Aldi rejects claims of unpaid overtime as lawyers warn SMEs away from “averaging hours” arrangements - SmartCompany

An Aldi employee claims to have worked for free to pay off “negative hours” as he was not given enough shifts to complete his contracted hours. Principal Lawyer Andrew Jewell highlights that employers should take extreme care not to treat their permanent part time employees like casuals when it comes to shift arrangements.

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Aldi rejects claims of unpaid overtime as lawyers warn SMEs away from “averaging hours” arrangements – SmartCompany

Objections from workers at an Aldi distribution centre around the “averaging” of shift hours have prompted legal experts to remind SMEs it’s crucial to stick to the provisions of workplace awards and avoid variations to hours, including unpaid overtime at the end of shifts.

An employee at the discount supermarket has told Fairfax this morning Aldi workers are facing uncertainty over open-ended shift hours and the need to work longer hours some weeks to make up “negative hours” for when he is not rostered on.

The discount supermarket chain has been accused of essentially making workers complete “unpaid overtime” to make up those negative hours, an accusation ALDI says it categorically denies.

Employee Paul Joyner, who is employed on a permanent part-time basis, told Fairfax he has amassed “minus 78” hours work because he has not been given enough shifts to make up contract hours. A representative for the National Union of Workers has labelled the concept of negative hours as “in effect wage theft” and said the union will pursue the matter with the Fair Work Commission if it is not resolved.

Aldi has told Fairfax the workplace arrangements are part of an “averaging hours” provision in the company’s enterprise bargaining agreement (EBA), which means workers are paid for their contracted hours each fortnight. However, in the event they don’t meet their required hours in a pay period, they may have to work additional hours in the subsequent fortnight.

“The Fair Work Commission has examined and approved this work arrangement as being lawful and suitable,” an Aldi spokesperson said.

In a statement provided to SmartCompany, an Aldi spokesperson said the company outlines a minimum number of contract hours for each employee.

“If our employees cannot work their Contract Hours in a fortnight, they will still receive payment for their Contract Hours. They are then rostered to work additional hours above their Contract in subsequent fortnights,” the supermarket explains.

However, managing director at Workplace Law Athena Koelmeyer tells SmartCompany the arrangements agreed upon in the Aldi EBA are “relatively unusual”.

While averaging hours across multiple fortnights is acceptable in some awards, small businesses should always stick to the letter of the award that covers their employees, says Koelmeyer.

Smaller businesses also need to be careful that they do not operate on open-ended shift hours where work is completed beyond a standard shift in an informal capacity, like through cleaning up at the end of trade.

“If you’ve asked someone to come and work for you, you pay them until they have finished working for you. The idea of the shop is going to shut at 5:00pm, but I actually need you to cash up and mop the floor, that’s still work,” Koelmeyer says.

SMEs also need to take care that standard work hours are adhered to, because employees could well be keeping records of their actual hours worked, which could lead to a dispute down the line.

Koelmeyer says one of her clients once experienced this when a former employee made a claim for $200,000 in backpay when she left the business, having kept a diary of her work hours over 20 years. While she could only reasonably claim six years’ worth of these records due to the statute of limitations, the dispute resolution process was still very lengthy for the business owner.

“She had kept records, and she had 20 years of code of, like a dot for “I worked on a public holiday and didn’t get paid my loading’,” Koelmeyer explains.

Take care between part-time and casual

Andrew Jewell, principal at law firm McDonald Murholme, told SmartCompany employers also need to take extreme care they do not end up treating permanent part-time employees like casuals when it comes to shift arrangements.

If an SME is employing part-time workers, they should be vigilant that their hours are regular and correspond to the contract hours agreed upon. Any averaging of these hours should ideally take place within the one pay period to avoid problems down the line.

“Be careful in entering into averaging arrangements — if you’re going to do that, have a level of formality around it,” he advises.

Jewell is also of the opinion that small businesses would be wise to ensure the hours promised to workers are delivered and paid for each fortnight.

“I have the opinion that a permanent part-time worker is owed their hours. That’s where the importance of permanent part-time is different to casual,” he says, highlighting that in general terms, part-time workers are given minimum set hours that should be adhered to.

Meanwhile, Jewell says he would be “very careful” about negotiating an EBA to vary an award if you are a small business owner, because it is necessary to prove the conditions in the agreement make employees better off than their awards overall.

“To be blunt, I wouldn’t say there’s too many times when an employer would want to do that,” he says.

Reference: ‘Aldi rejects claims of unpaid overtime as lawyers warn SMEs away from “averaging hours” arrangements’. SmartCompany, Wednesday 7th June 2017