employers may need to ensure that both their employment contracts and actual practice make it clear that their annual salaries compensate them for all time worked, including overtime.

This case may also provide some guidance on how the Fair Work Commission will approach right to disconnect cases.

Under the new right to disconnect provisions of the Act, an employee may refuse to monitor, read or respond to contact, or attempted contact, from their employer or a third party outside of their working hours, unless the refusal is unreasonable.

At this stage, we are still waiting to see how the Fair Work Commission will approach the right to disconnect provisions of the Act. For small business employers, the right to disconnect does not take effect until 26 August 2025.

However, this case indicates that industry practice or business needs alone may not be enough to demonstrate that it is reasonable to require an employee to respond to out-of-hours contact. Similarly, if an employer is frequently requiring an employee to respond to and be available for out-of-hours contact, it will more likely be reasonable for an employee to refuse to respond to this contact.

This case also demonstrates that one way to decrease the risk of an employee reasonably refusing to respond to out‑of-hours contact, whether it be from their employer or clients, is to compensate them for remaining available or for performing work outside of their ordinary hours of work.

If you have any questions regarding this case or the right to disconnect, please contact a member of our workplace relations and safety team.