New Rules for Taking Time Off In Lieu of Overtime Payment

25th August 2016

The Fair Work Commission has issued final Determinations varying 72 modern awards, which now require written agreements on each individual occasion an employee takes time off work in lieu of overtime payment (TOIL).

The new model award provision prescribes the terms of agreement that must be recorded on each occasion an award covered employee takes TOIL ‘time for time’ i.e. the employee takes the same amount of time off work that was worked in overtime rather than the overtime payment equivalent.

Each written agreement will be considered an employment record and must include the following:

(1) the number of overtime hours to which it applies and when those hours were worked;
(2) that the employer and employee agree that the employee may take time off instead of being paid for the overtime;
(3) 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;
(4) that any payment mentioned in subparagraph (3) must be made in the next pay period following the request.

Modern awards that have historically prescribed TOIL at overtime rates have not yet been varied, but will be subject to further amendment on a case by case basis.

The variations to the 72 modern awards commence operation in the pay period on or immediately following 22 August 2016.

Further information is available including a fact sheet explaining the application of the award rules is available on Employee Relations Online Small Business, and Employee Relations Online Employment, Education and Community Service. Join today, its free.

If you wish to discuss the implications for your organisation please contact me.