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Topic: Contractual clauses

overtime and time off in lieu clause
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Overtime and time off in lieu clause

Overtime and time off in lieu clause

If you require an employee to work overtime hours from time to time, use our overtime and time off in lieu clause. It’s then up to you whether you are going to pay overtime payments, grant time off in lieu or give nothing for additional hours worked.

Additional working hours

In the employee’s written statement of employment particulars, you will have set out their normal hours of work - these are the hours the employee is contracted to work. Overtime is then time worked over and above normal hours of work on an occasional basis. Usually, you won’t want to give the employee a contractual right to work overtime as you won’t want to guarantee it, but if you need the right to require them to work over and above normal hours from time to time, you will need a clause to enable this. So our Overtime and Time Off in Lieu Clause provides that the employee may be required to work such additional hours in excess of their normal hours as are reasonably necessary for the proper performance of their duties and to meet business needs (and this can include working at weekends and on public holidays and overtime may be required on short or no notice). It also provides there’s no guarantee of overtime.

Payment

Where an employee works overtime hours, you essentially have three choices: they get nothing extra, they receive overtime payments or they’re granted time off in lieu (TOIL). Those in senior positions normally receive nothing extra as their salary is set at a level to envisage they’ll work extra hours when needed. You usually wouldn’t give the employee a choice between overtime payments or TOIL as that can get confusing. However, there’s nothing to stop you having a dual system in place if that’s what you want. Where overtime is paid, it’s up to you what rates you pay at, subject to complying with National Minimum Wage provisions. Our clause provides for various options. Finally, it provides that paid overtime won’t be offered to anyone who hasn’t signed an opt-out agreement under the Working Time Regulations 1998. Where an employee works overtime, even where an opt-out agreement has been signed, remember that you still need to comply with the statutory provisions relating to rest breaks and daily and weekly rest periods. The opt-out agreement only relates to the maximum 48-hour working week. 

TOIL

If you want to grant TOIL rather than pay overtime payments, make this clear in your wording and then use the second part of our clause. It sets out detailed rules for the operation of your TOIL scheme covering: what rate it accrues at (again, we’ve provided a couple of options), the minimum time which can be worked and counted towards TOIL on a particular day, a limit on the amount of TOIL which can be accumulated each month, when TOIL has to be taken by (otherwise it will be lost), how it must be taken and what system the employee must follow for approval of TOIL. Finally, we’ve covered record-keeping requirements and what happens to accrued TOIL on termination of employment, i.e. that it will not be paid in lieu but will be lost.

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