Do Your Employees Work a 40 Hour Week? Court Clarifies ‘Full-Time’ Hours

In Chin v Visual Thing Australia Pty Ltd [2024] FedCFamC2G 896, the Court ruled that an employer's contractual requirement for a full-time employee to work a 40-hour week was unlawful under section 62 of the Fair Work Act 2009 (FW Act).

Maximum Weekly Hours

Section 62 of the FW Act prohibits an employer from requesting or requiring a full-time employee to work more than 38 hours per week, unless the additional hours are ‘reasonable’. This requirement is non-negotiable, even if an employee agrees to longer hours in a contract, or it’s common practice within a particular industry.

In this case, Ms Chin had been employed by Visual Thing Australia Pty Ltd, a post-production business, for over eight years. Her contract stipulated “standard hours of work are 40 hours per week, Monday to Friday, 9.00am sharp to 6.00pm, with 1 hour lunch break.” Her salary remained fixed, and she was not paid additional overtime under the applicable Graphic Arts, Printing and Publishing Award 2020 (Award).

What is ‘Reasonable’?

To determine whether additional hours are reasonable, the FW Act requires Courts to consider the following factors:

• Any risk to the employee’s health and safety;

• The employee’s personal circumstances, including family responsibilities;

• The needs of the workplace;

• Whether the employee is entitled to receive compensation for the additional hours;

• Any notice given by the employer of a request/requirement to work additional hours;

• Any notice given by the employee of their intention to refuse to work additional hours;

• The usual patterns of work in the industry;

• The nature of the role and responsibilities; and

• Any other relevant matters.

The employer bears the burden of proving that extra hours are reasonable. In this case, the employer failed to clear the hurdle once the Court considered all of the factors.

The Court’s View

While the Court acknowledged the employer’s claims that a 40-hour week was standard practice within its industry, it found no compelling operational justification for Ms Chin to work beyond 38 hours every week on a permanent basis.

Critically, she was not in a senior or managerial role, nor were additional hours consistently and permanently required to perform her duties.

The Court considered that two additional hours per week were not unreasonable in isolation, though the frequency, regularity and length of time over which these additional hours were worked in this instance made them unreasonable.

The Court also noted the lack of any overtime payments, or other compensation, which further undercut the employer’s claim that the arrangement was reasonable.

The drafting of the employment contract did not allow for above-Award payments to be set-off against overtime pay entitlements under the Award.

Lessons for Employers

This decision is a warning to employers who routinely require staff to work beyond 38 hours per week without specific justification or compensation.

Even long-standing industry practices or contractual arrangements will not shield employers from breaching the FW Act.

Employers should:

• Ensure full-time employment contracts reflect 38 ordinary hours per week (unless averaged in accordance with an award);

• Rigorously assess if additional hours are genuinely reasonable and, if so, reflect these in the contract as additional hours;

• Have a properly drafted set-off clause in their employment contracts if above-award pay is intended to be set-off against award entitlements, such as overtime pay; and

• Keep detailed records of hours worked and compensation provided.

Need Help Ensuring Compliance with Working Hours?

Our employment lawyers assist businesses with drafting compliant employment contracts, set-off provisions, reviewing workplace practices, and managing risks arising from awards and the FW Act. Contact us for tailored advice via the form below.