Working Time Directive and its Implementation in the UK - Term Paper Example

Working Time Directive and its implementation in the UK. WTD: a tool to hamper development of the UK business sector Table of Contents I. Introduction II. Working Time – a general overview III. Working Time Directive IIIa. General description and purpose IIIb. Highlights of the measures involved IV. Working Time Directive in UK IVa. Implementation of Directive in UK – procedure and consequences - Working Time Regulations 1998 V. Issues for consideration VI. Conclusion References I. Introduction Working time arrangements in industrialized countries are changing along a number of dimensions. Some of these changes have been emerging for a number of decades, such as the expansion of part-time work, while others are more recent developments, such as the lengthening of the working week in some parts of the economy (Bosch 1999; Evans et al. 2001). In addition, while working time reduction was being discussed in relation to unemployment in some countries and sectors, in many cases the focus was on the use of working time flexibility rather than reductions as a means of stimulating economic growth and job creation. This marked the beginning of the big flexibility debate that has dominated much of the activity around working time policies since the early 1980s (Messenger, 2004, 1) In the above context, the European Working Time Directive (WTD) presents a major challenge that requires innovative approaches to working patterns and service delivery if high quality clinical care and training are to be maintained taking into account the fact that (see also legal judgements on SiMAP and Jaeger cases) all the data revealed in the literature and the empirical research as well as the relevant legal principles confirm that time spent at the place of work, whether working or not, must count as work (Implementing the European Working Time Directive: A Position Paper from the Academy of Medical Royal Colleges, [5]) II. Working Time – a general overview Standard economic theories often assume that workers current levels of working hours correspond to their needs and preferences, but this is not the case for many workers. In fact, their ability to exercise choice over their working hours is to large extent constrained by many factors that are beyond the control of individual workers, including the structure of the labour market itself (Euwals 2001; Kahn et. al 1992; Schor 1992; Stewart et al. 1997). As Schor (1992:129) stated it is often the case that competition in the labour market is typically skewed in favour of employers: it is a buyers market. And in a buyers market, it is the sellers who compromise. This explains at least in part why active working time policies have been adopted in many industrialized countries to reduce the gap between current and preferred working hours (Messenger, 2004). It should also be noticed that very short working hours are often related to poor working conditions. In fact, there is some evidence that these jobs are designed to meet employers requirements rather than labour supply preferences (Fagan 2001b: 253). Those workers who are working very short hours are also reported to be disadvantaged in terms of promotional opportunities and non-wage benefits (Walsh 1999). In terms of earnings, evidence indicates that hourly earnings for part-time workers with less than 20 hours per week appear to be lower than for other part-time workers (OECD 1999). Interestingly, a recent EU Working Conditions Survey reveals that the increase in part-time in Europe between 1995 and 2000 was largely bottom-up (Bodin 2001): the increase resulted mainly from an increase in the lowest working time band (i.e. less than 10 hours), in which employment and pay conditions are generally unfavourable. Furthermore, these workers (particularly women workers) are exposed to a significantly higher risk of unemployment (European Commission 2002b: 87) Moreover, the long-term historical trend of shorter working hours, as illustrated by Maddison (1995), is to a large extent attributable to changes in legal normal hours as well as in paid annual leave. Since the Factory Act of 1833 in England, almost all countries have placed restrictions on the length of working time. The rationale for this state intervention stems mainly from the following factors: (1) the negative effects of long working hours have social, health and safety dimensions that are sometimes ignored by individual workers and employers (hence, there is a potential for negative externalities); (2) workers with weaker bargaining positions are forced to work longer hours; and (3) the reduction of working hours needs to be undertaken simultaneously across firms, since initiatives by individual employers to reduce working time can simply mean a reduction in their competitiveness, particularly against those companies with long working hours. The legal imposition of a standard number of normal hours is thus seen as a realistic solution in this context. This may mean (Messenger, 2004) that working time is a currency which should not be wasted, but long hours should not be used as the major source of a firms competitiveness . Specifically for the UK, it has been found by McDonald (1998) that a century ago people in the UK on average worked more than 50 hours each week. The length of the average working week then fell to around 35 hours by the end of the 1970s, due to the combination of higher productivity and the gradual rise of part-time working as more women entered the workforce. The downward trend came to a halt in the 1980s. This was primarily the result of a structural shift in employment towards occupations where long hours are the norm but most notably, self-employment and managerial and professional jobs. However, the trend toward shorter hours resumed in the second half of the 1990s. Since 1998 the average working week has fallen by over an hour. According to the ONS, full-time workers (now averaging 37.34 hours) are putting in around an hour and a half less each