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In annualised hours an employee is contracted to a minimum number of hours work within a year. This allows the employer to choose when in the year it will require the worker. This type of contract is ideal for industries which have significant peaks and troughs in demand through out the year.
Annualised hours can be used as part of flexible working scheme, allowing employees and employers to select different working hours or patterns as required.
An employer must have a good understanding of the number of working hours they will require when offering annualised hours in this way. If they over commit, they may in effect have to pay the employee more per hour that was planned.