Employers may need to pay employees for time they spend at work performing essential pre-start tasks before a shift, in light of a recent Federal Circuit and Family Court decision.

Multi-national supermarket chain Aldi has been ordered to pay distribution centre employees for time spent performing pre-shift tasks solely for its benefit.

The claim

The Shop, Distributive and Allied Employees Association (SDA) claimed that since August 2018, Aldi required around 4,000 employees at the Prestons Distribution Centre to clock-on 15 minutes before their paid start time to perform pre-shift tasks, including safety checks on forklift-like stock pickers.

The SDA has claimed that Aldi could owe up to $10 million in unpaid wages to affected employees before penalties.

Aldi did not dispute that employees were required to undertake pre-start tasks before their paid shifts began, but said it expected employees only to be ready to commence work at the start of their rostered shift.

This case raised two key questions for the Court:

1. Did the pre-shift tasks constitute “work”, for which employees had to be paid?

2. If so, did Aldi give employees a direction to attend work 15 minutes before commencing their shift to complete those tasks / work?

Aldi’s cross-claim sought to set off the value of hours it paid employees but which were not worked (such as when employees were permitted to go home early after completing the required duties for the day).

Decision

The Court held that the pre-shift tasks constituted “work”, and so affected employees had to be paid for the time spent performing those tasks, because:

• each task was performed solely to the benefit of the employer, in that by the time the employee arrived at the designated work location for the commencement of their shift, they had already completed all activities required to allow the employee to get immediately to work;

• they were not performed solely for the personal benefit of the employee, such as storing personal effects or putting on uniforms or personal protective equipment.

The Court found insufficient evidence to decide whether Aldi gave an express direction to arrive at work early to perform unpaid pre-shift or pre-start checks.  However, based on the threat of disciplinary action if they did not complete the checks before their shift started, Justice Humphreys found there was a clear implied direction to conduct those checks.

Noting that recording attendance by use of a fingerprint scanner need not amount to starting a shift, his Honour found that, in this case, the average time taken for pre-start tasks was 10 minutes for each worker.

The Court dismissed Aldi’s cross-claim on the basis that:

• there was no evidence of employees leaving early; and

• Aldi did not point the Court to any authority or power, either in statute or at common law, that allowed Aldi to set off time at the end of an employee’s shift against unpaid work undertaken prior to a shift commencing and so it was not convinced that Aldi had a power to set off those hours in the way it contended.

The Court ordered Aldi to compensate affected employees for failing to pay them, in full, for their work in performing the required pre-start checks, before their rostered shifts. It found that this was contrary to the enterprise agreement in question and the Fair Work Act 2009 (Cth). The Court directed the parties to confer and agree, if possible, on a methodology for determining what compensation is payable to affected employees.

The SDA is pressing its case for the imposition of penalties, which could be significant.

What does this mean for employers?

While much may depend on the facts of any case, this decision suggests that if a pre-start check of plant or equipment is an essential precondition to starting work, and not a private activity done solely for the benefit of the employee in question, an employee should be paid for performing the check.

It is not to the point that in this case, the workers in question were covered by an enterprise agreement.  These principles apply more broadly, to employees covered by a modern award.

Any employer who requires its employees to be at work, before their shift commences, to take particular steps to prepare for work, should consider whether the performance of those steps is really solely for the employer’s benefit, and whether those workers should be paid for the time they spend performing those steps before the shift.

Employers will need to manage the risks involved, with significant penalties available in addition to any remediation required.

Contact a member of our Employment and Safety team to discuss the implications for your business.

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