Paid Rest Breaks – Are your practices defensible?

In recent years, a series of class actions have been brought by employees and unions regarding the alleged failure of major employers (including McDonald’s, KFC, Lovisa and most recently Grill’d) to provide paid rest breaks.

Essentially, these claims assert that employees:

• did not receive paid rest breaks in accordance with their applicable industrial instrument;

• were informed that such breaks were “optional” or directed not to take them at all; and

• were misled as to their entitlement to receive paid rest breaks.

Paid rest breaks in practice

Most modern awards include provisions dealing with paid and unpaid breaks.

For example, under the Clerks – Private Sector Award 2020, paid rest breaks are required as follows:

• More than 3 but not more than 8 ordinary hours worked

One 10 minute paid rest break

• More than 8 ordinary hours worked

Two 10 minute paid rest breaks

• More than 4 hours overtime on a Saturday morning

One 10 minute paid rest break

In our experience, many employers either overlook this entitlement or entrust employees to take rest breaks at times that suit them.

Accordingly, employers tend not to roster paid rest breaks, and employees commonly do not record such breaks in their timesheets.

As a result, when it comes time to undertaking an award compliance review or responding to a legal claim, many employers are unable to produce evidence of this entitlement actually being provided.

The abovementioned class actions highlight that, where this obligation is allegedly misunderstood, expectations with respect to paid rest breaks are not clearly communicated to staff, or there are no records of such breaks being taken, risk arises in the form of complex litigation and potential penalties. In relation to McDonalds, the SDA is seeking over $250 million in compensation and penalties.

How employers can manage this risk

In order to be in a position to demonstrate compliance with their paid rest break obligations, employers should consider implementing the following measures:

1. Introduce a breaks policy or clause: Employers should formalise their expectations with respect to paid rest breaks, either within the employment contract or a workplace policy. Specifically, employers should confirm the applicable entitlement, as well as when/how such breaks need to be taken. However, a clause or policy alone is not enough and would need to be supported by evidence of paid rest breaks actually being provided in practice.

2. Schedule/record rest breaks: Employers who issue rosters to staff commonly roster unpaid meal breaks. Such employers should also consider scheduling paid rest breaks in accordance with the applicable award to ensure that they are taken. This is particularly relevant in sectors with continuous service demands, such as the disability and aged care sectors. Requiring employees to record paid rest breaks provides a further layer of evidence of this entitlement being taken.

3. Ensure employees actually have the opportunity to take a break: The obligation to provide paid rest breaks is not satisfied by evidence of payment for employees’ time; they must also be afforded the opportunity to actually enjoy continuous and uninterrupted rest for the full rest break period. Achieving this will require a careful consideration of work allocation, as well as training those who manage staff as to the importance of award compliance (and consequences of non-compliance).

Overall, it is critical for employers to familiarise themselves with their obligations with respect to breaks – both paid and unpaid – and communicate same to staff. Rostering and work allocation practices should be reviewed to ensure compliance. If your organisation requires assistance in this respect, please reach out to the RemCheck team.

Cowell Clarke is pleased to offer its RemCheck service to organisations that wish to obtain peace of mind by confirming their payroll compliance. Our Employment & Workplace Relations Team can also provide advice should you have any queries or concerns. Contact Cassie Burfoot, Director, Emily Gray, Senior Associate, or Jemma Andretzke, Lawyer, for further information.