Blended pay rates and reasonable additional hours – what are the issues?


The National Employment Standards in the Fair Work Act 2009 (Cth) (FWA) require that employers must not require or request full-time employees to work more than 38 hours per week unless that request is reasonable.

What amounts to a “reasonable” request to work additional hours will always depend on the circumstances, and can be an area where disputes arise.

Recently, the Federal Court has found that a contractual requirement to work 50 hours per week was unreasonable. This provides a useful reminder for employers to:

  • carefully consider what is ‘reasonable’ regarding each individual employee’s position (especially when requiring them to work more than 38 hours per week and outside the normal span of hours);
  • carefully consider the business’s needs against the employee’s additional hours in determining whether they are ‘reasonable’;
  • clearly identify remuneration and entitlements in employment contracts. This includes explaining the rationale for a ‘blended’ pay rate (i.e including penalty rates); and
  • always provide Fair Work Information Statements to new employees.

Background and context

In the case of Australasian Meat Industry Employees Union v Dick Stone Pty Ltd (2022), Katzmann J examined the matter of a recent migrant working in a meat retail establishment.

Under his employment contract, the employee was engaged for 50 hours per week of “ordinary work hours”.

The AMIEU brought proceedings on the employee’s behalf, alleging that Dick Stone had breached section 62 of the FWA and certain clauses of the Meat Industry Award 2010 (Award) by failing to pay overtime rates.

Dick Stone disputed the allegation, stating that it paid the employee a “blended rate” which took into account overtime rates.

The main issues of dispute were:

  • Did a blended rate set-off the requirement to pay overtime rates?
  • Was it reasonable for the employee to work 12 extra hours per week?
  • Was it reasonable for Dick Stone to require a 2:00am start time when the ordinary span of hours commences at 4:00am?


The AMIEU was successful on behalf of the employee. Her Honour found:

– That Dick Stone was not entitled to ‘set-off’ the Award entitlement to overtime against the blended rate because it did not inform him of its intention to incorporate overtime into his wages.

The evidence showed that this was not communicated to the employee when he started work. Crucially, there was no mention of this arrangement in his contract or any other document, and his payslips made no mention of overtime.  It only made mention of “ordinary hours”. As such, the legal elements of a set-off were not met.

2 – That the additional 12 hours per week and 2:00am start time were unreasonable when considered against the matters set out in section 62 of the FWA.  As to those matters:

  • There were health and safety risks because the work was physically straining and involved the use of knives and meat cutting machinery with a 2:00am start.  As such, the inherent effects that fatigue can have on alertness and concentration in such circumstances were an obvious risk.
  • While the 2:00am start did appear to align with Dick Stone’s business needs, it did not necessarily mean that the additional hours were reasonable. The Award suggested that the meat industry’s pattern of work required a 4:00am start, and Dick Stone provided no evidence to the contrary.

3 – Dick Stone did not provide the employee with a Fair Work Information Statement or any materials informing him of his Award entitlements. As such, he did not have a meaningful opportunity to question or negotiate the terms of his employment contract. This aspect carried some weight because he was a recent immigrant and was more unfamiliar than most people with standard employment conditions in Australia.

More information

If you have any queries or would like further information regarding this article, please contact:

Joe Mullavey
M: 0416 794 061

Peter Foster
T: (03) 6235 5153

Published: 15 September 2022

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