New time off instead of payment for overtime for restaurant industry

Restaurants and cafes have a new regime for time off in lieu of overtime.

This takes effect from the start of the first full pay period that starts on or after 14 December 2016.

What does this mean for you?

What’s new

  • Six months to take time off, up from four weeks.
  • If time off isn’t taken within that 6 months, overtime must be paid instead. Time off can’t be left on the books.
  • No undue influence.
  • No refusing the leave unless there are ‘reasonable business grounds’ – same rule as for flexible working arrangements.
  • The clause is about three times longer.

What hasn’t changed

  • It’s still a cash neutral outcome.
  • Agreement to take time off instead of overtime still needs to be recorded in writing.
  • Time off is still equivalent to the overtime pay, not actual hours worked.
  • Employee can still tell their employer that they want to be paid instead.

In with the new

33.5 Time off instead of payment for overtime

    1. An employee and employer may agree in writing to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.
    2. The period of time off that an employee is entitled to take is equivalent to the overtime payment that would have been made.

EXAMPLE: By making an agreement under clause 33.5 an employee who worked 2 overtime hours at the rate of time and a half is entitled to 3 hours’ time off.

    1. Time off must be taken:
      1. within the period of 6 months after the overtime is worked; and
      2. at a time or times within that period of 6 months agreed by the employee and employer.
    2. If the employee requests at any time, to be paid for overtime covered by an agreement under clause 33.5 but not taken as time off, the employer must pay the employee for the overtime, in the next pay period following the request, at the overtime rate applicable to the overtime when worked.
    3. If time off for overtime that has been worked is not taken within the period of 6 months mentioned in paragraph (c), the employer must pay the employee for the overtime, in the next pay period following those 6 months, at the overtime rate applicable to the overtime when worked.
    4. An employer must not exert undue influence or undue pressure on an employee in relation to a decision by the employee to make, or not make, an agreement to take time off instead of payment for overtime.
    5. An employee may, under section 65 of the Act, request to take time off, at a time or times specified in the request or to be subsequently agreed by the employer and the employee, instead of being paid for overtime worked by the employee. If the employer agrees to the request then clause 33.5 will apply for overtime that has been worked.

Note: If an employee makes a request under section 65 of the Act for a change in working arrangements, the employer may only refuse that request on reasonable business grounds (see section 65(5) of the Act).

    1. If, on the termination of the employee’s employment, time off for overtime worked by the employee to which clause 33.5 applies has not been taken, the employer must pay the employee for the overtime at the overtime rate applicable to the overtime when worked.

Note: Under section 345(1) of the Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person under clause 33.5.

Out with the old

The old clause 33.5 read:

33.5 Time off instead of payment for overtime

  1. Despite clause 33.1 an employee may choose, with the consent of the employer, to take time off instead of payment for overtime at a time or times agreed with the employer. This agreement must be in writing. The employee must take the time off within four weeks of working the overtime.
  2. If an employee takes time off instead of payment for overtime then the amount of time off is to be equivalent to the pay the employee would have otherwise received for working the overtime.
  3. If requested by an employee an employer must, within one week of receiving a request, pay the employee for any overtime worked. The employee must be paid at overtime rates.

Further reading: the full decision on putting the new clause in, and the determinations under the Restaurant Industry Award.

By | 2017-06-01T13:06:12+00:00 15 December 2016|Categories: News|Tags: , , , , , |

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