Memorandum submitted by Dr Catherine Barnard,
Dr Simon Deakin, and Mr Richard Hobbs
1. BACKGROUND
TO THE
REPORT
The Commission put out a tender for experts
to examine the extent to which the opt-out from the Working Time
Directive has been used in the UK. The tender was limited and
specific (see point two below) and required a report which took
into account the views of a range of representative parties and
which provided evidence of practices in a number of different
sectors. Having successfully bid for the tender we carried out
the research during 2002, with the report submitted at the end
of the year. Given the sensitivity of the issues involved, the
Commission did not release the report to the public but the public
could request the report from the Commission (under the EU's policy
on access to documents) and the Commission seems to have released
it to all who have asked. Various groups have used the report
to support their own agenda on the question of whether the opt-out
should be retained.
2. REPORT STRUCTURE
The first part of the report analysed the UK
legal provisions implementing the relevant parts of the Working
Time Directive (WTD). Issues highlighted included the UK practice
of "copying out" European Directives; the 1999 amendments
to the Working Time Regulations (WTR); and the availability of
remedies. The second part of the report analysed the industrial
relations context, emphasising that traditionally the regulation
of working time in the UK had mainly depended on sector-level
collective bargaining, which was more concerned with ensuring
premium rates of pay rather than with restricting working hours.
Therefore, implementation of the WTD represented a significant
cultural change in the UK. The evidence also indicates that the
implementation of the Directive has had only a limited impact
in terms of reducing average weekly working hours. The third part
of the report presented the empirical study on how the individual
opt-out is being used and how necessary it is for the UK. The
remit from the European Commission was to report the views of
public officials,[1]
representatives of employers[2]
and employees,[3]
and case study employers[4]
from five sectors. The sectors chosen were Education, Health,
Manufacturing, Financial and Legal Services and Hotel and Catering.
3. HOW ARE
INDIVIDUAL OPT-OUT
AGREEMENTS MADE?
In general, opt-out agreements are presented
to new employees at the time of induction, when they are completing
other contractual and administrative documents. There was some
evidence of indirect influence. This took various forms. For example,
in the health service UNISON and one of the case study employers
said staff felt a moral pressure to work extra hours and that
although some staff may not want to work the additional hours
nor did they want to let down their colleagues. In another example,
one of the case study employers said that they referred to the
need for long working hours right the way through their recruitment
process, from initial presentations to induction programmes. This
could be interpreted as subconciously influencing individuals
to sign opt-outs. In addition, some unions said their members
signed opt-outs because they feared losing their jobs or not been
given overtime if they did not do so. Other evidence indicated
more direct influence. For example, one trade union alleged that
the use of the opt-out by construction industry employers was
definitely abusive, with an attitude of "sign the opt-out
or you are out of here". There was also evidence indicating
that in some cases the opt-out has been included as a standard
term of the employment contract. However, HSE and ACAS said that
in their experience opt-outs have been predominantly voluntary
agreements, with individuals willing to work overtime so as to
increase earnings.
4. THE CONTENT
OF INDIVIDUAL
OPT-OUT
AGREEMENTS
Opt-outs were for indefinite periods in all
but one of the case studies, but all provided for termination
on the giving of notice. Four-week notice periods were most common
among the case studies. However, both HSE and ACAS had found that
three-month notice periods tended to be most common. Agreements
to opt into, as well as opt out of, the 48-hour limit and opt-out
agreements disapplying more than just the 48-hour limit indicated
misunderstanding of the regulations.
5. RECORD KEEPING
Rather than keeping a central record of opted
out workers, most employers kept copies of opt-out forms in personnel
files and some had a marker on the payroll or personnel computer
systems. According to HSE, many companies employ the same system
used for recording hours for pay purposes, and so still have a
record of workers' hours even when they have opted out.
6. ENFORCEMENT
The evidence indicated a "light touch"
to enforcement of the WTR. HSE had a policy of "reactive"
enforcement and a local authority inspector informed us that other
health and safety issues were given priority over working time.