week, although part-time workers (who work average 15.7 hours) are working half an hour longer (Working Hours in the UK, [10]). However, it should be noticed that although the aim of the European Working Time Directive is to improve workers safety and protection, it seems to have caused a collective headache for member states since its conception more than 10 years ago (McDonald, [12]). On the other hand the regulation of working time has been a significant problem for most countries around the world. However, there are also some countries that have experienced changes in the techniques used for regulating working time. Good examples of these types of changes are found in Australia and the UK, which are seemingly moving in different directions. In Australia, trade unions and employers associations have been fragmented, but, due to the critical role of so-called industry awards, hours of work were effectively determined quasi-legislatively (Dawkin and Baker, 1993). As for the UK, the country had been known for its absence of legislative regulations on working time. However, according to Messenger (2004) the UK was required to move away from this traditional approach to working time and to introduce the Working Time Regulations in 1998 in order to implement the EU Working Time Directive, which stipulates a maximum workweek of 48 hours including overtime; although the full effects of this new regulation on actual working hours are yet to be realized, this law so far has not changed the general pattern of working hours in the UK. In particular, the law has not been successful in curbing long hours. Moreover, it is often reported that the speed of reductions in working hours in the industrialized world has slowed down since the mid-1970s (Evans et al. 2001; Lehndorff 2000). This trend appears to persist in many countries. In fact, average annual working hours did not change much in most countries during the 1990s, with variances normally within 2 per cent of the average annual hours at the beginning of the decade. Nevertheless, a research made by Messenger (2004) showed that due to changes in labour laws or collective agreements on working time, some significant reductions in working hours were achieved in the 1990s in some countries, such as Japan (9.3 per cent), West Germany (3.9 per cent) and France (3.2 per cent). By contrast, an increasing trend in hours of work is found in Sweden and the USA. III. Working Time Directive IIIa. General description and purpose The diversification of working time practices - and perhaps workers working time preferences - in conjunction with the general trends of collective bargaining, decentralization and declining coverage - are creating new challenges for how working time standards are defined and established. Historically, state intervention and collective bargaining in relation to working time have centred upon full-time, daytime and weekday work schedules as the reference point of standard hours (Bosch et al. 1994; Bosch 1999b). Shorter full-time hours and compensation for unsocial hours (evenings, nights, weekends and rotating shifts) have been the focus for regulations, followed in more recent decades by measures to guarantee equal treatment for part-timers. Similarly, as Messenger (2004) accepts, this full-time standard has also been the reference point for the development of national social protection systems, and it is only recently that the importance of protecting periods of part-time work have begun to be accommodated in welfare state policies. Specifically for the European Union area of particular interest are the legislative measures which allow for collective agreements to derogate from their provisions. Perhaps the best known among these is the EU Working Time Directive, which permits derogations from its standards on night work, daily rest, the weekly day of rest, and rest breaks. Indeed, the Directive is unusual in that it contemplates derogations at the level of the individual which would allow employees to opt out of its 48-hour weekly limit. This provision was included in the Directive at the behest of the UK government, which has since been the only EU member state to make the individual opt-out universally available (Messenger, 2004, 21) Directive 93/104/EC (EU Working Time Directive, [2]) lays down provisions for a maximum 48 hour working week (including overtime), rest periods and breaks and a minimum of four weeks paid leave per year, to protect workers from adverse health and safety risks. It applies to all sectors of activity, both public and private. A number of areas, such as air, rail, road, sea, inland waterway and lake transport, sea fishing, other work at sea and doctors in training, which were exempt from the 1993 Directive, were brought within its scope in an amendment agreed in 2000 There remain a number of categories of worker who are excluded from the Directive: Managing executives or other persons with autonomous decision-making powers Family workers Workers officiating at religious ceremonies in churches and religious communities (EU Working Time Directive, [2]) IIIb. Highlights of the measures involved The Working Time Directive (the Directive) was introduced in 1993 as a health and safety measure as a ‘practical contribution towards creating the social dimension of the internal market’. It provides for: • a working time limit of 48 hours over 7 days averaged over a reference period not exceeding 4 months; • night work limits; • health assessments for night workers; and • entitlements to weekly, daily and in-work rest breaks and four weeks’ paid annual leave. The Directive does not apply to anyone who is self-employed or to persons with “autonomous decision-making powers”, family workers or workers officiating at religious ceremonies in churches and religious communities. (Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organization of working time, Official Journal L307, 13/12/1993 p. 0018-0024, The Working Time Directive: A Response to the European Commission’s Review, 9th Report of Session 2003-04, [6]) The 