Overtime Employment

(Statutory restrictions)

Key points
  • Until the coming into force, on 1 October 1998, of the Working Time Regulations 1998, there were few legal restrictions in the UK on the number of hours which an employee could be required to work. The 1998 Regulations, which extend to Great Britain only (there are cognate provisions in Northern Ireland legislation) implement Council Directive 93/104/EC of 23 November 1998 'concerning certain aspects of the organ- isation of working time'. They also incorporate Council Directive 94/33/EC of 22 June 1994 'on the protection of young people at work'.
  • The reader will note that the protection afforded by the 1998 Regulations extends to all workers, and not just to those who are employees in the strict legal sense of the word. In short they apply to any person (casual, seasonal, freelance, trainee on work experience, agency 'temp', and so on) who undertakes to do or perform personally any work or service for an employer – whether for a day or two here an there, for a couple of weeks, or whatever. However, they do not apply to persons who are genuinely self-employed. An employer should not accept at face value any statement by a worker that he (or she) is self-employed. There must be documentary evidence to support such a claim (eg, business accounts, letterhead, pre-printed invoices, VAT registration, etc). In doubtful cases, an employer should always seek the advice of the Inland Revenue.
The 48-hour week
  • Under the 1998 Regulations (as amended by the Working Time Regulations 1999 and the Working Time (Amendment) Regulations 2002) adult workers (ie, workers aged 18 and over) cannot be required to work more than an average 48 hours a week (including overtime hours), calculated over a rolling or fixed reference period of 17 weeks. That reference period may be extended in prescribed circumstances to 26 or 52 weeks. However, there is no provision for averaging in the case of young workers under the age of 18, who have legally left school. A worker under the age of 18 cannot lawfully work, or be required to work for more than 8 hours a day or for more than 40 hours a week. 
  • However, there is an opt-out facility that enables an adult worker to agree to work more than that average 48 hours, so long as he (or she) does so individually, voluntarily and in writingThat option is not, repeat, is not, available to workers under the age of 18. A purported general opt-out for the adult workers at large or for a particular group of workers, under the terms of a workforce or collective agreement, is void and unenforceable. The same applies to any term in a contract of employment that presumes to override a worker's rights under the 1998 Regulations. Furthermore, the opt-out agreement signed personally by an adult worker must remind that worker of his (or her) right to cancel the agreement on giving a specified period of notice (not exceeding three months). If the opt-out agreement makes no mention of the worker's right to change his mind, it may be cancelled by the worker giving his employer seven days' advance written notice of that decision (ibid. regulations 4 and 5).
  • Any attempt on the part of an employer to pressurise a worker into opting out of the 48-hour week will not only invalidate the agreement but could also lead to criminal prosecution and a fine of up to £5,000, or more if a conviction is obtained on indictment. 
Exceptions to the 48-hour rule
  • The upper limit on working hours does not apply to managing executives and other persons with autonomous decision-making powers; nor does it apply to people whose working time is not measured or predetermined by their employers or who determine their own patterns of work (ibid. regulation 20(1)).
  • The exception also applies to workers (such as travelling salesmen, repairmen, etc) whose working time is partly measured, predetermined or determined by the worker, and partly not. In such cases, the provisions in the 1998 Regulations which relate to weekly working time and night work apply only in relation to that part of the worker's work which is measured, predetermined or cannot be determined by the worker himself (or herself) (ibid. regulation 20(2), as inserted (with effect from 17 December 1999) by regulation 4 of the Working Time Regulations 1999).
Extending the reference period
  • The standard reference period of 17 weeks, over which an adult worker's average weekly hours (including overtime hours) are calculated, may be extended (in special cases) to up to 26 weeks by an employer, or up to 52 weeks under the terms of a collective or work- force agreement – so long as the extension is for objective or technical reasons or reasons concerning the organisation of work. However, no collective or workforce agreement can override an adult worker 's statutory right not to work more than an average 48-hour week. As was explained earlier, that is entirely a matter for the individual. The optout option is not available to workers under the age of 18, however willing a 16 or 17-year-old may be to work more than 48 hours in any week.
Work at night
  • An adult worker (aged 18 and over) whose contract requires him or her to work at night (ie, for seven or more hours, including the period between midnight and 5:00 am) cannot legally be required to work more than an average eight hours in any 24-hour period calculated over a static or rolling reference period of 17 consecutive weeks. That said, employers must nonetheless see to it that adult night workers engaged in work involving special hazards or heavy physical or mental strain do not work at night for more that eight hours in any period of 24 consecutive hours.
  • With the coming into force on 6 April 2003 of the Working Time (Amendment) Regulations 2002, young workers under the age of 18 must not be employed between 10:00 pm and 6:00 am or, where their contracts require them to work after 10:00 pm, between the hours of 11:00 pm and 7:00 am. However, those restrictions do not apply to young workers employed in hospitals or similar establishments or in connection with cultural, artistic, sporting or advertising activities. Young workers employed in agriculture, retail, hotels, bakeries, postal or newspaper deliveries or in catering activities (including bars and restaurants) may be employed up to midnight or after 4:00 am (but not between those hours) so long as they are given an opportunity of a free assessment of their health and capacities before being assigned to such work.
Enforcement
  • Responsibility for enforcing the upper limits on working time (and night work) rests with health and safety inspectors and local authority environmental health officers. The latter have sweeping powers to enter an employer's premises, examine records, and talk to workers. Evidence of non-compliance could lead to prosecution and a heavy fine. A failure to maintain appropriate records or to obstruct an inspector in the exercise of his (or her) functions is also a serious matter which will attract swingeing penalties under the Health & Safety at Work etc Act 1974.
