Money Matter

Overnight on call - to pay or not to pay

by Bucky Chan, Partner, Litigation Department, Woo Kwan Lee & Lo

Article exclusively contributed by
Woo Kwan Lee & Lo

The case of Cheng Ho Kee & others v Secretary for Justice handed down on 9 February 2004 decided on the nature of the "overnight on call" duty required by the Correctional Services Department ("CSD") of its officers. It helped to determine whether a "request of duty" attracted a form of overtime allowance or time off in lieu according to the employment contract entered into between the parties.

In such a case, officers performing "overnight on call" are doing no more than making themselves available so that, in accordance with the imperatives of their job, they are able to report for duty if required.

Although the officers must remain in the immediate vicinity, unless they have permission to the contrary, they may engage in activities which the CSD cannot and does not control. They are left to their own devices and, therefore, the court was of the view that the officers are not working but, instead, are making themselves available to work.

The court was satisfied that the performance of "overnight on call" by the officers had constituted an inherent requirement of their employment. Contractually, it had never constituted a form of additional duty which should have attracted some overtime allowance.

This case stands on its own and the ruling may not be applicable to non-civil service employment. However, it does raise the general point about the payment of overtime allowances. Overtime simply means time spent at work after the usual working hours.

In Hong Kong's employment legislation, there is no provision governing the maximum number of working hours for an employee. This is left as a matter of agreement between the employer and employee.

In employment contracts or manuals, it is usual to have a clause stipulating the duration of office hours during which the employee is expected to perform his or her duties. As part of the agreement, the employee is required to render his or her personal service during the stipulated office hours but not so required outside them. Unless the employer has expressly reserved the right in the employment contract to request the employee to change or to work beyond office hours, the employee could refuse the request.

If there is no such term in relation to overtime work, it is not open to the employer to insist that the employee does work overtime. However, it is legitimate if the employee voluntarily renders service outside office hours.

If the employer insists that the employee does overtime work, the employee may terminate his or her service without notice or payment in lieu on the grounds that the employer has breached the agreement of employment. In such circumstances, the employer is liable to pay compensation to the employee.

Therefore, it is better if the employment contract is clear and specific about the issue of overtime work. A well-drafted employment contract should have a contractual term requiring the employee to work overtime if so requested by the employer. This will avoid any future dispute.

There is also no statutory requirement that an employee must be compensated for the overtime work rendered. Overtime may be paid or unpaid. It is, though, good practice to state clearly in an employment agreement whether overtime is paid or unpaid and the rate of pay, if appropriate.

Section 21 of the Employment Ordinance, Cap 57, stipulates that "any condition in a contract of employment which makes the payment of any annual bonus, or any end of year payment or any proportion hereof, subject to working on rest days granted under Part IV shall be void." This section does not apply to overtime allowances. It is, therefore, open to the employer to decide whether to make the rendering of overtime work a condition of annual bonus or year-end payments and how payments should be made.

Q&A on overtime allowances
Q1 If an employment contract has stipulated that the employee is required to do overtime work but is silent on whether the work is paid or unpaid, is the employee entitled to an overtime allowance?
A1 As the contract is silent on this point, the employee may not be able to claim an overtime allowance unless he or she can prove that the payment of such is an implied term of the contract or a past practice of the employer. It is never easy to prove implied terms. However, if the contract has no provision on the requirement for overtime work, any request by the employer for overtime work may, arguably, attract an overtime allowance as remuneration for the additional service rendered by the employee.

Q2 Is an overtime allowance part of the "wages"?
A2 Yes, in Section 2 of the Employment Ordinance, "wages" means all remuneration including overtime pay. In calculating an employee's statutory entitlement for long service payment, severance payment or workmen's compensation, "wages", including the overtime allowance, forms part of the calculation.

Taken from Career Times 25 June 2004

(Last review date: 23 August 2013)

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