What happens to flexi-time on termination?

The answer will lie in the contract of employment but the reality is that many employment relationships are not governed by a written contract so it can be difficult to determine what if anything was agreed between the parties.

In the recent EAT case of Vision Events (UK) Ltd v Paterson the EAT overturned the Employment Tribunal’s decision concerning an unlawful deduction of wages.  The employee was permitted to work flexi-time and in this case had clocked up over 1,000 hours which he was due to take back.  Unfortunately, dismissal intervened and he was not paid on termination for these extra hours.  The Claimant brought a claim for unlawful deduction of wages, which succeeded in the first instance.  The EAT overturned the decision stating that it was wrong to imply a term that the employee was entitled to be paid for accrued hours that he had not taken off in lieu.  It was not a necessary term and one which it was unlikely that both parties would agree to.  Thus the employee had effectively given up 1000+ of his hours for free.

 There are really two morals to this story, for employees not to let the time build up to this extent and to ensure that you are clear when and how you can take the time back in lieu.  For employers whilst on this occasion no written term worked to their advantage, employers should ensure that they have clear terms in place for flexi-hours schemes setting out what will happen to accumulated hours on termination and ensure that time off in lieu is managed.  On a normal 40 hour week this employee could have taken 25 weeks off to make up for the extra hours so nearly 6 months!

Written by
Edward Aston
11th March 2014



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