EC: Commission proposes to amend working time Directive

The Commission has issued a proposal aimed at amending the working time Directive in key areas such as the opt-out from the maximum average working week, treatment of on-call working and reference periods for the calculation of maximum average working time. We look at the detail of this controversial proposal and assess the reaction, which has been largely critical.

Introduction

On 22 September 2004 the European Commission issued a proposal aimed at revising the 1993 (93/104/EC) working time Directive, as codified in 2003 by Directive 2003/88/EC. This development follows two consultation exercises of the EU-level social partners on this issue. The first was launched on 5 January 2004 (see Commission consults on working time Directive), during which all the parties concerned expressed a view that the Directive needed updating, although they differed in their opinion of how to go about this. The second consultation was launched on 19 May 2004 (see Commission urges negotiations on working time), at which the Commission urged the social partners to try to negotiate an EU-level agreement on key areas of revision. These included:

• reference periods for the calculation of average weekly working time. The Directive contains a reference period of four months, but derogations from this are permitted - member states may extend it to six months in some cases and it may also be extended to one year by collective agreement.
• the future of the so-called "opt-out" from the maximum average 48-hour working week. The Directive allows member states, if they wish, to include in their implementing legislation a clause allowing individuals to opt out of the maximum 48-hour week, subject to certain conditions. This is the most controversial issue, particularly in the UK, which is the member state that has made the most widespread use of this option; and
• the definition of working time, in the light of recent European Court of Justice (ECJ) judgments on on-call working;

However, the social partners declined the Commission's invitation to enter into negotiations on this topic (for details of their responses, see box ), asking the Commission to propose a Directive instead. The Commission therefore issued a proposal on 22 September. It is a relatively short five-Article proposal, amending the working time Directive and dealing with the issues raised above.

Definition of working time and on-call working

The proposal does not change the definitions of working time and rest period contained in the working time Directive. However, it inserts two new definitions:

• "on-call time", which is a "period during which the worker has the obligation to be available at the workplace in order to intervene, at the employer's request, to carry out his activity or duties"; and
• "inactive part of on-call time", which is a period during which the worker is on call within the meaning of on-call working as defined above, but "not required by his employer to carry out his activity or duties".

This innovation is a response to the recent ECJ rulings on the subject of on-call working (the Simap case (C-303/98) and the Jaeger case (C-151/02 - see Commission consults on working time Directive). These rulings essentially clarified that time spent on-call should be regarded as working time, if a worker is required to be at the place of work, and even if a bed is provided for rest purposes.

The Commission felt that the Directive as it stood contained two mutually exclusive definitions - working time and rest period, with no intermediate or combined categories to cater for situations such as on-call working. It has therefore introduced a concept into the Directive that is not strictly speaking a third category of time, but a mixed category, incorporating the two concepts of working time and of rest period. The inactive part of on-call time will not be regarded as working time, unless national legislation or collective agreements decide otherwise. However, the period during which the worker is required to carry out their activity or duties during on-call time will be regarded as working time.

This would mean that, for example, time spent by a doctor required to be present on an on-call basis, but not required to carry out any duties would not be defined as working time. However, any duties actually carried out during that period would be defined as working time.

Reference periods

The proposal retains the standard four-month reference period for averaging out working time, as contained in the Directive. However, it allows member states to extend this period up to one year by law or regulation, for objective or technical reasons or reasons concerning the organisation of work. This is subject to consultation of the social partners concerned and member states must make "every effort . . . to encourage all relevant forms of social dialogue, including negotiation if the parties so wish."

However, where the duration of an employment contract is less than one year, the reference period cannot be longer than the duration of the employment contract.

As national law can now establish a reference period of up to one year, it is no longer necessary to allow member states to derogate from the four-month period for up to six months. Therefore, the proposal removes the provision for derogation from the four-month period.

Compensatory rest

The Directive states that compensatory rest must be provided for where derogations (permitted under the Directive) are made from the principles of daily and weekly rest (11 hours per 24-hour period and 24 hours plus the 11 hours of daily rest during each seven-day period).

The proposal aims to clarify that these periods of compensatory rest must be granted within a reasonable time and, in all cases, within a time limit not exceeding 72 hours for daily rest. However, it does not specify when the compensatory rest should be awarded and allowed it to be waived in certain circumstances. The ECJ rulings referred to above interpreted the Directive as meaning that compensatory leave had to be taken immediately.

