It is common for employment contracts to include a clause stating that an employee agrees to work overtime “as and when needed.” However, while such clauses are widely used, their enforceability is not always straightforward – and in many cases, they may, in fact, be unenforceable.
1. There Must Be an Agreement
The Basic Conditions of Employment Act (BCEA) is clear:
“An employer may not require or permit an employee to work overtime except in accordance with an agreement.”
While this agreement doesn’t have to be in writing, employers typically include an overtime clause in employment contracts to avoid ambiguity. However, even a signed contract does not give the employer carte blanche to demand overtime indefinitely.
2. The One-Year Lapse Rule
A frequently overlooked provision of the BCEA is found in Section 10(5). It states that an agreement to work overtime – if entered into when employment commences or within the first three months – automatically lapses after one year.
In practical terms, this means:
- If an employee signs a contract with an overtime clause upon joining the company (or within the first three months), that clause becomes unenforceable after one year, unless a new agreement is reached thereafter.
- Employers and employees are thus required to renew or re-confirm the agreement to work overtime after the first year, something that rarely happens in practice.
3. Tacit or Implied Consent?
There is an argument that if an employee continues to work overtime after the first year, they have tacitly or implicitly agreed to do so. However, this is a matter of interpretation. The employee could just as easily argue that their consent applied only to those specific instances and does not imply ongoing agreement.
4. Implications for Employers
It is crucial for employers to ensure that any instruction to work overtime is both legitimate and enforceable. To mitigate risk:
- Employers should review and renew overtime agreements annually, especially for employees who initially agreed to overtime within the first three months of employment.
- They should also keep clear records of overtime agreements, including any verbal or informal consent, especially if the employee continues to work overtime after the one-year period.
Conclusion
In summary, while including an overtime clause in an employment contract is good practice, it does not provide indefinite authority to require overtime. Employers must be proactive in reviewing, updating, and reaffirming such agreements to ensure they remain legally valid under the BCEA.
