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Employment Court rules on payment for extra hours

By Claire Mansell - 15 May 2018

When does work start and finish? It seems like an obvious question but it can be a bit more complicated than you might first think. For instance, should employees be paid for "pre work" activities like meetings or changing into protective work gear? What about after work training?

The Employment Court recently ordered electronic retailer Smith City to pay its employees for attending a daily 15 minute informal meeting. Employees met with management before the shop opened to discuss sales targets, upcoming promotions, customer feedback and company announcements. The meetings were informal and not strictly compulsory (although employees were encouraged to attend and seen as "slackers" if they did not). Because of the informal nature of the meetings and because they occurred before the stores opened, Smith City believed that it wasn't work and so they did not have to pay their employees for attending.

The Employment Court disagreed and said that the meetings were work and so the employees needed to be paid for their time. When forming this view, the Employment Court looked at whether the meetings were 'integral' to the employee's work at Smith City. Because the meetings were entirely about Smith City's business and allowed it to improve sales they were integral to its business.

Throughout the judgment the Court referred to other circumstances which may also be considered work. It considered an American case where workers at a factory who worked with toxic substances had to put on protective equipment before and shower after each shift. Because these activities were an indispensable part of the job, it was work that needed to be paid for.  The Employment Court also referred to after work training and where employees were required to stay after a shift has ended to complete their tasks but ultimately did not make a decision on those examples.

It pays to note that this case only affects employees who earn wages. Salaried employees will usually have a clause in their employment agreement which says that their salaries include compensation for working beyond their normal agreed hours of work.

The Smith City case will have some employers re-evaluating their employment practices. For some employers who have been under-paying staff, they may suddenly face an unexpected liability for unpaid wages.

Contact our employment law specialist Claire Mansell if you're wondering how you or your business could be affected.


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