Memorandum by the British Retail Consortium
(BRC)
INTRODUCTION
1. The British Retail Consortium (BRC) represents
the whole range of retailers, from the large multiples and department
stores through to independents, selling a wide selection of products
through centre of town, out of town, rural and virtual stores.
We welcome the opportunity to be able to provide information for
and opinion on the review of the Working Time Directive.
2. At the end of March 2003, the retail
industry employed over 2.7 million people. This equates to one
in nine (11 per cent) of the total UK workforce. The retail sector
is the largest employer of women, employing almost twice as many
women as men (over 1.7 million women and approximately 1 million
men). It is also a sector that employs a majority of part time
workers, about 1.6 million, as opposed to 1.1 million full time
employees working more than 30 hours per week. Over the last five
years, employment in retailing has grown by over 190,000 and the
industry continues to be one of the biggest providers of net new
jobs in the economy. Committees representative of the whole membership
approve our policies and positions.
BACKGROUND
3. The retail industry within the UK is
not a long hours one. Though food retailers are increasing the
number of stores that are open 24 hours a day and non-food retailers
are extending their opening hours during the week, retailers have
managed to avoid longer working hours for their employees, unlike
other industries that have been unable to do the same. The large
numbers of part-time staff within the retail industry, combined
with innovative flexible working schemes, have meant that many
staff have been able to continue working under 48 hours a week.
The retail industry has pioneered family-friendly schemes in the
UK, and continues to be at the forefront of their innovation and
development.
4. This does not, however, mean that retailers
attach little value to the Directive and the aspects being reviewed.
In order to remain such a large employer, the retail sector demands
that the highest possible levels of flexibility are attained.
Whilst the use of the opt out in retail may not be as widespread
as in other industries, it is signed by many retail employees,
of their free will, to enable them, if they want, to work beyond
48 hours per week. Flexibility, the reduction of which is the
main concern for the BRC, is crucial to the success of the retail
industry in the UK and the loss of the opt-out would have a serious
negative impact on this. The extension of the reference period
to 12 months may go some way to lessening the blow, but the BRC
sees this as a distinct fallback position to retaining the opt-out.
In an effort to appease the Commission regarding abuse of the
opt-out, the UK may have to revert to the pre-1999 legislation,
requiring employers to record the hours worked by those who opted
out.
1. The reference periods used for determining
the working week
5. As the Commission has stated in its paper,
the UK is one of four Member States that has faithfully reproduced
this provision of the Directive ie a reference period of four
months (17 weeks) for calculating the maximum average weekly working
time with the ability to extend the reference period to a maximum
of 12 months only by collective agreement with a company's workforce.
6. However, the UK has the lowest percentage
of collective bargaining in the EU area (only 22 per cent in the
private sector), which therefore limits the possibility to extend
the reference period to one year, unlike in most other member
states, where collective agreements are widespread and numerous.
Whilst there are workforce agreements in the retail industry to
extend the reference period, collective bargaining and workforce
agreements are not widely used.
7. The BRC feels very strongly that retailers
should have the provision to individually negotiate an extension
of the reference period to 12 months, instead of the necessity
of a workforce agreement. An individual may sign the 48-hour opt-out
without the need for a workforce agreement, so they should also
be given the opportunity to voluntarily extend their reference
period to 12 months. This provides added flexibility for retailers,
especially when dealing with seasonal peaks. It will be especially
pertinent if the UK loses the opt-out, as it will limit the damage
to some extent. It could therefore be an acceptable fall back
for the UK Government should the opt-out be removed. The main
disadvantage of this, however, is that employers will have to
record the working hours of all employees with such an extension
in order to prove that, over 12 months, they did not work more
than 48 hours per seven days. This may be a moot point if the
Government revert to the pre-1999 legislation in order to retain
the opt-out. In any case, the BRC would like to reiterate that
this should be purely a fall back position.
2. The use of the individual opt-out by the
UK and other Member states
8. As the BRC is a UK Trade Association,
we are only able to comment on the use of the opt-out in the UK
retail industry. The 48-hour opt-out is a necessity in many UK
industries, and at the very least provides a great deal of added
flexibility to the all the UK sectors, the retail industry being
no exception. The BRC feels the Commission is examining the opt-out
from three angles:
9. (i) Use of the opt-out: The use
of the opt-out in the retail industry is not particularly widespread.
