UK: Employment Bulletin - March 1999

Last Updated: 1 March 1999
Hours is not to reason why

In this month's Bulletin we reflect on the first cases filtering through in relation to the EU Working Time Directive (WTD) and the Working Time Regulations 1998 (WTR). The UK Government was supposed to have incorporated the WTD into English law by 23 November 1996 but due to the last Government's political opposition to the whole basis of the WTD, the WTR only came into force on 1st October 1998.

The first case (Barber v RJB Mining (UK) Ltd) addresses workers' rights under Regulation 4 of the WTR - the 48 hour working week. Five pit deputies argued before the High Court that the 48 hour limit in the WTR over-rode any provision in their employment contract which allowed their employer to dictate what hours they worked. As a result, the deputies claimed that they were entitled to stop working until their average working hours, calculated over the 17 week reference period, fell below the 48 hour limit. The Court agreed with the deputies (as well as giving a broad hint that RJB might well be prosecuted by the HSE for not monitoring the workers time adequately and enforcing the 48 hour limit).

The implications for employers are clear. Opt-outs are essential if employees are being asked to work long hours - otherwise you will be acting in breach of contract in instructing your staff to work in excess of the 48 hour average limit and they will be able to complain about this to the Courts (not just the Tribunals). Moreover, without opt-outs, workers will be able to down tools once their average hours exceed the 48 hour limit. For hourly paid workers this is likely to mean no pay (because they are only paid for each hour worked) but for salaried workers, just because they stop working will probably not mean that they stop being entitled to be paid (because the salary is not calculated by reference to each hour worked).

Meanwhile, the construction firm Tarmac has recently settled its dispute with the GMB union in relation to the holiday provisions contained in workers' contracts. Tarmac had asked a group of its workers to sign new contracts which included four weeks paid holiday entitlement but which cut the workers' basic hourly rate of pay (in effect so that the holiday pay did not increase the overall annual wages bill). The GMB argued that this action amounted to an unlawful detriment under the WTR. Details of the settlement reached by Tarmac and the GMB have not been disclosed but it is anticipated that Tarmac will reverse their decision to cut pay.

BECTU, the entertainment workers' union, is challenging the 13 week qualifying period for paid holiday entitlement under the WTR on the basis that it excludes many freelance and casual workers from the right to paid holidays since they will generally not have work that lasts as long as 13 weeks with the same employer. The High Court has granted leave to bring judicial review proceedings.

In relation to public sector employers the recent case of Gibson v East Riding of Yorkshire Council is also significant. Mrs. Gibson was employed by a local authority as a swimming instructor and under her contract was not entitled to paid holiday leave. Shortly after the date when the WTD should have been implemented (but before the WTR came into force) she claimed that she was entitled to paid holidays. She argued that, as a public sector worker, the WTD was "directly effective" which meant that she could rely on it without waiting for the WTR to be passed. Her case succeeded before the Employment Appeal Tribunal.

The case has opened the floodgates for workers employed in the public sector to claim holiday pay for the period 23 November 1996 to 1 October 1998 if this was not paid to them. Private sector employees, whilst unable to rely on the direct effect of the WTD, could be entitled to claim damages from the Government if they can show they have suffered loss as a result of the late implementation of the WTD.

The Gibson case deals only with provisions in relation to annual leave. In the recent case of Cawley & ors v Hammersmith Hospitals NHS Trust, the EAT said it was less clear whether the Articles of the WTD governing daily rest and length of night work would also have direct effect. These Articles are dependent on the definition of 'working time' which the EAT considered to be ambiguous (a view that will be shared by most employers!). Therefore in this respect the WTD may have no direct effect and public sector workers are seemingly unable to rely directly on its provisions.

Finally, as if all this case law was not enough, the Trade and Industry Secretary has just announced that the DTI's own guide to the WTR needs to be re-written because it contains fundamental mistakes. These include the wrong formula for calculating average hours of night work; two different formulae for working out compliance with the 48 hour week and an arithmetical error in an example of the night work calculation! Presumably they will not blame the errors on overwork!

It seems likely that the uncertainty as to how the WTR operate in practice will only get worse before it gets better.

STOP PRESS

The National Minimum Wage will come into effect on 1 April. The National Minimum Wage Regulations which govern the operation of the minimum wage are currently before Parliament. The main changes to the original proposals include exemptions for people who work and live as part of a family e.g. au pairs; that there will be no requirement to state the minimum wage on payslips; and no specific obligation for employers to keep detailed records.

For further information please contact Susan Nickson, e-mail: Click Contact Link , Trinity Court, 16 John Dalton Street, Manchester M60 8HS, UK, Tel: +44 161 830 5000

This article was first published as the March 1999 Hammond Suddards Employment Bulletin

The information and opinions contained in this article are provided by Hammond Suddards. They should not be applied to any particular set of facts without appropriate legal or other professional advice.

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