European Union: Parliament votes to eliminate working time opt-out
The European parliament has given a first reading to the European Commission's proposed revision of the working time Directive. Most controversially, it recommends that the individual opt-out from the maximum 48-hour working week be repealed after three years. This has provoked the anger of employers in Europe and particularly in the UK. European Industrial Relations Review looks at the main issues.
Background - the commission's proposal
The commission issued its proposal in September 2004, aimed at amending the Directive in key areas such as the opt-out from the maximum average working week, the treatment of on-call working and reference periods for the calculation of maximum average working time. Essentially, the commission's text addresses the following areas:
- dividing on-call working into "active" and "inactive" parts. The inactive part would not be counted as working time;
- allowing member states to extend to 12 months the current four-month reference period for averaging out maximum working time (at present, a 12-month reference period is only possible through a collective agreement); and
- retaining the provision allowing member states to enable employers to ask their employees to opt out of the maximum 48-hour working week, but tightening up on its use. It suggests that the offering of an opt-out should be subject to a collective agreement, where this is possible. Further, the opt-out would be limited to one year, although renewable, consent from individuals cannot be obtained at the beginning of the employment relationship or during a probationary period, and the conditions surrounding record-keeping are tightened.
For more details of the commission's proposal, see EC: Commission proposes amendments to working time Directive.
The parliament's first reading
At its plenary session on 11 May 2005, the European parliament gave a first reading to the commission's proposal. It voted by a sizeable majority to approve a text prepared by the Spanish MEP Alejandro Cercas, agreed in the parliament's employment and social affairs committee in April (see European Council: Informal Social Council). The parliament's text revises the commission's proposal significantly, inserting 25 amendments. We review the key revisions below.
On-call work
The parliament's text states that "the entire period of on-call time, including the inactive part, shall be regarded as working time". However, it goes on to state that the inactive part of on-call time "may be calculated in a specific manner in order to comply with the maximum weekly average working time", if this is allowed for by collective agreements or other agreements or by laws or regulations. Therefore, the parliament's text views the whole of on-call working as working time, although this may be derogated from by agreement or law.
Calculation of working time
The parliament inserts a new article, dealing with the calculation of working time. It states that where workers have more than one contract of work, their working time shall be the sum of the periods of time worked under each of the contracts.
Reference periods
The parliament's text deletes the commission's proposal that member states may extend the reference period up to 12 months. Instead, it provides that member states may extend the reference period up to 12 months in the following circumstances:
- where workers are covered by collective agreements providing for a 12-month reference period; or
- where there is no collective agreement, as long as the employer informs and consults with workers about the introduction of the new working time pattern, and the employer takes the necessary measures to prevent and/or remedy health and safety risks.
Thus, the parliament has removed the provision allowing more or less automatic extension of the reference period to 12 months, replacing it with a requirement that a collective agreement be in place or that information and consultation and health and safety requirements are met.
The opt-out
Most controversially, the parliament's text amends the conditions surrounding the opt-out from the maximum 48-hour working week. In the first instance, it changes the maximum length of the opt-out from one year to six months (renewable). However, noting in the recitals that the opt-out has been problematic and has led to abuse, it also states that the opt-out provision will be repealed 36 months after the Directive comes into force.
Other amendments
Other revisions introduced by the parliament include a greater emphasis on work-life balance provisions and more focus on the specific needs of small and medium-sized businesses. The parliament also removes the commission's reference to compensatory rest needing to be taken within 72 hours, stating that taking the rest should be in accordance with the relevant law, collective agreement or other agreement between the two sides of industry.
The next steps
The commission will now look again at the text, before forwarding it to the council for further deliberation, likely at the 2-3 June 2005 social affairs council. Under the co-decision procedure, to which this proposal is subject, the decision-making is relatively lengthy. Once the council has seen the text again, most likely making more amendments by qualified majority voting, it will be returned to the European parliament for a second reading. If the parliament makes further amendments to the text, it will be returned once more to the council. If, at this stage, the council cannot accept the parliament's amendments (ie if the key issues of the opt-out, on-call working and reference periods cannot be agreed on between the council and the parliament), the text will be forwarded to a conciliation committee, which will attempt to broker a solution. For more details of the co-decision procedure, see box.
