Can you be dismissed for time fraud?
Time fraud, or in other words, taking work breaks for longer than you are entitled to, can be a valid reason for dismissal in Australia. The Fair Work Commission states that workers are entitled to work breaks. But how many breaks can you have? And for how long? And when does taking too long on a break constitute time fraud, and therefore, dismissal? Can you be dismissed for time fraud? can have serious consequences
In this article, we answer all these questions. And we share a recent unfair dismissal case that will help you understand how the Fair Work Commission decides when excessively long breaks constitute time fraud and fair dismissal.
Guarding against time fraud: What breaks are Australian employees entitled to?
Some employers take a liberal attitude to employee breaks. They therefore may not call out an employee for taking more time than they are officially entitled to. But it’s important to remember that other employers aren’t so kind with taking longer breaks. And because they are paying for those extra, unentitled minutes, it can be considered time fraud.
Therefore, to ensure you aren’t at risk of committing time fraud, it’s important to understand what you are legally entitled to. The Fair Work Commission states that during a work period (for example, an eight-hour work day), workers can be entitled to paid or unpaid:
- Rest breaks, which are generally ten minutes in length.
- Meal breaks, which are often 30 minutes to an hour in length.
- Split shifts, which are often granted to employees who work long hours. This entitles them to a break that can be several hours long, with the aim to break up their work periods. For example, the Restaurant Award allows for an employee to have a split shift if each of their working periods are two hours or longer.
In the majority of instances, an employee is entitled to take a break after working five consecutive hours. However, depending on the work you are performing, it may not be reasonable to take a break only after five hours.
Guarding against time fraud: How do I find out my break entitlements?
It’s important to remember that employers have strict workplace health and safety obligations to make sure a worker is provided the opportunity to take their legally entitled breaks. The type and length of break that you are entitled to generally depends on the hours that you work. Also, the type of work you are performing and industry you are in employed in.
Whether these breaks are paid or unpaid often comes down to these factors too, in addition to your employment type (full-time, part-time or casual). To find out how many breaks you are entitled to take during your work period, and for how long, you can check one of three documents. Either your award, enterprise agreement or employment contract.
You can also use the Fair Work Commission’s interactive tool to find out your break entitlements based on the industry that you work in. Checking these resources can help you know exactly how long you can take breaks for. With this knowledge, you can therefore avoid any risk of committing time fraud.
Can you be fairly dismissed for exceeding your break entitlements?
The Fair Work Commission has adjudicated on many unfair dismissal cases concerning employees who were dismissed for alleged time fraud. And the lessons we can glean from these is that to be fairly dismissed for time fraud, it must be consistent, repeated behaviour. Also, the amount of time the employee had spent on their breaks in excess of their legal entitlements must be significant.
If you spent longer than you were entitled on a break, and were dismissed for it, it’s highly likely that the Fair Work Commission would rule it an unfair dismissal. However, if you repeatedly exceeded your break entitlements, there’s a good chance that it would be ruled as fair.
“This is bullsh*t:” Worker is dismissed for committing time fraud
The dangers of committing time fraud were illustrated in the recent unfair dismissal case Karl McKeown v The Smith’s Snackfood Company Pty Ltd [2023]. Maintenance technician Karl McKeown had been working at The Smith Snackfood Company for over eight years when he was noticed taking an extra-long break. He was soon summoned to a meeting where he was asked if he had been given permission to go off-site.
And if so, whether he had taken his break afterwards, which would have exceeded his 30-minute break allowance under the company’s enterprise agreement. However, Mr McKeown didn’t take lightly the implication that he had committed time fraud. After explaining that he went off-site to grab lunch for his co-workers, he walked out while saying “this is bullsh*t.”
Mr McKeown is suspended for time fraud, workplace investigation is conducted
Following Mr McKeown’s abrupt walkout, Smith Snackfood reviewed the preceding week’s CCTV footage. It discovered that Mr McKeown had taken extra-long breaks for the entire week. He was thereafter verbally notified that he was being suspended pending a workplace investigation.
The workplace investigation concluded that there was sufficient evidence that Mr McKeown had committed time fraud. It deemed that it was “improbable” that Mr McKeown “did not know that his breaks were well in excess of the site agreement.” The company found that his penchant for taking extra-long breaks was “deliberate conduct as it was repeated behaviour.”
Mr McKeown is dismissed for time fraud, makes unfair dismissal claim
Smith Snackfood therefore summarily dismissed Mr McKeown for serious misconduct. And he subsequently made an unfair dismissal with the Fair Work Commission.
At his unfair dismissal hearing, Mr McKeown expressed remorse for taking extra-long breaks. And that he wasn’t aware he had been doing so. He also laid forth a number of reasons why his dismissal for time fraud was unfair. He argued that:
- He was denied procedural fairness during Smith Snackfood’s workplace investigation. Namely, because his request to have a support person present during his meeting management was refused. And that he wasn’t provided with the CCTV footage and other documents he required to make a response to the allegations. Also, that he wasn’t told of the reasons for his dismissal in clear and explicit terms.
- Regarding the extra-long break he took and was initially questioned about, he had been getting banh mi’s for his colleagues. Mr McKeown argued that this was a team custom dating back to 2019 that aimed to improve morale. He said that it replaced the Thursday barbecue the team had in place for over ten years under previous management.
