AREEA employee relations consultant Simon White and AREEA graduate employee relations consultant Gemma Serjeant summarise a recent ruling from the Western Australian industrial Relations Commission, granting an increase to an employee’s working hours without an increase to remuneration.

THE right to be paid for the service performed by an employee is at the heart of the wages/work bargain. A recent decision highlights that the wording of employment contracts is critical when changes are made at the workplace.

The Facts

The employer, a contractor of Fortescue Metals Group, Morris Corporation, increased the number of hours the employee, Joanna Landsheer, was required to work, from 10 to 12 hours per day.

Ms Landsheer sought that the change to her conditions of employment, without an increase in wages was a breach of contractual terms of employment, as no terms, either express or implied, allowed Morris Corporation to change working hours.

Ms Landsheer pursued action under the Fair Work Act, seeking to be paid lost wages and superannuation entitlements.

The Decision

The claim before Western Australian Industrial Relations Commission (WAIRC) was for the alleged denial of a contractual benefit, to which the employee was entitled under her contract of service.
In considering the merit of the claims, the WAIRC held that the following principles were relevant:

• The employee was employed under a contract of service;
• The claim was an industrial matter relating to unpaid wages; and
• The benefit did not arise under an award or order.

After reviewing the terms of the contract, the WAIRC found that the contract stated ordinary hours of work were to be conducted within a daily spread of 12 hours, reflecting the amended number of hours Morris Corporation required the employee to work. Therefore, it was determined the employer could require Ms Landsheer to work up to 12 hours in any shift, without adjustments to remuneration.

Furthermore the reference to ‘may’ in the contract implied that it was not mandatory for the employer to conduct a review of an employee’s remuneration, as working conditions had not changed.

As a result, the WAIRC ordered that no wages, in addition to superannuation entitlements were owed to the employee.

Implications for Employers

This decision highlights the importance of terminology used in contracts. As there were no express terms in the contract, this allowed the employer to unilaterally vary a fundamental term. In this case, the term was increasing the hours of worked without the employee being paid additional remuneration.

Furthermore, while it may be considered unfair to require an employee to work additional hours without an increase to an employee’s remuneration, this case required an interpretation of the terms of the contract, not whether the terms were unfair to an employee.

Case decision: Johanna Landsheer v Morris Corporation (WA) Pty Ltd [2013] WAIRC 00574 (1 August 2013)