Pay hikes inevitable if UK loses opt-out from EU Working Time Directive

Employers will face increased pay bills if people are banned from working more than 48 hours per week, senior HR figures have warned.

Firms will also struggle to fill employment gaps left by migrant workers returning home, and the 2012 London Olympics will suffer as the construction industry grapples to find the manpower to get buildings finished on time, they claimed.

Last week, MEPs voted to scrap the UK’s opt-out from the Working Time Directive (WTD), which currently allows British employees to work more than the average 48-hour-per-week limit if they choose.

A final decision will be reached in mid-December by the whole of the European Parliament, but the vote by its employment committee is likely to sway opinion.

Paul Reynolds, HR director at catering company Elior, told Personnel Today that axing the opt-out would have a “significant detrimental impact” on the many thousands of catering staff who make up for comparatively low base pay by working longer hours.

He added: “The sector may find a proportion of the migrant workforce – especially from former Eastern Bloc countries – it has relied upon more significantly in the last three to four years may decide to return to their home country as the earnings margin between the UK and the rest of Europe narrows.”

More than one in 10 employees work beyond 48 hours per week, according to government figures.

Mick Leafe, HR director at bus operator Nottingham City Transport, said employers may be forced to increase pay rates for staff to substitute for the clampdown on longer hours.

“If we say to some of our drivers you are unable to regularly work more than 48 hours per week, that will restrict their earning capacity and they could say they want more money,” he said.

Ken Hersey, HR director at construction firm Lorne Stewart, added: “It’s very common in the contracting industry for project bonuses to be paid once an employee has met a target to get a project finished. How do we get the Olympics finished if no-one is allowed to work more than 48 hours?

“Where do we get the other people from? Polish workers are going home. Where do we get the other people to fill the hours that are needed?”

Business secretary Peter Mandelson vowed to protect the opt-out and gain enough support from UK MEPs to vote to keep it.

“Adding new rigidities to the labour market when employers are suffering under the credit crunch also risks losing jobs to China and India – which are focusing on Europe as US demand falters,” he said.

Business reaction

“People can look at their own circumstances and make their own decision about working longer hours. We call this common sense, and it doesn’t need amending by Brussels.” – John Cridland, deputy director-general, CBI

“At a time of great economic uncertainty, the last thing we needed was for MEPs to vote for something that will create burdens for employers and could lead to people being unable to work overtime if they want.” – David Yeandle, head of employment, EEF

“Regularly working more than 48 hours [per week] increases the chance of suffering from heart disease and stress-related illness.” – Brendan Barber, general secretary, TUC

“In hospitality, it might make employers and employees look at [staff] breaks. It’s not a bad thing for the sector… but it will have an impact on those people who want to work more hours.” – Sean Wheeler, group director of people development, Malmaison hotels

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