Memorandum by The British Chambers of
Commerce (BCC)
The British Chambers of Commerce represents,
through a quality assured, national network of Accredited Chambers
of Commerce, more than 135,000 businesses in all sectors of the
economy, and of all sizes. Accredited Chambers seek to represent
the interests and support the competitiveness and growth of all
businesses in their communities and regions.
BCC POLICY ON
THE UK OPT-OUT
The British Chambers of Commerce (BCC) have
consulted our membership on the specific question of whether business
wants to retain the opt-out from the maximum average 48 hour working
week. Following the Commission's Consultation the BCC is now conducting
a more detailed survey.
On the specific issue of retaining the opt-out,
our members are in full support. Business places a high value
on the flexibility the opt-out provides.
The sections below address the central issues
surrounding the discussion on the UK opt-out. The sections are:
— The value of the opt-out to business.
— Addressing concerns raised about
abuse of the opt-out.
— On-call hours (SiMAP/Jaeger).
VALUE OF
THE OPT-OUT
TO BUSINESS
British business wants a flexible economic environment
to maximise productivity and profitability. A central ingredient
to this environment is a flexible labour market. Restrictions
on working hours would serve to erode the flexibility of the labour
market. At Lisbon in 2000 the EU set the objective to make Europe
the most dynamic and flexible economy in the world. The BCC fully
support that objective.
The UK economy is the fourth-largest in the
world and has low unemployment rates at 5 per cent (1.4 million)
compared to 10.4 per cent in Germany, 9.7 per cent in France and
an EU average of 8.8 per cent. The strength of the UK's key economic
indictors is a result of a low regulatory and flexible economic
environment.
The Workforce Survey 2002 found that 3.7 million
workers usually work longer than 48 hours. This figure demonstrates
the widespread reliance on the opt-out in the UK and is re-emphasised
by the initial finding of the BCC survey which has found that
94 per cent of businesses use the opt-out. An example from our
survey of the importance of flexibility was underlined by an employer
from one business:
"Our staff work an average 9-hour day
in the winter, and 10-12 hours in the summer months. This they
do out of choice as the industry demands it, and it means their
wages are better. We can pay them more bonus time the longer they
work, which they like."
The BCC believe that if an employer and employee
agree on working longer hours and additional remuneration is paid,
they should be free to do so. For many businesses, agreements
to work longer hours are beneficial, often fundamentally essential
to the successful operation of the business.
Further, arguments are often presented that
the employer may "force" the employee to work longer
hours. However, the BCC have found that the benefits are for the
employee as well as the employer. The Barnard Report, entitled
"Use and Necessity of the use of the opt-out in the UK",
(cited throughout the Commission's Consultation) underlines this
point. In an article for the FT the author of the Barnard
Report, Catherine Barnard states "In one example given
to us, workers in the tobacco industry could lose hundreds of
pounds a week in overtime pay if they were limited to working
48 hours." (6 January 2004)
She goes on to say that "What was striking
was that, for every employee who felt under pressure to opt out,
we found others who wanted the right to choose what hours they
worked—and what salary, status and job satisfaction they
gained as a result."
Our survey has provided strong examples of the
importance of the opt-out to the employee. For example one business
told us:
"However, it is restrictive for the
employees, we would not want to see the opt-out removed as the
staff who work more than 48 hours do so because they want to for
whatever reason, which I am sure financial is a main one, removing
the opt-out would mean staff would work the contractual hours
with us and work several other jobs elsewhere, which would have
a H&S issue. They would therefore only accrue holidays and
sickness based on 37"
As cited previously the initial finding of the
BCC survey have found that 94 per cent of businesses currently
use the opt-out. This figure together with the Workforce Survey
findings and the case study examples demonstrate the practical
use and the strong reliance of business on the opt-out. The loss
of the opt-out would lead to a decrease in productivity and profitability
and would simultaneously deny employees the right to increase
their income if they wish to.
The clear long-term macro-economic impact would
inevitably be to harm the UK's global competitiveness.
ADDRESSING CONCERNS
RAISED ABOUT
ABUSE OF
THE OPT-OUT
The European Commission raised concerns in their
Communication about possible abuses of the implementation of the
opt-out in the UK.
The BCC agree that if abuses are occurring then
methods to address these should be explored. However, possible
abuse is not a justification for removing the opt-out but rather
a justification for improving its implementation.
The Commission's concerns centred on coercion
relating to the signing of the opt-out with the employment contracts.
The BCC believe that the possible abuses must be kept in perspective.
The article in the FT written by Catherine Barnard, author
of the Barnard Report, emphasised that abuses were unusual. Catherine
Barnard wrote:
"It is true that we did uncover evidence
of some abuses of the opt-out system. Sometimes the opt-out was
presented as a standard contract term to new staff, which they
would have to take positive steps to avoid. But this was unusual."
