Flexi-time schemes and unlawful deductions from wages

Businesses that use flexi-time schemes should take note of a recent EAT judgment that an employee, who was not paid on termination of employment for over 1000 extra hours worked under a flexi-hours scheme, had not suffered an unlawful deduction from wages.

The EAT recognised that the poor drafting of the flexi-hours scheme was at the heart of the problem in this case. The scheme differentiated between those employees who were entitled to overtime payments and those who were not and did not address the issue of payment on termination of employment at all.

To avoid this type of dispute, businesses should ensure that the terms of flexi-hours schemes make it clear what will happen to accumulated hours on termination and should, ideally, make sure that employees manage their accrued hours to avoid a significant build-up.