Select Committee on European Scrutiny First Report


17 Revision of the Working Time Directive


(a)

(25972)

12683/04

COM(04) 607

(b)

(26601)

9554/05

COM(05) 246



Draft Directive amending Directive 2003/88/EC concerning certain aspects of the organisation of working time


Revised draft Directive amending Directive 2003/88/EC

Legal baseArticle 137(2) EC; co-decision; QMV
Document originated(b) 31 May 2005
Deposited in Parliament(b) 6 June 2005
DepartmentTrade and Industry
Basis of consideration(a) SEM of 17 May 2005

(b) EM of 21June 2005

Previous Committee Report(a) HC 42-xxxiv (2003-04), para 10 (27 October 2004)
To be discussed in Council(b) No date set
Committee's assessmentPolitically important
Committee's decision(a) Cleared

(b) Not cleared; information on progress requested

Background

Section 1.127  17.1 The aim of the Working Time Directive[54] is to ensure better protection of the health and safety of workers. It lays down requirements for minimum periods of daily rest, weekly rest and annual leave and for a maximum average working week of not more than 48 hours. There is, however, provision for Member States to opt out of the requirement about the maximum working week subject to specified conditions. The UK has made more extensive use of the opt-out than other Member States.

Section 1.128  17.2 There have been two rulings by the European Court of Justice — the SiMAP and Jaeger judgments — which affect the concept of "working time". In SiMAP,[55] the Court ruled that the entire time a doctor spends on call at his place of work is to be considered working time. In Jaeger,[56] the Court ruled not only that doctors were to be considered to be working for the entire period that they are on call at their place of work, even if they are resting because their services are not required, but also that "compensatory rest" for missed rest breaks must be taken as soon as the person finishes the on call period. The effect of the two judgments is not confined to the health sector, but affects hospitals most acutely.

Section 1.129  17.3 At the end of 2003, the Commission presented a Communication which evaluated the operation of the opt-out, analysed the impact of the case law, and initiated consultations on options for a revision of the Directive. On the recommendation of the previous Committee, the Communication was debated in European Standing Committee C.[57] The debate was held on 24 March 2004.

Document (a)

Section 1.130  17.4 In September 2004, the Commission proposed a draft Directive to amend the definition of on-call time with the aim of overcoming the difficulties caused by the SiMAP and Jaeger judgments; it also proposed amendments to the conditions for the use of the opt-out.[58] The latter amendments proposed that:

·  the exercise of the opt-out should be expressly "foreseen" by a collective agreement or an agreement between the two sides of industry unless there is no collective agreement in force and no employees' representative empowered to conclude an agreement;

·  the employee's own consent to work more than 48 hours a week should be required and the agreement should be valid for not more than a year, but could be renewed;

·  such agreements should be invalid if made with employees at the time of the signature of their employment contracts or during any probationary period;

·  no employee should work for more than 65 hours in any one week unless a collective agreement provides otherwise; and

·  the employer should keep a record of the actual hours worked by an employee who agreed to work for more than an average of 48 hours a week.

Section 1.131  17.5 The Government told the previous Committee that it welcomed the Commission's proposals about on-call time and (subject to some detailed points) compensatory rest. The intended effect of those amendments was to reinstate what had generally been understood to be the meaning of the Working Time Directive before the rulings in the SiMAP and Jaeger cases.

Section 1.132  17.6 But the proposed amendments to the opt-out were not acceptable to the Government for reasons that it explained at length and which are summarised in the previous Committee's Report.

Section 1.133  17.7 The Government also said that the Commission would shortly provide a Regulatory Impact Assessment (RIA) of its proposals and that the Government would then complete its own RIA. The Government also referred to the consultations it had initiated in June 2004 on the operation of the opt-out in the UK.

Section 1.134  17.8 The previous Committee welcomed the Commission's efforts to find solutions to the difficulties arising from the SiMAP and Jaeger rulings and to devise a way forward on the opt-out which struck a reasonable balance between the needs of industry (and, in particular, of small and medium-sized enterprises) and the protection of employees' health and safety. It noted the Government's reservations about the proposals, that the negotiations on them were expected to be protracted and that the text of the draft Directive was likely to change. The Committee decided, therefore, to keep the document under scrutiny and asked the Government to send it the Commission's and its own Regulatory Impact Assessments of the draft Directive and a supplementary Explanatory Memorandum on the responses to the Government's consultation document on working hours and the operation of the opt-out.