Some employers alleged that lack of effective policing by HSE
had meant that less responsible competitors were undercutting
them.
7. THE EXTENT
OF OPTING-OUT
DTI figures indicate that 3 million employees
regularly exceed the average 48-hour limit for weekly working,
and that 1.8 million exceed 48 hours per week averaged over a
12-month period. It does not necessarily follow that all of these
1.8 million should have signed an opt-out, since some them may
have been covered by the "autonomous worker" derogation
in WTR regulation 20 (see below, para. 15). According to CBI survey
evidence 47 per cent of employers used opt-outs. The case studies
indicated the extent of opting out varies across different sectors.
8. EDUCATION
The individual opt-out has rarely, if ever,
been used in the education sector. For schoolteachers this is
largely due to the distinction between "directed" time
(which is set by statute as 1,265 hours over a reference period
of 195 days) and "undirected" time. For university academics,
the "context of professional autonomy" was highlighted.
9. HEALTH
Most hospital trusts use the opt-out because
of shortages in crucial areas such as career grade doctors, pathologists,
anaesthetists, and radiologists (about 15 per cent of all staff).
Shortages mean it is not always easy to remodel on-call arrangements
into shift arrangements. It was argued that bringing junior doctors
under the WTR would exacerbate capacity problems. The programme
of "extending roles" will take up to five years to implement.
10. MANUFACTURING/ENGINEERING
Most, but not all, employers used opt-outs extensively.
Some companies face labour shortages, especially of skilled engineers.
Most case study employers perceived that removing the opt-out
would increase costs because of the need to take on additional
labour and associated indirect costs. Some also argued that the
opt-out provided flexibility to meet instantly changing customer
demands. However, some evidence indicated the inefficiency of
overtime working.
11. FINANCIAL
AND LEGAL
SERVICES
Over 90 per cent of employees in the case study
firms had opted-out. Institutions said they needed flexibility
to complete merger and acquisition deals within limited time scales.
It is often necessary to have the same person handling clients
because of critical knowledge and the importance of personalities.
Senior directors of client companies are more than likely to be
exempt from the Working Time Regulations. Employers perceived
that removing the opt-out would increase costs because of additional
recruitment.
12. HOTEL AND
CATERING
Opt-outs were used almost exclusively and extensively
for management staff (about 10 per cent of all staff). Managers
travelling between widely dispersed outlets presented a particular
issue. Additional recruitment would not necessarily be possible.
General staff were unlikely to exceed the average 48-hour limit.
13. IS THE
OPT-OUT
A NECESSITY
OR A
BARRIER?
Some interviewees suggested that the opt-out
is a vital means of managing work for some employers. However,
other evidence indicated that the availability of the opt-out
has diluted the incentive for reorganising working time practices.
Overtime and on-call pay is a significant issue and several employers
and unions spoke of the difficulty of reducing working hours where
this meant reducing workers' earnings. This is where the views
of workers and their unions at times diverged. Many workers wanted
to work the long hours, some for financial reasons, others because
they saw it as part of the territory that went with the job, others
because they felt that the job could only be done satisfactorily
by putting in the long hours.
14. PRAGMATIC
USE OF
OPT-OUTS
Several interviewees highlighted employers'
pragmatic use of opt-outs to avoid the complexity and record keeping
requirements of the regulations. Using opt-outs also avoids potential
industrial disputes, which could arise from the need for stricter
definitions of working time and invasive monitoring.
15. REGULATION
20—"AUTONOMOUS WORKERS"
There was generally little reliance on the derogation
for "autonomous workers" in Regulation 20 of the WTR,
mainly because of the complexity of understanding the meaning
of the provision. But, there will be greater reliance if the opt-out
is removed. So, removing the opt-out could dilute the protection
and choice of some workers.
