Research highlights limited impact of Working Time Regulations

Research published in April 2001 suggests that the Working Time Regulations 1998 have had a limited effect, if any, on most UK organisations. Long hours continue to be worked consistently by a significant minority of employees, facilitated by voluntary exemptions from the legislation. The Regulations are seemingly a matter of little concern for most employers and their workers. However, there is also evidence of some employers flouting the law and exploiting ignorance about the Regulations to deprive vulnerable workers of their rights.

Some 18 months after the government introduced the Working Time Regulations 1998 (WTR) to implement EU Directive (93/104/EC) on certain aspects of the organisation of working time (UK9810154F), new research published in April 2001 by the Department of Trade and Industry (DTI) suggests that the overall impact of the Regulations has been limited. In many cases, working practices were already largely in line with the WTR. The Regulations have also been effectively side-stepped through the use of employee "opt-outs" from the maximum 48-hour average working week. On the whole, the WTR has therefore been neither an administrative burden nor a source of inflexibility, and the impact on costs is not as high as originally feared. Indeed there are some benign productivity effects where firms have used the WTR as part of ongoing revisions of working time practices. However, this research is complemented by other recent findings that focus on low-paid workers, especially in non-union workplaces. Here, long working hours might reflect worker ignorance or lack of power to assert their rights rather than "free choice".

Regulations of little concern in most organisations ...

The research for the DTI ("Implementation of the Working Time Regulations", Fiona Neathy and James Arrowsmith, Employment Relations Research Series No. 11, April 2001) involved interviews with managers and worker representatives in 20 case-study organisations, observed over a 12-month period. These covered large and small, public and private sector, and unionised and non-unionised workplaces. The study found that the Regulations were largely unproblematic in terms of costs, work reorganisation or industrial relations. The main findings are as follows.

• Employer concerns raised at the outset about the costs and administrative burden of the WTR, mostly associated with new record-keeping requirements, largely disappeared over the course of the year. Indeed, in some cases the new monitoring systems were found to have positive operational effects.

• According to line managers and worker representatives, employees were largely uninterested in the Regulations, except in a "negative" sense where they wanted reassurances concerning potential loss of overtime earnings.

• The use of "opt-outs" from the maximum 48-hour average working week varied amongst employers, with some introducing them automatically, often in response to employee concerns, whereas others viewed them as inappropriate. Some personnel managers, who usually had responsibility for implementing the legislation, viewed them as counter-productive to efforts to change patterns of working time. Likewise, trade union positions varied, though opposition in principle was expressed only in the National Health Service.

• Some of the firms more strongly affected chose to revise shift patterns and increase employment as well as use "opt-outs" for individual employees. Seven of the 20 organisations felt that the WTR had contributed to operational efficiency in some way, in particular by focusing managerial attention on labour scheduling issues.

• Problems were more likely to be experienced over the provisions on rest and recuperation. In-work breaks were largely routinely provided, but overtime and shift patterns meant that rest breaks between periods of work did not always meet the terms of the Regulations (ie not less than 11 consecutive hours rest in any 24-hour period; plus an uninterrupted 24 hours' rest within each seven-day period). Most employers had formal provisions to comply with the rest provisions, though operational pressures or employee concerns about loss of earnings meant that these were not always followed in practice.

• Other terms of the Regulations, such as maximum night work hours and provision of four weeks' paid annual leave, were largely unproblematic. However, some groups of workers did benefit from the new legal holiday entitlements, including casual and "bank" workers in the NHS and other organisations. Most night workers also took up the offer of free health assessments stipulated by the WTR.

• Most employers were not affected by the WTR in terms of negotiation and consultation processes, and none had any collective disputes arising from their approach to the Regulations. However, there was some evidence of a wider impact on industrial relations in a few organisations. Eight of the 20 organisations utilised the "flexibilities" in implementing the Regulations (such as longer averaging periods) available via collective or workforce agreements. In three of these cases, employers reported that the process had strengthened existing structures, eg by reviving a national negotiating committee that had "dwindled with the introduction of local pay bargaining", or giving "credibility to the consultative council".

Overall, the research found that the issue of responding to the Regulations had "gone off the boil" over the course of the year. This was because employers came to realise that they could largely maintain existing working arrangements with the consent of workers. In some workplaces, more pressing operational issues pushed compliance down the agenda, in part because initial concerns over the likelihood of prosecution dissipated. As a result, the WTR were largely "a matter of little concern" for most organisations, except those that were already looking to address long working hours or introduce greater working time flexibility. In short, the report concludes, "only when they coalesce with an agenda dictated by market pressures will the WTR have a further impact on working practices."

