KFC has joined McDonalds and Commonwealth Bank in the headlines for eye wateringly high underpayment claims related to breaching retail worker break entitlements. As new employment law on the horizon dramatically increases the penalties for record keeping breaches as well as underpayments, it is a timely reminder for all businesses to review their understanding of, and compliance to breaks. In fuel wholesale and retail the treatment and requirements for breaks is unique and must be understood and communicated clearly to avoid compliance breaches. To assist Members ACAPMA has released dedicated a Breaks Guide.
Breaks Cases Recap
The dual class action suits allege $250m in underpayments because the fast food giant did not provide workers with a mandatory break.
This is a hours breach but also results in significant underpayments as it triggers a clause that all hours worked after the break fell due must be paid at overtime rates until the break is actually taken or the shift ends.
Due to the nature of the class actions the actual underpayment amount sought may end up being significantly higher as the process unfolds and may attract direct breach penalties from the regulator in addition to the class actions decisions.
In a case before the Federal Court, the Commonwealth Bank is facing claims that it denied 3,000 workers their entitlement to 10 min breaks back to 2014, amounting to $45m in underpayments.
The Union bringing the case has argued that the Enterprise Agreement covering the Bank provides for 10 minute paid rest breaks in addition to the 45 minute unpaid lunch break. The Union argues that due to staff shortages the 10 minute rest break is almost never taken.
The Bank, in its response has argued that as the 10 minute rest break is paid there is no financial loss to the staff if the break is not taken and as such there is no underpayment to be answered for.
Like the McDonalds case this denial of the break triggered the ‘overtime until break taken’ clause which is the basis for the underpayment claims.
Also like the McDonalds case the bank could also face penalties from the regulator for breaches as well as any judgement in the class action
The KFC case appears to be a carbon copy of the McDonalds case and is likely to follow the same trajectory. It is also not likely to be the last retailer that faces such a case.
Learnings for All Businesses
“These cases are all working their way through the system now, and they are not likley to stop with these three retailers, we would expect to see more cases. These cases will likely cause close scrutiny on what a paid break is and what it means when a worker works through the paid break” hypothesises ACAPMAs Elisha Radwanowski
“What all businesses should take away from this case is that breaks matter. That understanding how breaks are supposed to work according to the applicable employment instrument is vital to ensuring compliance, and that failure to understand break requirements and adhere to them, could result in large claims such as this one” continues Elisha.
“The Fair Work Act and the applicable employment instrument (Award/EBA) will outline the specific minimum requirements for breaks, including when they apply, if they are paid or unpaid and how additional breaks should be addressed. Failure to understand and comply with these requirements is likely to lead to underpayments and issues” concludes Elisha.
Fuel Wholesale and Retail Concerns
In fuel wholesale breaks are more than a chance to have a cup of tea, fatigue management breaks are about saving peoples lives and are vital to drivers.
As per the Road Transport and Distribution Award 2020;
- an unpaid meal break of between 30-60 minutes must be allowed between 3.5 and 5.5 hours after starting ordinary hours, and if the meal break is not allowed then all time after 5.5hours from commencement will be paid at 200% of Base Rate to compensate for the lack of unpaid meal break (clause 16.1)
- a paid overtime meal break of 20 minutes is to be provided if the employee is going to be working 2 hours or more overtime (to be taken before starting overtime or as soon as possible after starting overtime) (clause 16.2)
- an additional paid long overtime meal break of 20 minutes is to be provided after completing 4 hours overtime (and every 4 hours of overtime until overtime is finished) (clause 16.2)
“It is not uncommon for distribution businesses to pay fuel drivers for ALL breaks, not just overtime breaks, due to simpler payroll processing and to ensure that drivers are encouraged to take theses vital rests” notes Elisha.
In fuel retail breaks are also handled differently to general retail operations.
As per the Vehicle Repair Service and Retail Award 2020;
- The typical meal and rest breaks do not apply to a person who is engaged to work on a fuel retail site (clause 26.1.a and 26.2.a)
- Breaks are to be available to any employee who has worked more than 5 hours
- Breaks are to be either; A paid crib break of 20 minutes while maintaining customer service and counting as time worked; or; where the business decides to offer a break away from the workstation that break can be unpaid and taken in accordance with 26.1
- Even with crib breaks a retail fuel site worker is able to lock the site to go to the bathroom, this is not counted as a break
“Crib breaks for retail fuel staff is one of the (many) industry peculiarities. As an oddity it is something that can be a point of confusion and tension, so we advise members to ensure they are discussing what crib breaks are and how they work to new employees, who may be used to the more standard break application” notes Elisha.
“The requirement for staff to remain at the workstation and to pause their break whenever they need to serve a customer is a function of the unique environment that fuel retail exists in. As a threshold mass hazard facility that is accessible to the public it is vital that safe fuel dispensing is monitored and emergency response is available at all times, this, combined with the reality that most service stations are single staff locations, makes the traditional break unsafe and impractical, as a result crib breaks are provided for” explains Elisha.
“Like so many things in P&C breaks are ‘a bit different’ than they are in other industries. The standard application of Crib Breaks in the industry is something that is often completely foreign to workers who are coming from other industries”, outlines ACAPMAs Elisha Radwanowski.
“Most new to industry staff have never even heard of a Crib Break, let alone understand how they work. This unique situation and lack of understanding leads to confusion and tension if it is not addressed. Add into this the treatment in the Award of breaks in two clauses that outline differing ‘options’ for breaks, some of which do not apply to console operator, and the result is that it is easy to get tied up in knots trying to work out breaks”, continued Elisha.
“These cases are a reminder to all businesses to review the requirements and operations of breaks in their business. Even compliant break operations can be a source of tension and concern if there is not adequate communication. Clear communication on how breaks operate, how they will be remunerated, and in the case of fuel retail, how the employee can access the bathroom, are all vital to ensure the harmonious and compliant operation of the site” concludes Elisha.
ACAPMA Breaks Guide
ACAPMAs Employment Department has published a new Guide that unpicks the tangle that can be Breaks in Fuel Retail and works through a detailed Q & A including;
- Which classifications are considered fuel retail workers?
- Which shifts do breaks for all fuel retail workers apply to?
- How do breaks work for all fuel retail workers?
- What is the difference between console operators and fuel retail workers?
- How does a Crib Break work?
- Does the choice of which Breaks Option to use have to be communicated?
- Does choosing Crib Breaks mean no unpaid Meal Breaks / Tea Breaks?
- Does a Crib Break need to be recorded on the timesheet/roster?
- Do Dedicated Breaks need to be recorded on the timesheet/roster?
- What happens if a Dedicated Break is missed or delayed?
- Can additional breaks be offered to some or all workers?
- Do fuel retail workers get Smoke Breaks?
“The new Breaks in Fuel Retail Guide the first of a full suite of employment and compliance guides for 2023-2024 that are being released in October”, continues Elisha.
The ACAPMA Breaks in Fuel Retail Guide is available in the Members Only section of the ACAPMA website, www.acapma.com.au , or members can email email@example.com to request a copy.
Here to Help
HR Highlights are things to consider, implement and watch out for in your business. They are provided as general information for you to consider and do not constitute advice. You should seek further advice on your situation by contacting your legal advisor. ACAPMA members can access resources and receive advice, guidance and support from the ACAPMA employment professionals via firstname.lastname@example.org , it is free for members. ACAPMA Membership delivers this and more benefits, see; https://acapma.com.au/membership/ for more information.
Elisha Radwanowski BCom(HRM&IR)