Annualised Working Hours Scheme

The annualised hours scheme allows flexibility for staff to work more or fewer hours at different times in the year to match demand.  It is often associated with services that experience seasonal peaks and troughs.

The annualised hours arrangement will have to detail:

  • The total number of hours to be worked over the year
  • A definition of what the working year is (i.e. when it starts and ends)
  • The number of hours that have to be worked in each period
  • Any flexibility that is allowed in the working hours – Note that employees working annualised hours will not be eligible for flexi-leave
  • Annual leave arrangements
  • Details relating to time recording

See the main flexible working page for a Flexible Working Request Form and the application process.

1. Annualised Hours – Statutory Limits

To comply with the Working Time Directive  an employee will not normally be permitted to work more than 48 hours per week as part of any annualised working arrangement.  In addition an employee MUST not work more than 13 hours within any 24 hour period and they must have an unpaid break of at least 30 minutes when working 6 hours or more.

Annualised hours allow an employee to work reduced hours during some part of the year and more hours at another time.  The reduced working time should be at times when service demand is low and increased hours when service demand is high.

All annualised working arrangements should be regularly monitored with actual working time being recorded and be within the minimum and maximum working limits per period.


2. Framework Provisions – Definitions

Annualised Hours

These are the contracted number of hours required to be worked over a 12 month period which are expressed in the contract of employment.

Working Year

This is a 12 month period commencing at the first day of January and ending the last day of December.

Working Limits per Period

  • In each period the employee will be required to work a minimum of 71% of their contracted hours for that period.
  • In each period the employee will NOT be permitted to work more than 129% of their contracted hours for that period.

Weekly Working Limits and Working Time Regulation

To comply with the Working Time Directive an employee will not normally be permitted to work more than 48 hours per week as part of any annualised working arrangement.  In addition an employee MUST not work more than 13 hours within any 24 hour period and they must have an unpaid break of at least 30 minutes when working 6 hours or more.

Balancing Months

Within the working year the employee will have their actual time worked “balanced” against the notional time that should have been worked.  The balancing will take place at the end of April and September.


3. Framework Provisions – Annualised Working Hours

Annualised Hours                                                        1924 per annum (FTE)

Notional Weekly Hours                                               37 per week (based on FTE working 12 months per year)

Minimum Weekly Hours (71% of 37 hours)               26.27 hours

Maximum weekly Hours (129% of 37 hours)             47.73 hours

These example figures are based on weekly periods.  The same principles apply where either 4 weekly or monthly periods are used.

For example, if basing the calculation on 12 monthly periods a full-time employee would have notional hours of 160.33 per month and could not work for less than 113.83 or more than 206.83 hours per month.


4. Framework Provisions – Operation of Scheme

Annualised Working Arrangement

A working arrangement for the year MUST be agreed in advance with the employee to undertake the annualised hours.  If a working arrangement cannot be agreed between Manager and Employee it will be for the Service Manager to determine the working arrangement based on service requirements.

Varying Work Hours during the Year

By definition annualised hours allow an employee to work reduced hours during some part of the year and more hours at another time.  The reduced working time should be at times when service demand is low and increased hours when service demand is high.

The scheme allows for individual working arrangements for employees, where agreed with their Line Manager, not to work for a particular day(s), week(s) or month(s).  In this case the notional hours will be calculated over actual total period required.

All annualised working arrangements should be regularly monitored with actual working time being recorded and be within the minimum and maximum working limits per period.

Balancing Months

For individual annualised working arrangements which vary from month to month there is a requirement for the actual working hours to be reconciled against the notional working hours for a preset period.

Abuse of the Scheme

The Annualised Hours Scheme relies heavily on the trust and co-operation of all employees.  It should be noted therefore that any abuse of the scheme will be regarded in a most serious light and the offending member of staff will be dealt with in accordance with the Disciplinary Procedure and provisions of the scheme removed where the scheme is being abused.


5. Framework Provisions – Local Operating Arrangements

Directorates may develop local arrangements taking account of local operating environments. In the case of annualised hours arrangements only the monthly working limits (as detailed above) can be varied.  All other provisions must apply as detailed in the framework.

An example Annualised Hours Scheme illustrates how these arrangements might work in practice.

