THIRD REPORT
The Education and Employment Committee has agreed
to the following Report:
THE DRAFT PART-TIME EMPLOYEES (PREVENTION
OF LESS FAVOURABLE TREATMENT) REGULATIONS 2000
1. We published our Report on part-time working on
23 March 1999.[1]
We received the Government's response on 18 June and published
it on 29 June.[2]
Our Report dealt with a wide range of issues related to part-time
working, central to which was the forthcoming transposition of
the Part-time Workers Directive into domestic legislation.[3]
The Draft Regulations and the Consultation Process
2. When we published our earlier Report, we
understood that the Government was to publish a consultation paper
on part-time working in the first half of 1999.[4]
The Government's response suggested that the consultation paper
would in fact be published in the second half of the year.[5]
The consultation paper was eventually published in January 2000.[6]
The new Parliamentary Under Secretary of State at the Department
for Trade and Industry[7]
appeared before the Employment Sub-committee on 1 March 2000 to
answer questions on the consultation paper and the draft regulations
contained in it. A number of organisations also sent us copies
of their responses to the consultation, for which we are grateful.[8]
3. The Minister explained that there were two reasons
for the delay in publishing the consultation paper. The first
was that the Department had decided in the summer to have an extended
period of private consultation with employers, unions and the
Equal Opportunities Commission. The second was that when the DTI
was ready to publish the consultation paper, shortly before Christmas
1999, some of the major employers' groups which would be affected
by the Regulations, such as those representing the catering and
hospitality industries, pointed out that it would be difficult
for them to respond during a period which included Christmas.[9]
4. As a consequence of this delay, the period of
public consultation was two months rather than the three months
which was originally planned.[10]
The Government is required to implement the Directive by 7 April
2000,[11]
and it is the Government's intention to publish the Regulations
in their final form as early as possible, in order to give those
who will be affected sufficient notice to make the necessary changes
before they come into force. The Minister did not see that the
truncation of the public consultation exercise had been a particular
problem and in fact described it as "beneficial".[12]
He argued that the Government had a full agenda of employment-related
measures, including some European Council Directives which had
to be implemented before the Part-time Work Directive and that
there had been "a continuing dialogue with the CBI, with
the TUC, with the EOC" throughout the period the draft Regulations
were being drawn up.[13]
5. We are not persuaded that the Government's
reasons for delaying the publication of the consultation document
were sound. It is not clear, for example, why a three-month consultation
period beginning before Christmas should present a difficulty
for potential respondents when a two-month period beginning in
January does not. Although we recognise the value of private and
informal consultation while draft statutory instruments are being
prepared, we do not believe that it should be treated as a substitute
for an open public consultation exercise.
6. The consultation paper contains, as well as the
draft Regulations, notes covering the main changes which the Regulations
would bring in and a summary of the regulatory impact assessment.
The Minister told us that the summary of the regulatory impact
assessment published with the consultation paper had been wrong.
Whereas the version published in January estimated that 45,000
of the country's six million part-time workersless than
one per cent of the totalwould benefit directly through
increases in pay and non-wage benefits,[14]
the actual figure was, according to the Minister, more than 400,000.[15]
Although this is still less than ten per cent, it is substantially
greater than the Government's original estimate. Likewise, by
the time the Minister came to give evidence, the estimated cost
per part-time employee had fallen from £260 to £50,
another significant change.[16]
7. The TUC drew attention to the content of the notes
accompanying the draft Regulations. The note on access to training
reads:
"Under the regulations, there is an obligation
on employers not to exclude parttimers as a matter of principle.
However, there is no legal obligation on employers to structure
their training in practice in order to accommodate parttimers.
They should be aware that this may sometimes be covered by indirect
sex discrimination.
To comply with the law:
- Employers
should not exclude parttime staff from training simply because
they work parttime."[17]
The TUC argued that this form of words "appears
to be an encouragement to employers to disregard the practical
implications of employing parttimers".[18]
The Minister agreed that the words could be open to this interpretation
and said that he was "very concerned" about it.[19]
The words also appear to contravene the intention behind Clause
5.3(d) of the Framework Agreement annexed to the Directive[20]
which encourages employers, as far as possible, to give consideration
to measures "to facilitate access by part-time workers to
vocational training to enhance career opportunities and occupational
mobility".
8. The substantive errors contained in the regulatory
impact assessment, together with the unfortunate phraseology used
in the notes, suggest that insufficient care was taken with the
production of the consultation paper. They also cast further doubt
on the rigour of the Government's private consultation with interested
parties during the drafting of the document.
