25 Jul What are Ordinary Hours and why do they matter?
It’s important to understand the meaning of Ordinary Hours, particularly in relation to permanent part-time employment as these contracted hours have ramifications for how you roster and pay employees. It’s common in many small businesses for part-time employees to be rostered like casual employees, but there are risks associated with doing this that you should be aware of.
Part-time employees are employed for a predetermined number of Ordinary Hours, which are anything less than full-time hours (full-time is always an average of 38 Ordinary Hours per week, so anything less is part-time employment).
In employment law, the term Ordinary Hours has an important meaning; it refers to the contracted hours that an employer and employee have agreed on. These are the work hours you as the employer are obliged by law to make available to the employee and the employee is obliged by law to work those hours. The Ordinary hours that an employee works has implications for how you calculate and pay public holidays, sick pay (personal leave), annual leave, and for when overtime rates apply. Changing the days and times of when those (total) hours are worked is simply a change of roster. It’s relatively easy to do (although it can have implications for when public holidays, personal leave and annual leave apply)!
Changing the total Ordinary Hours that an employee works is another thing altogether: that’s a change of contract and ideally this should be confirmed in writing. For example, some businesses use forms to confirm these changes with employees, in writing. Failing to confirm these changes with the employee can put your business at risk of underpaying employees.
Additional hours (above the Ordinary Hours) are generally overtime hours, although there are other ways you can deal with these hours, with an employee’s agreement (such as time off in lieu of overtime, salaried employment, and through Individual Flexibility Agreements).
It’s a good idea to be clear in your own mind about the Ordinary Hours that your permanent (part-time and full-time) employees work and to understand that changing the total number of these hours (up or down) is not simply a change of roster.