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17 February 2017

Federal Court sheds light on the distinction between ‘recall to duty’ and ‘overtime’

The Federal Court has provided guidance about when recall to duty becomes ‘overtime’. This is increasingly becoming an issue for employers due to flexibility in working arrangements and employees working outside of ‘normal’ hours and workplaces.

The Federal Court has provided guidance about when recall to duty becomes ‘overtime’. This is increasingly becoming an issue for employers due to flexibility in working arrangements and employees working outside of ‘normal’ hours and workplaces.

In Polan v Goulburn Valley Health (No 2) [2017] FCA 30, the Federal Court was required to determine the quantum of an employee’s underpayment of wages claim. The claim was based on the performance of on-call duties outside her ordinary hours of work between 2006 and 2012.

During the course of her employment, the employee was required to be on call to take telephone calls from doctors and attend to changes in roster arrangements at all times of the day and night. Between 30 July 2012 and 20 October 2014, the employer paid the employee a ‘recall to duty allowance’ under the provisions of the relevant enterprise agreement.

Liability decision

The employee claimed overtime for the telephone calls that she was required to take outside of her ordinary hours of work prior to receiving the on-call allowance. Due to the period of the claim (2006 to 2012), the Court was required to consider the Workplace Relations Act 1996 (Cth), the Fair Work Act 2009 (Cth) and two enterprise agreements.

Justice Mortimer held that the employee’s on-call duties amounted to overtime not ‘recalls to duty’ under the relevant enterprise agreements . Justice Mortimer held that the distinction between recall to duty and overtime lay in the word ‘recall’ ‘which suggests a conscious decision by or on behalf of an employer to require an employee to perform specific duties of employment outside the employee’s ordinary hours of duty’.

Justice Mortimer determined that there was no specific instruction given by the employer requiring the employee to act on each occasion she performed the on-call duties outside ordinary hours.

In contrast, overtime was considered as not being confined to a specific direction by the employer. Rather, Justice Mortimer held that overtime under the relevant legislation and industrial instruments is concerned with an employee working reasonable additional hours as authorised by the employer, including by way of an ongoing arrangement or understanding. On this basis, Justice Mortimer determined that the employee responding to staffing issues and then attending to making necessary roster arrangements while on-call amounted to her performing overtime.

Quantum decision

The employer sought leave to off-set the amount of $60,271.27 in recall payments made to the employee from October 2012 onwards (off-set claim) against the amount of the unpaid overtime work due to a mistake of law as to its obligation to make the recall payments. Justice Mortimer refused leave to pursue the off-set claim as it had insufficient prospects of success, was not supported by evidence and was only raised after the liability decision.

Due to the absence of evidence, Justice Mortimer relied upon the employee’s work phone bills from the relevant period and applied the applicable hourly rates, finding an entitlement owing of $18,579.52. As the records did not contain calls received or time spent performing other tasks, Justice Mortimer found that it was appropriate to ‘gross up’ the figure by 50% to $27,869.28.

Justice Mortimer noted that, while this was a somewhat broad brush approach given the lack of evidence, it would be inappropriate to conclude that the employee had not proved she worked overtime during the period. Furthermore, it was fair to only award interest from after the point when the recall to duty payments ceased in 2014, at a rate to be determined by the parties.

This case:

  • provides guidance to employers about correctly distinguishing between entitlements to ensure employees receive the correct payments for the duties performed;
  • underlines the importance of employers keeping proper time and wage records; and
  • illustrates that, while determining back pay entitlements can be difficult from an evidentiary point of view, courts are willing to take a flexible approach where an employee successfully establishes their right to an entitlement.
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