Supplementary Explanatory Memorandum of 17 May 2005

Section 1.135  17.9 In his supplementary Explanatory Memorandum (SEM), the Parliamentary Under-Secretary of State for Employment Relations and Consumer Affairs at the Department of Trade and Industry (Mr Gerry Sutcliffe) reiterates the Government's views on the proposals in document (a). He says that the Dutch Presidency had aimed to achieve a political agreement on the revision of the Directive at the Council meeting on 6/7 December 2004, but Member States had been unable to come to an agreement. In May 2005, the European Parliament gave the proposals a first reading. It voted to phase out the opt-out and proposed a number of other amendments to document (a).

Section 1.136  17.10 The Minister attached to his SEM:

·  the Commission's extended impact assessment of the proposals (available only in French)

·  the Department's own translation of the Commission's assessment;

·  the Department's initial Regulatory Impact Assessment; and

·  a summary of the responses to the Government's consultation paper on long-hours working in the UK and the operation of the opt-out.

Document (b)

Section 1.137  17.11 Document (b) is a revised draft of document (a). It incorporates some of the amendments proposed by the European Parliament. The Commission has not accepted the rest of the European Parliament's proposals.

Section 1.138  17.12 The main amendments the Commission has incorporated are as follows:

i)  A new definition of the calculation of the inactive part of on-call time (that is, the time when an employee is on call but not required to work).

ii)  New requirements for Member States to: encourage representatives of employers and employees to make agreements to improve compatibility between work and family life; ensure that employers inform their employees "in good time of any changes in the pattern or organisation of working time"; and ensure that employers consider employees' requests for flexible hours.

iii)  A new requirement for compensatory rest to be given within a reasonable period to be determined by national law or collective agreement.

iv)  The deletion of the provision in the current Directive for the maximum average working week to be calculated using a four-month reference period.

v)  A new provision permitting the reference period to be extended to up to 12 months by collective agreement or by national law provided that the Member State ensures that the employer "informs and consults the workers and/or their representatives" and, if the reference period is not set by a collective agreement, that the employer "takes the measures necessary to avoid or overcome any risk relating to health and safety that could arise from the introduction of such a reference period".

vi)  A prohibition on any employee working for more than 55 hours a week (rather than the 65 hours proposed in document (a)) unless a collective agreement or national law provides otherwise.

vii)  A requirement for the employers of workers who work more than 48 hours a week to keep "adequate records for establishing that the provisions of this Directive are complied with".

viii)  Provision to bring the opt-out to an end within three years of the proposed Directive coming into force. Member States would, however, be able to seek the Commission's permission to retain the opt-out for more than three years "for reasons relating to their labour market arrangements".

ix)  A requirement for the Commission to make a report on the application of the proposed Directive within three years of it coming into force.

The Government's view on document (b)

Section 1.139  17.13 The Minister's Explanatory Memorandum of 21 June tells us that the Commission produced document (b) late on 31 May and that Member States were unable to reach agreement on the revised text when it was discussed at the Employment Council on 2 June.

Section 1.140  17.14 The Minister goes on to comment in detail on the revised proposals on the opt-out, on-call time, compensatory rest and some of the other provisions.

THE OPT-OUT

Section 1.141  17.15 The Government does not agree with the proposal for the opt-out to cease to be available after three years unless the Commission agrees to a Member State's request for an extension. This would not be acceptable because it would not satisfy the Government's requirement for legal certainty that the opt-out can continue.

Section 1.142  17.16 Moreover, the Government considers that an absolute cap of 55 hours on the average working week would cause problems for a large number of UK workers and particularly for people on short-term contracts and seasonal workers.

Section 1.143  17.17 The Government remains concerned about the proposal to prohibit workers from signing an opt-out agreement during a probation period. The UK does not have a statutory probation period and there would be problems for employees and employers if workers were prohibited from working longer hours during their first year or while on a short-term contract. The Minister says that the Government has proposed an alternative safeguard: a "cooling-off period" of three months during which the employee would be able to withdraw from an opt-out agreement without giving notice.

Section 1.144  17.18 The Government welcomes the proposal to make 12 months the reference period for the calculation of average weekly hours. But the Minister is concerned about the conditions attached to the proposal (see paragraph 0.12(v) above) because: countries such as the UK do not have a widespread tradition of collective agreements; the proposed requirements for employers to inform and consult could damage "the carefully developed support for and acceptance" of information and consultation by UK employers; and the Government does not understand why health and safety checks should be required only if there was no collective agreement.

Section 1.145  17.19 The Government is also concerned about the proposal to abolish the four-month default reference period. The Minister says that:

"This would effectively mean a one-week reference period, which would cause problems for all sorts of workers. The reason for the removal of the clause is unclear — the Government will investigate with the Commission whether they intended the proposal to have this effect."

