Legal E: Model TOIL Clause Proposed

Another Decision Proposes a Model Time Off In Lieu Clause

The Fair Work Commission has delivered another decision as part of its obligatory review of the Modern Awards. This time the Commission looked at Award Flexibility and has created a model clause as to how TOIL should be treated.

The Review

The Commission was asked by The Australian Industry Group (“Ai”) to consider including a model Time Off In Lieu of overtime payments (“TOIL”) clause into those awards that did not provide for TOIL, and to insert in some awards a provision dealing with “make up time”. The AMWU was also seeking to change 5 Awards with regard to the calculation of TOIL.

Both applicant’s claims were rejected by the Commission but it took the opportunity to examine the relevant provisions and provide guidance on this aspect of many Awards. In particular:

  • The Commission reaffirmed that unless already provided for in an award, the calculation of time for the purpose of TOIL, should continue to be at the ordinary rate (i.e. time for time) rather than the overtime rate (i.e. time for penalty) that the AMWU was seeking.
  • The Commission was not convinced that the further provisions regarding “make up time” sought by Ai were necessary.
  • The Commission proposed a model TOIL clause to be inserted into the majority of Modern Awards (a list of the 113 Awards proposed to have the clause can be found at Attachment F of the decision).

The Model Clause

The draft TOIL Clause can be found here at paragraph [267] of the decision.

The new clause requires that:

  • A separate written agreement must be entered into each time an employee agrees to incur TOIL, stating:

-    The times the employee started and ceased working overtime;

-    That if requested the employer must pay overtime rates for any accrued TOIL;

  • The agreement must be kept on the employee’s personnel file.
  • Consistent with the decision to reject the AMWU’s application, unless an Award currently provides that TOIL be paid on a ‘time for penalty’ rate, TOIL will be calculated at the ordinary time rate.
  • The agreement must be reached within 4 weeks of the overtime having been worked or overtime rates must be paid.
  • The TOIL must be taken within 12 weeks of working the overtime or overtime rates must be paid.
  • If TOIL remains untaken or unpaid after that time, the entitlement does not expire and can still be taken or paid out.
  • All overtime payments must be made in the first pay period following the request.
  • Upon termination, any TOIL accrual must be paid out at overtime rates.
  • Under an Individual Flexibility Arrangement, an employee can request a TOIL arrangement which the employer can only refuse on reasonable business grounds.
  • The employer must not exert undue force or pressure as to whether an employee takes or does not take TOIL.

Three Awards (two relating to the building industry and one to seafarers) have been excluded from the application of the clause because of the unique provisions of their awards and an appropriate clause for each award will be developed later in the Review.

The Commission is seeking further submissions on the model clause until 28 August 2015 and will deal with the matter further on 4 September 2015.

This e-alert was prepared by Elizabeth Olsson, Senior Solicitor at Mellor Olsson.

For more information please contact:

Joanna Andrew, Partner 
Ph: (08) 8414 3454
e: jandrew@mellorolsson.com.au 

Thea Birss, Senior Associate 
Ph: (08) 8414 3415
e: tbirss@mellorolsson.com.au

  

Elizabeth Olsson, Senior Solicitor  
Ph: (08) 8414 3413
e: eolsson@mellorolsson.com.au

The contents of the E-Alert are for general information only. They are not intended as professional advice - for that you should consult a solicitor or barrister, or any other suitably qualified professional such as your accountant.

Practice Area: Employment

Head Office

5th Floor, 80 King William Street Adelaide, South Australia 5000
t: Australia (08) 8414 3400  International +61 8 8414 3400
t: Australia (08) 8414 3400
t: International +61 8 8414 3400
f: Australia (08) 8414 3444  International +61 8 8414 3444
f: Australia (08) 8414 3444
f: International +61 8 8414 3444

Connect With Us

ShareThis