Vladimir Spidla, the EU's employment and social affairs commissioner, has stated that the commission cannot accept the parliament's amendment on the opt-out in its current form. He stated: "I am aware that the opt-out is a political question and one of principle. In this context, the commission will continue intensive dialogue with the parliament". The commission is thought to be preparing a compromise text for discussion at the 2-3 June social affairs council.
The newly re-elected labour government in the UK retains its support for the opt-out to the 48-hour week and is likely to do all that it can in the June social affairs council to gather a blocking minority to oppose the elimination of the opt-out. The arithmetic for calculating a blocking minority in the council has now changed, post-enlargement. Under art. 205 of the Treaty establishing the European Community (TEC), as amended by the protocol on the enlargement of the Union and the Act of accession of the 10 new member states, 232 votes are needed to adopt a text under qualified majority voting. This is also subject, if verification of this is requested by a council member, to the votes representing at least 62 % of the total population of the EU. As a large country, the UK has 29 votes in the council. The UK thus needs the support of at least one other large member state, in addition to that of two or three smaller countries, to secure a blocking minority. According to the daily bulletin Agence Europe, the UK has the support of Germany, Lithuania, Latvia, Slovakia and Malta, which, under the qualified majority voting rules, would not be sufficient to form a blocking minority. Of the rest, France, Belgium, Spain, Sweden, Hungary, Finland and Greece do not agree to retaining the opt-out.
There have been rumours of behind-the-scenes deals linking the working time Directive to the temporary agency workers' Directive, which has been blocked in council due to UK opposition. Under the rumoured scenario, the UK would retain the opt-out if it agreed to drop its opposition to the temporary agency Directive.
Whatever happens behind the scenes, the future of the working time Directive will be decided in the coming months - it remains to be seen whether the UK government will be successful in its efforts to retain the opt-out.
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The co-decision procedure applies to the majority of social policy instruments, including this proposal to revise the working time Directive. Based on art. 251 of the Treaty establishing the European Community (TEC), the procedure is set out below. First reading The commission first issues a proposal to the council and the parliament. The parliament then gives the text a first reading. Following this, the council, acting on a qualified majority, will either:
Second reading The parliament then has three months in which to give the text a second reading. It can either:
This latter scenario is the most common, and if this route is chosen by the parliament, the amended text is sent back to the commission and the council which then both give an opinion on the amendments. Acceptance or conciliation committee The council then has three months to act. It can, by qualified majority, approve all the parliament's amendments, in which case the proposal is adopted, in the form of the council's common position as amended by the parliament. There is a complication here, however, in that if the council wishes to accept the parliament's amendments on which the commission has delivered a negative opinion, it must act unanimously. If, however, the council cannot accept all of the parliament's amendments, a council/parliament conciliation committee should be convened within six weeks to find a compromise text. The committee comprises an equal number of council and parliament members. If the committee agrees on a joint text (acting on a qualified majority of its council members and a majority of its parliament members), the council and the parliament then have six weeks to approve the text. The council acts on a qualified majority and the parliament on an absolute majority. If either the council or the parliament fail to approve the conciliation text within six weeks, the text falls. Equally, if the conciliation committee fails to agree on a joint text, the proposal falls. All the three-month periods referred to in this process may be extended by the parliament or the council by a period of a further three months. Equally, all the six-week periods may be extended by a further two weeks.
