WTD – finding a workable way forward

The debate could not have been more timely, or begun with more impact. As the delegates gathered in a London conference room on 17 December to discuss the potential scrapping of the UK’s opt-out from the Working Time Directive (WTD), the call came through: MEPs had voted 421 to 273 to end the UK’s exemption, which currently allows staff to voluntarily work more than the 48 hours per week limit.

There was a brief hiatus as everyone called their offices – some to celebrate, others to express their disappointment. It certainly made for a lively debate, which had been organised by Working Time Solutions, a consultancy that provides advice and software to help with work scheduling.

Director of consulting Martin Gee kicked off proceedings by summing up the two sides of the debate. “One view is that the 48 hour restriction is designed to help combat the use of long hours in the workplace, potentially reducing fatigue, stress and accidents,” he said.

“The other side of the argument is that the ability to work longer than 48 hours is essential if the UK is to remain flexible, competitive and successful. So there are extremes of thought around the table today,” he added.

Health implications

Representing the former viewpoint was Paul Sellers, working time policy officer at the TUC.

“The main plank of the trade union position is easily stated – if we allow people to opt out of this health and safety law then we’re going to be left with unnecessary suffering and death,” he said.

“The WTD itself is soundly based on robust research. All the evidence confirms that working long hours increases the risk of developing a wide range of health and safety problems, and squeezes out the time available for family life, which can undermine general wellbeing.”

And Sellers questioned whether the opt-out is currently a genuinely free choice.

“Even the government’s own studies have identified problems there, including some disturbing facts. For example, 44% of those who have signed the opt-out said it was a condition of their employment, and 23% said they had been put under pressure to sign it. It follows that simply putting tighter conditions on the use of the opt-out would not in itself guarantee free choice. The current position, decently founded in health and safety legislation, is spoilt by the opt-out and weak enforcement.”

Sellers argued that many offices have a culture of presenteeism, where employees are judged by the number of hours spent in the office rather than the quality or volume of their work.

“A fixed limit on working time would help to focus minds on tasks rather than attendance, and if the opt-out was removed many of these hours would vanish without a resulting drop in productivity. I suppose I’m saying that if the opt-out went then employers would be losing the hours that are least valuable to them.

“This is a vision of the future with more sensible working time and higher productivity. That’s got to be better for employers and workers, and it’s one that I hope all of us around the table can work together to get to,” he added.

Representing the employer’s view was David Yeandle, head of employment policy at the EEF, who pointed out that while the result of the vote was disappointing for his members, there was a long way to go.

“It is by no means certain what will come out of this six-to-eight-week conciliation process. There is going to be quite a stand-off now between the European Parliament and Council of Ministers. And if they can’t reach agreement, then the whole thing falls, and we are left with the WTD as it currently stands. I’m not sure if member states will have the appetite for that, but that is, in theory, where we could be.

“It’s going to be very interesting. A lot depends on the politics and, critically, on [current holder of the EU presidency] France. It is very much in the driving seat and determined to come out of this presidency with the kudos of having been able to solve a problem that no-one else has been able to solve for years. The jury is out on the result,” he added.

“And if the opt-out does go, there will also be a very serious question mark about the way the government implements the Agency Workers Directive. If one unpicks then there is a danger the whole thing could unpick.”

Yeandle was also keen to stress the diversity of the EU member states. “Particularly, since the most recent EU enlargement process, we now have a very disparate and different labour market across Europe, with very varied employee relations environments, histories, cultures and legislative environments. Prescriptive, detailed, one-size-fits-all legislation across so many countries – from Bulgaria to Luxembourg – is no longer practical. I think we need legislation that provides much more flexibility.”

Individual stumbling block

Yeandle felt the individual opt-out had, unfortunately, become something of a totemic issue for those on both sides of the debate.

“The ability of employees and employers to agree hours that they want to work is an integral part of the flexible labour market that has, without doubt, been a considerable benefit to the British economy.

“Removing the opt-out will send an unfortunate message that this flexibility is on the wane, at a time when we need to be encouraging businesses to invest in the UK rather than elsewhere. However, we have always been clear that individuals should have free choice in this area – it’s not something that people should be forced to do.”

He suggested that the UK had a greater variety in hours of work than many other member states.

“Many families are on two incomes,” he explained. “They may decide that to get the income they want one will choose to work longer hours and one shorter. That’s going to be increasingly important as we move further in this difficult economic environment, and more people lose their jobs. It would be unfortunate if the one member of the family who has got a job isn’t able to work the hours they want to work at a level they regard as reasonable to maintain the family income and pay the mortgage.

“This is not often for long periods. I do take the point that Paul [Sellers] makes that long hours, certainly over a long period of time, potentially have health and safety implications. But to do it for a couple of years to meet a particular need – there is far less evidence that that is a serious problem.

“Irrespective of the WTD, there is already a very clear requirement on employers to take in a whole range of health and safety issues, including the hours their employees work. Our record in this country looks very good in terms of health and safety and accident rates in comparison with the vast majority of other member states.”

