Onus is on employers to tell staff about overtime

If
companies want employees to work extra hours, this must be written into their
contracts, says the European Court of Justice. By Jason Smith

In
the recent case of Wolfgang Lange v Georg Schnemann the European Court of
Justice found that there is a general obligation on employers to inform
employees of all the essential elements of the employment contract/relationship
and that overtime is one such element.

Lange
was a lathe operator whose contract specified a 40-hour week but gave no
mention of overtime. When the employer asked Lange to work overtime in order to
fulfil orders within time-limits agreed with a customer, he refused. He was
consequently dismissed. The question was whether Lange was in breach of
contract by refusing to work overtime.

The
parties were in dispute as to what they had agreed at the time of Lange’s
recruitment in relation to overtime. The employer claimed that Lange had agreed
to work overtime at the request of the company in the event of sudden increases
in workload but Lange argued that he had agreed to work overtime only in
emergencies.

The
German court had to ask itself whether Lange was in breach of contract by
refusing to work overtime. In order to answer this question it had first to
establish what the parties had in fact agreed in relation to overtime. 

The
court sought the ECJ’s opinion on whether a particular EC directive on an
employer’s obligation to inform employees of the conditions applicable to the
contract imposed an obligation on employers to inform employees of any
requirement to work overtime.

The
ECJ decided that any term which was an essential element of the contract or
employment relationship must be notified in writing to the employee. This
includes any term relating to overtime.

But
failure to include a term relating to overtime or failure to include such a
term with sufficient precision in the contract of employment does not of itself
mean that an employee will escape any obligation to work overtime – if in fact
it had been agreed either verbally or by course of conduct that they would do
so.

The
directive the ECJ was interpreting was brought into effect in the UK by section
1 of the Employment Rights Act 1996. This section requires an employer to
provide a written statement of particulars to employees. It also sets out what
any written statement should contain.

The
lesson to be learnt from this case is that if employers wish their employees to
work overtime then they should say so clearly either in the contract of
employment or within the statement of terms and conditions of employment.

Setting
it out in writing will avoid employers having to go through the more difficult
task of proving that such a term had been agreed either orally or by course of
conduct.

Although
this case dealt specifically with the issue of overtime, it has also
established a more general rule, which is that any written particulars of
employment must cover all the essential elements of the employment contract
relationship.

It
serves to highlight once again the importance of properly drafted contracts of employment,
which clearly set out what an employee’s rights and obligations are.

Jason
Smith is a solicitor at Palser Grossman solicitors

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