Complaints to an employment tribunal
  • A worker may complain to an employment tribunal that he (or she) has been disciplined, dismissed, selected for redundancy, or subjected to some other detriment (eg, denial of overtime, forfeiture of a promised pay rise, etc) for challenging his employer's failure to comply with his rights under the 1998 Regulations, or for refusing to forego those rights, or for asserting those rights before a tribunal or court. If such a complaint is upheld, the employer will be ordered to pay the employee a substantial (or further substantial) award of compensation (per sections 45A, 48(lZA), 49(5A), 101A, 104(4)(d) and 105(4A), Employment Rights Act 1996).
  • It is as well to point out that a worker (whether employee or otherwise) has no need to resign in order to pursue his (or her) statutory rights before an employment tribunal, so long as the complaint is presented within three months of the employer's refusal or failure to comply. If the worker has resigned or been dismissed, the complaint must be presented within three months of the effective date of termination of his contract of employment or within such further period as the tribunal considers reasonable in the circumstances.
Written statement of employment particulars
  • A worker who is an employee, in the strict legal sense of the word, has the legal right to be issued with a written statement explaining the principal terms and conditions of his (or her) employment. The statement must include information about any terms and conditions relating to hours of work (including any terms and conditions relating to normal working hours, night work and, by definition, time off for meals or rest) (per section 1, Employment Rights Act 1996). Any written statement (often inaccurately referred to as the 'contract of employment') which purports to override or undermine the employee's rights under the Working Time Regulations 1998 is void and unenforceable.
    Note 
    The fact that the right to be issued with a written statement of employment particulars is restricted to workers who are employees (as distinct from workers who are not employees), does not undermine the protection afforded to every worker under the 1998 Regulations.
Overtime premium payments
  • Until the repeal on 30 August 1993 of Part II of the Wages Act 1986, wages councils were the only statutory bodies with the legal authority to require employers to pay premium payments to employees who work more than a specified number of hours a week.
  • Blue collar workers, shop assistants, restaurant and hotel workers, clerical, administrative and secretarial staff, ordinarily expect to be paid at premium rates if they agree to work hours in excess of their normal weekly hours, or if their contracts of employment require them to do so – but they have no statutory right to such payments. Overtime premium payments are less likely to be paid to professional and managerial staff and are almost unheard of in the ranks of senior managers and company directors. Much will depend on what is written into an employee's contract of employment, bearing in mind that the written statement issued under Part I of the Employment Rights Act 1996 (see above) must include particulars of 'any terms and conditions relating to hours of work (including any terms and conditions relating to normal working hours)' (ibid. section 1(4)(c)).
  • Collective agreements drawn up between employers and representative trade unions, and 'imported into' a worker 's contract, usually specify overtime premium payments for all hours worked in excess of the standard working week. Workers in certain industries are traditionally paid double time for overtime hours on Sundays and bank holidays, supplemented in some cases (eg, in the hotel and catering industry) by equivalent paid time off work to be taken at a later date.
    Note 
    The Sunday Trading Act 1994 and the Betting, Gaming & Lotteries Act 1963 (as amended) gave shop workers and betting workers the right to opt-out of Sunday work. But neither of those enactments (the relevant provisions of which are now to be found in the Employment Rights Act 1996) requires employers to pay premium rates for overtime working. 
Compulsory and voluntary overtime
  • Whether or not an employee can be fairly dismissed for refusing to work overtime will depend, in large part, on any related express or implied term in his (or her) contract of employment. If an employee's contract requires him to work a minimum of 10 overtime hours a week, he must work those hours (subject, of course, to any overriding legal restriction on the maximum number of weekly hours (including overtime hours) under the 1998 Regulations, discussed earlier in this section). If, having accepted employment on those terms he then refuses to work any overtime at all, let alone 10 hours a week, he will have repudiated a fundamental term in his contract of employment and can be dismissed with impunity bearing in mind that difficulties of this sort will ordinarily be identified, discussed and resolved long before any such employee qualifies to pursue a complaint of unfair dismissal.
  • If the same employee decides after one or more years' service that he is unhappy about working 10 hours' overtime a week, his dismissal for refusing to comply with the terms of his contract will still be held to have been fair so long as his employer can satisfy an employment tribunal that he had acted reasonably in treating the employee's refusal to work overtime (and his reasons for doing so) as a sufficient reason for dismissing him. 
  • If an employee's contract is silent on the question of overtime, or simply states that overtime hours will be remunerated at such-and- such a rate, his (or her) refusal to work overtime on a single occasion is likely to be less damaging to his prospects of survival than his refusal to work overtime on any occasion. A great deal will depend on the particular circumstances and the employee's general attitude to his work
Complaint to an employment tribunal
  • On the termination of his (or her) employment, a worker (qua employee) can bring a 'breach of contract' claim before an employment tribunal if his employer had denied him his contractual right to work a specified number of overtime hours each week, and/or (provided that he had been continuously employed for one year or more) a complaint of unfair dismissal if dismissed for refusing to work overtime. Unfair dismissal and 'breach of contract' claims must be presented to a tribunal within three months of the effective date of termination of the employee's contract of employment. If such a complaint is upheld, the tribunal will make a declaration to that effect and will order the employer to pay damages or compensation (and/or, in the case of a dismissal) to reinstate or re-engage the employee in his original (or in an equivalent) job

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