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The importance of an employer keeping records of hours worked

This case is an appeal heard by the Federal Court. The matter involved two employees who argued that they had worked ‘long hours’ for which they were not paid.

The employer could not provide records of the hours worked by the employees. By contrast, the employees provided evidence of the hours which were alleged to have been worked ‘in handwritten schedules’ which they claimed were based on contemporaneous records they had kept. 

The Federal Court observed that the requirement on an employer to keep records ‘are an important part of the protections afforded by the Fair Work Act’ on employees.

Section 557C of the Fair Work Act 2009 (Cth)

In this case, a key issue was the implications of s.557C of the Fair Work Act 2009 (Cth).  Briefly stated, that section provides that when an employee alleges that an employer breached certain provisions of the legislation or an industrial instrument, in relation to which the employer was required to keep records, then the employer has the burden of disproving the employee’s claim.

As the Court described, if the employer’s evidence ‘did not rise to the level necessary, on the balance of probabilities, to affirmatively prove that … [the employees] … did not work the hours that they claimed, then the effect of s 557C was that those claims were to be upheld’ (emphasis added).

In that regard, the Court said ‘…it was not enough that there may be reasons to question the credibility of the account’ provided by the employees, as even if the employees’ evidence was rejected, that does not mean the employer has disproved the employees’ allegations regarding the hours worked.

In this case, the employer was unable to discharge ‘its burden of disproving the alleged hours’ asserted by the employees.

It was said by the Court that there ‘may be’ a requirement before this section is invoked, for the allegation to be ‘made reasonably or bona fide’ but, in the circumstances, there was nothing indicating the ‘claims were not bona fide’.

Some of the evidence in this case

One of the employees had given evidence which was ‘quite specific as to what he did’ and ‘explained the way he recorded the hours he worked’.

The employer essentially argued there was a roster in place with ‘limited hours’.

Key take-aways

This case is an important reminder for employers to not ignore the need to keep proper employee records, especially for any overtime hours worked by an employee. Having a roster may not be sufficient, especially where the roster does not reflect the reality of the actual hours worked.

Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627 (3 October 2019)

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Note – this article is for information purposes only and does not purport to be comprehensive or to render legal advice.

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