1993 Directive defines working time as "any period during which the worker is working, at the employers disposal and carrying out his activities or duties, in accordance with national laws and/or practice”. A rest period is defined as “any period which is not working time". The directive does not allow for any interim category (EU Working Time Directive, [2]) Article 1 of the specific Directive defines its purpose and its area of application in general. More specifically, according to the above article [1]: 1. This Directive lays down minimum safety and health requirements for the organisation of working time. 2. This Directive applies to: (a) minimum periods of daily rest, weekly rest and annual leave, to breaks and maximum weekly working time; and (b) certain aspects of night work, shift work and patterns of work. The main provisions stated in the WTD were to ensure that workers enjoyed: a maximum 48 hour working week averaged over a reference period; a minimum daily rest period of 11 consecutive hours a day; a rest break where the working day is longer than six hours; a minimum rest period of one day a week; and a statutory right to annual paid holiday of 4 weeks; night working must not exceed eight hours a night on average (EU Working Time Directive, [2]) IV. Working Time Directive in UK IVa. Implementation of Directive in UK – procedure and consequences – Working Time Regulations 1998 The main characteristics of the system governing working time in the UK have not really changed since the Directive was introduced, largely due to the opt-out. Latest figures show that about 16% of the workforce currently works more that 48 hours per week, compared with a figure of 15% at the beginning of the 1990s. About 8% of the workforce say they work over 55 hours per week, 3.2% over 60 hours per week and 1% over 70 hours per week. The UK is the only Member States where weekly working time has increased over the last decade (EU Working Time Directive, [2]) The Directive was transposed into United Kingdom law by the Working Time Regulations 1998 (which came into force on the 1st of October 1998) which include the right to a voluntary opt-out. Under the Regulations the individual agreement that the 48 hour limit shall not apply must be in writing. In 1999 the Working Time Regulations were amended in order to bring them into line with the Directive which requires employers to keep up-to-date records of all workers who have voluntarily opted out (The Working Time Directive: A Response to the European Commission’s Review, 9th Report of Session 2003-04, [6]) It should also be noticed that the above Regulations (Working time Directive implemented in the UK, [4]), among other issues, mainly stipulate the following rights: a limit of an average of 48 hours in a week in which a worker can be required to work; three weeks annual paid leave, rising to four weeks in 1999; 11 consecutive hours rest in any 24 hour period; a limit of an average of eight hours work in 24 hours for night workers; and one days rest per week. Unlike other EU countries, the UK tried to minimize the impact of the Working Time Regulations by allowing individual opt-outs from the 48-hour limit. As a result, the establishment of individual agreements is the preferred way of responding to this new law (Neathey and Arrowsmith 2001). In fact, it is reported that 81 per cent of UK companies adopted individual agreements that allow for long working hours (i.e. over 48 hours per week) since the inception of the new working time law (Goss and Adam-Smith 2001). At a next level, possible developments on the opt out include (Working Time Directive, [9]): A strengthening of the conditions under which the individual opt out can be applied Derogations from the provisions on maximum weekly working hours on the basis of collective agreements Retaining the possibility of an individual opt out in the absence of such an agreement The fourth approach, proposed by the European Parliament in its non legislative resolution earlier this year, is to phase out the individual opt out as soon as possible and, in the meantime, to tighten the conditions of its use Moreover, according to article 4 of the Working Time Regulations 1998, No 1833 (Statutory Instrument 1998 No. 1833, The Working Time Regulations 1998, [3]) Article 4.  - (1) Subject to regulation 5, a workers working time, including overtime, in any reference period which is applicable in his case shall not exceed an average of 48 hours for each seven days. Whereas the paragraph six of the above article presents the specific formula for the calculation of an employee’s working hours (under the application of WTD and the British law): (6) For the purposes of this regulation, a workers average working time for each seven days during a reference period shall be determined according to the formula -  A + B C where -  A is the aggregate number of hours comprised in the workers working time during the course of the reference period; B is the aggregate number of hours comprised in his working time during the course of the period beginning immediately after the end of the reference period and ending when the number of days in that subsequent period on which he has worked equals the number of excluded days during the reference period; and C is the number of weeks in the reference period. As for the Working Time (amendment) Regulations 2003, these mainly refer to specific categories of employees, like the training doctors, the mobile workers and the workers employed in offshore work (Statutory Instrument 2003 No. 1684, The Working Time (Amendment) Regulations 2003) V. Issues for consideration Under the above terms it should be noticed that the diversification of working time practices - and perhaps workers working time preferences - in conjunction with the general trends of collective bargaining, decentralization and declining coverage - are creating new challenges for how working time standards are defined and established. Historically, state intervention and collective bargaining in relation to working time have