Blog » TIME IS MONEY! - PART IV – FLEXIBLE WORKING ARRANGEMENT AND FLEXITIME – DO WE HAVE TO PAY OVERTIME?
TIME IS MONEY! - PART IV – FLEXIBLE WORKING ARRANGEMENT AND FLEXITIME – DO WE HAVE TO PAY OVERTIME?
21 July 2022
In the latest part of our series, we discussed the rules of irregular work scheduling, i.e. working time banking and payroll period in Hungary. In this article, we discuss the cases when employer transfers the right to schedule working time to the employee in whole or in part. In view of the COVID-19 pandemic situation and the widespread Home Office working arrangement, this type of working time schedule is becoming more and more popular, so we consider important to examine this institution.
The previous part of the article is available here: TIME IS MONEY! – PART III – A LOOPHOLE FOR THE 8-HOURS WORKING DAY IN HUNGARY - Blog - Smartlegal
1. Flexible work arrangement[i]
For many employers, the use of flexible working arrangement can be tempting, since in this case overtime and remuneration issues cannot usually arise. However, it is important to note that we can only talk about flexible working arrangement in a narrow circle.
1.1 When can we talk about flexible working arrangement?
Based on the Labour Code[ii] (“LC”), the following conditions must apply together for the given work schedule to be considered flexible:
- the right to schedule working time may be ceded with regard to the independent organisation of work, i.e. in the case of an employee who is able to carry out the work processes with autonomy;
- and the employer must transfer the right of work scheduling to the employee in full, i.e. the full day's working hour shall be allocated by the employee.
1.2 Rules of flexible working arrangement
The employer shall transfer the right of work scheduling to the employee in writing. However, this can be done by a unilateral declaration by the employer or by an agreement between the parties. It is important to note that it may be preferable for the employer to unilaterally order since it also entails the possibility of unilateral withdrawal.
There are some cases where the flexible working arrangement must be used based on the LC, such as outworking or executive employment.
In case of flexible working arrangement, the employee decides for himself when he wants to work, but this does not mean complete informality.
The employee must consider the specifics of the job when scheduling his working hours, since certain tasks may only be performed at a specified time. For example, he may be obliged to attend the meeting or to provide information to his supervisor at a specified time.
It is also possible for the employer to determine the conditions and limitations of the work schedule. For example, working days and rest days can be recorded, as well as certain days when the employee is required to show up at the place of work.
However, it is important that the conditions and limitations can only be defined as such that they do not deprive the employee of his right of free work scheduling and that the actual scheduling of working time can be realized through him.
1.3 Benefits of flexible working arrangement
Effective work may not always take place through the employer's control over working hours, as it may be more productive for certain jobs if the employee determines when to work.
In case of the application of flexible working arrangement, most of the rules of LC relating to working time schedules do not apply. The employer does not have to pay attention to the break and the maximum daily/weekly working hours detailed in our previous series of articles, or even the public holidays.
However, what may be the most tempting for the employers is the possibility of reducing labour costs.
In this type of work schedule, the employer is exempted from his obligation to register working time and rest periods, which also includes the register of overtime working hours.
Consequently, as a general rule, the employee does not have overtime, so there is no obligation to pay in this regard, and additional wage supplements are not considered due to the lack of a record of working time.
1.4 Limitations of flexible working arrangement
As mentioned above, the transferring of the right to schedule working time does not mean that the employer cannot define its framework.
However, the right of employee cannot be deprived by defining the conditions of the work schedule in such a way that the employee no longer has leeway within that framework.
In case of the above, it may be suspected that the flexible working arrangement was ordered solely in order to avoid the obligation to pay overtime, in which an abuse of right could be established, which, is prohibited by law[iii].
It is also important to note that in the case of a flexible working arrangement, the daily working time applicable to the employee must also apply and no amount of work should be ordered which the employee could only perform by exceeding the daily working time fixed in the employment contract.
In the above case, if the employee can prove the extra working time and its necessity, he will also be entitled to remuneration for overtime even in the case of flexible working arrangement.
2. Flexitime [iv]
As we have seen above, we can only talk about flexible working arrangement if the employer grants the employee the right to schedule the working time in full.
However, given that the transfer of the right to schedule constitutes the right of the employer, there should also be no impediment to transfer this right only partially.
In practice, this is most likely to occur when the employer determines the periods during which the employee must be at the place of work on the given day (core period) and the period within which the employee must allocate his working time (flexi hours).
However, we note that flexitime does not constitute a flexible working arrangement, in view of which the rules on the working arrangement apply and the employer must set a working time banking within which the employee can complete the period of working time that governs him.
Based on the above, it is not always the employer who allocates the working time, since it is possible to delegate all or part of its right to the employee.
However, while the rules on the working arrangement, presented in our previous articles, continue to apply in the case of partial delegation, i.e. in the case of flexitime, in the case of full delegation, which means flexible working arrangement, these rules do not apply.
In this article, we have mentioned several times the overtime, in connection which we noted that the employer can usually be exempted from the obligation to pay in the case of a flexible working arrangement.
In our next article, we will go around the rules of legal institution of overtime.
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