The Meaning of "Employee"
9. In our earlier Report, we recommended that
a broad definition of "worker", such as the one contained
in the National Minimum Wage Act 1998,[21]
should be used in the Regulations.[22]
The Government told us that the definition would be a matter for
consultation.[23]
The draft Regulations contained in the consultation paper use
a narrow definition: " 'employee' means an individual who
has entered into or works under (or, where the employment has
ceased, worked under) a contract of employment".[24]
10. The Directive applies to "part-time workers
who have an employment contract or employment relationship as
defined by the law, collective agreement or practice in force
in each Member State".[25]
Thompsons Solicitors argue that the definition of "employee"
in the Regulations represents "defective implementation and
breaches of the principles of effectiveness and equivalence".[26]
They argue that the provision in the Directive, that Member States
may "exclude ... part-time workers who work on a casual basis,"
would be unnecessary if the intention was that workers who did
not have a contract of employment would be excluded anyway.[27]
11. NATFHE, UNISON and GMB have been advised by Counsel
that "it is strongly arguable" that the narrow definition
of "employee" contained in the draft Regulations does
not properly implement the Directives.[28]
The TUC also believes that the definition does not implement the
Directive properly.[29]
It argues that it is inappropriate for the Regulations to limit
their coverage to employees when legislation governing the minimum
wage and working timeareas which are both closely related
to part-time workinguses a much broader definition.[30]
12. The Minister told us that the decision to use
the narrow definition was a result of the Government's desire
to implement the Directive with a light touch and in a way which
was consistent with the implementation of the other Social Chapter
rights, such as the directive on parental leave.[31]
13. The Employment Rights Act 1999 gives the Secretary
of State power to extend the coverage of certain employment rights.[32]
Employment legislation has developed piecemeal over a period of
many years and some rightssuch as the minimum wage and
the right not to have unauthorised deductions made from wagesextend
to a relatively broad description of workers while others extend
only to employees as narrowly defined.[33]
The Minister told us that the Secretary of State would be issuing
a consultation paper on the exercise of this power in the summer
of 2000.[34]
14. The narrow definition of "employee"
used in the draft Regulations differs from the broader definition
contained in equal pay and sex discrimination legislation and
in the Working Time Regulations.[35]
This is likely to cause confusion for workers who are seeking
to decide under which legislation to pursue a claim.
15. We do not see any merit in introducing Regulations
with a narrow application at this stage, only to widen their coverage
later in the year. We believe that the arguments in favour of
a broader definition of "worker" are persuasive, not
least of all because the draft Regulations, as currently drafted,
do not appear to meet the reflect the intentions behind the Directive
and could be subject to a legal challenge. We welcome the Minister's
assurances that the Government will re-examine the coverage of
employment rights legislation but, in the meantime, we recommend
that the coverage of the Regulations should be broader.
The concept of a hypothetical comparator
16. In our earlier Report, we drew attention
to evidence of the occupational segregation of part-time workersthat
is, the extent to which part-time workers tend to be concentrated
in certain sectors and certain types of workplaces.[36]
Because of this, we are concerned that the definition of a
"comparable full-time employee" contained in the draft
Regulations is unnecessarily restrictive, and we urge the Government
further to consider the use of a hypothetical comparator, as we
recommended in our earlier Report.[37]
The Code of Practice
17. The Secretary of State has the power to
issue a Code of Practice for the purpose of eliminating discrimination
in the field of employment against parttime workers; facilitating
the development of opportunities for parttime work; facilitating
the flexible organisation of working time taking into account
the needs of workers and employers; and any matter dealt with
by the Parttime Work Directive.[38]
In its response to our earlier Report, the Government told us
that a number of our recommendations would be the subject of such
a Code, and the Minister of State told us in his covering letter
that our Report was "a useful and timely contribution to
our thinking on parttime work, especially as we draw up
the draft regulations and code of practice to implement the PartTime
Work Directive".[39]
18. In particular, the Government told us that the
Code of Practice would:
(a) "give employers
guidance on how to make the best use of parttime working";[40]
(b) encourage employers
to consider "increasing parttime and flexible working
at senior levels";[41]
(c) "make it easier
for all workers to change their hours of work by setting out criteria
for employers to consider";[42]
and
(d) "include ways
in which public sector employers can aid parttime workers,
in particular by identifying and reviewing obstacles which may
limit opportunities for parttime work, and taking steps
to eliminate these where appropriate".[43]
We were also told that the Government would be "consulting
widely before finalising the ... code of practice".[44]
19. The Government has now abandoned plans to produce
a Code of Practice on part-time work. When we asked him about
this, the Minister seemed to have formed an objection to the whole
idea of codes of practice. He described them as "big, dense
slabs of print ... which lead to a confrontational situation in
workplaces".[45]
He told us that the Government intended to proceed instead by
issuing guidance, and suggested that this guidance would be a
vehicle for implementing Clause 5 of the framework agreement on
parttime work annexed to the Directive, a role which was
originally envisaged for the Code of Practice.[46]
20. The TUC was "extremely disappointed"
by the Government's failure to produce a Code of Practice and
pointed out that the guidance, which can not be considered in
the same way by employment tribunals, would do nothing to persuade
the bad employer to adopt good practice.[47]
Thompsons Solicitors pointed out that the purpose of the Directive
was not only the removal of discrimination against part-time workers,
but "to facilitate the development of part-time work on a
voluntary basis and to contribute to the flexible organisation
of working time in a manner which takes into account the needs
of employees and workers".[48]
They argued that the draft Regulations by themselves would not
contribute to this end and that a Code of Practice would also
help to clarify some ambiguities in the Regulations, such as when
it would be appropriate to apply the principle of pro rata
temporis.[49]
21. We are dissatisfied with the Government's
decision not to produce a Code of Practice on part-time work.