... but an inadequate safety net for some workers

In the research for the DTI, employees in only one organisation, a utility company, said that they felt pressured into signing an opt-out from the maximum 48-hour average working week. The worker representative explained that the general feeling was one of resigned acceptance: "people had the feeling that this is the way it is going to be, so there was no option." It was also reported that employees who decided to opt back in were likely to be asked to leave. Other recent research suggests that such management pressure might be more widespread, especially in low-skilled jobs and non-union workplaces.

The work experience of low and medium earners has recently been explored through a dozen "focus groups" conducted for the Department for Education and Employment ("Wanting more from work? Expectations and aspirations of people in low-paid jobs", Laura Edwards and Nick Burkitt, DfEE Research Brief, March 2001). The research found that participants were "reasonably well informed" about the WTR and other employment rights. However, the report stated that "the most frequently broken rights appear to be those around working time". In particular, workers were unwilling to risk their job by challenging management's insistence on their signing an "opt-out" from the weekly 48-hour limit. These were often included in initial employment contracts, with most workers resigned to accept them as "part of the job". Even without management pressure, long hours were seen as necessary to boost low basic rates of pay.

A report from the National Association of Citizens Advice Bureaux (NACAB) highlights widespread flouting of the right to four weeks' paid annual leave ("Wish you were here?", NACAB, September 2000). This is usually a deliberate action by employers – indeed, allowing the inclusion of eight public holidays in the four-week entitlement has encouraged some employers actually to reduce contractual holiday leave. Between 1 January 1999 and 30 June 2000, Citizens Advice Bureaux in England, Wales and Northern Ireland reported 4,500 enquiries concerning individual terms and conditions of employment of which over 1,000 (23.5%) related to problems of holiday pay - the single most reported employment issue in this period. Workers most likely to encounter problems were part-timers, temporary and fixed term contract staff. Many were low-paid service sector workers, but problems were also reported in professional firms and large private and public sector organisations.

Government response

In response to these compliance problems, Tessa Jowell, employment minister, has suggested that awareness-raising rather than a tightening of the Regulations is necessary: "We have taken very careful steps to ensure new legislation is practical and minimises unnecessary regulatory burdens on business, but what we have to ensure is that legislation extends the protection that is intended," she said. "It argues very strongly against further legislation in this area and in favour of a drive to ensure that people understand what their rights are and how they exercise them."

Commentary

The WTR have failed to break the pattern of long working hours in the UK (UK9702103F). Overtime is entrenched by custom – the expectation of managers that it is needed to get work done, and of employees as a boost to take-home pay. More fundamentally, it is institutionalised by low basic wages and the changing demands of an ever more competitive marketplace, exacerbated by new work arrangements such as "lean production" and "just-in-time". In addition, the spectre of job insecurity encourages unpaid overtime working, or "presenteeism". In this context, it is more a disappointment than a surprise that the UK's first ever comprehensive working time law failed to assert an employment agenda more in tune with the government's "family-friendly" or "work-life balance" initiatives (UK0102115F).

Of course, part of the problem lies with the WTR themselves. First, the design of the Regulations allows most organisations easily to carry on as before. In particular, even with a generous minimum reference period of 17 weeks, the availability of an employee "opt-out" from the most well-known provision, the average 48-hour week, sent a signal of "business as usual" to employers and workers alike. It provided a means for employers either to avoid or to evade the full effect of the law. Either they met employee demands for continued access to overtime (itself often a highly circumscribed exercise of "free choice"); or they could press workers to deny their rights and provide them with little realistic alternative but to sign.

Second, enforcement of the WTR has been sporadic, especially in non-unionised workplaces where workers might feel more vulnerable to making a complaint. Responsibility for enforcement is mostly a matter for local authorities and the Health and Safety Executive (HSE), though some terms such as rest breaks and holiday leave are enforced only by employee complaint to an employment tribunal. The complexity of much of the WTR and the lack of a specialist inspectorate contrasts with the enforcement of the national minimum wage, where 6,000 individual complaints of underpayment have been made since its launch in 1999 (UK9904196F), with enforcement officers recovering some GBP 4 million in unpaid wages.

Nevertheless, employers should not be complacent. A small but rising number of claims for damages for mental injury, backed up by references to the WTR, could cost them dear. The increase of the compensation ceiling for unfair dismissal to GBP 50,000 could also encourage further claims against excessive workloads and hours. The HSE estimates that 60% of all work absence is stress-related, much of it caused by long hours and tight deadlines. Tightening up the "opt-out" and policing the WTR more vigorously might encourage employers to get their own house more productively in order before any damage is done. (James Arrowsmith, IRRU)