The QHA’s ER Team has recently been receiving a high volume of enquiries about part-time employment under the Hospitality Industry (General) Award 2020 ('HIGA'). Below we answer some of the most frequently asked questions.
DO I HAVE TO FIX A PART-TIME EMPLOYEE’S HOURS OF WORK?
Historically, the days, hours and start and finish times of a part-time employee covered by the HIGA had to be agreed upon in writing at commencement of employment. Fortunately, as part of the Fair Work Commission’s (‘FWC’) 4 yearly review of modern awards (‘Review’), the HIGA was varied to introduce a flexible part-time employment provision from 1 January 2018.*
In accordance with clause 10.4 of the HIGA, at the commencement of the employment, the employer and the part-time employee must agree on, and record in writing:
- The guaranteed hours and roster cycle period; and
- The days of the week, and periods in each of those days when the employee will be available to work the guaranteed hours (employee’s availability).
The employee’s guaranteed hours can be rostered on any day, and at any time within the employee’s availability, a part-time employee is not required to be provided with rostered shifts at the same starting and finishing times each week. Furthermore, if you are operating a fortnightly (or longer) roster cycle, you do not need to roster the same number of hours in each week.
*In accordance with 10.14 of the HIGA, A part-time employee who had a written agreement with their employer on a regular pattern of work immediately before 1 January 2018 is entitled to continue to be rostered in accordance with that agreement.
HOW MUCH PERSONAL/CARERS’ AND ANNUAL LEAVE IS MY PART-TIME EMPLOYEE ENTITLED TO?
Part-time employees progressively accrue portion of what a full-time employee would receive under the National Employment Standards, based on their ordinary hours of work. Due to the flexible part-time provisions in the HIGA, a part-time employee’s ordinary hours can fluctuate across roster periods. As a general rule of thumb, hours that are not overtime, including those that attract payment at penalty rates (e.g. weekends) are ordinary and should be counted when calculating accruals. Most payroll and timekeeping software automatically calculate these accruals based on the formulas below:
*Note: ‘X’ = the number of ordinary hours worked by the employee in a period
Annual Leave: X ÷ 13.035714
Personal/Carers’ Leave: X ÷ 26.071428
*Formulas obtained from the Fair Work Ombudsman website.
CAN AN EMPLOYEE WHO IS ENGAGED ON A PART-TIME BASIS UNDER THE HIGA BE PAID AN ANNUALISED SALARY?
Employees Classified as Managerial Staff (Hotels)
Clause 25 of the HIGA provides that an employee who satisfies the requirements set out in schedule A.2.9 to be classified as Managerial Staff (Hotels) can be paid an additional 25% of the base salary amount prescribed in clause 18.2 (currently equivalent to $62,354 per annum).
The 25% is in compensation for the award entitlements listed in clause 25.2.
The Australian Hotels Association (‘AHA’) has previously been advised by the Fair Work Ombudsman (‘FWO’) that this arrangement cannot be applied to part-time managerial staff.
As such, unless the business seeks to implement one of the alternatives addressed below in this article, a part-time managerial staff employee would need to be paid:
- The base hourly rate applicable to the managerial classification (per clause 18.2 of the HIGA), plus
- All relevant penalty and overtime rates, loadings and allowances.
Employees Otherwise Classified
A part-time employee engaged in any classification other than Managerial Staff (Hotels) can currently be paid a salary in accordance with clause 24 of the HIGA, paid on a pro-rata basis, based on their hours of work.
Importantly, once implemented, anticipated changes to clause 24 arising from consideration of the annualised salaries common issue as part of the Review will preclude part-time employees from being paid a salary in accordance with clause 24.
The QHA does not have any information regarding when this change will take place, however members will be kept up-to-date with any developments as they occur. In the interim, members should start thinking about alternatives for when the time comes.
Alternatives to Salary
Despite the above, there are statutorily compliant options that would allow the business to pay a flat amount (similar to a salary) that is inclusive of compensation for award entitlements such as penalty and overtime rates, loadings and allowances.
- Payment of a Loaded Rate in accordance with an Individual Flexibility Arrangement (‘IFA’)
An Individual Flexibility Arrangement (‘IFA’) allows an employer and employee to agree to vary the application of prescribed award terms to meet their genuine needs.
Clause 5 of the HIGA addresses IFAs in detail. Of particular importance is the requirement that:
- The agreement be in writing, and entered without coercion or duress (i.e. employment cannot be made contingent on acceptance of an IFA);
- It leaves the employee better-off-overall than they would have been compared to the award at the time the IFA is made. To ensure this requirement is met, calculations would need to be undertaken prior to the IFA being implemented and regularly reviewed (for example when the rate of pay increases or work pattern changes).
- An Employment Contract Featuring a Detailed Offset Clause
An alternative to the implementation of an IFA is to prepare an employment contract that includes a well drafted ‘offset’ clause. Per the below excerpt from a decision published by the FWC, parties are not strictly prevented from entering such an agreement, even where the applicable award already contains a salary provision (as is the case with the HIGA):
…As we made clear in paragraph  of the 2018 decision, an employer is able to pay an employee to whom an award applies an annualised salary arrangement that compensates for or “buys out” various identified award entitlements without engaging with any annualised wage arrangement clause in that award and without there needing to be an annualised wage arrangement clause in that award, in accordance with the principles stated in Australia and New Zealand Banking Group Limited v Finance Sector Union of Australia and Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate. The model clauses do not seek to invalidate or regulate any such contractual arrangements.
