Flexibility to change part-time hours cast aside

A successful economic recovery for Australia hinges on increasing participation in the labour market and reducing underutilisation: many workers want more hours. But award rigidity can create challenges to something as simple as offering more hours.

In the global pandemic, we saw the Fair Work Commission (FWC) and the Government act at lightning speed to inject flex into the award system to support COVID pivots. We saw new found flex around the nature of the job, the location of the job and the hours of work, and protections via JobKeeper for ongoing (but not casual) workers’ wages. In ‘normal’ circumstances, the award system would have constrained these sorts of flexibilities.

One measure proposed in the now abandoned schedules of the Government’s Bill would have helped achieve this by enabling part-time employees to work additional hours at their ‘ordinary’ wage rate, without the usual procedural burdens.

Part-time work generally requires set work patterns. While this provides certainty, it constrains employees changing their hours to suit them or accessing extra hours they want. Most award rules require a combination of notice and written agreement and often the payment of changed (i.e. additional) hours at a more expensive overtime rate. What does this mean? Employers who follow the rules may be discouraged from offering part-time employees more hours as it will cost comparatively more than offering those hours to casual workers.

The Bill proposed allowing part-time employees to agree to do extra hours at their ordinary rate. Employees could refuse an additional hours agreement. In theory, this proposal could support Australia’s economic recovery by enabling part-time employees to work extra hours at their ordinary rate, without the usual heavy procedural requirements.

In the meantime, the battle for part-time flexibility reform was also being played out in the FWC. The Council of Small Business Organisations Australia (COSBOA) on behalf of the Master Grocers Association (MGA) and the Shop, Distributive and Allied Employees' Association (SDA) agreed to change the General Retail Industry Award (GRIA) so part-time employees could take extra hours at ordinary rates provided they:

• Work a minimum of nine hours a week; and
• Make a written agreement

The changes would enable arbitration to deal with disputes and measures to protect against a sustained increase in hours.

The matter is still on foot, with the FWC noting there are uncertainties about the way the current rules operate. The FWC expressed a ‘provisional’ view that there may be merit in varying the award to enable greater flexibility. There are more conferences to come on this soon.

In Deloitte’s compliance work, we often see a failure to properly systematise rules around part-time work pattern changes. Businesses often inadvertently underpay part-time workers who have voluntarily worked additional hours but have not received overtime. Sometimes it is unclear whether employees voluntarily changed or swapped shifts on their own accord because the reasons have not been documented. And without evidence of the acceptance for the change in part-time hours, we see overtime is typically paid.

The rules around part-timers flexing up or changing shifts are so rigid that the costs of complying and the risks of unintentionally not complying may together discourage hiring part-time workers.

In the absence of legislative reform, our eyes turn back to the FWC and this process. We can only hope that the goodwill that went into the consultations in Canberra can be resurrected before the tribunal to produce industry focused change.