Further, the Directive currently offers strong
protection for the employee. The Directive states that an employer
cannot force the employees to sign the opt-out, it must be agreed
by both sides. It is therefore a violation of the Directive if
an employer was to pressure an employee to sign. In addition to
this protection, the Directive also specifies that if an employee
decides not to opt out, no repercussions can be taken by the employer
against the employee. This would be a further breach of the Directive.
Therefore, the BCC believe any abuses must be
kept in perspective and are not a justification for removing the
opt-out. If there are circumstances where the opt-out is included
in the employment contract, this problem can be addressed.
RECORD KEEPING
The BCC survey is investigating whether businesses
would accept additional record keeping requirements in exchange
for retaining the opt-out.
Our primary concern is that if additional requirements
are placed on businesses these requirements must serve to have
a tangible value. Administrative burdens place a disproportionate
burden on smaller businesses that do not have the manpower or
resources to administer complex systems.
Following the conclusion of our survey, more
details on our position will be presented.
REFERENCE PERIOD
The BCC survey is also investigating the benefits
of extending the reference to one year. Although the BCC would
welcome an extension to one year for those not using the opt-out,
unless our survey reveals evidence to the contrary, we would not
accept this extension in exchange for losing the opt-out.
The Workforce Data 2002 states that currently
3.7 million full time workers do work more than 48 hours a week.
If the working hours were calculated over the current reference
period of 17 weeks, 2.5 million workers would still average over
48 hours per week. If the working week was averaged over one year,
1.7 million workers would work over 48 hours per week.
These figures show that an extension period
to one year would help through accommodating an extra 800,000
workers who currently still work over 48 hours a year when calculated
over 17 weeks. Nevertheless, it would still leave 1.7 million
who would be forced to cut hours resulting in the employers and
employees being forced to face the economic consequences of shorter
working hours.
ON-CALL
HOURS
Following the ECJ judgments in the cases SiMAP/Jaeger
the definition of working time has been ruled to include on-call
hours. The ECJ found that when a doctor was at his place of work
and on call then that time qualifies as full working time.
These ECJ judgments add further restrictions
to the calculation of working time. As a result a greater number
of employees than the 3.7 million found in the Workforce Survey
will be classified as working beyond 48 hours.
Clearly the greatest impact of the ECJ judgments
will be on the health services in the EU Member States. Many governments,
including the UK, have already made it clear that they will not
be able to recruit enough doctors to work the extra hours required,
let alone pay for them. However there are also other sectors affected,
such as maintenance, health provision, security, caretakers etc.
BCC members have in those sectors indicated the importance of
the opt-out particularly as a result of the ECJ judgments.
The BCC therefore believe that the Commission
should redefine working hours to exclude on-call hours.
Furthermore, the opt-out is clearly essential
to cope with unexpected shocks from the ECJ, such as these recent
cases.
SMALL BUSINESSES
A large proportion of the BCC's membership consists
of small- and medium-size businesses. Restrictions on flexibility
place greater operational difficulties on small businesses that
do not have the resources to accommodate further restrictions.
The Labour Survey found that the smaller the business the greater
the use of the opt-out with over a fifth of businesses with less
than 25 employees needing to use the opt-out.
The BCC believes the detrimental impact of losing
the opt-out, particularly for smaller businesses, reinforces the
importance of retaining it. This case is further strengthened
when considering the disproportionate and cumulative burdens placed
on small businesses from other regulations. The BCC have calculated
a total of £20.6 billion of extra regulation has been placed
on businesses in the last seven years, 42 per cent of that from
the EU. A further burden must be avoided.
WORK LIFE
BALANCE
A frequent argument presented is that the opt-out
undermines the drive to improve work life balance. However, this
argument is flawed for two reasons.
Firstly, the opt-out can be used only if fully
agreed by both the employer and the employee. If the employee
would prefer not to work longer hours he/she does not have to
sign the opt-out and the employer is legally prevented from taking
any negative action against the employee. Therefore, there are
no additional requirements placed on the employee to work longer
unless they want to and agree to.
Secondly, in recent years there have been improvements
from the employee perspective in work life balance legislation.
Many of the rights such as maternity rights, parental leave, paternity
pay and leave, rights to apply for work flexibility, adoption
leave and pay and time off for public duties have improved in
recent years. The UK can not be accused of neglecting work life
balance issues and therefore this can not be used a reason to
remove the UK opt-out.
CONCLUSION
The BCC strongly support retaining the UK opt-out
from the maximum 48-hour working week.
A flexible economic environment is an essential
ingredient for business to flourish and maximise productivity
and profitability. Removing the opt-out serves to undermine flexibility
and furthermore would provide no value or benefit to either the
employer or employee.
The concerns of the Commission should be examined
and if there are incidents of abuse, these should be addressed.
However, these concerns do not form a justification for removing
the opt-out.
The opt-out is highly valued by British business
and widely used, particularly by SMEs and therefore must be retained.
Lewis Sidnick
Policy Adviser
February 2004
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