Although the retail industry's opening hours are gradually increasing
in response to consumer demands, and the numbers of food retailer
outlets that are open 24 hours are multiplying, retail staff hours
are not being appreciably increased. This is because retailers
use shift work and flexible working patterns to ensure the smallest
negative impact on employees work-life balance. Many retail employees
also work part-time, so there is no need for them to sign the
opt-out, as they would never reach the 48-hour threshold. With
the existence of the autonomous workers clause, many staff are
also excluded due to managerial or budgetary responsibility.
10. However, this is not to say that the
opt-out is not used within retail, and retailers do find it an
extremely valuable tool in retaining flexibility in their workforce.
The Commission highlight in their communication that although
33 per cent of UK workers have signed the opt-out, only 16 per
cent actually say that they work more than 48 hours a week, and
that therefore the opt-out is not important. The BRC does not
believe this to be a valid argument, as many retail employees
choose to sign the opt-out to give them added choice over how
long and when they can work, and it is especially valuable for
retailers over extended busy periods. The take up is particularly
high in management positions that retailers feel are not covered
by the autonomous workers clause and is also used a great deal
in distribution and production, where employees are keen to do
voluntary overtime, benefiting both themselves and the retailer
in the process. There are also thousands of part-time retailers
who have more than one job, and are only able to do so because
they have signed the opt-out.
11. The removal of the opt-out will impact
severely on all employees in the jobs detailed above. The loss
of the opt-out will impact negatively on the flexibility that
they currently enjoy. With employees who have more than one job,
it will also greatly increase the burden on employers of monitoring
employees' hours to ensure they are not working a combined total
of more than 48 hours, and in the process will create uncertainty
over how an employer ensures this or indeed which employer would
be responsible for ensuring this. In turn, this damages the relationship
of trust that retailers build up with their staff, making them
feel as though they are always being checked up on. The removal
of the opt-out will also make it very difficult for retailers
to adapt during extended busy periods when they need staff to
work longer, damaging their competitiveness.
12. (ii) Signing the opt-out: For
obvious reasons, the larger retailers tend to be the companies
that have a significant number of employees who have signed the
opt-out. Where this is the case, they employ good practice and
do not offer this option at the point of a contract being signed.
Indeed, there is no evidence to suggest that there is a generalisation
in the presentation of the opt-out in the retail industry as a
whole. Retailers do not force an employee to sign the opt-out
and employees do not suffer any detriment as a result of not signing
it. As mentioned above, many employees work part-time, and so
do not need to sign the opt-out. Those who sign the opt-out do
so because they recognise the added flexibility that it gives
them by allowing them to work extra hours, with many receiving
benefits that they would not get by working overtime on a standard
contract.
13. (iii) Recording hours: Under
the 1998 transposition of the Working Time Directive, there was
a stipulation to record working time—Article 5(4) (a) (iii):
"specify the number of hours worked by him for the employer
during each reference period since the agreement came into effect
(excluding any period which ended more than two years before the
most recent entry in the records)." This was amended in the
UK review of 1999, and is now worded as such in Article 4(1):
"[Employers are to keep] up-to-date records of all workers
who carry out work to which [the limit] does not apply by reason
of the fact that the employer has obtained the worker's agreement
as mentioned in paragraph (1)" (Article 4(2). The 1999 revision
does not state that an employer has to specify the time worked
by an employee, and therefore, on the whole, retailers do not
record the hours of their staff that have signed the opt-out unless
they are recorded for other purposes, for example shift work.
14. The Commission communication states
that the 1999 review does not meet the conditions established
by the Directive for use of the opt-out in Member States. They
cite this as the principle evidence that the opt-out is being
abused in the UK. However, the Directive itself does not explicitly
state that working hours have to be recorded. In the latest version
of the Directive (2003/88/EC), Article 22(1) (b) states, "the
employer keeps up-to-date records of all workers who carry out
such work". In their communication, the Commission states
that recording the hours worked of employees who have signed the
opt-out is implied in the legislation (pp 9-10).
