Annex A
The Survey
1. Please indicate the number of employees
(exclude agency) in your business:
2. How many of those employees have signed an
individual opt-out agreement?
3. How many opted-out employees consistently
work more than 48 hours a week in a four-month period?
4. Please indicate when you issue opt-out agreements
for employee signature. (please tick one box for your overall
policy, if policies differ for sections of your workforce, please
explain underneath)
Opt-out is included in the standard contract
of employmentOpt-out issued with contract as a separate document
Opt-out issued during induction process
Opt-out agreement issued on an ad hoc basis
when individual need is identified
Other, please specify
5. For which groups of employees do you keep
records of working hours?
February 2004
Memorandum by the British Hospitality Association,
British Beer and Pub Association and Business in Sport and Leisure
INTRODUCTION
This paper has been produced by the three associations,
covering the hotel, restaurant, catering, pub and leisure sectors,
to assess the impact on these sectors in the United Kingdom of
those provisions in the Working Time Directive which are due for
review in November 2003.
The provisions are:
(i) Article 18(1)(b)(i) which gives a Member
State the option not to apply the 48 hour average weekly limit
under article 6 in cases where, among other conditions, the individual
worker has agreed to perform such work. We describe this below
as the "individual opt-out." We understand that the
United Kingdom is the only Member State which takes advantage
of this derogation.
(ii) Article 17(4) which gives Member States
the option to permit collective or similar agreements to set reference
periods of up to 12 months.
The main concern of the associations relates
to the significant use which the hospitality industry makes of
the individual opt-out in order to meet customer service requirements
and the ensuing difficulties if the article 18(1)(b)(i) option
were to be withdrawn following the Commission's forthcoming review.
1996 SURVEY
In 1996, in advance of the Directive's introduction
in the UK, the British Hospitality Association surveyed its members
on the likely implications. Of the 684 responses, exactly two-thirds
(456) reported that they had employees who worked more than 48
hours per week (including overtime, but excluding meal breaks)
on a regular basis. In all, 14.4 per cent of the 53,000 employees
covered by the survey regularly worked over 48 hours.
The overwhelming number of responses related
to hotels, a sector in which, at that time, 65 per cent of employees
were full-time. Thus, it appears that about 22 per cent of full-time
hotel employees worked over 48 hours a week before the implementation
of the Directive.
2002 SURVEY
The three associations decided during 2002 that,
in order to assess the continuing significance of the individual
opt-out, they should carry out a new survey of their members.
With minor exceptions, the questions were identical in the surveys
sent out by the three associations: a copy of the BISL survey
is at annex A.
The total number of completed questionnaires
in 2002 (339, of which 327 were useable*) was only half the number
in the BHA's 1996 survey, but the number of employees covered
was substantially greater at 271,415 (in the 327 useable surveys).
(Note: * The 12 completed surveys not used included
several from organisations and consultancies linked to the hospitality
and leisure industry, but not in the business of directly providing
accommodation, food and drink, and leisure activities. There were
also several where the data provided on employees exceeding 48
hours were too vague to be incorporated in the totals.)
In broad terms, the number of employees (technically
"employees and workers," since the Working Time Regulations
apply equally) in each sector identified by the 2002 survey was
as follows:
Public houses and brewing: 122,073 employees
(of whom about 11,500 in brewing) included in 28 responses, three
from single "pub/restaurant" operations, 25 from groups,
of which 22 included employees in brewing; 7,686 of these employees
(6.29 per cent) regularly worked over 48 hours. 22 of the 28 employers
responding had staff in this category. Excluding brewing employees,
the (roughly) 111,000 pub (and club—see below) employees
represent some 40 per cent of all pub and club employees in the
industry. Grossing up therefore suggests that nationally about
17,000 pub and club employees work over 48 hours.
Hotels: 38,742 employees included in 253 responses;
6,060 of these employees (15.64 per cent) regularly worked over
48 hours. 198 of the 253 employers responding had staff in this
category. The 253 responses cover about one-sixth of all hotel
employees in the industry. Grossing up therefore suggests that
nationally about 36,000 hotel employees work over 48 hours.
Restaurants: 10,892 employees included in 10
responses (two groups; eight standalone); 3,158 of these employees
(29.15 per cent) regularly worked over 48 hours. All 10 employers
had staff in this category. The responses cover just 2.5 per cent
of all restaurant employees in the industry. Grossing up therefore
suggests that nationally about 126,000 restaurant employees work
over 48 hours.
Contract catering/food service/catering: 64,864
employees, included in 16 responses; 917 of these employees (1.41
per cent) regularly worked over 48 hours. Nine of the 17 responding
employers had staff in this category. Assuming that all 64,864
employees are allocated to contract catering, with (Labour Force
Survey, 2000) some 122,000 employees, the responses cover 53 per
cent of the sector. Grossing up therefore suggests that nationally
about 2,000 contract catering employees work over 48 hours.