If a local flexible working arrangement is needed, the directorate will be responsible for developing the detail of the scheme and for consulting with the trade unions and staff with a view to reaching agreement. It is recommended that managers discuss their intentions with People and Orgnisation for their directorate before beginning formal consultation and provide a copy of the final agreement before implementation so that the legal compliance of the proposals can be confirmed.


6. Additional Guidance

Working Time and Hours

The total number of hours an employee is contracted to work within the scheme year will be agreed in advance by the Service Manager.

Where 6 or more hours are worked in a 24 hour period an un-paid rest break of 30 minutes must be taken.  The Working Time Regulations are available here which must be complied with.  Both the employee and the line manager have a duty of responsibility to ensure that all Health and Safety issues are identified and addressed and that performance is maintained at a consistent level.

Annual Leave

The annual leave and public holiday entitlement will be calculated for the year and where appropriate on a pro-rata basis.  For a full time employee with less than 5 years service this would be worked out on the basis of:

Annual Leave: 27 days x 7.4 hours = 199.8 hours

Public Holidays 7 days x 7.4 hours = 51.8 hours

When requesting annual leave it will be deducted from the above hours based on the number of hours due to be worked on the day for which leave is requested. For example, if the employee was due to work for 8 hours on the day leave is taken, then 8 hours will be deducted from the leave entitlement.  The Annualised Working Hours Scheme may specify limits on the proportion of annual leave which can be taken during periods of extended working hours.

Relationship with other Flexible Working Frameworks

Annualised hours is likely to vary the normal working day and perhaps reduce the number of days worked over the year.  Although there may be some limited flexibility in start and finish times, those employees with an annualised hours working arrangement will NOT be entitled to access the full provisions of the flexi-time scheme, in particular the entitlement to flexi-leave. It will however be consistent with other solutions such as Term Time Working or Home/Mobile/Satellite Working.

Operation of the Scheme

Although hours of work may vary throughout the year staff are paid the same each month, irrespective of the number of hours worked in that month.  Staff are contracted to work a set number of hours per year, these hours will be calculated out into an annual salary which will be paid in twelve equal monthly instalments.

The annualised hours are broken down into a set number of hours to be worked each week.  Every 4 weeks each employee will be informed of the number of hours actually worked against those notionally contracted to work for that period.  This will result in either a negative balance if the employee works less than the notional contracted hours for the month or a positive balance if the employee works more.  Each period balance is taken forward.

Those staff who at the end of month 11 of the working year are projected to work, or have already worked, more than their annual contracted hours will be allocated additional hours for the year by way of contract variation.  Additional hours will be paid at flat rate for all hours worked up to the annual full-time equivalent number of hours and at the agreed overtime rate thereafter.  The additional monies will be paid at the earliest opportunity through payroll.

Where a negative balance is projected, arrangements should be made for the employee to work the required hours so that a balance can be achieved.

Group or Individual Annualised Working Arrangements

This scheme allows for group or individual annualised working arrangements.  This is likely to be appropriate for a group of workers where the work demands are seasonal or cyclical and can be determined in advance.  Where an annualised working arrangement is developed for a group all employees in the group must comply with the pre-set annualised working arrangement.  Such an arrangement will not normally require for there to be a “balancing” of working time during the year of actual against notional working hours.

The scheme provides the facility for an individual to agree with their managers their own annualised working arrangement.  This may be appropriate where the demands of their job are not predictable and forward planning is not straight forward. For the individual arrangements where working times are more likely to vary from month to month there will be a requirement to “balance” actual working time against the notional hours for the period.

Balancing of Hours on Termination of Employment

On notification of termination of employment the number of hours worked up to the date of termination in the year will be reconciled against the required number of hours in the scheme year and every effort made for the hours required to “balance”.  Where the required credits/debits against the required number of hours at the time of leaving the final salary payment will be adjusted in relation to any negative or positive balance of hours worked.


7. Balancing Hours on Termination

The number of hours worked up to the date of termination in the year will have to be checked against the required number of hours.  The employee can then be asked to work more o less hours during the remainder of their employment to try to balance their hours.  If that is not possible then the final salary payment will be adjusted in relation to any negative or positive balance of hours worked.

Relevant Documents and Links

To return to the main Flexible Working page please click here.

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