Most Australian employees are employed, whether they know it or not, under a modern award or enterprise agreement. Nevertheless there are some employees, managers for example who are truly award or agreement free. Although a modern award or enterprise agreement may apply to his or her workplace, they will often exclude senior employees from coverage. What is their entitlement to overtime payments?
All Australian employees who are covered by the fair work system (the vast majority), including award and agreement free employees, are covered by the National Employment Standards prescribed by the Fair Work Act 2009.The NES standards will generally be exceeded by an award or agreement, and thus serve as a safety net for those employees, but for those who are award or agreement free, the NES is the absolute safety net.
The NES provides that the ordinary hours of work for such employees are those which are agreed as such. Although the NES provide for a maximum number of hours to be worked per week, namely 38, an agreement between award or agreement free employees to another number ordinary hours will override that maximum.
However in the absence of an agreement that ordinary hours will be something other than 38, he Act provides that “an employer must not request or require an employee to work more than 38 hours in the case of a full time employee “unless the additional hours are reasonable; sub-sec 62(3) sets out the criteria for determining what is reasonable and includes the needs of both parties.
However the Act does not make provision for a penalty rate to apply for time worked by an award or agreement free employee in excess of the ordinary hours, but in my opinion hours worked in excess of ordinary hours are payable at a rate to be calculated by a mathematical exercise to calculate the hourly rate and then applying that to extra hours worked. Remarkably, there does not appear to be a binding decided case on point though.