The employee in this case was promoted. Upon promotion he received a salary increase but lost the right to overtime payments. Instead, he could take part in a flexible working scheme. He amassed an amazing 1000+ hours in flexitime before being made redundant.
The employee sought payment for the unused flexitime accrued by him. The employer offered to pay half (they argued as a gesture of goodwill) and asked him to use up excess flexitime during his notice period. The employee refused both offers.
A tribunal found in his favour, notwithstanding the handbook was silent on payment. The tribunal also had doubts that the employer could require the employee to use up flexitime during his notice period. It also considered that an offer to pay half indicated the employer was aware of some contractual obligation to pay - employee's don't work for nothing. The tribunal ordered payment of more than £12k.
The employer successfully appealed. The majority of the EAT found that the lack of specific reference to payment for flexitime in the documentation was telling and such a right could not be implied into the contract. They accepted that an offer to pay for part of the outstanding hours could be for goodwill reasons and it did not reflect any belief that there was a legal requirement to pay. The EAT was unanimous in its finding that the employer could require the employee to use up flexitime during the notice period:
"We have come to the view that the contract between the employer and employee, while poorly drafted and not very clear, does not include any clause which shows that it was the intention of the parties that a person not entitled to overtime would be paid for his flexi-hours on leaving... We have considered it and the majority have come to the view that there is no requirement to imply such a term. It is not necessary for business efficacy and it is clearly not a term which both parties believed should be implied..."
Practical lessons from this decision:
It could be argued that the employer got lucky in this case – others might be advised to include a specific term in contracts relating to the non-payment of flexitime (a ‘use it or lose it’ clause), just to be on the safe side. And don’t let employees accrue 1000 hours of flexitime.
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