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Annual hours

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Annual hours

Annual hours is the name given to the system whereby employees are contracted to work a certain number of hours per year, while the actual hours worked each week may vary.

There may be some positive flexibilities for workers, but the overall bias is heavily in favour of the employer. Therefore, careful negotiations on proposals for a scheme are advised in order to ensure that necessary safeguards built into the scheme.

Annual hours can reduce problems for employers with a varying workload but they create common problems for workers who may be required to work unexpectedly or at inconvenient times.

Nevertheless, there are advantages for workers, for example:

  • The ability to modify working patterns to suit personal circumstances.
  • Consistent salary payments each month even where the hours worked may vary.
  • Quieter periods of the year enable the employee to have blocks of time off.
  • The security of knowing personal rosters well in advance.

For organisations, there is clearly an advantage in being able to match staffing levels to fluctuations in workload over the course of the year and the possibility of reducing the use of agency staff, thereby reducing costs.

Good practice guidelines

 Negotiators and reps should seek to agree:

  • That management anticipates the workload, plans rosters in advance, and reduces the working year to bring contracted annual hours closer into line with rostered hours.
  • A maximum limit for daily and weekly hours; there may be scope to negotiate a reduction in hours of the average working week in exchange for flexibility for the employer.
  • Adequate breaks are built into the agreement.
  • That the employer takes account of time off for annual leave before determining the number of hours required per year and before matching labour supply against labour requirements.
  • A limit to commitment hours and procedures for their use.
  • That commitment hours are used for predictable labour needs and training, rather than as emergency cover.
  • That any unplanned labour use is examined so that there is cover from those workers already at work, before someone is called in.
  • That swapping of shifts is allowed.
  • The facility to wipe the slate clean or reduce outstanding banked hours commitments at regular intervals, rather than let them build up.
  • That appropriate arrangements are made for compensating hours worked at unsocial times (eg weekends, public holidays, unsocial hours) are at premium rates.
  • Callout compensation. For instance a certain number of hours could be taken off the individual's commitment hours for each callout, counting standby shifts against commitment hours.
  • Adequate notice of a requirement to work commitment hours, so that individuals have some discretion in agreeing to work at a particular time.

Annual hours schemes operate at BAE Systems, Countryside Council for Wales, Defra, DSTL, Forestry Commission, Historic Scotland, Natural England, Office of Rail Regulation and UK Power Networks.