Overtime: The Importance of Agreements
'…an employer may not require or permit an employee to work … overtime except in accordance with an agreement' (Basic Conditions of Employment Act)
All employers and employees need to know of a recent Labour Court judgment holding that an instruction to work overtime in the absence of an agreement is unlawful.
A lapsed overtime agreement makes dismissal unfair
A company’s Site Manager instructed four employees to work overtime to meet production targets but they refused, citing safety issues on the day in question.
They were charged with gross insubordination and subsequently dismissed.
They took the matter to the Commission for Conciliation, Mediation and Arbitration (CCMA) to dispute the dismissals, and when the CCMA found that the dismissals were substantively fair, they applied to the Labour Court for review.
Although the CCMA commissioner had found that there was a work agreement in place that bound the employees to work overtime as and when necessary, the Labour Court held that the overtime clause in their contracts of employment had already lapsed by the time the instruction was issued.
Moreover, on the facts there was no evidence to support any inference of an 'implied or tacit' agreement to work overtime on this particular day. Said the Court: '…an agreement [to work overtime] could be inferred only when an employee had actually worked overtime without prior consent'.
The Court’s conclusion - without an agreement to work overtime on the day in question, the instruction was unlawful, and the dismissal accordingly unfair.
A further finding by the Court, although of practical relevance only to one employee whose agreement to work overtime remained valid, is nevertheless well worth noting: 'The sanction of dismissal should be reserved for instances of gross insolence and gross insubordination as respect and obedience are implied duties of an employee under contract law, and any repudiation thereof will constitute a fundamental and calculated breach by the employee to obey and respect the employer’s lawful authority over him or her.' In this case 'There was no evidence that the applicant employees acted willfully and repeatedly … Obviously, a progressive disciplinary sanction in a form of a warning or final written warning could have availed.' (Emphasis added)
The employer was ordered to reinstate the employees, retrospectively and with full back pay.
Agreement is essential: The BCEA (Basic Conditions of Employment Act) regulates overtime and provides that overtime is voluntary: '…an employer may not require or permit an employee to work … overtime except in accordance with an agreement'. It is up to you as employer to prove that a valid agreement is in place - so whilst a verbal agreement is perfectly fine in practice most of the time, a written agreement will prove invaluable in the event of any uncertainty or dispute.
When overtime agreements lapse: The BCEA also specifies that an overtime agreement 'concluded … with an employee when the employee commences employment, or during the first three months of employment, lapses after one year'.
The bottom line
Make sure you have valid overtime agreements in place and renew them if they lapse. As always with our labour laws remember that the complexity and the downsides of getting it wrong make specific professional advice an easy decision.