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“Time theft” a significant risk for Australian employers as hours of unpaid work increase
24/11/2021
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Time and Australian Dollar
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Shani Alexander
Shani Alexander, Senior reporter

The number of unpaid hours undertaken by Australian workers now totals almost eight weeks per year as a result of covid-era work-from-home policies, according to a new report. Employers have been warned that this “time theft” could lead to increased worker fatigue, higher staff turnover and lawsuits.

The “Working From Home or Living at Work” report found workers in 2021 average just over six hours per week of unpaid overtime. In 2020, unpaid work averaged a little over five hours per week, which had risen from more than four-and-a-half hours in 2019. This equates to a one-third increase in the average amount of unpaid overtime completed over the last two years of the pandemic.

The study from the Australia Institute calculated that this unpaid work costs an average employee A$460 every fortnight and, at the economy-wide level, equates to A$125bn of lost income each year.

“This year, Australian workers are taking home a smaller share of GDP than we have ever seen before. Yet, time theft is rife, and bosses are stealing record amounts of unpaid time from workers,” said Dan Nahum, economist at the Australia Institute’s Centre for Future Work.

“Arriving at work early, staying late, working through breaks, working nights and weekends, taking calls or emails out of hours – there are a host of ways employers steal time from their employees, and we see them all being used prodigiously.”

Under Australia’s Fair Work Act 2009, employees can be required to work a maximum of 38 hours per week plus “reasonable additional hours”. Employees can, however, refuse to work additional hours if they are deemed “unreasonable”.

The Act outlines several factors that should be considered in determining whether additional hours are reasonable or unreasonable, including risk to employee health and safety; workers’ personal circumstances, including family responsibilities; the needs of the workplace; and the nature of the employee’s role and level of responsibility.

Catch-22

While many workers globally are now demanding remote working as a standard in the post-covid era, the ability to work from home has not necessarily improved employees’ work-life balance.

“Instead, we’re seeing further incursion of work into people’s personal time and their privacy,” said Nahum. “In many cases, it’s making it easier for employers to undercut Australian minimum standards around hours, overtime, and penalty rates.”

Among those working from home, 26% of Australian workers reported that employers’ expectations of work availability had increased during the pandemic.

“The clear implication is that Australia’s system of industrial protections requires greater enforcement and proactive expansion, all the more so if a larger share of paid work will now occur in workers’ homes,” the report said.

The report concluded that wage theft, lack or excess of working hours, and job and income insecurity are all preventable consequences of policy choices that have favoured employers and allowed work to invade employees’ private lives.

“If Australians want to stop this alarming theft of billions of hours, and hundreds of billions of dollars of income, policymakers need to strengthen workers’ power to demand reasonable, stable hours of limit, and fair payment for every hour they work. This is all the more important with so many Australians working from their own homes,” Nahum said.

Employer risks

Employment contracts containing a modern award – a document which sets out the minimum terms and conditions of employment on top of Australia’s National Employment Standards – or an enterprise agreement that prescribes overtime and penalty rates present a significant risk to businesses that fail to monitor employees’ hours.

“Employers can potentially be in breach of the award or agreement – and subject to underpayment claims – if they are not paying employees enough to match those rates for the hours worked,” say Charmaine Tsang and Steve Bowler, partner and senior associate, respectively, at HFW.

Additionally, there are health and safety concerns if overtime leaves workers feeling fatigued. “If employees regularly work excessive hours, this can impact their mental health and contribute to ‘burn out’. In turn, this can result in employers having to deal with workers’ compensation claims,” say Tsang and Bowler.

Unpaid overtime can also have a negative impact on productivity, with workers becoming less motivated and efficient when regularly working unpaid, say Tsang and Bowler. “This can also lead to higher staff turnover and difficulties in retaining staff, which in turn affects productivity and staff morale.”

Organisations should advise employees to keep a record of any additional hours worked, allowing employers to assess which staff are regularly working more than 38 hours per week. This data can then be used to reallocate workloads, suggest Tsang and Bowler. A policy requiring employees to seek their employer’s authority before working overtime should also be considered.

Tsang and Bowler advise employers to actively encourage staff to maintain a good work-life balance, set realistic workloads that are monitored, and ensure workers take their annual leave.

Employers should also look at offering more work flexibility. For example, employees required to work long hours during a busy period could benefit from a time-off-in-lieu arrangement during quieter periods.

Finally, Tsang and Bowler suggest remote workers should be encouraged to stick to their regular working hours and “clock off” at the usual time, but seek support should they find this difficult with their existing workloads.