“Can I change the work hours of an employee?”

Public news

One of the most frequent questions we receive in the WR department is whether an employer can change the hours of work of an employee.

Where an employee is a true casual- that is to say that their hours fluctuate and vary week to week-there is no issue with this. Where an employee is a permanent (full-time or part-time) employee and you wish to reduce their hours to that of a part-time or casual employee, the options are much more restrictive.

First, if the reasoning for the proposed change in hours is due to performance, disciplinary or reliability issues then the employer needs to comply with the consultation obligations under the award in order to properly implement such a change.

Clause 8A of the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (Vehicle Award) and the Clerks – Private Sector Award 2010 (Clerks Award) both state that where there is a proposed change to an employee’s hours of work, other than where their hours are irregular, sporadic or unpredictable, you as the employer must consult with the employee about this. Each potentially affected employee must be brought into a meeting where you can discuss this proposed change and allow them an opportunity to give their views on the impact of the change etc. An employee is also allowed to bring a representative to any such meeting.

If an employee voluntarily agrees to this change in hours then it is very important to get that confirmed in writing and for both parties to sign this. If the employee declines to accept the change they cannot be forced into a reduction of hours, and the employer will have to explore performance management or disciplinary options to deal with the issues.

Where the reasoning is based on financial concerns or a legitimate restructure then this will be a potential redundancy issue. A redundancy occurs when a role is made redundant, that is to say there is no longer the capacity or need for that role to be maintained in a business.

A redundancy can’t just be used to lessen the hours of an employee you simply don’t wish to keep, and possibly intend to replace once they are removed. There can be serious financial ramifications in the form of an unfair dismissal claim where a non-genuine redundancy is implemented.

Where the reason for reducing the employee’s hours is due to a genuine redundancy an employer will need to follow a similar process to what is detailed in clause 8A of the Vehicle and Clerks Award.

An employer would need to invite the affected employee or employees to a meeting and notify them of the potential redundancy and invite them to bring a support person. Where for example your business has 3 full-time panel beaters, but you only wish to put one or two down to a casual position, all 3 must be brought into a meeting.

It is also important that when determining which of the employees permanent positions will be made redundant the reasoning is based on a set of objective criteria, eg skill, reliability, experience etc. The decision cannot be predetermined.

During any such meeting an employer needs to discuss the proposed change with the employees and give them an opportunity to raise anything relevant that they wish to and to discuss alternatives. At the end of this meeting the employer would also need to raise the option of the casual/part-time position as an alternative.

Once the meetings have been concluded, an employer should take time to consider the options and then make the decision. The employee or employees then need to be notified of the redundancy and again have the casual or part-time position offered to them. The employee can then accept or decline this offer.

Where an employee accepts the lesser position they are still entitled to a notice period and can either be paid for the notice period at the same rate they were in the previous position or be kept on their previous hours for the notice period before swapping to the lesser hours.

If an employee declines the lesser position then they are made redundant. As well as an applicable notice period and the payout of outstanding wages and leave accruals for a large business (15+ employees) a redundant employee would also be entitled to redundancy pay, which is dependent on how long they have been with the employers business as seen below:

Period of continuous service

Redundancy pay

At least 1 year but less than 2 years

4 weeks

At least 2 years but less than 3 years

6 weeks

At least 3 years but less than 4 years

7 weeks

At least 4 years but less than 5 years

8 weeks

At least 5 years but less than 6 years

10 weeks

At least 6 years but less than 7 years

11 weeks

At least 7 years but less than 8 years

13 weeks

At least 8 years but less than 9 years

14 weeks

At least 9 years but less than 10 years

16 weeks

At least 10 years

12 weeks

An employee of small business employer (less than 15 employees) or an employee of less than 12 months service at a large business is not entitled to redundancy pay.

As can be seen the rules for reducing an employee’s hours are often very restrictive and a failure to properly conduct the process can be very expensive for the employer. It is important to fully understand the potential risks and costs when deciding whether or not to explore lessening an employee’s hours.

If you would like any assistance or further information in regards to changing an employee’s hours of work, please contact the Workplace Relations team by clicking here or by calling 8291 2000.