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How to allocate Overtime fairly

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Bottom Line Express - 10/06/11 - Written by:

Overtime is used on a regular basis by companies who experience a sudden change in demand or possibly a workforce shortage.

To ensure that a company has the legal right to request staff to work overtime there will need to be an express term within the employee’s contract of employment and this will enable an employer to instruct staff to work in accordance with the operational needs of the business. In the event that an overtime clause is not contained within a company’s contract of employment, it would be essential to obtain an employee’s consent to work overtime.

When drafting an appropriate overtime clause a company will need to consider a number of factors such as, overtime rates, when overtime becomes payable and whether overtime is compulsory or voluntary.

If there are more employees looking for overtime than work available, a company can consider introducing an overtime rota. In order to ensure that overtime is allocated fairly and consistently it would be beneficial for a manager to administer these procedures.

If the overtime hours that need doing are guaranteed overtime and employees are refusing to do them, you could consider disciplinary action because this amounts to a refusal to work contractual hours. If it is not guaranteed overtime, however, you may need to consider offering a higher rate of pay than normal, or some other incentive e.g. vouchers, to try and entice workers to undertake the work.

When considering overtime a company will need to be mindful of The Working Time Regulations 1998. This piece of legislation provides limits on the maximum number of hours which can be worked each week and also the weekly and daily rest periods for employees.

The legislation provides for the following restrictions to working hours:

An employee’s average working time should not exceed 48 hours for each 7-day period. This is averaged over a 17 week period. However, an individual is allowed to agree to opt-out of the 48-hour limit on the working week. For this agreement to be valid it must, in writing, state whether it refers to a specified or indefinite period and be terminable by the worker for a specified period of no more than 3 months or at least 7 days.

Adult workers are entitled to at least 11 consecutive hours of rest in each 24 hour period between finishing the one shift and starting the next.

Adult workers are entitled to an uninterrupted rest period of no less than 24 hours in each 7 day period. This must be in addition to their daily rest period entitlement and statutory paid annual leave. Where this is not possible, it is permissible to roll this over to the following week so that the individual has at least 48 hours (2 days) leave in a 14 day period.

If, as a company, you make use of overtime on a regular basis it could prove to be more cost effective if the company considers flexible working practices such as flexi-time, time off in lieu and part-time working.

For more information on overtime, please contact the Peninsula Advice Service on 0844 892 2772.

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