15. The BRC does not want to use this opportunity
to debate at length whether or not the Commission's interpretation
is correct. However, we assume that the Government would not have
amended the legislation to something that would go against the
principle of the opt-out. Whether the Government want to maintain
their current interpretation of the Directive is, of course, their
choice, but this would have the support of the BRC, as there is
no requirement to record hours. On the other hand, we assume that
this has been debated for some time now. The lack of recorded
hours is central to the Commission's argument that the UK's abuse
of the opt-out is damaging the health and safety of workers. An
alternative route to retaining the opt-out may be to enforce the
Commission's interpretation and revert to the pre-1999 legislation
of recording working hours for those who have opted out. Whilst
this would be burdensome to both employers and the Health and
Safety Executive in the short-term, the BRC believes that the
retention of the opt-out would be far more beneficial for retailers
and the economy in the long term.
16. If the opt-out were removed, but individual
contracts could be subject to the 12-month reference period, some
of the issues above might be solved. However, flexibility in the
workplace, which is the BRC's main concern, would be severely
impacted upon. The BRC would stress that retention of the 48-hour
opt-out is vital to maintaining the good flexible working practices
that the retail industry currently uses.
3. Ensuring compatibility between work and
family life
17. The BRC does not want this aspect of
working to be included in the Directive. The retail industry in
the UK has led the way in introducing and expanding family-friendly
and flexible working policies, and have many examples of voluntary
good practice that ensure an excellent balance between work and
family life. The inclusion of this in the Directive would be unnecessary
and over-prescriptive. Rather, we would like this to remain voluntary,
perhaps with a best practice guide that contains family friendly
policies already in place in the EU area. The BRC would welcome
working with the Government to promote these ideas to the Commission
and other relevant stakeholders to highlight this good practice
and demonstrate the benefits of a voluntary approach. It is fundamental
that the Commission are aware of the voluntary practices that
are already in operation, and those that are in the pipeline.
In this vein, we list below some of the family friendly options
that retailers offer.
18. The retail industry in the UK is renowned
for providing a wide-ranging selection of flexible working opportunities.
Retailers employ diverse workforces, and as such understand that
to continue to attract, retain and develop high quality employees,
it is necessary for them to offer a variety of flexible and family
friendly working options. Some actually use it as a competitive
tool to gain an edge over their rivals. Although they believe
that offering employees the opportunity to work additional hours
and earn overtime is important, as part of a good work-life balance
is about the individual deciding on what hours suit them best,
retailers acknowledge that this needs to be balanced with other
flexible working and family friendly policies that enable employees
to balance their work and home life.
19. Through talking to their employees,
retailers have found that different people have different priorities
at different stages of their career/life. For example, people
may want to work longer hours earlier in their life when they
have fewer responsibilities, like a family or elderly parents.
Retailers currently offer, amongst other options:
— Many part-time positions.
— Consider and accommodate where possible
requests for changes to hours/days.
— Job shares between people.
— Term-time only working.
— Flexi contracts- staff work a minimum
number of hours each week and agree to flex up to a maximum number
each week.
— Operate shift swap procedures.
— Choice between time off in lieu or
overtime, when they have worked additional hours.
20. Retailers are always looking at creating
new flexible working options. Some currently under consideration
are:
— Allowing contracts that enable employees
to take time off during the winter months to go abroad.
— Compressed work- employees work their
contracted hours over a shorter time span to allow for time off,
without the reduction in pay.
— Buying or selling holiday entitlement.
21. The BRC will continue to support the
Government's aim of retaining the 48-hour opt-out and would welcome
the Government highlighting the flexibility that it provides to
the retail industry. If the Commission are unable to accept the
Government's argument that there is no widespread abuse of the
opt-out, the BRC would urge the Government to revert to the pre-1999
agreement, as we feel that recording working hours would be more
acceptable than losing the opt-out. We would also stress that
it will be detrimental to family-friendly practices if they were
included in the Directive, and would rather see a concerted effort
to bring the existence of good, voluntary practice to the attention
of the Commission.
23 February 2004
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