The number of hours that are to be worked by an employee is outlined in the employment contract, including their pay, bonuses and compensation for overtime work. However, there are situations that, either by design or circumstance. So what happens when, as an employer, you find contracted hours not being met?
In this article, RealBusiness will outline what you can do in these situations, including whether it’s avoidable, your rights, compensation, and more.
Table of Contents
What if I find a difference in contracted hours and actual hours worked?
So we’re clear on definitions:
- Contracted hours – Your contracted hours are the minimum paid hours expected to be paid out each month as per the legal agreement laid out in the employment contract.
- Hours worked – These are the hours that have been worked by the employee, which should only ever be equal to the contracted hours, or above if there are extra shifts, or if the business needs to mandate it.
If you ever discover contracted hours not being met, you will have to determine the following:
1. Identify the cause – It’s vital to know why the hours worked are lower than the contracted hours. Talk to the employee to find out what these reasons are. The reasons could be:
- Unauthorised absences – This could be anything from lateness, to early finishes.
- Short-time working – This occurs when there is a legitimate shortfall in work or reduced business demand, and it’s supposed to be initiated by the employer.
- Flexible working pattern – It’s somewhat common for employees to misunderstand the flexibility clause if it exists.
- Illness or sick leave – Employees have statutory rights, but they are required to inform the employer.
2. Check employment contract – The things you need to determine, and cross-reference with the current scenario, in the employment contract are:
- Minimum hours – The contract will state the required minimum number of hours to be worked either weekly or monthly.
- Agreed working days and times – Self-explanatory.
- Flexibility clause – This can allow a variable number of hours worked.
3. Consider adjustments – If the work has been done, and the lower hours worked are backed by valid reasons, consider making temporary changes to their contract, or support them to help meet their hours.
4. Formal action – Depending on the severity of the contract violation, consider formal action, from a warning to dismissal. Follow your company’s disciplinary procedures.
5. Adjust pay – If they are working fewer hours than contracted, reduce their pay proportionally, so long as it aligns with contract and employment law.
For some industries, it can be hard to expect employees to work the exact hours and never go above or below. For example, coach drivers and delivery drivers. Coach drivers may be expected to work 40 hours per week, but find busy periods or areas keeping them in work for longer, or off-peak seasons seeing less business. Alternatively, delivery drivers may have a zero-hours contract that sees them work 30+ hours weekly.
Some industries that find it difficult to align with the regulations may have their own working time laws to cover themselves.
Can you get the payback?
Only in specific circumstances:
- The contract allows deductions – You can recover wages that are overpaid directly from their future pay.
- The contract doesn’t allow deductions – you need an employee’s written consent to reclaim the money.
- In the event of a refusal – Your only recourse is to pursue the funds through a civil court claim.
What is the law on contracted hours?
There are two main UK laws that govern contracted hours:
- Employment Rights Act 1996 – Section 1 requires employers to provide a written statement of employment particulars, which is technically the employment contract, and follow it to the letter unless specific exceptions are outlined. Section 13-27 discusses unlawful deductions, outlining when it is allowed.
- Working time regulations 1998 – Regulates the number of hours an employee may work, and how many hours they may not (to facilitate rest).
- Employment law bill – This recent bill (10/10/2024) enhances worker protections, such as protection from unfair dismissal. Zero-hour contract arrangements are under threat due to this bill also. To protect workers’ rights, employment contracts will soon need to provide a minimum number of hours to be worked each week.
Contracted hours are guaranteed working hours if set out clearly in the contract. They cannot force their employee to work fewer hours than promised in the contract given to the employee. The only reason that employers can lower working hours is through a flexibility clause, but this is for temporary changes only.
There are some options open to employers who can’t offer the minimum contracted hours to their employees for whatever reason. Perhaps business needs have changed or the business isn’t making as much money as it once was.
What if the employer cannot offer the full contracted hours?
When contracted hours not being met is the result of there being a lack of work to give, then the employer has two main options. Either ask the employee to take unpaid leave either via a layoff, or accept a short time working.
- Layoff – Layoffs are not a full dismissal, but rather a postponing of work for between one working day to several weeks. The employer will not be obliged to pay for this time off unless otherwise stated in the employment contract.
- Short-time working – This occurs when an employee’s contracted hours are reduced temporarily. Again, the employment contract must allow for this, or else it will be a breach of contract.
How Long Can An Employee Be Laid Off For?
Layoff and short-term working are usually short-term situations that occur when a business is having hardship, such as not enough work to go around or being unable to pay for employees.
During lay off or short time working, employees may work more or fewer hours than their contracted hours due to various factors such as business needs or financial constraints. There is no maximum time frame for how long an employee can be laid off or put on short-time working. So it really could be anywhere from a day to a few months.
When Can Contracted Hours Be Cut?
If employers fail through contracted hours not being met, it’s considered the employer’s job to rectify this. Contracted and actual working hours, however, can be cut in specific circumstances:
- Where the contract allows for periods of short-term, unpaid layoff or short-time working.
- Where the employee agrees to a reduction in working hours, even when the contract does not explicitly state this.
In both cases, the employer is not legally obligated to pay employees for their contracted hours where they haven’t been worked.
The final way an employer can cut contracted and actual hours is by actually altering the contract to reflect new hours that the business can afford and genuinely offer. However, this can only happen if the employee agrees to it.
As a business owner, it’s best to offer realistic hours with a new contract than to continually let down your employees. If your business is in an industry that allows for it, you might also suggest finding another part-time job so that an employee can make their previous income through more than one job.
What If The Employment Contract Doesn’t Allow For Reduced Hours?
Whilst some contracts of employment allow for unpaid or reduced pay lay off or short time working, in the majority of cases these situations are not mentioned in the contract. That means employees are due payment for their contracted hours, even if the business wasn’t able to provide those hours to be worked.
An employer is well within their right to then ask the employee to reduce these contracted hours if they weren’t able to offer them to the employee and may struggle to pay them. The employee does not, however, have to agree. If the employee doesn’t agree and the employer fails to pay them their contracted hours, then this is a breach of contract.
Can employees take on a new job in a short time?
Yes, although the employee has to ensure their second job does not violate the employment contract, which may have clauses to protect their company secrets and/or prevent conflict of interest. That being said, employees should understand that when the short time working hours end, then they must return to normal working hours immediately.
Can employees claim redundancy after having reduced hours?
An employee can claim redundancy if they’ve been laid off or put on short time working in the following situations:
- They have been on short time working hours or laid off for four or more consecutive weeks.
- They have been on short time working hours or laid off for six or more in a 13-week period.
You might also be wondering how sick pay affects things. If an employee has been off sick during the period in which they might claim redundancy, then technically their illness was the reason for you not working your contracted hours – even if you were previously not being offered work. Their ability to claim redundancy would be affected by this and working periods must be reset from that point for success.
A counter-notice is the employer promising the employee that contracted hours will be met again within four weeks, so the redundancy is rejected. To avoid complaints and a potential employment tribunal, the employer must provide the employee with their contracted hours for a minimum of thirteen consecutive weeks once the employee returns to their full contracted hours.
If the employer doesn’t respond with a counter notice within seven days, the redundancy is automatically accepted.
Conclusion
Hopefully, today, whether you’re an employee or an employer, you’ve been able to understand what will happen when contracted hours are not met in the workplace.
There’s no reason an employer wouldn’t want to provide the contracted hours to an employee, so when it occurs, it’s usually because there’s no other choice. Ensure that you know your rights and explore workarounds when you find contracted hours not being met.
