Described as one of the most confusing pieces of legislation of recent years, how are firms coping with the Working Time directive?
As the Working Time regulations approach their second birthday next month, two reports out last week highlight the problems for employers still struggling to put this confusing piece of legislation into practice.
Figures from the annual Acas report (Personnel Today, 5 September) show the number of tribunals on the Working Time directive has soared from 1,953 in May 1999 to 5,580 a year later.
And the National Association of Citizens Advice Bureaux published a report last week that claims thousands of working people are being deprived of their statutory right to paid holiday.
The report, Wish you were here?, draws on evidence collected from more than 300 citizens advice bureaux across England, Wales and Northern Ireland, revealing how employers avoid giving paid leave, offering diverse and frequently misleading excuses.
While the report focuses on employers who intentionally withhold this right, it is clear that grey areas within the directive itself present problems to employers who are keen to uphold the law.
“The Working Time directive is one of the most confusing pieces of legislation introduced over the last few years,” says Frederique Bosvieux, senior policy adviser in the HR directorate at the CBI. “Many employers have found the regulations difficult to interpret.”
Acas chairwoman Rita Donaghy told Personnel Today that the number of calls received each year by Acas has increased from half a million to three-quarters of a million in the past two years.
“A large number of people called us with questions about the Working Time directive and paid holidays. I found it surprising the number of employees and employers who are not aware of the amount of paid holiday that people are entitled to,” she said.
Russell Brimelow, head of employment law at Boodle Hatfield, pointed out that prior to the introduction of the directive there was no statutory right to paid holiday. Little surprise, then, that it is this area that has dominated tribunal cases. “From my experience at least two-thirds of contentious issues have been over the right to paid holiday,” he says.
Casual or temporary staff present particular problems. Employees qualify for paid leave only after 13 consecutive weeks’ work, but determining that this has happened is not always a simple matter.
Manpower has had a policy of directly employing its temporary staff – therefore granting them full employment rights – for the past 25 years, but as Keith Faulkner, director of employment affairs at Manpower, maintains, continuity is a big issue throughout the sector.
“Many agencies do not directly employ their workers,” he said. “In this situation, while a worker may feel he is entitled to paid leave, it could be that he has failed to build up the necessary period of service because his contracts kept getting broken.”
Manpower’s experience shows that even organisations that already provided employee benefits at a level in excess of that set by the directive had to work hard to comply with the legislation.
The company already gave employees paid leave above that required by the directive, but since the legislation determines precisely how holiday entitlement should be calculated, the company still had to introduce new systems to calculate each employee’s leave allowance.
“We still needed to make an investment in order to alter the contractual terms with our employees and bring our practices in line with the regulations,” says Faulkner. “I think many employers felt this was too prescriptive and represented a degree of over-regulation.”
Even sectors excluded from the legislation have not been able to avoid litigation. The transport sector was excluded because of its use of “mobile workers”. As Ruth Pot, employment adviser for the Road Haulage Association points out, this has meant a relatively trouble-free period for the sector.
However, according to Raymond Jeffers, employment law partner at Linklaters, one tribunal case recently referred to the European Court concerns a clerical worker employed by Tuffnells Parcels Express, who claims she should be entitled to paid holiday in spite of working within the transport sector. The employee is clearly not a “mobile worker” and is doing the same job as office workers in other sectors.
“The worker may be operating within the transport sector, but does it really make sense that she should be excluded from holiday entitlement?” asks Jeffers.
In its report, Nacab has called for the creation of a new employment rights enforcement body with powers to investigate named, anonymous and third party complaints, to carry out random spot-checks on employers and penalise those who it finds are not complying with the law.
Bosvieux at the CBI believes the number of tribunal cases heard in this area is an indication that employees are willing to take effective action if they feel they are not receiving their full entitlement.
At the same time, the CBI has been working with the Government to make existing guidance more user-friendly and to clarify the application of the directive to ensure employers of all sectors are able to implement the regulations correctly.
The Employment Agencies Act will bring further clarity to the agency sector later this year, while the transport sector will have to deal with its own version of the directive in 2003.
While this legislation may cause headaches for the organisations affected, at least there will be greater clarification on the issue, which could lead to a reduction in tribunals.
• Details of the Nacab report Wish you were here? are at www.nacab.org.uk
By Simon Kent