The QHA can offer assistance in drafting an IFA or a contract with an offset provision, however due to its bespoke nature, this work is undertaken on a fee-for service basis at the member consultancy rate of $205 plus GST per hour.
WHEN IS A PART-TIME EMPLOYEE ENTITLED TO BE PAID OVERTIME RATES?
A part-time employee is entitled to the overtime rates prescribed in clause 28.4 of the HIGA if they work:
|HIGA CLAUSE REFERENCE|
|· In excess of 38 hours per week or, if the employee works in accordance with a roster, an average of 38 hours per week over the roster cycle;||10.13(b)(i)|
|· In excess of 11.5 hours on any single day (excluding meal breaks);||10.13(b)(ii) & 15.2(b)|
|· In excess of the employee’s rostered hours;||10.13(b)(iii)|
|· Outside their availability;||10.7(a) & 10.13(b)(iii)|
|· On a rostered day off (‘RDO’);
Defined a continuous 24 hour period between the end of the last ordinary shift, and the start of the next ordinary shift, on which an employee is rostered for duty.
|10.13(b)(iii) & 28.2(d)|
|· In excess of 8 days of more than 10 hours’ duration in a 4 week cycle;||10.13(b)(ii) & 15.2(d)|
|· In excess of 10 ordinary hours on more than 3 consecutive days, unless the employee is given a break of at least 48 hours after the last consecutive day exceeding 10 ordinary hours.||10.13(b)(ii) & 15.2(c)|
WHAT ARE THE OVERTIME RATES?
Per the table contained in clause 28.4 of the HIGA (and re-produced below), the rate at which overtime is payable depends on when it is worked:
For overtime worked on
(% of ordinary hourly rate)
|Monday to Friday—first 2 hours||150%|
|Monday to Friday—after 2 hours||200%|
|Midnight Friday to midnight Sunday||200%|
|Rostered day off||200%|
- Per clause 28.3, in calculating overtime, each day stands alone.
IF A PART-TIME EMPLOYEE AGREES TO WORK AN ADDITIONAL SHIFT AT MINIMAL NOTICE, CAN IT BE PAID AT THEIR BASE, RATHER THAN OVERTIME RATE?
Clause 10.13(b)(iii) of the HIGA provides that a part-time employee is entitled to payment at overtime rates for any work performed outside of their rostered hours.
Provided an entitlement to overtime rates is not triggered by any other provision of the HIGA, it follows that an employer could seek the employee’s agreement to amend the roster in accordance with clause 15.5(d) (re-produced below), such that it incorporates the previously unanticipated additional time the employee is proposed to work.
…The roster of an employee may be changed at any time by the employer and employee by mutual agreement or by the employer giving the employee 7 days’ notice of the change.
Each separate occasion on which mutual agreement is reached to change the roster should be recorded in writing, for example through a brief email exchange, file note or note on the roster itself.
MY PART-TIME EMPLOYEE WANTS TO REDUCE THEIR AVAILABILITY TO THE POINT I CAN’T VIABLY ROSTER THEM TO WORK THEIR GUARANTEED HOURS: WHAT SHOULD I DO?
Clause 10.11 of the HIGA states that:
If there is a genuine and ongoing change in the part-time employee’s personal circumstances, then they may alter the times they are available by giving 14 days ‘written notice of the alteration to the employer.
If the employer cannot reasonably accommodate the employee’s change in availability, then clause 10.12 of the HIGA provides that the employee’s guaranteed hours cease to apply and agreement must be reached as to a new set of guaranteed hours.
Should the employee’s new availability be limited such that the employer can no longer reasonably roster the employee for the minimum of an average of 8 guaranteed hours per week, the employee may no longer be able to satisfy the conditions associated with part-time employment.
BUSINESS IS SLOW: CAN I REDUCE MY PART-TIME EMPLOYEE’S GUARANTEED HOURS?
Where slackness of trade persists to the extent that there is insufficient available work to satisfy a part-time employee’s guaranteed hours, management should, in the first instance, exhaust any potential to resolve the issue in a manner agreed upon by the employee. A reduction in staffing costs could be achieved, by, for example, ensuring part-time staff receive priority over casual employees in the rostering of available shifts, or by reaching agreement with the employee to take leave, including (but not limited to) unpaid leave.
Clause 10.5 of the HIGA provides that a part-time employee can consent in writing to an ongoing reduction in their guaranteed hours.
Absent such an agreement, should an employer deem they no longer require the part-time position subject to the employee’s guaranteed number of hours, it may be necessary to consider termination on the basis of redundancy, potentially giving rise to redundancy pay entitlements. If the employer still requires the employee’s duties to be performed on a part-time basis, albeit subject to fewer guaranteed hours, section 389(2) of the Fair Work Act 2009 (‘FW Act’) may require the employer to offer the affected employee re-deployment in to this position as an alternative to termination.
Importantly, regardless of whether they refuse or accept such an offer, the employee retains any prima facie entitlement to redundancy pay derived from an applicable industrial instrument or section 119 of the FW Act itself. Should the employer view that other acceptable employment has been obtained for the employee, it can make an application to the FWC to reduce the amount of redundancy payable in accordance with section 120 of the FW Act.
Part-Time Employment Fact Sheet
The QHA has developed a detailed Fact Sheet on part-time employment. A copy it available to download from the QHA website, or from HERE