Australian court rules 40-hour week breaches Fair Work Act

The decision in Chin v Visual Thing Australia Pty Ltd [2024] FedCFamC2G 896 offers a timely reminder to Australian employers that they are under increased scrutiny regarding the management of employee working hours.

In that case, the Federal Circuit and Family Court of Australia determined that an employer’s requirement for a full-time employee to work a 40-hour week was unreasonable and constituted a contravention of the Fair Work Act.

Ms Chin, a full-time employee, was required by her employer to work 40 hours per week. She was employed as a creative retouching specialist by Visual Thing Australia Pty Ltd, a postproduction company. At the time of termination, Ms Chin was paid an annual salary of $75,000 plus superannuation.

Section 62 of the Fair Work Act imposes a statutory limitation on the number of hours an employee may be required or requested to work. In the case of full-time employees, an employer must not request or require an employee to work more than 38 hours per week unless the additional hours are “reasonable”. Specifying longer hours in an employment contract does not override this requirement.

Section 62 is a civil remedy provision and attracts penalties under the Fair Work Act.

A number of prescribed factors are relevant to determining whether additional hours are reasonable or unreasonable, including:

• the nature of the employee's role and their level of responsibility;
• the needs of the workplace;
• whether the employee is entitled to receive overtime payments, penalty rates or other compensation for working additional hours;
• usual patterns of work in the industry;
• the employee's personal circumstances, including family responsibilities; and
• any risk to the employee’s health and safety from working the additional hours.

Ms Chin’s claim asserted that her employer had breached section 62 by requiring her to work 40 hours each week (rather than 38) throughout her period of employment.

The burden rested on Visual Thing Australia to demonstrate that the additional two hours were reasonable.

The court accepted that Visual Thing Australia operated in a fast-paced industry and was subject to external deadlines and that 40-hour weeks were “industry standard”.  However the court considered that there was nothing in the nature of Ms Chin’s role which required her to permanently work more than 38 hours per week. Critically, she did not hold a senior position and did not have managerial or supervisory responsibilities.

The court noted that whilst there may have been occasions where it would have been reasonable for Ms Chin to work additional hours to meet client demands, this did not mean it was reasonable for her to work additional hours throughout the entirety of her employment.

The court concluded that Visual Thing Australia had contravened section 62 of the Fair Work Act by requiring Ms Chin to work unreasonable additional hours.

This case serves as a clear warning to Australian employers who routinely require staff to work beyond the 38-hour statutory limit. Reliance on industry norms alone will not shield businesses from potential Fair Work Act penalties.

A requirement to work two hours of overtime in a week may not, in and of itself, be unreasonable. However there must be a legitimate need for requiring employees to consistently work more than 38 hours.

Employee claims of excessive working hours may also give rise to work health and safety risks for businesses, noting the increased focus on management of psychosocial risks in the workplace, as well as liability for breaching the “right to disconnect” (which will apply to small businesses from 26 August 2025).

For businesses operating in the hospitality industry, the Hospitality Industry (General) Award 2020 also prescribes a 38 hour week for full-time employees. However, the Award permits hospitality businesses to implement a range of rostering arrangements to suit operational needs. Hospitality employers should also be mindful that any hours worked in excess of ordinary hours will attract overtime rates under the Award, and that payment of overtime is a relevant factor in assessing whether an employer has complied with section 62 of the Fair Work Act.

Business should:

• review their employment contracts, rostering arrangements and workplace practices to ensure strict compliance with the Fair Work Act and relevant Award terms in relation to working hours and payment of overtime and penalty rates;

• communicate clear expectations about working hours;

• ensure employment contracts make it clear that any annual salary paid compensates the employee for all time worked, including overtime; and

• ensure there are effective systems in place to monitor hours worked by employees.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.

If you have questions about maximum weekly hours, overtime obligations, or Fair Work Act compliance, our experienced workplace and safety team can help. Contact us today for clear, practical advice tailored to your business.