Hitachi Rail STS Australia Pty Ltd v Schoof
Citation: [2026] FCA 343
At a glance
- Employees affected
- 1
What happened
Hitachi Rail STS Australia Pty Ltd sought clarification from the Federal Court about how to calculate penalty rates and overtime under its enterprise agreement. The central dispute was whether certain allowances paid to employees should be counted as part of the 'base hourly rate' when working out those penalty and overtime amounts. A secondary question was whether a waiting time penalty provision, which applies when 'wages' are not paid on time, also applied to unpaid allowances.
What was decided
The Court held that allowances are not to be included in the 'base hourly rate' for the purpose of calculating penalty rates and overtime under the enterprise agreement. Declarations were made to that effect. On the second issue, the Court declined to grant a declaration about the waiting time penalty applying to non-payment of allowances, refusing that relief as a matter of discretion rather than ruling it out entirely.
What it means for employers
Employers covered by enterprise agreements should review how their agreements define 'base hourly rate' before calculating penalty rates and overtime. Where allowances are treated as separate payments, they may not form part of the base used for those calculations. Seeking a court declaration on disputed agreement terms is one way to resolve ambiguity, but courts retain discretion to refuse declarations on some questions.
What it means for employees
Employees covered by this enterprise agreement should be aware that allowances are calculated separately from penalty rates and overtime, not stacked on top of the base rate used for those calculations. If allowances are unpaid, the availability of waiting time penalties for that specific loss was not confirmed by the Court on this occasion.
Every statement above is drawn from the published decision. Read the original here:
https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2026/2026fca0343This summary was drafted by AI from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections →