Where an unexpected interruption occurs at the workplace, where the workplace closes before or after a holiday, or where the employee takes leave at their own request, the resulting idle periods give rise to a loss of production that the employer needs to make good. The legal order permits that loss to be made good on certain conditions; this facility is known as compensatory work.
This institution, laid down in Article 64 of the Labour Act, while allowing additional work to be performed, does not fall within the category of overtime work. On the one hand it preserves the continuity of the undertaking’s operations, and on the other it ensures that working hours are kept within the statutory ceilings. This balance is, however, frequently upset to the employer’s detriment in practice; applications that stray outside the framework drawn by the statute give rise to overtime claims.
In this briefing note we address compensatory work within the framework of Art. 64 of the Labour Act, examining the conditions required for the institution to be applied, the ceilings on hours, the circumstances in which it converts into overtime, and the judicial course to be followed in the event of a dispute.
The Concept of Compensatory Work
Compensatory work is a special arrangement founded on the making good, by working at a later date, of working hours that passed idle for various reasons. This institution, contained in Article 64 of Labour Act No. 4857, makes it possible to remedy the loss arising in periods when production or the provision of services has been interrupted. Provided that the required conditions have materialised, the employer may maintain the flow of work by having its employees perform additional work.
The Definition Under Art. 64 of the Labour Act
Under that article, compensatory work is the making good, by subsequent working, of periods that passed idle in circumstances such as the stoppage of work for compelling reasons, the closure of the workplace before or after national and public holidays, or the granting of leave to the employee upon the employee’s own application. The statute has expressly placed work of this kind outside the scope of overtime work and work at extended hours.
That said, compensatory work may only be performed within a particular period of time, and the ceilings laid down by the statute as to daily working hours may not be exceeded.
The Purpose and Legal Nature of the Institution
The principal aim of the provision is that periods which passed idle be made good subsequently without disrupting the flow of production and services. In this respect compensatory work is regarded as an application relating to the exercise of the employer’s right of management.
That power is not, however, absolute. The legislature has secured the employee’s position by imposing a ceiling both on the interval within which compensatory work may be performed and on daily working hours.
The Distinction From Overtime
Although the two concepts are frequently used interchangeably in practice, their legal natures do not coincide.
Overtime denotes work exceeding the weekly period of 45 hours and makes the payment of an enhanced wage mandatory. Compensatory work, by contrast, is directed at making good a period that previously passed idle; as it is not treated as overtime work, it does not as a rule give rise to any additional pay.
Work performed outside the periods and ceilings envisaged by the statute, on the other hand, loses its character as compensatory work. In that event the work performed is regarded in law as overtime and an obligation to pay overtime pay may arise for the employer.
Conditions for Compensatory Work to Be Performed
Compensatory work is not an instrument the employer may bring into play whenever it wishes. Article 64 of Labour Act No. 4857 requires a number of conditions to have materialised for this practice. Work performed without those conditions having arisen may be characterised not as compensatory work but as overtime work.
Stoppage of Work for a Compelling Reason
There must first be a circumstance leading to work at the workplace stopping temporarily or diminishing appreciably. Natural disasters, power cuts, machinery breakdowns or similar technical and compelling reasons may be assessed within this scope.
In such cases the periods that passed idle may subsequently be made good by way of compensatory work.
Leave Taken at the Employee’s Own Request
Compensatory work may also be applied where the employee requests leave for personal reasons. Following such a period of leave, it is possible for the periods that remained idle subsequently to be worked. What is required here, however, is that the request came from the employee and was accepted by the employer.
An Express Instruction From the Employer
The implementation of the practice depends on the employer giving a clear instruction to that effect. The days on which and the hours for which the compensatory work is to be carried out must be announced to the employees in advance. The process must be conducted at the workplace on the basis of a definite plan and in an orderly manner.
Performance Within a Four-Month Period
Under the statute, compensatory work must be performed within four months at the latest, beginning from the date on which the idle periods arose. Work performed after this interval has passed loses its character as compensatory work. In such a case the work performed by the employees is treated as overtime work and an obligation to pay overtime pay may arise.
Ceilings on Hours and Daily Limits
Compensatory work may only be performed within the periods and working ceilings determined by the statute. Art. 64 of the Labour Act imposes significant restrictions both as to daily hours and as to the interval within which it may be applied. The purpose of these restrictions is to prevent excessive burdens being placed on the employee and to keep working hours at a reasonable level.
The Three-Hour Daily Upper Limit
Under the statute, compensatory work may be performed for a maximum of three hours per day. This figure indicates the maximum compensatory period that may be added to normal working hours.
For instance, an employee whose daily working time is eight hours may be required to perform at most 3 hours of additional work by way of compensatory work on the same day; the total for that day may therefore not exceed 11 hours. Where the three-hour ceiling is exceeded, the work performed is not treated as compensatory work but is assessed as overtime work.
The Eleven-Hour Daily Maximum
In applying compensatory work, the maximum daily working time of 11 hours contained in the Labour Act must also be observed. The employee’s total working time within a day may not exceed 11 hours even when compensatory work is included.
Normal working time and compensatory working time are therefore calculated together and the total must remain below this ceiling.
May Compensatory Work Be Performed on the Weekly Rest Day?
There is no legal possibility of compensatory work being performed on the weekly rest day. The weekly rest day is a right to rest protected by statute; it cannot be waived on the pretext of compensatory work.
Work performed on the weekly rest day therefore does not fall within the scope of compensatory work; it is characterised as overtime work or as work on the weekly rest day, and the corresponding pay must be made.
For details on this subject, reference may be made to our note entitled Weekly Rest Day Pay: Conditions, Method of Calculation and Court Proceedings.
In Which Cases Does Compensatory Work Convert Into Overtime?