Members' clubs: 511 employees, included in seven
responses; 32 of these employees (6.26 per cent) regularly worked
over 48 hours. Six of the seven employers responding had staff
in this category. In view of the small sample, these have been
included in the grossing up calculation for the pub sector, above.
Leisure/conference: 38,666 employees, included
in 13 responses; 2,001 employees (5.17 per cent) regularly worked
over 48 hours. Twelve of the 13 respondents had staff in this
category. Employment data is less available for the leisure sector
and respondents covered sports clubs, night clubs, ten pin, cinemas,
coin op, and conference. Indications are that this would be about
a 10 per cent response suggesting that about 20,000 leisure employees
nationally work over 48 hours.
SUMMARY OF
OPT-OUT
RESULTS
Excluding the 11,500 employees in brewing, the
total number of employees covered by the survey (about 260,000)
represents 10 per cent of total hospitality and leisure employment.
Grossing up the number working over 48 hours (around 20,000) suggests
that nationally some 200,000 hospitality and leisure employees,
or about about 8 per cent of the whole industry, full- and part-time,
work such hours, as follows:
| Restaurants | 126,000
|
| Hotels | 36,000
|
| Leisure and related | 20,000
|
| Pubs and clubs | 17,000
|
| Contract catering | 2,000
|
However, it should be noted that, with almost exactly half
of hospitality and leisure employees being part-time (source:
Labour Force Survey 2001), the 200,000 who work over 48 hours
represent about 16 per cent of the industry's full-time workers.
INTERPRETATION
In the case of hotels, the only sector for which we have
data from before the implementation of the Directive, the latest
survey suggests that the percentage working over 48 hours may
even have risen (from 14.4 per cent in 1996 to over 15.6 per cent
in 2002). Even allowing for the effects of sampling, one conclusion
must be that, for very many hotel employers, the need for employees
who can exceed 48 hours has not diminished. The significant numbers
working such hours in restaurants and, though a smaller percentage
of the workforce, in the leisure and pub sectors, strongly suggests
that the need for employees able to work these hours has not diminished
in these sectors either.
DETAILS OF
THE RESPONSES
Respondents were asked first whether they were single site/establishment
or group/multi-site businesses. Of the 327 useable responses,
204 were from single site businesses, 120 from groups (either
centrally or from individual sites within a group) and three did
not answer this question.
They were then asked whether they made use of the individual
opt-out. A few who said "yes" did not report any employees
actually exceeding 48 hours and a few who said "no"
reported one or more employees exceeding 48 hours. This need not
imply that they were in breach of the Regulations, since a number
had only managerial grades who exceeded 48 hours—and, in
several cases, the context indicated that it was the owner/proprietors
who were the only workers in this category.
Overall, 257 respondents out of 327 reported that they had
some staff exceeding 48 hours.
A total of 19,854 employees were reported to be working over
48 hours (including those in brewing). Of these, 10,453 (or 53
per cent) were described as managerial grades, 5,574 (or 28 per
cent) as non-managerial grades and 3,827 (or 19 per cent) were
not classified in either category. These can be analysed by sector
as follows:
Pubs and clubs: 7,718 working over 48 hours, of whom 6,697
were in managerial grades and 1,021 in non-managerial grades.
Hotels: 6,060 working over 48 hours, of whom 2,252 were in
managerial grades, 3,520 in non-managerial grades and 288 were
not identified.
Restaurants: 3,158 working over 48 hours, of whom 2,100 were
not identified. The remaining 1,058 split 526 managerial to 532
non-managerial.
Contract catering, etc: 917 working over 48 hours, of whom
654 were in managerial grades, 243 in non-managerial grades and
20 were not identified.
Leisure, etc: 2,001 working over 48 hours, of whom 1,419
were not identified. The remaining 582 split 324 managerial to
258 non-managerial.
This analysis strongly suggests, especially in pubs, but
generally across the industry, that long hours (as defined in
the Directive) affect a far greater proportion of managers than
of non-managers.
The survey then turned from the current situation to ask
about future developments. First, respondents were asked whether
they would be content with a 48 hour limit for all employees—ie,
no opt-out for anyone. Of the 327 respondents, 108 (33 per cent)
said "yes" and 205 (63 per cent) said "no."
There were 14 (4 per cent) who did not respond.
Secondly, they were asked whether they would be content with
a 48 hour limit for all non-managerial employees—ie, no
opt-out except for managers. Of the 327 respondents, 131 (40 per
cent) answered yes, 174 (53 per cent) answered no and 22 (7 per
cent) did not respond to this question.