- He had sworn in the meeting because he felt it was “going in circles’ and that he was being treated in a “bullying fashion.” Mr McKeown said that he felt he was a victim for something that had previously been approved by management.
Employee had permission
He had been given permission to go off-site on several other days during the week in question. This meant that he had only taken extra-long breaks on three occasions. His dismissal was a disproportionate response to his alleged time fraud. He felt that instead of a dismissal, he should have been given a warning.
- His dismissal was “too harsh” because he had a track record of working “diligently and responsibly.” Mr McKeown also argued that it was harsh given his age and skills, and the fact that finding new employment would be difficult.
- Smith Snackfood shouldn’t have used CCTV to monitor his breaks and believed that they had a “hidden agenda.”
- His alleged time fraud didn’t meet the Fair Work Commission’s standard for serious misconduct. Namely, that it was wilful or deliberate behaviour not consistent with his employment contract.
Employer makes its case at the Fair Work Commission
At the unfair dismissal hearing, Smith Snackfood made a much simpler argument to justify Mr McKeown’s dismissal as fair. It argued that Mr McKeown:
- Was provided with procedural fairness during its workplace investigation into the alleged time fraud
- Was never provided permission to extend his breaks when he went off-site.
- Had displayed “disrespectful behaviour” and “inappropriate conduct” by swearing and walking out of his meeting with Smith Snackfood management.
- Knowingly and wilfully committed time fraud by taking extra-long breaks.
- Had exhibited behaviour that that was dishonest and lacked integrity. And therefore, it struck at the heart of the employment relationship. This caused Smith Snackfood to irredeemably lose confidence and trust in him.
Time fraud or not? The Fair Work Commission rules on the unfair dismissal case
Weighing up both arguments, the Fair Work Commission found that Smith Snackfood had a valid reason to dismiss Mr McKeown for serious misconduct. It stated that there was significant evidence that he had committed time fraud.
The Fair Work Commission found that:
- Smith Snackfood had provided Mr McKeown with procedural fairness during its workplace investigation.
- The paid breaks Mr McKeown took were “significantly beyond” the stipulations set out in Smith Snackfood’s enterprise agreement. The Fair Work Commission noted that over a five-day period, they were “frequent and repeated.” This therefore constituted time fraud.
- There were 10 occasions when Mr McKeown had taken extra-long breaks. This ranged from 20 minutes longer per day up to 50 minutes longer. The Fair Work Commission deemed this a “deliberate and wilful flaunting” of the trust of Smith Snackfood.
- Smith Snackfood employees were relied upon to manage their own breaks. The Fair Work Commission rejected Mr McKeown’s argument that he was unaware of the length of his breaks.
- Mr McKeown was a union delegate, and as such, should have been “well aware” of his break entitlements under Smith Snackfood’s enterprise agreement. And that by exceeding them, that he was committing time fraud.
- Mr McKeown’s assertion that he should have been given a warning instead of being dismissed was flawed. Namely, because he “deliberately” exhibited conduct that was “deceptive.”
In summation, the Fair Work Commission found that Mr McKeown’s time fraud was a valid reason for his dismissal. That is, because his conduct was “wilful and deceptive.” The Fair Work Commission noted that lacking Mr McKeown’s “repeated and excessive” instances of time fraud, his dismissal would have been ruled unfair.
Employers can commit time fraud too
Cases of employees committing time fraud, like that of Mr McKeown, are certainly out there. But time fraud can go the other way too. Employers are sometimes known to pressure workers to skip their legally entitled breaks or work unpaid overtime. A recent study reveals that the average Australian employees work an average of 4.3 unpaid extra hours per week. The study reveals that these extra hours equate to $93 billion per year. Or on a per worker basis, around $8,000. This certainly qualifies as time fraud by employers, conducted on a massive scale.
This data, however, is based on the hours of the average Australian worker. Full-time employees give away even more of their time for free – on average a full hour per day. That equates to around six weeks of unpaid work per year. Often, employers might maintain a culture of fear within the workplace that pressures employees to work unpaid hours. If they don’t, they may be seen as “not being a team player.” Or even, “not living up to a high-performance culture.”
By knowing your legally entitled breaks, and standing up for your rights, you can ensure that time fraud isn’t committed against you by your employer.
Have you been unfairly dismissed?
If you have been unfairly dismissed for alleged time fraud, you have the means to take action through the Fair Work Commission. We at A Whole New Approach can help you make an unfair dismissal claim to gain reinstatement to your role. Or financial compensation. But remember, you need to act fast. You must make your unfair dismissal claim with the Fair Work Commission within 21 days of your dismissal. With A Whole New Approach, you can rely on a team of highly experience workplace mediators who have been helping Australian workers for more than two decades.
We’ve handled more than 16,000 unfair dismissal cases in our time, with an excitement track record of helping workers achieve a successful outcome. With all this experience, we can navigate you through the often complex process of making a claim. And we can explain everything you need to know in an easy-to-understand way. Additionally, we offer a risk-free guarantee, meaning you only pay if we successfully win your case, so you don’t have to worry about costs. We also offer a free initial consultation to educate you on your rights and explore all available options.
Facing a workplace investigation or serious misconduct allegations we can act as a support person for you or draft a response to the allegations
Get in touch with us at 1800 333 666 for a private discussion and let us assist you in fighting for justice.
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