Memorandum on behalf of the Federation
of Small Business
BACKGROUND
1. The Federation of Small Business ("FSB")
is the UK's leading and largest non-party political lobbying group
for UK small businesses. It exists to promote and protect the
interests of all who own and/or manage their own businesses. It
has over 185,000 members operating small and medium sized businesses
in the UK.
2. Small and medium size businesses contribute
over 50 per cent of GDP in the UK with a combined turnover of
over £500 billion. 97 per cent of all businesses in the UK
employ less than 20 people.
3. The UK has a more individual approach
to industrial relations than the collectivist approach adopted
by many other Member states and the vast majority of UK businesses
employ people who are not members of a trade union. Only 22 per
cent of all private employers in the UK have terms and conditions
of employment determined by collective agreement.
4. The typical UK small business consists
of an owner/manager (who generally works very long hours) who
employs a few staff,[10]
typically on hourly rates of pay. The resources of such businesses
are generally focussed on meeting customer demand in the most
efficient and cost-effective way. Expenditure for additional,
administrative and support staff is not something small businesses
can afford. These tasks inevitably fall upon the owner/manager
to undertake when not servicing customer demand thereby extending
the hours worked. Employees in such businesses generally offer
significant flexibility in relation to hours and duties undertaken.
This also impacts upon the hours they are required to work.
5. An important consideration in relation
to many small businesses is the close-knit nature of the employer/employee
relationship. Many small business owners employ members of the
family and will be immediately aware of any personal circumstances
of employees. This can result in more effective regard being paid
to an employee's work and family life balance.
LEGISLATIVE BASE
6. The Working Time Directive (93/104/EC)
(as amended) states in the second recital that:
". . . those directives are to avoid imposing
administrative, financial and legal constraints in a way which
would hold back the creation and development of small and medium
sized undertakings".
7. Full regard should be had to this second
recital when considering any changes to the Directive.
REFERENCE PERIODS
8. Many small businesses find that the demand
for goods and services which they offer has peaks and troughs.
As such, the current 17-week reference period is inadequate for
the needs of such businesses. Subject to the FSB position on opt
outs set out below, a one-year reference period would more adequately
account for the needs of small businesses.
OPT OUTS
9. The opt out of the 48 hour week is essential
for small businesses. Empirical and anecdotal evidence indicates
that there are two main groups of people where opt outs are being
used. These are the comparatively low paid hourly paid workers
who get overtime and the comparatively highly paid professional
and managerial workers for whom long hours mean significant rewards.
These groups of people tend to fit the dynamics of small business.
Removing the opt out would be unworkable and unfair to small business.
The opt out must therefore be retained.
10. In any event, the opt out produces an
undue financial and administrative burden on small businesses.
There should be no additional administrative burdens imposed upon
small businesses. A more appropriate way to give full effect to
the second recital of the Directive would be to have a small employer
exemption for employers with less than 20 employees, with a right
for such employees to opt in to the 48-hour working week.
11. Generally employees do not wish to work
their working hours to be limited as this can impact upon their
income. There is obvious tension between the stated position of
trade unions and the actual views of their members in this regard.
A fairer system for small businesses therefore requires that an
exemption be put in place. This would remove any suggestion that
pressure is placed upon an employee to sign an opt out, as is
presently the case.
DEFINITION OF
WORKING TIME
12. The impact of the ECJ decisions of Jaeger
and SiMAP are not limited to the Healthcare sector. Many small
businesses from nursing homes to taxi firms could be affected.
The definition of working time should therefore be amended to
avoid the interpretation, which is currently applicable by the
ECJ decisions.
COMPATIBILITY BETWEEN
WORK AND
FAMILY LIFE
13. Retaining the opt out (or exempting
small businesses from the effect of the 48 hour week with a right
for employees to opt in) is the most effective way to ensure flexibility
and a work and family life balance.
14. Employees may want or need to work longer
hours to gain extra qualities of family life, an expensive holiday,
buying a nice home etc. By limiting an employee's right to do
so by removing the opt out would have a devastating effect on
the work/family life balance.
10 Survey of the FSB membership demonstrated that
the majority of members (57 per cent) employ between one and four
full-time staff. "Lifting the Barriers to Growth" 2002. Back
| 
