FACT: Employers cannot cut fixed hours of award-free permanent full-time or part-time employees
An employer who cuts the contractually fixed hours of a permanent full-time or part-time employee on a short-term temporary basis or permanently without the employee’s agreement, is breaching the employment contract and Fair Work Act.
Such an act is a unilateral breach of the employment contract of a set number of hours, therefore the employee can sue the employer for compensation and specific performance of the employment contract.
“Specific performance” means that court proceedings are commenced to enforce what the contract said would happen, namely the employee working and being paid for their usual hours.
Where an employer cuts the contractually fixed hours of a permanent full-time or part-time employee on an ad hoc basis, as if the employee was a casual, a probable breach of section 524 of Fair Work Act has occurred. It is a breach regardless of whether the employee is covered by an award or not.
Section 524 of Fair Work Act describes stand down. Fair Work Act states that an employer may only stand down an employee during a period in which the employee cannot usefully be employed because of:
- Industrial action (other than industrial action organised or engaged in by the employer);
- Breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; or
- A stoppage of work for any cause for which the employer cannot reasonably be held responsible.
The third item means circumstances completely outside of the employer’s control such as flood, fire or industry sabotage.
Client or patient cancellation or any other downturn of work, even if it is at short notice, does not qualify as a lawful reason for stand down under Fair Work Act. This is because patient cancellation is not out of the employer’s control in the same way as flood or fire is.
Patient cancellation or other temporary downturn of work is part of the normal day-to-day vicissitudes of running a business. As such, it is up to the employer to devise business methods to minimise patient and client cancellations, such as a reminder service, a fee for cancellations, a stand-by list for cancellations, or possibly a discount for clients who agree to come in at short notice when a cancellation has occurred. There are always non-clinical tasks that can be done during down time, including (but not limited to) - sharpening instruments, re-stocking the surgery, laboratory duties, administrative tasks.
It is not a lawful option for employers to force their employees to take leave without pay, annual leave or long service leave, when there are late notice patient or client cancellations. To do so is a breach of how leave is to be used under Fair Work Act and the associated rights of permanent employees to use that leave.
Any contractual clauses which purport to allow an employer to do this are probably unenforceable or which purport to be a permanent contract but do not offer any fixed hours are probably unenforceable. Nonetheless, DHAA strongly recommends that members do not sign contacts which have such terms.
DHAA recommends that members do not sign contracts for permanent employment which do not offer fixed hours and specified daily start and finish times.
Contact DHAA IR advice line for further enquires. Please fill out the form on the IR Advice Line page of the DHAA Member website
Additional resources including a Long Service Leave Summary table, Katrina Murphy’s presentation from the 2018 National Symposium, and wage comparison data for permanent and casual employees, are available in the Members Area.