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Esther Smith

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Ask the Expert: How legal are contract clauses to work overtime for no pay?


The question

I’ve just downloaded an Employment Contract T&C’s template from an online provider and it contains the following condition:
5. Hours of work
Your normal hours of work are between [TIME] and [TIME], [Mondays] to [Fridays] inclusive, with a lunch break of one hour. You may be required to work such additional hours as are necessary for the proper performance of your duties without extra remuneration.
Is that last line acceptable both legally & ethically?
The legal verdict
Martin Brewer, a partner at Mills & Reeve
The short answer is that, legally, it is fine, subject to one or two points. Moreover, it is a very common piece of drafting, most usually seen in contracts for senior employees.
But there are a couple of things to say about the clause and, indeed, clauses like this.
In terms of hours of work, it is worth remembering that the Working Time Regulations impose an average 48-hour working week on employees, averaged over a 17-week reference period.
So, although this clause envisages staff members working all manner of additional hours, unless they have signed an opt-out from the average 48 hour working week, these additional hours are, in fact, subject to limits.
The other thing to say is that the clause operates very much like a flexibility clause, under which employers can, in effect, get their employees to work longer hours by giving them more work or perhaps by not employing enough personnel.
While a court will not imply reasonableness into a contract, it will nevertheless look to see if ‘flexibility’ has been introduced in such a way as to seriously damage or even destroy employee trust and confidence.
So if, for example, a staff member resigns and argues that they were required to work too many additional hours, in most cases an employer could simply point to the clause in question and say: "You have a contractual obligation to work additional hours".
That argument will not work, however, if the employer has acted in bad faith, has ‘dumped’ a huge amount of extra work on the employee or has otherwise behaved capriciously.
But I stress that, as a general rule, a contract means what it says.
Martin Brewer is a partner at law firm, Mills & Reeve LLP.
Esther Smith, a partner at Thomas Eggar
The last line of the template confirms that, while overtime may be required, it will be unpaid. Such a clause is often featured in employment contracts, particularly where employees are paid an annual salary rather than by the hour.
Although there is currently no legal obligation on an employer to pay overtime, a staff member may be able to bring a claim in respect of their entitlement to the National Minimum Wage if their pay, when averaged out over all of the hours that they actually work, falls below this amount.
There are also several rules in relation to the number of hours that an employee can work as well as the breaks to which they are entitled that need to be adhered to.
Most notably, staff should not work more than 48 hours a week (including any overtime) unless they have agreed in writing that this limitation does not apply to them. In the absence of this written agreement, an employer would need to ensure that any overtime worked did not take employees over the 48-hour limit.
Legally-speaking, there is nothing wrong with the clause, provided it is exercised correctly, as discussed. But whether or not such a clause is ethical really depends on the viewpoints of the parties involved.
Many will argue that, in the current economic climate, employers are justified in expecting employees to go the extra mile, while staff members may be more willing to meet these expectations.
Others, on the other hand, will feel uneasy about the prospect of an employee having to dedicate more hours to their employer with no additional remuneration. There is no clear answer to this issue, I’m afraid.
Esther Smith is a partner in Thomas Eggar‘s Employment Law Unit.

One Response

  1. Does that include having to
    Does that include having to undertake on call standby duties out of hours? Having to be in standby for emergency situations? Or does on call duties need to be stated specifically in an employee contract.


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