New working time Regulations take effect

The Working Time Regulations 1998 came into force in the UK on 1 October amid fears that many employers are ill-prepared to cope with the complex new legal requirements. We highlight employer concerns and the scope for the flexible application of the working time limits by agreement with employees.

With effect from 1 October 1998, nearly two years after the original transposition deadline, the UK Government finally implemented the requirements of the 1993 EU Directive on certain aspects of the organisation of working time (93/104/EC) in the shape of the Working Time Regulations 1998. The Regulations, which also cover the working time aspects of the 1994 Directive on the protection of young people at work (94/33/EC), incorporate a number of detailed amendments to the draft Regulations issued in April for consultation (UK9805123F), but their key provisions essentially remain the same, reflecting the requirements of the two Directives. Nevertheless, there has been criticism from the Confederation of British Industry and other employers' organisations that employers have been given insufficient time to adjust to the new legal environment.

Subject to the exclusions and "derogations" permitted by the working time Directive, the Regulations mean that for the first time (UK9702103F) the UK now has a generally-applicable statutory framework covering maximum weekly working hours, minimum daily rest periods, rest breaks, weekly rest periods, paid annual leave, and night and shiftwork. Many commentators regard the Regulations as the one of the most complex pieces of employment legislation ever faced by UK employers.

Employer concerns

UK companies are widely reported to be unprepared for the new legislation. For example, a recent survey of senior human resources directors by the Employers' Forum on EU Social Policy showed that more than seven out of 10 member organisations have yet to make arrangements for compliance with the Regulations. Moreover, notwithstanding the recognition by employers' organisations that the Government has generally sought to allow the maximum possible flexibility in the application of the EU working time Directive's provisions, it remains the case that many employers are worried that the new Regulations will prove to be complex, bureaucratic and costly. The Engineering Employers' Federation fears that in "cases of ambiguity", employment tribunals and the courts are likely to give priority to "protecting workers rather than preserving flexibility for employers". More generally, concerns have been expressed that the Regulations will involve employers in time-consuming negotiations and recording of employees' working hours and that the use of flexible working time patterns geared to meeting demand will become more difficult.

The scope for flexibility by agreement

The flexible application of a range of the Regulations' provisions is possible by means of collective agreements between employers and trade unions or, in the case of groups of workers who are not represented by recognised trade unions, by means of "workforce" agreements - a new mechanism introduced into UK employment law specifically to enable comparable flexibility in non-union areas.

A number of "traditional" collective agreements on applying the new law on working time have already been reported. The first such agreement was reached between the Heating and Ventilating Contractors' Association and the Manufacturing Science Finance (MSF) trade union as long ago as November 1996 and made provision for an extended reference period of 12 months for calculating average weekly working hours to ensure compliance with the 48-hour limit. Another example of a sector-wide agreement is that between the Engineering Construction Industry Association and four unions - the Amalgamated Engineering and Electrical Union (AEEU), the GMB general union, the Transport and General Workers' Union (TGWU) and MSF - reached in 1997, to use the maximum collectively-agreed reference periods allowable under UK legislation when applying the statutory working time limits. One of the first reported company-level agreements on the application of the Regulations is between security company Group 4 and GMB.

No "workforce agreements" in respect of groups of workers whose terms and conditions are not set by collective bargaining have yet come to light but, unsurprisingly given its novelty, the concept has prompted considerable debate. Under the Regulations, such agreements may be negotiated by elected employee representatives or, in small firms with 20 or fewer employees, signed individually by a majority of the workers concerned. A likely employer fear is that conducting negotiations with a set of independently-elected employee representatives might potentially provide a platform from which some sort of quasi-works council arrangement might develop. The procedure might also provide opportunities for trade union members to be elected as employee representatives and to build union influence within the company.

In response to the Government's earlier consultation document, the Trades Union Congress (TUC) criticised the scope for "workforce agreements" to be signed by a majority of the workers concerned, rather than by elected representatives. The TUC argued that this proposal was inconsistent with the intentions of the Directive (which envisaged derogation by means of "collective agreements or agreements between the two sides of industry") and that any derogations should be available to an employer only through a collective agreement with an independent trade union or, where no union is recognised, through an agreement with "clearly independent, properly elected workers' representatives". The final Regulations now restrict the option of reaching workforce agreements directly with the majority of the workers concerned to employers with 20 or fewer employees. While this formulation is likely to be seen by unions as an improvement, the question of its consistency with the Directive remains unresolved.

Another controversial aspect of the Regulations is that individual employees can voluntarily agree with their employer in writing that the 48-hour limit on average weekly working time should not apply in their case. The UK is the only EU country to have taken up the "individual opt-out" option allowed by the Directive (though longer working hours are also possible in Ireland with the written consent of employees, subject to higher statutory limits and for a transitional period only). According to the Employers' Forum on EU Social Policy, 74% of member organisations intended to ask at least some of their employees to opt out of the 48-hour maximum working week. Trade unions have argued that this will serve to legitimise working practices involving excessive working hours, and have already criticised the widely reported move by Forte Hotels, part of the Granada group, to ask its UK staff to sign individual opt-out agreements.

However, reliance on individual opt-outs from the 48-hour maximum would not appear to be a robust long-term working time strategy for employers. The Regulations enable employees to opt in or out of longer working hours subject to a minimum statutory notice period of seven days (or up to three months by agreement). Moreover, the use of individual opt-outs will give rise to additional statutory record-keeping and other administrative requirements which some employers may find burdensome. In any event, the provision in the Directive enabling the use of individual opt-outs may not be permanent: it is to be reviewed by the EU Council of Ministers before November 2003 and a "qualified majority" in the Council would be sufficient to close off this option.

Commentary

It remains to be seen whether the concerns voiced about the impact of the new law on working time will be borne out in practice. What is clear is that the Regulations have served to push working time issues to the top of the industrial relations agenda. As well as directly affecting workers whose terms and conditions of employment do not comply with the new rules, the introduction of a comprehensive statutory framework in the UK can be expected to result in a higher level of litigation and the "juridification" of a key aspect of the employment relationship which hitherto has largely been a matter for voluntary determination. Moreover, as a result of the important role given to collective and "workforce" agreements as a means of achieving the flexible application of the Regulations' standards, negotiation over detailed working time questions is likely to become more widespread and systematic. Above all, the Regulations may well prove to be a catalyst for a broader re-evaluation of working time patterns. It seems inevitable that UK workers' general expectations in respect of rest periods, working hours, holidays etc will be raised by the introduction of the Regulations, whether or not their existing working time arrangements are directly affected by the new legislation. Employers too may be prompted to review the case for more radical moves towards flexible working arrangements. (Mark Hall, IRRU)