Labour Dept’s Warning On Overtime Pay

Press, Volume CV, Issue 30956, 12 January 1966, Page 6

Labour Dept’s Warning On Overtime Pay

When work is done outside or in excess of the ordinary hours for a particular trade, overtime must be paid, according to an article in the November issue of the “Labour and Employment Gazette.” Commenting on a case heard recently in the Court of Arbitration, the journal says: “From time to time, particularly in the carpentry trade, employers may be tempted to offer a flat rate of payment in excess of the minimum award rate for ordinary time but less than the minimum which would be payable at that rate for overtime.

“Such an agreement would be contemplated only if the worker was likely to be working consistently long hours or if he would often be working in hours outside ordinary time. At least, in principle, these illegal agreements attempt to ‘average out’ both ordinary time hours and overtime hours to give a single uniform rate for all hours worked Two Recently Tried

“In a recent case, an employer was fined £l5 and bis worker £5 for entering into a flat rate wage agreement Regardless of whether the parties are satisfied with its terms, an agreement to make payment at a flat rate

for all hours worked, including overtime, is a breach of an award,” says the journal. “It is true,” the journal continues, “that a flat rate proposal may have advantages, and if it were possible to ensure that both parties went into such an agreement with full understanding of its implications there might indeed be some merit in a system which not only avoids seasonal fluctuations in the worker’s wages, but also assists the employer both in computing wages and in costing of jobs. “May Be Enticed”

“But there is a danger that, from lack of full knowledge of his legal entitlement, a worker may be enticed into agreeing to a rate which appears to be substantially above the award rate, but which, in the event of his working substantial overtime, actually secures for him less than he is entitled to.”

The journal adds a warning; "If an employer pays a flat rate of (say) 8s 5d he runs the risk that he will be required to pay arrears of overtime based on that amount (i.e. 12s 7Jd an hour at time-and-a-half, andlfislOd an hour at double time). In addition, both employer and worker are liable to be fined a substantial amount for breach of the award.”