In many workplaces, the unspoken rule that ‘everyone pitches in when it’s busy’ has given way to a more defined relationship between hours worked and the entitlements that follow. What was once managed informally is increasingly governed by explicit legal rules, documented arrangements, and employee expectations that extra work will be recognised and paid for.
This is as much a cultural change as a legal one. In decades past, overtime was often absorbed as part of a job’s ‘give and take,’ with employers showing appreciation through a long Friday lunch, early knockoffs, or an end-of-year bonus. In professional settings, sustained long hours could even be seen as a badge of commitment. However, as awareness of workplace rights has grown coupled with broader conversations about mental health, burnout, and work-life balance, employees are more likely to see overtime as a matter of legal entitlement rather than informal reciprocity.
The legal architecture of extra hours
The Fair Work Act 2009 (Cth) (the Act) and the National Employment Standards (NES) provide the backbone for regulating working hours. The NES set a maximum of 38 hours per week for full-time employees, with scope for ‘reasonable additional hours’ on top. How this limit interacts with pay, penalty rates, and rostering depends on the worker’s role and the industrial instrument that applies.
Award-covered overtime
For employees whose roles are covered by a modern award or enterprise agreement, overtime is precisely defined. Awards set:
- The ordinary hours of work.
- The ‘spread of hours’, that is, the time of day ordinary hours can be worked.
- The rates payable for overtime (or rules for time off in lieu).
Award provisions are not optional. Even if an employee is willing to work beyond the spread of hours without extra pay, the award prevails. This means that an employee can potentially make a claim for underpayment if they work overtime without pay, even if they are paid significantly above Award rates, and have previously said that they will work without compensation.
Individual flexibility arrangements
For award-covered employees, an Individual Flexibility Arrangement (IFA) provides a lawful way to vary certain award provisions. An IFA might replace overtime rates with a higher flat rate, adjust the spread of hours, or create a different system for time off in lieu (TOIL).
For an IFA to be valid:
- The employee must be better off overall compared to the award
- The arrangement must be in writing and signed by both parties
- Either party must be able to terminate it with notice.
An IFA can adjust how overtime is delivered, but it cannot remove the entitlement entirely. The ‘better off overall’ test (BOOT) ensures that flexibility does not erode minimum standards.
Reasonable additional hours in award-free roles
Some employees, such as those in professional services, managers, or executives, may not be covered by an award. For them, the NES limit of 38 hours plus reasonable additional hours is the key test.
What is ‘reasonable’ is not open-ended. The Act lists factors such as:
- Health and safety risks, including fatigue.
- The employee’s personal circumstances, such as caring responsibilities.
- The operational needs of the business.
- The amount of notice given.
- Industry norms.
- Whether the employee is compensated for the additional time.
Employment contracts for award-free roles often state that the salary includes payment for reasonable additional hours. This can help set expectations, but it does not create an unlimited right for the employer to demand extra hours. Even a well-paid professional can lawfully refuse hours that would be unreasonable under the Act.
Can an employee ‘waive’ overtime?
It is a persistent myth that if an employee agrees, verbally or in writing, to work extra hours without payment, the employer is relieved of their legal obligations. In reality:
- For award-covered roles, overtime provisions are minimum entitlements and cannot be waived. Any agreement to forgo them is legally ineffective.
- For award-free roles, an employee can agree that their salary includes payment for reasonable additional hours, but the hours must still meet the legal test of ‘reasonable.’ Hours that are unsafe, excessive, or inconsistent with the NES cannot be enforced.
- Under an IFA, overtime arrangements can be varied but not removed entirely, and only if the employee is better off overall.
This reflects a deeper policy principle in Australian employment law: minimum standards are non-negotiable. Consent does not legitimise a breach of those standards.
Refusing overtime and the risk of dismissal
Whether an employee can be dismissed for refusing overtime depends entirely on whether the request for extra hours was lawful and reasonable.
If overtime is required under an award, contract, or IFA, and meets the ‘reasonable additional hours’ test, a refusal without good reason may be a breach of duty and could amount to misconduct.
If the request is unreasonable, for example, because of health and safety concerns, caring responsibilities, inadequate notice, or sustained excessive workloads, a refusal will generally be protected, and dismissal could expose the employer to unfair dismissal or adverse action claims.
The law’s underlying approach is that an employer’s right to require extra hours is balanced against the employee’s right to a safe, sustainable workload.
From practice to compliance
The law now operates in a climate where employees are more willing to speak up, and where the tools for enforcing rights from Fair Work Ombudsman investigations to underpayment claims are more accessible. In workplaces with seasonal peaks, whether in tax accounting, retail, hospitality, or project-driven sectors, overtime has moved from being a cultural assumption to a regulated, measurable, and enforceable obligation.
Understanding which framework applies - award overtime, IFA, or reasonable additional hours - is essential for navigating this landscape. Each has its own rules, limits, and mechanisms for flexibility, but all share the same foundation: extra hours must be lawful, reasonable, and fairly compensated.