We recommend that the Government should re-consider its decision
to replace the Code of Practice with guidance which will not have
the same force in law. We would also welcome from the Government
a new response to those recommendations in our Second Report of
Session 1998-99 which it originally told us would be covered by
a Code of Practice.[50]
In particular we would welcome from the Government clarification
of how it intends to implement Clause 5 of the Framework Agreement
(Opportunities for part-time work), including Clause 5.2 which
states that a worker's refusal to transfer from between part-time
and full-time work should not in itself constitute a valid reason
for termination of employment and Clause 5.3 which encourages
employers, as far as possible, to give consideration to requests
from workers to transfer between full- and part-time work.
1 Second Report from the Education and Employment Committee,
Session 1998-99, Part-time Working, HC 346-I. Back
2 Third
Special Report from the Education and Employment Committee, Session
1998-99, Government's Response to the Second Report from the
Committee, Session 1998-99: Part-time Working, HC 609. Hereafter,
"Government Response". Back
3 Council
Directive 97/81/EC of 15 December 1997 concerning the Framework
Agreement on part-time work concluded by UNICE, CEEP and the ETUC.
Hereafter, "the Directive". Back
4 Letter
from the Director, Employment Rights and Tribunals, Department
of Trade and Industry, to the Clerk of the Employment Sub-committee,
dated 1 December 1998 (not printed). Back
5 For
example, "whether part-time work regulations exclude casuals
... will be matters for consultation later this year", Government
Response, p. ix. Back
6 Part-time
Work Public Consultation,
URN 99/1224, Department of Trade and Industry, January 2000.
Hereafter, "the consultation paper". Back
7 Referred
to hereafter as "the Minister". Back
8 They
were the Low Pay Unit, the National Association of Teachers in
Further and Higher Education, Thompsons Solicitors and the Trades
Union Congress. Back
9 Q.
5. Back
10 Q.
6. Back
11 Council
Directive 98/23/EC of 7 April 1998. Back
12 Q.
7. Back
13 Q.
8. Back
14 Consultation
paper, p. 14. Back
15 QQ.
2-4. Back
16 Q.
4. Back
17 Consultation
paper, p. 3. Back
18 Response
to DTI consultation on implementation of Part-time Work Directive,
TUC, February 2000, p. 12. Back
19 QQ.
53 & 54. Back
20 Hereafter,
"the Framework Agreement". Back
21 National
Minimum Wage Act 1998, section 54 (Meaning of "worker",
"employee" etc.). Back
22 Second
Report from the Education and Employment Committee, Session 1998-99,
HC 346-I, Parttime Working, paragraph 131. Back
23 Government
response, pp. viii-ix. Back
24 Consultation
paper, p. 6 (Regulation 1(2)). Back
25 Framework
Agreement on part-time work concluded by UNICE, CEEP and the ETUC,
annexed to Council Directive 97/81/EC, Clause 2.1. Back
26 Part-time
Work Public Consultation: Response by Thompsons,
Thompsons Solicitors, February 2000, paragraphs 7.1-7.10. Back
27 ibid,
paragraph 7.5. Back
28 Lord
Lester of Herne Hill QC and Dinah Rose, In the Matter of: The
draft Part-time Employees (Prevention of Less Favourable Treatment)
Regulations and the Maternity and Parental Leave Etc. Regulations
1999, Joint Opinion, 24 February 2000. Back
29 Response
to DTI consultation on implementation of Part-time Work Directive,
TUC, February 2000, pp. 2-3. Back
30 ibid,
p. 5. Back
31 QQ.
24-27. Back
32 Employment
Relations Act 1999, section 23 (Power to confer rights on individuals). Back
33 Explanatory
Notes to the Employment Relations Bill [Bill 36-EN], p. 45. Back
34 Q.
29. Back
35 Q.
26. Back
36 Second
Report from the Education and Employment Committee, Session 1998-99,
Part-time Working, HC 346-I, paragraphs 137-139. Back
37 ibid,
paragraph 139. Back
38 Employment
Relations Act1999, section 20. Back
39 Government
response, p. iii. Back
40 Government
response, p. v. Back
41 ibid. Back
42 Government
response, p. vi. Back
43 Government
response, p. ix. Back
44 Government
response, p. viii. Back
45 Q.
16. Back
46 QQ.
16 & 20. Back
47 Response
to DTI consultation on implementation of Part-time Work Directive,
TUC, February 2000, paragraphs 57-59. Back
48 Part-time
Work Public Consultation: Response by Thompsons,
Thompsons Solicitors, February 2000, paragraph 5.2. Back
49 ibid,
paragraph 5.3. The principle of pro rata temporis requires
that part-time employees be rewarded, in terms of both pay and
non-wage benefits, at the same hourly rate as full-time employees.
The question of exactly how and when this principle should be
applied-especially to non-wage benefits such as company cars and
pension schemes-is not answered conclusively by the draft Regulations. Back
50 They
are the recommendations contained in paragraphs 66, 71, 77 and
144 of that Report. Back
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