Compliance around shiftwork is complex, specifically how shiftwork and leave entitlements and loadings interact. The complexity in this space is compounded when dealing with 24/7 businesses that can trigger the 7 Day Shiftworker definitions, with its additional week of annual leave. Mistakes happen, but all businesses, and particularly all fuel businesses are on notice to review their systems to ensure they are accurately managing the interaction between shiftwork and leave now. This weeks HR Highlight is a deep dive into Shiftwork and Leave in the fuel industry with a practical Q & A.
Ensuring compliance when it comes to the interaction between shiftwork and annual leave entitlements and loadings has to start with the basics…
What is a shiftworker?
The definition of a shiftworker is laid out in the applicable Award or Agreement (or in the Fair Work Act for award/agreement free employees). These definitions differ slightly from Award to Award but usually amount to a shiftworker being a person who is working in a business that has continuously rostered shifts.
Both permanent and casual employees can be shiftworkers, and in most Awards and Agreements shiftworkers receive a loading for working particular shifts.
“This is the first point we need to be clear on. Shiftworkers are generally entitled to a loading or a specific shift rate for doing shiftwork. All of the fuel industry Awards include shiftloading provisions with the fuel retail workers provisions being the most complex as they apply only to permanent workers and only to some shifts and the rate is variable, its complicated”, explains ACAPMAs Elisha Radwanowski.
What is not complicated is that when a shiftworker is working ordinary hours that are subject to shiftloading or a shift rate then that is the rate that the employee should receive.
ACAPMA has highlighted the operation of shiftloading for many years, including in the complicated fuel retail context, and has been actively engaging with members on understanding and applying shiftloading to ordinary hours of work (see: https://acapmag.com.au/2016/09/hr-highlight-permanent-part-timer-retail-staff-shift-work-implications/, https://acapmag.com.au/2022/05/acapma-workshop-on-shiftloading-this-friday/, and the Member Resources – ACAPMA Wage Guides).
Before we get onto the interaction between shiftwork and annual leave we need to dig deeper into the practical operation of shiftwork.
What is a 7 Day Shiftworker?
Like a shiftworker there is a definition for a 7 Day Shiftworker in the Awards (and Agreements and the Act) that differs slightly from Award to Award but can be broadly summarised as it is in the Vehicle Repair, Service and Retail Award 2020;
A 7 Day Shiftworker is a shiftworker who is regularly rostered to work on Sundays and public holidays
“So a shiftworker is a person, can be a permanent or a casual, who is working shiftwork, which has subtly different definitions across the Awards. While a 7 Day Shiftworker is a shiftworker that is ‘regularly’ rostered to work Sundays and Public Holidays”, explains Elisha.
This leads inevitably to the next question…
What is meant by ‘regularly’?
As ACAPMA explored several months ago (here) this is an area of employment law that has caused confusion and has resulted in a heap of case law falling on both sides of the fence.
“In a recent case before the Fair Work Commission Deputy President Boyce clarified that ‘regularly’ would mean actually working 34 Sunday shits and 6 public holiday shifts per year. This affirmed a case from 1989 that set the precedent. But DP Boyce did leave the door open that in some industries this number would be more malleable”, continued Elisha.
“The exact number of Sundays that a shiftworker would need to work to be considered a 7 Day Shiftworker may be in flux and up for debate depending on the industry, but it would appear it would need to be at least more than 50% of the Sundays in a year”, Elisha adds.
7 Day Shiftworkers are entitled to an additional week of annual leave per year, so they receive 5 weeks entitlement instead of the standard 4 weeks for other dayworkers and shiftworkers.
Shiftwork and Leave Entitlements
When an employee is on leave the Award or Agreement will lay out how they are to be paid. Each Award prescribes different rates and different treatments for shiftworkers.
“This is the second point we need to be clear on. When a shiftworker goes on annual leave the Award will stipulate what rate the shiftworker should receive, and generally it is a different treatment than for dayworkers. For example in the fuel retail Award a shiftworker is to receive the base rate and penalty rates for the ordinary hours that they would have worked had they not been on leave, PLUS a loading. The loading will be either the shiftloading that they would have received had they been working OR the 17.5% annual leave loading, whichever is the higher, but not both”, explains Elisha.
“It is on this second point that some of the publicised underpayments has occurred, so it is important that all employers dig into this point. Many payroll and simple accounting systems are set up to process annual leave as base rate plus standard annual leave loading, but if you have an employee who is a permanent console operator working nightshifts, this would result in an underpayment, as the standard annual leave loading is 17.5% and the standard nightshift loading is 30%”, Elisha continues.
“Systems can be configured to address these quirks, but it is a matter of the business reviewing the systems, identifying the potential treatment of all types of leave scenarios, including shiftworkers and 7 Day Shiftworkers”, cautions Elisha.
Fuel Industry Shiftwork Summary
Learnings for all businesses
“All businesses should take the latest round of underpayment news as a clear, and loud, warning to review their systems with regard to employment compliance. This means checking more than just ‘is the base rate right’, and paying particular attention to processes and systems that are utilised on a more infrequent or rarer basis – like Long Service Leave, or systems and processes that have been in place ‘forever’. The reality is that many systemic underpayments arise not from malicious action, but from a lack of oversight or an approach that has not been properly scrutinised. ‘But we have always done it this way and there has been not problem so far’ is not an approach any employer should be taking, rather they should be having an qualified, experienced and independent person review their systems on a regular basis”, concludes Elisha.
Checking your own compliance
ACAPMA members are reminded that the ACAPMA Assisted Compliance Audits are available as a resource to not only have an external professional ‘check in’ on employment compliance, but also get the help needed to ensure the documents, records and systems are not only ensuring compliance but can demonstrate it.
ACAPMA Assisted Compliance Audits are available to Members for $500 inc GST per site. To learn more about the ACAPMA Assisted Compliance Audits see; https://acapma.com.au/our-services/compliance-and-auditing/
Here to Help
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 emailing employment@acapma.com.au its free for members. ACAPMA membership is affordable at only $860 per year for a single site and valuable with sites gaining access to all the ACAPMA Guides as well as HR and IR advice support and representation and a raft of other benefits and discounts.
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