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Opportunities created by the “overtime act” put into practice

Amending Act CXVI of 2018 on the organization of working time and the minimum fee of labor leasing activity (hereinafter: amendment) has been announced on 20 December 2018 and entered into force on 1 January 2019.

In our article we are looking for answers to the following questions; what opportunities the change has actually created for employers and which employers can take advantage of the opportunities created by the change.
The amendment essentially concerns issues related to the organization of working time, in particular the rules on working time banking and overtime.

The new opportunities provided by working time banking are only open for employers with collective agreements, while the opportunities in the area of overtime may be used by employers without collective agreements as well, as follows:

I. Options based on collective agreement

According to the amendment as from 1 January 2019, a maximum of 36 months of working time banking may be introduced on the basis of a collective agreement instead of a maximum of one year. In practice, this means that employers wishing to apply a longer working time frame, an amendment must be initiated to the collective agreement currently in force or; in the absence of a collective agreement in force, a collective agreement must be concluded with the trade union authorized to conclude the collective agreement, including that option.

It is important to note that not only 36 months, but shorter, e.g. a 24-month working time frame may also be included in a collective agreement by the parties.

There is a statutory limit to the extremes of work schedules arrangement within the longer working time banking – in addition to the rules on rest days/rest periods – that the 48 hours a week should be at most an annual average (and not, for example, the average of the three years).

For the time being, it is disputed whether the working time banking of more than one year is harmonized with the rules of Directive 2003/88/EC on certain aspects of the organization of working time. Article 19 of that directive provides that a ‘reference period’ for the calculation of working time or rest periods in a collective agreement may not exceed 12 months.

II. Options based on individual agreements with employees

The annual number of overtime hours can be increased up to 400 hours based on an individual agreement with employees. This option is therefore open to employers which do not have a collective agreement/ do not have a trade union with authorized to conclude a collective agreement.

400 hours is the absolute upper limit for overtime work. Higher amounts cannot validly be stipulated in a collective agreement either.

The employee may terminate the agreement by the end of the calendar year. Termination of the agreement shall not be a reason for termination of employment.

III. Options based on the request of the employee

According to the amendment, overtime (supplement payment) is not generated in situations where the employees themselves request the modification of the working time schedule in advance within 96 hours.

This provision recognizes situations that actually occur in practice, when for example the employee asks for a change in the working time schedule for some kind of personal reasons, e.g. “exchange” a workday with another colleague.

It is important that the initiative really comes from the employee. Using employee’s requests for employers’ interests are abusive, thus illegal.

In relation to the option described above it is also important to take into account the general principle of labor law, that working schedule arrangements, overtime arrangements are possible only if the requirements of healthy and safe work are met. In addition to the economic benefits associated with more flexible working hours, it is important to consider that the employer may be required to pay financial compensation for the damage caused by the workers who are proven overloaded or the accidents and health damage caused to them.