Flexi-time – what happens when the employee leaves?
The recent case of Vision Events (UK) Limited v Paterson highlighted weaknesses in an employer’s flexi-time policy. In terms of Vision’s scheme, if Mr Paterson worked more than his contracted 45 hours per week, he was entitled to time off in lieu at a time which suited his employer.
When he was made redundant, he had more than 1,000 hours of flexi-time ‘in the bank’. The policy did not specify how flexi-time should be dealt with on termination, and Vision refused to pay Mr Paterson in full for his accrued hours. He brought a claim for unlawful deductions from wages.
An Employment Tribunal upheld the claim, awarding Mr Paterson £12,500. The Tribunal found that there was an implied term in the contract that accrued flexi-time would be paid for. Vision appealed, and the Employment Appeal Tribunal (EAT) overturned the decision, finding no grounds for implying such a term. The EAT also noted that an offer by Vision to pay Mr Paterson 50% of the banked hours was simply a goodwill gesture, and not a concession that it was legally required to pay anything.
Although Vision was ultimately successful, the claim could have been avoided if the flexi-hours scheme had been drafted comprehensively, setting out what would happen to accumulated hours on termination. In practice, employers should also have systems in place to manage accrued hours under flexi-time or time-off-in-lieu schemes to avoid significant build-up.
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