The opt-out

This is the most contentious part of the proposal. The Commission's text states that if the maximum 48-hour average working week is not to apply, this must be authorised by a collective agreement or an agreement between the two sides of industry at national or regional level or by means of collective agreements or agreements concluded between the two sides of industry at the appropriate level.

However, this condition would not apply if there is no collective agreement and there is no collective representation of workers within the undertaking that is empowered to conclude a collective agreement or an agreement between the two sides of industry. "In such cases, the individual worker's consent, in accordance with the established conditions, is sufficient."

Even if an opt-out is authorised by a collective agreement, the individual worker must give their consent. The conditions surrounding consent have been tightened up and now read as follows:

• the consent has to be given in writing (this was not specified in the Directive);
• the consent cannot be given at the beginning of the employment relationship or during any probation period. Any agreement given at this time will be null and void;
• the validity of an agreement is limited to one year, although it will be renewable;
• no worker should suffer any detriment because they are not willing to give agreement to work beyond an average of 48 hours a week;
• an absolute maximum limit of 65 weekly working hours is fixed, unless provided otherwise by collective agreement or agreement between the two sides of industry;
• the employer must keep up-to-date records of all workers who carry out such work and of the number of hours actually worked;
• the records must be placed at the disposal of the competent authorities, which may, for health and safety reasons, prohibit or restrict the possibility of exceeding the maximum weekly working time; and
• the employer must provide the competent authorities at their request with information on cases in which agreement to opt out of the maximum 48-hour average working week has been given, as well as information on the number of hours actually worked by those concerned.

In addition, five years after this proposal comes into force, provision is made for the Commission to submit a report on the application of its provisions and in particular the workings of the opt-out. The Commission shall then propose any appropriate amendments "including, if necessary, a phasing out" of the opt-out provisions.

The Commission hopes that this will curb alleged abuses of the opt-out, such as employers demanding consent at the time of the job offer or during the probationary period.

The next steps

The proposal will now enter the EU legislative process. It is subject to the codecision procedure, meaning that final agreement on its content must be reached between the European Parliament (EP) and the Council. The Commission believes that the text represents an acceptable compromise between the different points of view expressed by the EU-level social partners during the period of consultation. Employment and social affairs Commissioner Stavros Dimas said: "This proposal will address shortcomings in the present system, demonstrated in the course of its application. It is a balanced package of measures that protect the health and safety of workers whilst introducing greater flexibility and preserving competitiveness." However, given that the EP has already recommended a complete phasing out of the individual opt out (see Resolution on working time Directive ), it is highly likely that amendments to the text will be made over the coming months as it progresses through the decision-making machinery.

Social partner responses to the Commission's second consultation The opt-out The ETUC stated that the only acceptable option was its phasing-out as soon as possible. In contrast, UNICE, representing private-sector employers, argued that the opt-out should be maintained and that the possibility of member states permitting opt outs by collective agreement should be added. CEEP, representing public-sector employers, argued that the opt-out should remain but that the conditions in which it applies should be strengthened. Derogations from reference periods for calculating working time The ETUC maintained that the annualisation of the reference period is already possible and that the possibility of extending the four-month reference period to 12 months by law or regulation would hinder the conclusion of "modern working time arrangements". Therefore, it did not want the current arrangements to be amended. UNICE and CEEP wanted the Directive to allow a general reference period of a year, with the possibility of extending this by collective agreement. It argued that this would make it possible for companies to respond to fluctuations in their activity, reduce the administrative burden for companies (and in particular small and medium-sized enterprises) and support employment in periods of fluctuation of demand. Definition of working time ETUC felt that the introduction of the concept of an inactive part of on-call working time (which would not be considered as working time) would be a disproportionate solution to the problems faced by member states, arguing that a less far-reaching measure could be envisaged. UNICE argued that only time actually worked should be considered to be working time and suggested that the definition of working time be modified to reflect this. CEEP strongly supported the introduction of the concept of an inactive part of on-call working time.

