Regulation of working time
126. Working time in the UK has traditionally
been determined by voluntary negotiations between employers and
individual employees, sometimes influenced by collective agreements.
The EU Working Time Directive[28],
first implemented in the UK in 1998, represented a significant
departure from this tradition by providing employees with certain
basic legal entitlements and protections, covering such matters
as a guaranteed minimum number of days of paid leave, required
rest periods and a limit of an average of 48 hours on the working
week.
127. The Working Time Directive was adopted primarily
on health and safety grounds, though there was an underlying economic
rationale for regulating working time based on the assumption
that this would be beneficial for productivity. The evidence we
heard to support this rationale was mixed.
128. Professor Shackleton noted that, other
things being equal, legal reductions in hours of work would require
organisations to hire more staff in order to maintain any given
level of output, thereby reducing productivity per worker employed.
(Q 8) Mr Meager, by contrast, suggested that other things
may not be equal. He pointed to evidence indicating that restrictions
on working time provide an incentive to organisations to produce
more output from their existing workforce in order to lower unit
labour costs rather than take more people on. This was often achieved
by means of reducing overtime, which was often worked unnecessarily
for reasons of custom and practice in order that employees might
benefit from higher rates of pay for overtime hours. (Q 9)
129. Whatever the merit of this particular argument,
there is, however, an opt-out clause to the 48 hour week limit
enabling employees to voluntarily work longer. The opt-out clause—which
is used relatively more extensively in the UK than in other Member
States—has been a source of controversy both within the
EU and the UK. The TUC told us they would like the opt-out removed
whereas employers' organisations, including the Confederation
of West Midlands Chambers of Commerce, stated that for many UK
businesses the retention of the opt-out was critical to their
ability to remain competitive. (pp 52-68, pp 137-142)
130. Attempts within the EU to secure removal
of the opt-out have to date been unsuccessful—being opposed
by the UK government amongst others—but judgements by the
European Court of Justice in the cases of SiMAP and Jaeger[29]
have, at the very least, opened up consideration of the need for
clarification of the 48 hour work limit. The result of these judgements
is that time spent "on-call" on an employer's premises
constitute hours of work for the purposes of calculating the limit
regardless of whether any work is actually done during this time.
This has particular implications for such essential services as
hospitals and fire-fighting. These issues were covered in greater
detail in the European Union Committee's Report HL Paper 67.[30]
131. The Employment Minister Mr Fitzpatrick
told us he was not sure what would happen next on this matter
but was adamant that the UK would oppose any attempt to remove
the opt-out. He stated that working time is not a health and safety
issue for the UK which has a very good health and safety record
by EU standards. Moreover, the opportunity voluntarily to choose
the opt out preserved employment flexibility for employers and
freedom of choice for people in work without reinforcing a long-hours
culture: "The vast majority of our people are happy, and
companies are happy, and the average hours worked for UK workers
since 1997 have come down from 33 to 32 hours. So, we are working
less in the UK notwithstanding we do use the opt-out. We will
fiercely defend the opt-out, and our European partners know that."
(Q 172)
132. We conclude that the present framework
of individual labour law in the UK strikes a fair, efficient and
sensible balance between the rights and responsibilities of "employees"
and "workers".
133. We agree with the Government that any
change in this framework would create difficulties for employers
without providing any substantive advantage to workers and possibly
harm employment prospects. The focus of attention should therefore
be on informing all workers of their rights and enforcing existing
entitlements.
134. We recognise the important role played
by trades unions and collective machinery in helping to ensure
people are treated fairly at work, are able to exercise their
legal rights, and can make a productive contribution in the workplace.
However, we see no need for action at an EU level to alter directly
the scope of collective labour law in the UK or other Member States.
135. We fully appreciate the particular pressures
facing smaller businesses in coping with an increasing amount
of labour law which may seriously hamper their ability to create
jobs and improve their performance. We therefore recommend that
the Government should pay serious attention to the concerns of
small businesses about the impact of employment protection provisions
on their operations. We would not, however, wish to see any groups
of workers, including those working in the smallest businesses,
left without the employment protection which is afforded to workers
in larger organisations.
136. We do not believe there is need for more
convergent definitions of worker in EU directives. We also firmly
reject any suggestion of a common floor of rights, although we
do not consider this to be the intention of the Green Paper. The
UK already provides a sensible floor of rights covering all workers
and any changes to this legislative floor should be left for the
UK to decide for itself.
137. We recommend that efforts at EU level
to affect the broad frameworks of labour law within Member States
should be planned to promote the sharing of experience and good
practice, rather than to introduce new legislation.
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