You have a set amount of hours you must work per year. However, you have flexibiilty when you do these. This can include 'core hours' per week - working the rest flexibly or when there's extra demand at work.
The new UK Flexible Working Bill makes requesting flexible working a day 1 right.
Working Week: The core working hours might be set at 20 hours per week.
Working Month: During peak seasons, the employee may work up to 40 hours per week.
Working Year: Over the course of a year, the employee could work a total of 1,800 hours, with busier months during holidays and quieter months with reduced hours.
This system is highly prevalent in sectors like retail, healthcare, and manufacturing due to their variable workloads and seasonal demands.
Annualised hours contracts specifiy the total number of hours an employee must work over the year but do not define when these hours will be worked.
The employee has to work a certain number of hours over the year but they have some flexibility about when they work. There are sometimes ‘core hours’ which the employee regularly works each week, and they work the rest of their hours flexibly or when there’s extra demand at work.
Annualised pay distributes an employee's salary evenly throughout the year, irrespective of the hours worked in a specific month. This provides a consistent income stream for the employee, while employers can effectively balance staffing with business demand.
For more information have a look at the Government site and the Onfolk site.