ON-CALL TIME AND COMPENSATORY REST

Section 1.146  17.20 The Minister says that the SiMAP and Jaeger judgements seriously threatened the adequate provision of health services in the UK. He notes that the revised proposals remove the flexibility provided in document (a) for the inactive part of on-call time to be treated as rest. The Minister tells us that:

"This would be a particular concern because the proposed definition of 'workplace' might on occasion include home working. If on-call work at home was included in the rules for inactive and active time, this would cause problems as inactive on-call at home would not be defined as rest for the purpose of the Directive, and this could have implications for workers and employers in a number of sectors."

Section 1.147  17.21 The Minister says, however, that the Government welcomes the proposal on compensatory rest for missed rest breaks and believes that it would solve the problems caused by the Jaeger case.

OTHER PROPOSALS

Section 1.148  17.22 The Government is concerned about the new proposal to require Member States:

·  to encourage employers and employees to make agreements "aimed at improving compatibility between working and family life";

·  to ensure that "employers inform workers in good time of any changes in the pattern or organisation of working time"; and

·  to ensure that employers examine workers' requests to change their working hours and work patterns "taking into account employers' and workers' needs for flexibility".[59]

The Minister says that:

"Though this article looks superficially reasonable, it would create problems in the UK and in other Member States. The UK has successfully introduced targeted 'light touch' legislation on the right to request flexible working, which has allowed employers and workers to agree a wide range of solutions that best meet their individual needs. The achievements of this policy would be jeopardised by an inflexible 'one size fits all' legislative approach. It is not clear how the employer would be expected to judge the employee's need for flexibility against the employer's own needs, as appears to be required by the Commission's proposal. The right to request flexible working would also be far more extensive than the current UK right, which applies only to parents of young and disabled children, and only applies after six months of employment. The UK Government is also concerned about the new requirement to inform employees 'in good time' of any changes to shift patterns. It is not clear what this would mean in practice, but it could mean that the slightest changes to a shift pattern would have to be notified to employees well in advance."

Section 1.149  17.23 The Government considers that the proposal for the new arrangements to be reviewed after three years would not allow enough time for the effect of the arrangements to be assessed and would expose industry to "the prospect of almost permanent change and a lack of stability".

Conclusion

Section 1.150  17.24 We welcome the prospect of agreement on legislation to redress the effect of the Jaeger judgement on compensatory rest. We agree with the Minister that the proposals on on-call time need clarification. Action to overcome the difficulties caused by the SiMAP and Jaeger judgements is required urgently. We hope it might be possible, therefore, to deal with the amendments for that purpose separately from, and in advance of, the proposals about the opt-out, which are likely to take more time to negotiate.

Section 1.151  17.25 We agree with the Minister that the proposals about the opt-out do not appear to take sufficient account of the differences between Member States: for example, of the fact that the UK does not have a widespread tradition of collective agreements and that there is no statutory probation period in the UK. We also agree that three years would not provide sufficient time to enable the new arrangements to be evaluated before the opt-out ceased to be available. Moreover, we question if it is appropriate for the Commission to be the sole arbiter of whether Member States should be given an extension of the three-year period "for reasons related to their labour market arrangements".

Section 1.152  17.26 We share the Government's reservations about the drafting of the proposal in Article 1(3) of document (b) about agreements on the compatibility between work and family life; informing employees "in good time" about changes in shift patterns; and dealing with workers' requests for flexible hours.

Section 1.153  17.27 We consider that the drafting of some of the other proposals is insufficiently precise and would, therefore, be likely to create uncertainty and consequent litigation. We have in mind, for example:

·  The proposal that, if the 12-month reference period is set by national legislation or regulation, the employer must take "the measures necessary to avoid or overcome any risk relating to health and safety that could arise from the introduction of such a reference period". In our view, whether there is or is not a risk is likely to be a subjective judgement and the reference to "any risk" seems to us to set a disproportionately high hurdle.

·  The proposal that the employers of workers who work more than 48 hours a week should keep "adequate records for establishing that the provisions of this Directive are complied with". The document contains no definition of what records would be "adequate", so creating uncertainty and risk for employers generally and for those running small and medium-sized businesses in particular, who are unlikely to be able to afford expert advice on the adequacy of their records.

Section 1.154  17.28 Because of the Government's and our own reservations about the proposals, we shall keep document (b) under scrutiny. We ask the Minister to keep us informed of the progress of negotiations on the text.

Section 1.155  17.29 We clear document (a) because it has been superseded by the revised draft of the Directive.


54   Council Directive 2003/88/EC concerning certain aspects of the organisation of working time, OJ No. L 299, 18.11.2003, p.9. Back

55   Case C-303/98 [2000] 1 ECR 7963. Back

56   Case C-151/02 [2003] 3 CMLR 493. Back

57   See (25248) 5188/04: HC 42-ix (2003-04), para 4 (4 February 2004). Back

58   See headnote. Back

59   Article 1(3) of document (b). Back


 
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