centred upon full-time, daytime and weekday work schedules as the reference point of standard hours (Bosch et al. 1994; Bosch 1999b). Shorter full-time hours and compensation for unsocial hours (evenings, nights, weekends and rotating shifts) have been the focus for regulations, followed in more recent decades by measures to guarantee equal treatment for part-timers. Similarly (Messenger, 2004) this full-time standard has also been the reference point for the development of national social protection systems, and it is only recently that the importance of protecting periods of part-time work have begun to be accommodated in welfare state policies. According to a survey by the Institute of Personnel and Development (IPD), the professional institute for personnel managers, published in October 1998, UK employees work long hours willingly. Nearly three-quarters of employees surveyed stated that they actually enjoyed working long hours, while relatively few said that they worked long hours because of the fear of being sacked or made redundant. Most respondents said that they worked long hours because of heavy workloads and not wanting to let colleagues or clients down. Interestingly, over half said that they would put a work commitment before a social commitment and a quarter said that they were more committed to work than their private life. According to the IPD, many of those working long hours are unlikely to make use of the Directives provisions: "Many long-hours workers are so committed to their work that they will probable sign away their right to work fewer hours." (Working time Directive implemented in the UK, [4]) The UK’s official Guidelines produced by the Department of Trade and Indusrty regarding the implementation of the 1998 Regulations however instruct employers that they are not required to ensure that workers actually benefit from the rest periods to which they are entitled - the employer must merely ensure that there is no obstacle preventing workers who wish to benefit from such rest periods to do so (ECJ to rule on UK’s implementation of the European Working Time Directive, [8]) On the other hand, there are work related issues which the Regulations will combat. In doing so, they will contribute to the Governments wider goal of promoting family friendly employment. Combining paid work and parenting, or caring for dependants, is a constant juggling act. Being a parent and a worker is not easy and working parents need as much support as possible. The long hours culture has historically not only created barriers to work for women with caring responsibilities, but has also prevented many men from taking an active role in their childrens upbringing. Providing limits on working hours, minimum rest periods from work and an entitlement to paid annual leave will help working parents to spend more time with their children and so balance their home and work commitments more successfully. However, as part of a flexible approach, the Regulations allow many aspects relating to the arrangement of working time to be resolved by agreements between workers and employers. Work patterns, within a fair framework, are best set locally rather than by Government. The Regulations allow arrangements to be made through agreement that are appropriate to particular workplaces that suit workers and maximise productivity for employers (McArtney, 1998 [14]). In fact, as will become clear, a number of the same policy initiatives - quality part-time work, flexi-time and collective reductions in working time, for example - can be employed to advance different dimensions of decent working time. On the other hand, being able to fulfil care responsibilities and social activities is not just about how much time is available, it is also about when people are available, and the energy that they have left for the practical and emotional inputs to social relationships and activities outside of the workplace. Intense workloads, non-standard schedules and unpredictable variations in working hours seem to be spreading. Each of these factors increase the probability that people will evaluate their employment as incompatible with family and other activities, as well as increasing their reports of work-related illnesses. Where regulations exist to address these issues they usually come under health and safety policy, yet the links with work-family reconciliation should also be drawn into policy formulation. Developments in EU legislation and policy are instructive here. The 1993 EU Working Time Directive draws together standards on health and safety and work-family reconciliation and encourages the social partners to take both into account in their negotiations, although there is no requirement for them to do so (Messenger, 2004, 199) VI. Conclusion The examination of the particular elements of Working Time Directive as accepted by the member states and implemented gradually within the European countries, shows that the creation of a common policy regarding the work rights and obligations is a feasible target. However, when examining analytically all the aspects of the specific strategy we can observe a series of weaknesses related mostly with the fact that each particular state has its own social and cultural structures and for this reason the regulation of the work related issues has to be differentiated in accordance with the standards accepted by the specific state. This assumption can be supported by the fact that many states (like the UK) have not yet implemented the above Directive in practice although they have may already finished the above implementation in typical terms (UK). For this reason, WTD has to be reviewed in accordance with the needs and the demands of all member states if it is to be applied in practice and not remain just a formal European rule. References Beaumont, P., 1995: The Future of Employment Relations, London: Sage Bell, D., Hart, R. (1998) Working time in Great Britain, 1975-1994: evidence from the New Earnings Survey panel data. 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