The working time opt out – much ado about nothing

There is a lot of fuss this morning about the European Parliament’s vote to remove the right to opt out of the EU’s Working Time Directive. The anti-EU papers are having a field day, business organisations are predicting ruin and employment lawyers are warning of serious consequences for those firms that breach the regulations. Well they would wouldn’t they?

Let’s clear something up before we go any further. This is not a UK-only opt out. The right of individual workers to work more than 48 hours per week applies across the EU, unless it is superseded by a member country’s domestic laws. Workers in the UK have made the most use of the opt out but it also applies in some other European countries. For this reason, significant lobbies in other EU states are also against the removal of the opt out.

There is, therefore, a good chance that the removal of the opt out might never happen. The European Parliament might have voted against it but, as any EU-watcher can tell you, the parliament has very little real power. The ultimate decisions on any EU-wide laws are made by the Council of Ministers. Only this summer, the Council of Ministers agreed to retain the opt out, provided that working time is capped at 60 hours per week throughout the EU. Germany, Austria, Hungary, Poland, Malta and Cyprus oppose the abolition of the opt out too. That is enough to create a deadlock in the Council which will, in all probability, prevent any change. Unless the members states can agree by next May, there will be no new legislation and the law will stay as it is.

Employment lawyer Tom Flanagan of Pinsent Masons doesn’t think it will happen either:

The Council of Ministers will have to knock out a deal early in the New Year and while we may lose the opt-out, I don’t think that our European partners would do that to us. The Czech Republic is taking over the presidency and they are Eurosceptic so are not likely to follow this kind of line.

But, for the sake of argument, what would happen if the 48-hour working week were to be imposed?

This TUC report, using statistics gathered from the Labour Force Survey, calculates that only 12.7% of workers actually put in more than a 48-hour week over any four month period. Of those, more than a third work only one or two hours above the limit. Less than 8% of the workforce, therefore, works over 50 hours per week.

Labour Force Survey statistics are gathered by self-reporting so, if anything, these figures are likely to be inflated. Men, in particular, tend to overstate the number of hours they work in the same way that teenage boys exaggerate the number of times they have had sex. Working long hours is still seen by many as a badge of status, the implication being that the worker is so important that the company just can’t do without him.

So just how much impact would the reduction in hours to 48 really have if so few people are working significantly more? Would the productivity lost really make the UK less competitive? Some of the countries that have imposed the 48-hour week don’t seem to have suffered. Year after year, Finland, Denmark and Sweden finish in the top five or six of the World Economic Forum’s Global Competitiveness Report. For them, the Working Time Directive and competitive economies are not incompatible.

Business lobbies argue that the opt out is needed more than ever now that the UK is heading for a recession. That’s odd because some companies are asking workers to take extra holidays with reduced pay and to work shorter hours to save costs at a time of depressed demand. Surely a recession is the ideal time to move to a 48-hour week.

Industry groups looking for something else on which they can blame poor business performance, employment lawyers seeing a business opportunity and EU-haters wanting to bash Europe are all sounding dire warnings about yesterday’s vote. All of them are overplaying the danger. The removal of the opt out will probably never happen and, even if it does, it is unlikely to do significant damage the UK’s economy. The wailing about yesterday’s European Parliament vote is a lot of fuss about nothing.

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