Unpaid overtime is on the rise but what are the legal implications, asks Sara McCorquodale.

Workers are taking action to help their employers survive the recession, a survey has revealed.

Half of the UK’s employees are doing unpaid overtime, taking unpaid leave or making some kind of personal sacrifice to stave off job losses, insolvency specialists R3 found.

These redundancy avoidance techniques are sure to help retailers, especially in the run-up to Christmas. However, human resources directors and store managers should be aware of the legal implications with regards to staff working without charge.

Kim Roberts, senior associate for law firm Nabarro, says: “Unless employees have been required to opt out of the 48-hour working week regulation, managers need to make sure they are not working more than this.”

She adds that retailers need to check the small print of employment contracts. “Managers should find out whether employees’ contracts say they are entitled to overtime pay, in which case they must be reimbursed for their time,” she says.

Other than this, retailers would benefit from investigating whether or not their insurance covers staff outside of their agreed working hours.

Although R3’s survey shows it is widespread, clocking out later than the contract stipulates is nothing new in retail.

This Christmas, staff are trying to cope with festive footfall and the pressure of potential redundancy due to the financial climate. To maintain the goodwill of those putting in extra effort, retailers should show their appreciation.

Human resources consultant Nadine Jones says: “It has been a tough year for employees, they are aware there is the big swinging axe of redundancy. Many are going the extra mile and that should be rewarded.”

Small complimentary gestures can be effective to keep staff happy, Jones says. “A handwritten note from a manager or something heartfelt written on the white board in the staff room will show staff that they are appreciated,” she says.

“Also, retail staff don’t get much of a chance to do their Christmas shopping so perhaps managers should offer them a floating day to take if they’ve been putting in extra time.”

Jones adds: “If staff are staying late, get in a few pizzas or if they look tired give them a voucher to get cake and a coffee. Give them a discount or extend a pre-existing one if possible.”

Overtime: the issues

  • It is illegal for an employee to work more than 48 hours a week unless they opt out of the regulation
  • Depending on your agreement, arranged insurance may not cover staff working outside of stipulated hours
  •  If their contract states they are entitled to overtime pay, staff must be reimbursed for their time
  •  Managers should show their appreciation. Staff are working for free to stave of redundancy and out of good will. Extra holiday or small, thoughtful gestures can help

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