16. EXTENDING
THE REFERENCE
PERIOD BY
COLLECTIVE/WORKFORCE
AGREEMENT
The reference period for averaging the 48-hour
limit can be extended to 12 months by collective agreement. However,
only 29.1 per cent of UK employees are union members and only
22 per cent of private sector employees are covered by collective
agreement.[5]
In addition, collective bargaining outcomes are not extended throughout
industrial sectors by law in the way that they are in some Continental
European countries. There is provision for extending the reference
period by a "workforce agreement" where there is no
recognised trade union. However, workforce agreements have been
used only rarely. We were told that his was because of the complexity
of the procedure and because of the prevailing culture of UK industrial
relations: although non-statutory works committees and similar
representative bodies are becoming more common in the UK, there
is no tradition of such bodies negotiating over the implementation
or variation of statutory standards on working time, as there
is on the continent, where statutory works councils and enterprise
committees commonly perform this task.
Table 1
CHARACTERISTICS OF CASE STUDY EMPLOYERS
|
| Name | Sector/Description
| UK Staff | Unionised
|
|
| HEALTH |
| |
| H1 | Hospital Trust providing emergency and elective acute medical services
| 6,000 | Yes
|
| H2 | Hospital Trust providing emergency and elective acute medical services
| 5,000 | Yes
|
| MANUFACTURING/ENGINEERING
| | |
| ME1 | A first tier manufacturer supplying components directly to the automotive industry
| 148 | Yes
|
| ME2 | Manufacturer of high pressure aluminium die castings mainly for the automotive industry
| 420 | No
|
| ME3 | Subsidiary of an international construction company specialising in foundation and underground engineering.
| 220 | Yes
|
| ME4 | Service engineers for supermarket commercial refrigeration equipment. Another (unionised) company in the same group manufactures the equipment.
| 350 | No
|
| ME5 | Foreign-owned major manufacturer in the automotive industry
| 3,000 | Yes
|
| ME6 | Major food manufacturer with 18 operating companies.
| 24,000 | Yes
|
| FINANCIAL AND LEGAL |
| |
| FL1 | Medium sized global private investment bank specialising in mergers and acquisitions
| 550 | No
|
| FL2 | Large European-owned investment bank
| 1,500 | No
|
| FL3 | International law firm
| 1,500 | No
|
| HOTEL AND CATERING |
| |
| HC1 | International hotel and leisure company with four hotel brands and 2,000 pubs and restaurants in UK
| 45,000 | No
|
| HC2 | Hotel company operating 62 hotels in UK. Subsidiary of major hotel, restaurant and leisure business.
| 10,000 | No
|
|
1
The officials represented the Department of Trade and Industry
(DTI); Advisory Conciliation and Arbitration Service (ACAS); Health
and Safety Executive (HSE); and a Local Government Environmental
Health Department. A search of the register of cases at the offices
of the Employment Tribunal Service (ETS) was undertaken. An employment
law practitioner was also interviewed. Back
2
These were: Confederation of British Industry (CBI), Institute
of Directors (IOD), Chartered Institute of Personnel and Development
(CIPD), Association of Colleges (AOC), Engineering Employers'
Federation (EEF), Local Government Employers' Association (LGEA),
and London Investment Banking Association (LIBA). The Department
of Health, The Law Society, the Universities and Colleges Employers'
Association were contacted for their views but were not interviewed. Back
3
Officers from the following trade unions were interviewed: AMICUS,
Association of University Teachers (AUT), General Municipal and
Boilermakers' Union (GMB), National Union of Teachers (NUT), National
Association of Schoolmasters and Union for Women Teachers (NASUWT),
National Association of Teachers in Further and Higher Education
(NATFHE), Transport & General Workers Union (TGWU), UNIFI,
the largest finance sector union, and UNISON, the public sector
union. Back
4
Table 1 sets out the characteristics of the case study employers. Back
5
DTI (2002) Trade Union Membership: an analysis of data from the
Autumn 2001 Labour Force Survey, available at http://www.dti.gov.uk/er/emar/artic_01.pdf.
73 per cent of public sector employees are covered by Collective
Agreements. Back
| 