Yeandle concluded by pointing out that other member states also failed to fully comply with the WTD.

“British employers feel they are being picked on a little bit,” he said. “Other member states are using all sorts of other ways of getting around the individual opt-out. For example, there are countries that look at the working hours not on the basis of the number of hours the individual actually works, but in terms of their contract. Some have used slightly dubious ways of defining autonomous workers, based on how much they are paid. The UK’s approach, which is the only one that is clearly spelled out in the directive as an option, is the one on which all the focus of attention has been.”

Stress factors

Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development (CIPD), felt that while the WTD had its downsides, it had at least galvanised the debate about working hours and reminded individuals and management of their responsibilities. He then turned to the issue of ill health and long hours.

“Stress is the biggest issue in most UK workplaces, but I’m not sure removing the opt-out will help. Where individuals are oppressed and damaged, that is of course the area that is most difficult for unions and legislation to reach.

“Taking away the opt-out does nothing for those inaccessible people, who may be dependent on overtime or long hours working for their income.”

He pointed out that overtime is a concept that is not recognised across much of the UK’s labour force. “The real problem with long hours in the UK is in the relatively unmanaged and possibly unmanageable environments of self-employment, professionals and vulnerable workers.”

Working Time Solution’s Gee asked the group to sum up the effect they felt the disappearance of the opt-out will mean for the UK over the next few years.

Yeandle said: “If we lost the opt-out it would not happen for three or four years – at least until 2012. It wouldn’t surprise me if there was a much longer transition period. Those member states that don’t want to lose their opt-out may insist on a quid pro for making any concessions.

“We haven’t been in conciliation on an employment issue for a considerable period of time, possibly ever. This is new territory, and we don’t quite know how it will work, particularly at a time when the make-up of both the European Commission and the European Parliament is about to change [following elections in June]. Many of the people sitting around the table in Brussels voting today will not be there in six months’ time. Will the socialists still be the largest party in the new parliament? Even if scrapping the opt-out doesn’t happen this time, will a parliament in five years’ time have another go at it?”

Political fallout

Both Yeandle and Emmott felt the furore over the WTD opt-out could increase anti-EU sentiment in the UK.

Emmott said: “It may tip the balance in the way a Conservative government might behave towards Europe. I feel it may be more important politically than it is industrially. That may sound a bit glib, but those perceptions about Europe and employment legislation are important.

“If you ask any employer where it really hurts, they might mention maternity pay and other bureaucratic processes, but working time is seen as the most offensive – rightly or wrongly,” he added.

Yeandle concurred. “The danger is that the big-picture political issues will be the driver over the next few months, rather than the practical issues on the ground. It will drive even stronger anti-EU feeling in the press than exists already,” he said.

Sellers called for collaboration between the interested bodies.

“There will be a role for employer organisations, unions and advice bodies – none of us can do it on our own, we need to work together. That might help to maximise the positives of whatever comes out of this.

“The least desirable outcome of the conciliation process would be not much compromise on either side, locked in a room with the deadline approaching, and they throw away all their positions and write something on the back of an envelope. Whatever happens, the issue of working time isn’t going to go away. But some certainty about the law would at least give us something to work with.”

Kevin White, managing director at Working Time Solutions, said: “I am pleased and surprised that there is so much common ground between everyone. It’s certainly not a black and white issue.”

Unilever in Norwich

Andy Watts, manufacturing excellence manager at the Unilever Norwich Factory (formerly Colman’s of Norwich), talked to the group about the factory’s successful move to annualised hours back in 1994.

It was previously a traditional, hourly environment with a complex pay grading system and an established overtime culture. Production was highly seasonal, but there was no flexibility to match fluctuations in demand, and some employees clocked 70-plus hours a week for months in peak times.

Now all employees are contracted to work 1,900 hours per year, made up of rostered hours and reserve hours to cover increases in demand or make up for poor performance. Managers made it clear that their aim was not to use reserve hours if possible.

As a result, absence has dropped from 6% to 2.5% and operating efficiency has risen from 55% to 80%. Watts also believes that the work-life balance of the majority of workers has greatly improved.

“When we began annualised hours, many people started seeing life from a different perspective and began enjoying spending more time at home and less time at work,” he said. “Our new arrangement was better for 60% to 70% of the people in our operation. You can’t please all the people all of the time, but we pleased the majority in a way that also suits the company.”

“Some of the success of work-life balance is down to perception,” he said. “Seven years after we introduced annualised hours, one of our factory units had a large lump of new volume come in. We needed another 100 hours more work over the year done by each of our three teams.

“We presented them with two options – we could have rented another machine that could do that volume inside the current contract, or they could each work another 100 hours a year and be paid for the extra hours.

“Under the old hourly pay they would have ripped off our hands for the money. But instead they told us ‘no, we don’t want two weeks out of our 12 weeks’ holiday, please rent the machine’.

“That sent the hairs on the back of my neck up, it really did. We had facilitated a cultural change in our organisation about work-life balance, because their perception is now centred around working a 40-hour average week – and then going home.”

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