Managing Overtime – A guide for Employers

17 May

We explore the different types of overtime and answer some of the most common questions about employees working additional hours below.

There are three forms of overtime:

  • Voluntary overtime
  • Compulsory and guaranteed overtime
  • Compulsory but not guaranteed overtime

Voluntary overtime

Voluntary overtime occurs in the absence of a contractual agreement for the employer to offer overtime or for the employee to accept it. On this basis, where business needs require an employee to work overtime, or where the employee wishes to work additional hours, this will need to be agreed by both parties.

Compulsory and guaranteed overtime

Compulsory and guaranteed overtime occurs when the employer is contractually obliged to offer overtime of which the employee is required to accept. This arrangement may be expressed in a contract of employment, where there are guaranteed times that the employer is aware of that will require higher staffing levels.

Compulsory but not guaranteed overtime

Finally, compulsory but not guaranteed overtime occurs where the employer requires an employee to accept overtime on an ad-hoc basis. The employer is not obliged to provide overtime, but the employee is required to accept it where this is expressed in the contract of employment.

Employers will need to be aware of the restrictions under the Working Time Regulations, in particular in relation to maximum weekly working hours for employees that have not ‘opted out’ of the Working Time Regulations and also in relation to minimum rest periods. Also, even if all of the above considerations are met and adhered to, employers have a duty of care for the psychological and physical health and safety of their employees. Where there is a suspected or reported concern for the employees’ health and safety, this will need to be considered.

What can I do if an employee refuses to work overtime?

Any action taken will depend on the type of overtime arrangement set out in the contract of employment if there is one. Voluntary overtime will not be able to be enforced by employers. However, compulsory guaranteed and non-guaranteed overtime that isn’t adhered to may result in the employer taking disciplinary action against the employee – subject to investigation as to the reasons for the refusal.

Should employees be paid for overtime?

There is no statutory right to be paid for overtime. However, especially for voluntary overtime, employers may wish to offer an enhanced rate of pay as an incentive. Employers that do not provide additional pay for overtime should clearly detail this in the contract of employment and should ensure that employee pay does not fall below NMW for their pay reference period.

Practical Considerations:

Forcing employees to work overtime against their will, even if the employer is entitled to, is likely to create resentment between the employee and the employer.

  • Where possible, the requirement for overtime should be communicated to the employee to reduce mistrust and bad feeling.
  • Clear policies and contracts can help all employees to fully understand their obligations so there are no surprises further down the line.
  • Recognition and appreciation can be strong motivators and can help encourage a culture of willingness to ‘chip in’ when needed. A simple thank you, even for compulsory overtime can go a long way.

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