Asked about the additional annual cost if there were to be
a 48 hour limit for all employees, most respondents to the BHA
said either that it was too difficult to calculate or indicated
a percentage increase in payroll (but the base figure was not
given) or stated that the problem was not so much the cost as
the impossibility of finding suitable recruits to cover the hours
of work lost under a 48 hour limit. Where figures were given,
taking the lower figure where a range was stated, gives an annual
cost just short of £33 million (£16 million for BHA
respondents, £29.4 million for BBPA and £17.54 million
for BISL, but duplicated responses bring the overall total down
by £20 million). Grossing this up to the national picture
would suggest cost of around £200 million. Some costs would
be one-offs, ie implementation of new systems, but much would
be on-going costs year on year reflecting the additional cost
of recruiting, retaining and paying additional employees.
Finally, respondents were asked: "if the opt-out is
not renewed, but the exemption for autonomous workers remains,
what level of managers would you want exempted?" Predictably,
there was a wide range of answers to this open question—here
are some examples:
Senior supervisors and above
. . . and so on
In the pub sector, a large number of responses specifically
asked for Pub Managers (and some for Assistant Managers) to be
exempted as autonomous workers. The most obvious point of common
agreement would be that the senior person on-site/establishment
should be treated as autonomous and possibly his/her immediate
subordinate as well.
The BBPA and BISL also asked their members about whether
they tracked other employment undertaken by staff which might
take them over a (combined) 48 hour limit. About half undertook
some form of tracking.
Respondents to all three associations referred to the dangers
of reducing flexibility through the Working Time Regulations.
POLICY VIEWS
One important aspect of the forthcoming review of the opt-out
is the extent to which individuals whose work routine might lead
them to exceed 48 hours do not need to be opted-out because that
excess is covered by a derogation. The most obvious derogation
is that for "managing executives or other persons with autonomous
decision-taking powers" (article 17(1)(a)). However, this
has caused particular difficulties in the managed pub sector,
with questions about how far a pub manager comes within the exemption.
The introduction of revisions to the UK Regulations in the
shape of the "partly unmeasured working time" exemption
did not help to resolve these questions because it was based on
an element of voluntary working, whereas the pub sector's problems
had arisen where managers were unwilling to exceed 48 hours. Those
willing to do so will presumably be willing to sign an individual
opt-out, so their employer will not need to justify their hours
via a derogation.
UTILISING OTHER
FLEXIBILITIES
Legal advice obtained by some Member companies has suggested
that flexibilities within the Directive were not incorporated
into the UK Regulations and Guidance, and therefore there is little
or no scope to make use of them. One legal opinion is that no
employee or worker can be classed as "autonomous" or
having the right to determine their own working time. Companies
fear they risk prosecution by utilising other flexibilities. This
would appear to be a major reason why employees have chosen to
sign opt-out forms. Another reason is that employees, and particular
managers, do not like "clocking in and out" and do not
wish to have their working time monitored by employers. BISL would
like to see the Guidance clarified in respect of "autonomous
worker", and the assumption of seniority should be removed
in deciding whether a worker can determine his or her working
time.
ABUSE
We are not aware of any evidence of abuse within our sector.
The survey also shows that the number of employees working over
48 hours has dropped from 14.4 per cent of employees (22 per cent
for hotel employees) in 1996 to 8 per cent in 2002.
POST-NOVEMBER
2003
We acknowledge that, even if the Commission review were to
recommend the abolition of the individual opt-out, which only
the UK uses, this could take some years to come into force and
we have noted that DTI Ministers and officials have taken a very
robust line, as has the CBI, in defence of the opt-out's continuation.
However, the associations thought it right to assess both
the likely costs if the opt-out were abolished and their members'
views on what "middle ground" might exist.
CONCLUSIONS
The opt-out remains a crucial exemption from the Working
Time Directive for a very substantial proportion of hospitality
employers. Its total loss could cost the industry at least £20
million a year of identified additional expenditure, but conceivably
many times that amount, and up to £200 million if grossed
up to cover the UK as a whole. Because the opt-out remains most
critical in relation to managerial staff, a widening of the existing
managing executives exemption could be very valuable.
We would strongly recommend the DTI to continue its efforts
to secure the retention of the individual opt-out.
Turning briefly to the 12 month reference period derogation
in article 17(4), this can be particularly important for seasonal
businesses, of which hospitality is the prime example, because
a 17 or 26 week period may be too short to cover cases where staff
hours have to react to seasonal demand. We also therefore strongly
recommend its retention.
CONTACT DETAILS
For more information on this paper, please contact one of
the three associations:
Anna Steinitz
Business In Sport and Leisure
17a Chartfield Avenue
London SW15 6DX
Tel/Fax: 020 7924 4277
Anna.Steinitz@btconnect.com
Martin Couchman
British Hospitality Association
Queen's House
55 Lincoln's Inn Fields
London WC2A 4BH
Tel: 020 7404 7744
Fax: 020 7404 7799
e-mail: martin@bha.org.uk
Stuart Eke
British Beer and Pub Association
Market Towers
1 Nine Elms Lane
LONDON SW8 5NQ
020 7627 919
e-mail: seke@beerandpub.com
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