Monday, 23 December 2019

Travel travesty: Employer forced to pay employee travel time

A recent decision of the Federal Court regarding payment for travel time could impact employers with similar terms in their enterprise agreements, particularly where workers are situated on large sites.

Despite travel time to and from work usually not considered to be ‘time worked’, in this case the Court rejected the employer’s interpretation of its enterprise agreement and found the employer was required to pay its employees for their bus travel from the site perimeter, up to the worksite where they commenced physical work.

The case is a timely reminder for employers to ensure that each clause of your enterprise agreement is drafted carefully to reflect the employer’s actual intentions, in order to avoid exposure for underpayments.

In this case, a union-backed class action was pursued by workers, in which they claimed that they should be paid for a 20-minute bus trip from their worksite to the security gates at the end of each shift. The worksite was the site of the Wheatstone Project, which is a large area stretching over 10 square kilometres in Western Australia.

The applicable enterprise agreement stated in relation to working hours: “An Employee’s Project Working Hours shall start at the Employee’s prestart and finish at the inside of the Site Employee access gates”.

The employer argued that travel time should be to the worksite itself, and not the site perimeter. However, the Federal Court ultimately determined that working hours included the time taken by the worker to reach the site access gates.

The Federal Court’s reasoning included:

  • the enterprise agreement wording had expressed affirmatively when project working hours would start and finish;
  • although the employer attempted to rely on an assertion that common law employees were not compensated for time travelling to and from work, this did not override the express terms of the enterprise agreement;
  • the workers were dependent on their employer to arrange transport to get from their accommodation to work and back again, given the remote location of the site;
  • the employer’s argument that wages are not payable unless ‘earned by a service’ was not consistent, as workers could be paid for journey time if recalled to a job or could be paid for being on standby.

The employer was therefore liable to pay travel time for the 20-minute bus trip since working hours included up until the workers arrived inside of the site access gates.

Lessons for employers:

This case highlights the need for careful drafting of enterprise agreements, as the unintended consequences of drafting errors can be significant, particularly where the clause concerned impacts the majority of employees on every shift.

Employers operating on large worksites on which workers are required to travel a considerable distance from the perimeter of the worksite to the place at which work is commenced (eg employees working at airports) should review applicable enterprise agreements and current practices to ensure they are compliant.

It is also advisable that employers seek assistance in drafting enterprise agreements to avoid costly disputes.

Case study: Sheehan v Thiess Pty Ltd [2019] FCA 1762 (1 November 2019)

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This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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