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Topic: Contractual clauses

opt-out clause
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Opt-out clause

Opt-out clause

As an alternative to an opt-out agreement, use our opt-out clause in employment contracts to disapply the average weekly working time limit but, if you do, make sure workers sign their contracts and that their consent to the provision is entirely voluntary. Our clause recommends they take independent legal advice on it.

Working time limits

Under the Working Time Regulations 1998, the average working time of most adult workers must not exceed 48 hours per week, calculated over a 17-week reference period (extended to 26 or 52 weeks in limited circumstances). This includes overtime, plus it includes any work for secondary employers. However, the Regulations also enable workers to voluntarily consent to work more than these hours, provided they’ve signed an individual written opt-out agreement which makes clear they agree to disapply the 48-hour average weekly working time limit - see our Opt-Out Agreement.

Opt-out clause

An alternative to an opt-out agreement is to include our Opt-Out Clause in the worker’s employment contract. Provided it consists of their agreement in writing to disapply the 48-hour average weekly working time limit, it will be legally valid. As a minimum, they will therefore need to have signed the contract as evidence of their express consent. However, there’s one key pitfall to be aware of. The worker’s agreement must be voluntary, so if the contract has been presented to them as a “done deal” that’s not open for negotiation, their consent won’t be a free choice. This could well be the case where the contract is given to them for signature before they start work, with the implication that the job offer will be withdrawn if they don’t sign it, particularly as there’s currently no prohibition on refusing to employ someone who refuses to opt out. To tackle this, our clause includes a provision that you’ve advised the worker to take independent legal advice regarding the meaning and effect of it. This gives the appearance that the clause is open for negotiation and that you’re not trying to force them into agreeing something they don’t understand.

Duration and termination

Once an opt-out provision has been signed, it will apply indefinitely, unless you’ve specifically stated in it that it will only apply for a fixed period. An indefinite agreement means you won’t need to renew it at regular intervals. Our clause applies indefinitely. Workers can cancel an opt out, but they must give you not less than seven days’ written notice, or longer notice, up to a maximum of three months, if this has been agreed as part of the opt-out provision. Our clause requires the worker to give the maximum three months’ notice to withdraw their consent. Likewise, it states you will give them three months’ notice to terminate the opt out, although it’s unlikely you would want to do this. You must keep a record of all workers who have opted out, but you don’t need to keep records of the actual hours worked by opted-out workers.

Dismissal

It’s automatically unfair to dismiss an employee, and you must also not subject employees or workers to any detrimental treatment, for refusing to sign an opt-out provision or for cancelling an existing one - and an employment tribunal claim here for unfair dismissal or detriment doesn’t require any minimum period of qualifying employment. Therefore, don’t put any pressure on workers to sign, even if they’ve only just started work for you.

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