 

Reactions to the Commission's proposal It would appear that in trying to achieve a compromise between the different views of employers and unions, the Commission has drawn up a text that pleases nobody. Both employers and unions have been critical of the proposal. Trade union views The ETUC issued a detailed press statement on the day that the Commission issued its proposal, stating that it completely rejected what the Commission has drafted, believing it to be out of proportion and putting the health and safety of more workers in danger. John Monks, ETUC general secretary issued the following statement: "I am very disappointed in the Commission. It has largely caved in to pressure from certain member states and employers' lobbies on key issues like making the individual opt-out more widely available, giving employers a unilateral right to organise working time over 12 months, and practically ending protection for on-call workers. Employers' lobbies are complaining about new limitations on the individual opt-out, but that is a smokescreen. The fact is that individuals without union help will be under huge pressure to work longer. The Commission has sided with the general employer offensive on working time. It should have deferred a decision, and passed the matter to the new Commission [that takes office on 1 November 2004]. Now the Commission has failed in its duty, the ETUC expects the Parliament to confirm its earlier stance and protect Europe's citizens from longer and longer working hours." The ETUC is not happy with the new definitions of working time, fearing that this will have a detrimental effect on workers, particularly in the health sector, where on-call working is widely used: "The proposal to only define the "active part" of on-call working time as working time, will deprive workers in many sectors (and not only healthcare) from the right to have appropriate and compensatory rest periods after long hours of work, very often in situations where a full day's work has been followed up by an on-call night shift. This is unacceptable from the point of view of health and safety, but also from the perspective of the long-term needs of sectors such as the health sector, to provide for a working environment that attracts new staff, instead of forcing workers to leave because of over-burdensome working time arrangements." It is also unhappy with the part of the proposal dealing with reference periods for calculating average maximum working time, particularly as the reference period could previously only be extended to 12 months by collective agreement: "No research is presented, nor any business case proven, for allowing member states the possibility to extend reference periods to 12 months without any further conditions. To delete the existing safeguard of collective bargaining for the introduction of annualised hours will allow employers to manage the working time of their employees at will, leading to very long and/or irregular scheduling of working hours." On the opt-out, although the ETUC acknowledges that the Commission has tried to come up with a solution that limits the use of the individual opt-out, it maintains that this has not been very successful, arguing that "the proposal would still allow for individual opt-outs whenever there is no collective agreement, thereby not only continuing the current situation in the UK, but also creating a dangerous dynamic in which trade unions can be put under pressure to allow for individual opt-outs or otherwise not be recognised as collective bargaining partners." It also argues that the measures contained in the proposal to tighten up on the conditions of the individual opt-out can be welcomed, but only as short-term measures within the longer-term perspective of phasing out the individual opt-out altogether. The UK's Trade Union Congress (TUC) is also dissatisfied. TUC general secretary Brendan Barber stated: "This is a disappointing decision that will satisfy no-one. People at work will get some slight extra protections against bosses who try to force them to opt-out of a 48 hour working week. And union members will be able to negotiate a limit to their maximum hours. But these limited reforms show that the Commission has failed to grasp the scale of the UK's long hours culture and the damage it is doing to our workforce and economy. British bosses will still be able to rely on pressuring staff to work long hours instead of adopting safe, efficient and productive working practices." Employer views UNICE has not yet issued a detailed response to the proposal. However, UNICE secretary general Philippe de Buck has stated that it falls short of meeting UNICE's demands as set out in response to the Commission's second consultation paper (see box ). He also maintains that: "The text is unnecessarily complicated and includes bureaucratic provisions for record-keeping which will hit SMEs in particular." UNICE also feels that the revision has not gone far enough and would like to see more flexibility, stating that any moves towards cutting flexibility or reducing working time should be avoided. The UK national employers' organisation CBI has stated its opposition to many aspects of the proposal. The UK is the country that will be most affected by any changes to the opt-out from maximum average weekly working time and employers have been fighting hard to avoid any elimination or phasing out of the opt-out. John Cridland, CBI deputy director-general, issued a statement, maintaining that the proposal was "an attempt to broker a compromise that has completely backfired. The proposals show a clear misunderstanding of the UK's industrial relations culture, which serves this country well." He added that the CBI was pleased that the opt-out is to remain, but disagrees with giving trade unions "a veto over what should be an individual decision", adding that this "would undermine the individual's right to choose the hours they work". The CBI is also critical of the new requirement to maintain records of working hours, believing that this would "trigger a mass of unnecessary form-filling for employers and employees. It is an administrative minefield that could land companies in court if they get it wrong". It also disagrees with the provision requiring annual renewal of the opt-out and the provision obliging opt-outs to be signed after a probationary period: "Having annual agreement together with collective agreement is wholly unacceptable. Unions would be able to use the opt-out as a bargaining chip, allowing them to hold management over a barrel every 12 months."