The apple and pear industry has been blindsided by a 14-day timeframe for the implementation of complex casual wage changes.
The Fair Work Commission’s (FWC) decision to require casual employees to be paid overtime under the Horticulture Award from 15 April 2019 has left growers woefully short of time to get abreast of and implement changes.
“It’s true that the issue of overtime for casuals has been at the centre of intense lobbying over the past four years, but the rush to implement this decision has blindsided industry and could hurt both growers and employees,” said Phil Turnbull, CEO APAL.
“Two-weeks is simply not long enough for growers, most of whom are running small or medium sized businesses, to get to grip with, let alone implement changes to their payroll practices, which could lead to mistakes and unintended non-compliances,” said Phil.
The timing of the decision is made even more problematic by the number of public holidays occurring during April’s busy harvest season which will continue to be paid at a rate of 225 per cent of the employee’s minimum hourly wage (i.e. this is inclusive of casual loading and unchanged).
The National Farmers’ Federations (NFF) which chairs the Horticultural Council, of which APAL is a member, has expressed significant reservations about the timeframes behind this overhaul, pointing out that the sector is already struggling with significant labour challenges and growers would be excused for thinking they had been set up to fail.
As a final binding decision of the FWC, industry must comply with the changes or be exposed to risk.
“Despite the unreasonableness of these timeframes, growers need to familiarise themselves with the new requirements and implement the systems which will enable them to comply,” said Phil.
The NFF has provided the below summary of the key points of the new system which takes effect from 15 April 2019:
- A casual employee’s ordinary hours are limited to 12 per day and 304 over eight weeks.
- A casual employee must be paid a night loading of 15 per cent for any ordinary hours which are worked between 8.31 pm and 4.59 am.
Night loading is paid in addition to the casual loading of 25per cent. Although the decision does not specify, in the NFF’s view these loadings should not ‘compound’; this means that the 15 per cent night loading is calculated on the base rate, the 25 per cent casual loading is independently calculated on the base rates, and the amounts of the two loadings are then added to the base rate;
If the hourly base rate is $18.93, then:
- The ‘night’ loading is 15 per cent x $18.93= $2.84
- The ‘casual’ loading is 25 per cent x $18.93 = $4.733
- Final rate is $18.93 + $2.84 + $4.73 = $26.50
- In states and territories which do not observe daylight saving time, by agreement between the employer and a majority of affected employees, the daily spread of hours can be moved forward to 7.31 pm to 3.59 am for the period of day-light savings time.
- Any work performed by a casual employee outside ordinary hours will be considered overtime.
- When working during overtime, a casual employee must be paid an overtime rate of 175 per cent; i.e. the standard time-and-a-half plus the casual loading of 25 per cent.
- If, during an eight-week period, an employee works a number of days/shift which exceed 12 hours (i.e. are overtime), those extra hours are paid at the overtime rate, but do not count towards the 304 ordinary hours they can work in an eight week period and are not paid (again) as overtime.
If the hourly base rate is $18.93, then
- The casual rate is 125 per cent x $18.93 = $23.66
- The overtime rate is 175 per cent x $18.93 = $33.13
- When a casual employee works a 15-hour day they are paid ($23.66 x 12) + ($33.13 x3) = $383.31
- When an employee works 400 hours over eight weeks but has worked for 15 hours on 14 of those days — that is, has already worked and been paid for 42 overtime hours — then the amount of overtime for the calculation of the eight-week period does not include those 42 hours i.e. is 54 hours.
- The ‘night’ loading is not paid where the employee is working overtime.
- The eight week period will be calculated individually for each employee, commencing from when the employee starts work or when the new overtime arrangements take effect
- Nothing in this decision affects the payment of a casual employee on a piecework agreement. This means that the piecework does not get overtime or the night loading, and neither the overtime rate nor the night loading are factored into the calculation of the piece rate (i.e. of the “minimum hourly rate” for the purpose of clause 15.2 of the Award).
To see the decision from the FWC please click here.
Growers who have specific questions about how this will impact their business, or how to calculate overtime wages for casuals, should seek legal advice or an industrial relations professional.