Meals and Rest Breaks - Do You Know Your Obligations?

Major fast food chain McDonald’s is facing a class action from the Shop, Distributive and Allied Employees Association representing around 250,000 employees who allege they were denied paid rest breaks. The compensation is estimated to be at least $250 million for past and present employees who allege they were offered a free drink or a trip to the toilet in exchange for their Award entitlement of a paid ten minute break for shifts of four or more hours. Workers allege they were not told of their entitlement and had to seek permission to take a break and breaks were only granted to go to the toilet or take a drink, not the ten minute rest from work they were entitled to.

What does this mean for me?

Protect yourself from an underpayment claim:

This case is a reminder to ensure that you as an employer are paying your workers correctly and providing the appropriate breaks that employees are entitled to under their Award. Under clause 26.1 of the Vehicle Repair, Services and Retail Award 2020 (‘Vehicle Award’), workers are entitled to an unpaid meal break of no less than 30 minutes and not more than 60 minutes. Employees cannot be required to work for more than 5 hours without a meal break. You must provide your employees their entitlement to a meal break, even when work gets busy, otherwise you might be faced with an underpayment claim.

In terms of rest breaks, there is no obligation for you to provide these like the requirement in the hospitality industry. The Vehicle Award states under 26.1(e):

“In addition to a meal break, an employer may provide to an employee either a morning or afternoon tea break not exceeding 15 minutes. Where a break is unpaid it must not exceed 15 minutes duration. Where both a morning and an afternoon tea break are provided on the same day or shift, at least one of these breaks must be paid.”

As employers, you have the option as to whether to provide your worker tea breaks. You may provide a paid tea break but if it is unpaid, it must not exceed 15 minutes. However, if you provide two tea breaks in one shift, one of them must be paid. We highly recommend including your policy on meal breaks and tea breaks in your employment contracts, so employees know exactly what their rights are. For example, your employee’s contract should include details as to whether their unpaid meal break is 30 minutes or 1 hour.

However, please check your obligations under each Award that applies to your employees. For example, the Clerks—Private Sector Award 2020 outlines different rules regarding paid rest breaks for standard employees versus shiftworkers. Please contact us if you have any questions in interpreting your Award obligations.

Protect yourself from civil penalties:In 2020, the operator of a South Australian petrol chain store was ordered to pay almost $65,000 to a low-paid employee after being found to have deliberately exploited the vulnerable worker through systematic underpayments while he worked between November 2015 and December 2016.

The company was ordered to pay penalties of $27,000 for failing to pay for work, $24,300 for taking pay deductions for meal breaks that did not occur, and $13,500 for failing to pay overtime. Magistrate Lieschke said the larger pecuniary costs should act as a warning.

"There is a high need to deter this employer from further contraventions regarding unpaid work and proper meal breaks," he said. "The penalty should also serve as a deterrent to other employers in the retail industry and generally."

We recommend that employers need to be vigilant and continually update their awareness of their obligations towards their employees as you can face not only underpayment claims, but severe civil penalties for breaking the law.

Furthermore, the SA Government is likely soon to propose wage theft laws in South Australia which will criminalise the deliberate and dishonest underpayment of employees and likely carry penalties of up to 10 years imprisonment and fines exceeding $1 million.

We recommend timely audits to ensure your business is not at risk of significant underpayment claims. We offer an MTA package which includes training on how to pay your staff correctly and a payroll audit to check that your current practices are compliant with your obligations.

If you want to book a training package, need assistance reviewing your employment contracts, or have any other questions on the above information, please contact the MTA Workplace Relations Team on 8291 2000, or at wr@mtasant.com.au.