Engaging staff is a fraught process.  There are so many things the business has to get right.  Not only do they have to find the right person, who is capable and with fit well within the culture of the business, they also need to ensure the engagement process and documents are correct.  Getting this last part correct is an elusive area for many businesses.  Having and using good Engagement Documents is key to getting this right, but even when great Letters of Offer are used the requirements around Guaranteed Hours are typically addressed poorly or not at all.  This weeks HR Highlight will explore what every employer needs to know about Guaranteed Hours.

What are Guaranteed Hours?

Guaranteed or Standard Hours is a term utilised within the Fair Work Act and outlines the times the business and the employee have agreed that the employee will be working.

What are the requirements around Guaranteed Hours?

When engaging staff it is a requirement under the Act that the Guaranteed Hours be communicated in writing.  This is requirement for communication in writing differs from many of the other engagement level requirements…which just call for communication.  This need for the Guaranteed Hours to be communicated in writing makes the use of Engagement Documents a must (see here:  https://acapmag.com.au/home/2017/08/hr-highlight-getting-engagement-documents-right/) for more on Engagement Documents).  But the requirements don’t stop at providing this communication in writing.  There is a specific format that is stipulated for the communication of Guaranteed Hours, that is, the day, start time and finish time of each shift.

This is an area that is not typically done well.  Where Engagement Documents are used, and where they do refer to Guaranteed or Standard Hours, they almost always simply state a number, rather than stipulating the day, start time and finish time of each shift.  So rather than stating “The Standard Hours for this role will be Monday to Friday 08:00-17:00 with a 1-hour lunch break each day”, they simply state “the Standard Hours for this role will be 40 hours a week”.  While this is common practice, it is technically and practically inadequate.

Why do Guaranteed Hours matter?

It is important that the Guaranteed or Standard Hours are communicated, and communicated correctly, for several reasons.  The agreement between the business and the employee is for them to work a certain number of hours on certain days.  The business has an obligation to pay staff for those agreed hours and days each week, and cannot unilaterally reduce those hours.  So if the employee was engaged to do 21 hours that is what they need to be paid for as a minimum.  The unilateral reduction of hours can trigger adverse action and exploitation concerns, as well as common law breach of contract.

This agreement also extends to situations where the employee works outside of the Guaranteed or Standard Hours.  Anytime an employee is unilaterally directed to work outside of the agreed Standard Hours that work is overtime and should be treated and paid as such.

Does that mean rosters can never change?

ACAPMA is often asked this question.  The short answer is no, this does not mean that rosters must be fixed.  But the longer answer is that businesses need to be engaging with staff to ensure that any changes to the Standard Hours are agreed and not unilateral.

Guaranteed or Standard Hours can change over time by agreement.  The agreement part is key.  The business can set up a framework for an agreement.  Some businesses use formal variation to Standard Hours forms, others use Hands Up Agreements for additional hours at ordinary time rates, while others set up a roster proposal and acceptance system whereby changes to the Standard Hours are taken to be made “by agreement” through the posting of, and acceptance, of a roster.

What about Casuals?

Casual staff are employed and engaged by the hour and as such, they have no Guaranteed or Standard Hours.  It is beneficial, in the interests of clarity, for Engagement Documents to specifically recognise this reality with a clause to that effect.

Here To Help

ACAPMA Employment Professionals are available to assist members on 1300 160 270 or you can email employment@acapma.com.au. ACAPMA members can access resources and can call on the advice and support of the ACAPMA Employment Professionals on 1300 160 270.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by calling 1300 160 270 and speaking to one of ACAPMA Employment Professionals its free for members. ACAPMA membership is affordable at only $880 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts. Click here to apply for ACAPMA membership.