So long as the conditions and periods drawn in Art. 64 of the Labour Act are complied with, compensatory work is not treated as overtime work and does not require an enhanced wage. Where the statutory limits are exceeded, by contrast, the practice loses its character and the work performed is assessed as overtime. In that event the employer may face the payment of overtime pay for the work in question.
For details on this subject, reference may be made to our note entitled Overtime Pay Claims: Conditions, Method of Calculation and Court Proceedings.
The principal circumstances leading to this change of character are as follows:
- Working on holidays. It is not legally possible for compensatory work to be performed on the weekly rest day or on national and public holidays. Work on these days is not brought within the scope of compensatory work; it must be treated as work on the weekly rest day or on a holiday and paid accordingly.
- Exceeding the eleven-hour daily ceiling. In applying compensatory work, the employee’s total working time within the day may not exceed 11 hours. Where this ceiling is exceeded, the work performed cannot be characterised as compensatory work and the employee may become entitled to overtime pay.
- Exceeding three hours per day. The additional time that may be required of an employee by way of compensatory work is a maximum of three hours per day. The portion exceeding this ceiling is not treated as compensatory work; it is regarded as overtime work and is subject to an enhanced wage.
- Allowing the four-month period to pass. The statute requires compensatory work to be performed within four months at the latest, counted from the date on which the idle period arose. Work not performed within this interval does not bear the character of compensatory work; where four months are exceeded, the work performed becomes overtime and overtime pay may arise.
Consequences of Breaching the Rules
Compensatory work is an arrangement that may be applied on certain conditions within the framework of Art. 64 of the Labour Act. The practice is expected to be conducted lawfully and the parties are expected to abide by that framework. Failure to comply with the rules may give rise to different legal consequences for both the employee and the employer.
The Employee’s Right to Terminate for Just Cause
The performance of compensatory work in a manner contrary to the conditions required by the statute may constitute a just cause for termination on the part of the employee. It may be accepted that working conditions have been made more onerous where, in particular, compensatory work is performed outside the four-month period, the three-hour daily ceiling is exceeded, work is performed on the weekly rest day or on other holidays, or the maximum daily period of 11 hours is infringed. In such a picture the employee may bring the contract to an end for just cause under Art. 24 of the Labour Act and may become entitled to severance pay.
Sanctions That May Arise for the Employer
Where the compensatory work has been planned in accordance with the statute and announced to the employees but the employee does not take part in that work without showing a valid ground, the employer may have recourse to a number of sanctions.
Where an instruction as to compensatory work given within the scope of the right of management is not complied with, it is possible for a disciplinary sanction to be applied; depending on the gravity of the situation, termination of the employment contract may also arise.
In assessing such a termination, however, the particular circumstances of the case, the lawfulness of the compensatory work practice and the extent to which the employee’s conduct affected order at the workplace are considered together.
Court Proceedings in the Event of a Dispute
Where compensatory work is conducted contrary to the statutory conditions, the employee may claim the employment claims that arise — overtime in particular — by way of an action. In disputes of this nature there are certain procedural steps that must be completed before recourse is had to the courts.
Mediation as a Procedural Requirement
Labour Courts Act No. 7036 provides for an application to a mediator as a procedural requirement in actions for employment claims between employee and employer. Recourse to mediation before an action is likewise mandatory in monetary claims founded on the assertion that compensatory work has converted into overtime.
If an action is brought directly, skipping this step, the court will dismiss it on procedural grounds for want of the procedural requirement.
If the parties reach a settlement at the mediation stage, the settlement minutes drawn up are regarded as a document in the nature of a judgment and may be made the direct basis of enforcement proceedings.
Courts With Subject-Matter and Territorial Jurisdiction
- As to subject-matter jurisdiction: Disputes over overtime and other employment claims arising from compensatory work are heard by the Labour Courts.
- As to territorial jurisdiction: The rule is the court of the respondent’s domicile and the court of the place where the work was performed; the employee may bring the action before whichever of these two options they choose. In places where no Labour Court has been established, these actions are heard by the Civil Courts of First Instance sitting as labour courts.
Burden of Proof
In actions for employment claims, the rule is that the party asserting that overtime work was performed must prove it. At this point the working arrangements at the workplace, wage payrolls, timesheets, entry and exit records and witness accounts carry decisive evidential value.
The employer keeping regular records of working hours and clearly documenting compensatory work practices very often changes the outcome in the resolution of the dispute.
Limitation Period
The limitation period for employment claims, including overtime claims, is five years. Claims for overtime pay must be asserted before this period expires.
The period begins to run, as a rule, on the date the claim arose. The dates on which work asserted to have been performed by way of compensatory work took place are therefore of importance for the calculation of the limitation period.
Independent Legal Assessment
Compensatory work is a practice that, when properly structured, affords the undertaking flexibility, but that turns into an overtime claim years later when it is not recorded. The greater part of disputes stems not from the institution itself but from a failure to document which idle period the compensatory work was performed against. The employer’s linking in writing of the stoppage or leave giving rise to the compensatory work with the subsequent work programme proves decisive at the stage of proof.
When designing a concrete practice or assessing a dispute, the following headings should be given priority:
- Recording in writing the compelling reason or the employee request forming the basis of the compensatory work
- Tracking the starting date of the four-month period separately for each idle period
- Automatically monitoring the three-hour daily and eleven-hour total ceilings within the timesheet system
- Keeping the weekly rest day and national and public holidays outside the compensatory work plan
- Announcing the compensatory work programme to employees in advance and by a method capable of proof
- Retaining working-time records with the five-year limitation period in mind
Independent Legal provides advisory and litigation services in employment law processes, from the regulation of working hours through to the conduct of overtime disputes before the courts.