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Reactions to the parliament's text Trade union views In general, trade unions have welcomed what the parliament has done to the text. The European Trade Union Confederation (ETUC) stated: "This vote sends out a clear signal to the council and the European Commission that it is time for an end to the 'opt-out' clause. Today's vote is important for a number of reasons. It demonstrates a commitment on the part of a large number of the political groups represented in the parliament to play a significant role in defending the European social model and fundamental rights against neo-liberal ideas. It is proof that a strong social Europe really does exist." The ETUC has written to José Manuel Barroso, president of the European Commission, to ask him to ensure that the commission supports the changes made to the Directive by the European parliament. In particular, it is asking the commission to ensure that the opt-out is eliminated and that the basic principles of the working time Directive are preserved. It states: "The commission, as guardian of the European treaties, must confront member states with the necessary limits to competition and free market forces as acknowledged from the very birth of the first European Economic Community in all its treaties until today. The commission, in view of its own Lisbon agenda and frequently reiterated policy objectives, cannot support a policy that advocates flexibility without security." The UK's Trades Union Congress (TUC) has also supported the parliament's amendments, on "common sense" and on health and safety grounds. TUC general secretary Brendan Barber commented: "This is a victory for a common sense compromise on the 48-hour working week. If implemented it would mean that employers would have to accept that staff could no longer work more than 48 hours a week on average, but unions would have to concede that the average would be calculated over 12 months, not the current 17 weeks. This would mean nearly 2 million UK workers who currently work more than 48 hours over a 17-week period would fall below the limit, and only the 2 million workers putting in extremely long hours all year round will be affected. Working more than 48 hours week in, week out, year in, year out is undoubtedly bad for health and productivity. Tired workers are more likely to have accidents and to suffer illness. Today's employer rhetoric about choice fails to convince. UK employers have had nearly a decade to implement a system free of abuse that gave staff a genuinely free choice. But research shows that less than half the workforce even know they have a right not to work more than 48 hours a week, and that two out of three who work more than 48 hours a week have not been asked to sign an opt-out. Of course some employers rigorously follow the rules, but these figures show a large number cannot be trusted not to ignore or abuse the rules." Employer views However, employers are strongly opposed to the amendments, believing that the revision would severely restrict flexibility and pose a threat to employment levels. Philippe de Buck, secretary general of Unice, the EU-level organisation representing private sector companies, issued the following statement: "Unice deplores the changes made. Reducing flexibility in working time is inconsistent with the objectives of enhancing growths and jobs in Europe. In its resolution on the mid-term review of the Lisbon Strategy, the European Parliament stressed that sustainable growth and employment are Europe's most pressing goals. Yet, the report contains proposals which put the fulfilment of these goals in jeopardy. Flexibility in working time is essential for the competitiveness of companies, in particular for SMEs. But it is also in the interest of workers. When the European Commission and the council look at the revised Directive, they should not underestimate the consequences of further restricting this flexibility." Unice has set out the areas where it has the most concerns. They are:
CEEP, the EU-level organisation representing public sector organisations, had not issued a dedicated statement at the time of writing. However, it has made its views on various aspects of this Directive known in previous statements. It is in favour of the inactive part of on-call working not being viewed as working time, believing that this "will return the Directive to its original intentions", prior to the Jaeger and Simap ECJ cases.CEEP is also in favour of a general extension of the reference period to 12 months, although it supported the commission's original proposals as a "workable and reasonable compromise". On the opt-out, CEEP believes that it should be retained for all workers, but that the regulations surrounding it should be strengthened. It suggests that social dialogue should be used to try to gain agreement in the first instance - employers wishing to offer an opt-out should try to reach an agreement on this with trade unions. However, employers should not be prevented from offering an opt-out if no agreement is reached within a reasonable time-frame. The UK is the country that will be most affected if the opt-out to the maximum average 48-hour week is eliminated, as it makes most widespread use of the opt-out. The UK employers' organisation, the CBI, has issued a statement condemning the parliament's text and calling on the UK's newly re-elected Labour government to oppose the text in the council. CBI director-general Digby Jones commented: "Today's vote shows the European Parliament has learned nothing about the challenge of globalisation … the current opt-out system works, in large part, extremely well. It gives employees choice in the hours they work, allowing them to generate wealth for their families and companies to generate wealth for the nation. People need the opportunity to aspire and earn extra money if they want to. If implemented, this Directive would restrict the UK's highly flexible labour market, and undermine the EU's declared aim to become the most competitive economy in the world by 2010."
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