Significant Decision: Variations to Overtime Provisions in Modern Awards – Time Off Instead of Payment for Overtime (TOIL)
On 16 September 2016 the Fair Work Commission (the Commission) issued a final determination which varies the Amusement, Events and Recreation Award 2010 (the Award) to replace the current award provisions for TOIL (23.4(d)) with the Commission’s model clause inserted as clause 23.5.
What does the replacement TOIL provision mean?
An employee and employer may agree in writing to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee. There must be, however, a separate written agreement for each pay period in which any amount of overtime worked by an employee is to be taken as time off instead of the employee being paid for that overtime at the applicable overtime rate.
In addition, each agreement must state:
- The number of overtime hours to which it applies and when those hours were worked;
- That the employer and employee agree the employee may take time off instead of being paid for the overtime;
- That, if the employee requests at any time, the employer must pay the employee, for overtime covered by the agreement but not taken as time off, at the overtime rate applicable to the overtime when worked;
- That any overtime payment mentioned in the above point must be made in the next pay period following the request.
The Award has also been varied to include an example of the type of written agreement now required for any TOIL arrangement. The variation does not require, however, that this particular form of agreement must be used. A written agreement can also be made by an exchange of emails between the employee and employer, or by other electronic means, provided it includes the required information set out above.
The provision also sets out further conditions for TOIL including:
- The period of time off an employee is entitled to take is the same as the number of overtime hours worked – that is, ‘time for time’ (e.g. where an employee who worked 2 hours overtime is entitled to take 2 hours as time off);
- The time off must be taken within the period of 6 months after the overtime is worked;
- If the employee requests at any time to be paid for overtime covered by an agreement rather than take this as time off, the employer must make the payment in the next pay period at the applicable overtime rate;
- If agreed time off has not been taken within a period of 6 months, the employer must make payment for the overtime in the next pay period, at the applicable overtime rate;
- The employer must keep a copy of any agreement referred to above as an employee record (that is, for a period of 7 years);
- An employer must not exert undue influence or undue pressure on an employee in relation to making (or not making) an agreement to take time off instead of payment for overtime.
The variation also includes a note that if the request for time off instead of payment for working overtime is a request under section 65 of the Fair Work Act 2009 (Cth) (the Act) for flexible working arrangements, an employer may only refuse such request on reasonable business grounds. Where an employer agrees to such a request, the agreement is subject to the same conditions outlined above.
The variation includes a note that, under section 345(1) of the Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person concerning the above matters.
When do the variations commence?
The variations take effect from the commencement of the first full pay period on or after 16 September 2016.
Please follow the link to the updated version of this Award: Amusement Award
What if I want to know more? For more information, please contact the AFEI Hotline on 02 9264 2000.