Working without pay: Aussies owed $106 billion in overtime

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Australian workers will miss out on $106 billion in wages this year due to 3.2 billion hours of unpaid overtime, according to new research.

A new study released by the Australia Institute’s Centre for Future Work claims the average Australian worker is putting in six hours of unpaid overtime each week, up from 5.1 hours last year.

The findings, released to coincide with Go Home On Time Day, point to ‘endemic time theft’ across the entire labour market, according to study author Troy Henderson.

“Most Australians wouldn’t dream of working for two months without pay. But it’s spread out over the whole year, and has become part of the implicit expectations of too many jobs,” he said on Wednesday.

The survey of 1,459 workers points to broader uncertainty with the way the Fair Work Act considers overtime work, from the perspective of both employees and employers.

Full-time work is defined as 38 hours under the law while employees are able to refuse “unreasonable” requests for additional work beyond that.

But the act isn’t specific about what constitutes “reasonable” and workplace lawyer Peter Vitale says it’s difficult to know where the line is.

“I don’t think there’s a clear line, it really depends on the circumstances,” he tells SmartCompany.

“It might be perfectly reasonable to ask a young person to work two hours of overtime, whereas for someone with a young family that might be an unreasonable request.”

The Fair Work Ombudsman says reasonable overtime needs to consider health and safety risks, personal situations, workplace needs, overtime payments, employment contracts, the notice provided of overtime work and “usual patterns of work” in a given industry.

Last year a Melbourne restaurant ran afoul of the ombudsman over a claim by a worker she was underpaid due to regularly working overtime.

Vitale believes it would be difficult for the Fair Work Act to be much more specific though, given the nature of overtime requiring a nuanced case-by-case approach.

“The reality is that reasonable overtime has either been an implied term of contracts of employment or an aspect of awards since the beginning of the Australian system,” he says.

Driving a culture of work-life balance

There’s a large body of evidence suggesting work-life balance is both good for productivity and other performance indicators such as retention and employee engagement.

This applies to business owners as well, who a recent survey found often work 70-80 hour weeks.

As David Wurth of Wurth Human Resources explains, productivity and overtime are different beasts.

“I don’t think people are working any harder, they’re just spending more time at work,” he tells SmartCompany.

“You want productivity, not spending time more at work.”

Productivity has emerged as a talking point lately amid discussions about why real wage growth is sluggish in Australia.

Earlier this year, Reserve Bank governor Phillip Lowe said labour productivity was one of the factors holding back the economy.

“Despite a positive outcome in the most recent quarter, there has been no net increase in measured labour productivity over the past two years,” Lowe said in June.

Wurth says fostering a culture of work-life balance has to start from the top.

“It has to come from the top of a business that it’s not acceptable,” he says.

“Those people have to role model the behaviour of going home at a reasonable time, it’s not rocket science, people see senior colleagues doing it and don’t leave until they go.”

“The behaviour of senior workers gets mirrored.”

NOW READ: Former bartender takes Melbourne restaurant Chin Chin to court claiming $9,000 in underpayments

NOW READ: Name-and-shame website for dodgy employers launches, but does Australia really need one?


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