UK: Time´s Up For The Opt-Out?

Originally published October 2004

This month we will highlight new proposals from the European Commission which, if ratified, will restrict the use of the opt-out from the 48-hour maximum working week. In addition, we will also report on recent changes to the Disability Discrimination Act which have broadened its scope, providing increased protection for disabled employees and increased complexity for employers.

After extensive consultation across Europe, the European Commission has issued new proposals to update key aspects of the Working Time Directive. The proposals follow a review of the reference period being used when calculating average working time and the use of the opt-out from the 48-hour week. The proposals also deal with a new definition of time spent on-call by health professionals.

In relation to the opt-out, the Commission found that the UK was the only country where general measures to allow individuals to opt out of the maximum working week had been put into place from the outset and it therefore based its conclusions on the use of the optout in the UK. The Commission found that the opt-out was being misapplied and that insufficient protection was afforded to workers. As a result, it has developed proposals that will restrict its use.

The opt-out will only apply provided it is expressly allowed under a collective agreement or an agreement between the two sides of industry. However, the proposals do recognise that this may not be possible in all cases and therefore, where there is no collective agreement in force and there is no collective representation of workers within the business, individual consent (which has to be in writing) may still be obtained. Indeed, even where there is a collective agreement, employees will still need to give separate written consent to work over the 48-hour limit. However, the conditions attaching to individual consent will be tightened up too.

The employee cannot give consent to opt out at the same time as the employment contract is signed or during any probationary period. This means that if and when the law changes, it will no longer be possible to include the optout in the employment contract, which is perhaps the most common practice at present. There will also be an absolute maximum limit of 65 hours in any one week (unless there is a collective agreement varying this maximum). Therefore, in businesses where there are no collective agreements or collective representation, no worker will be allowed to work more than 65 hours a week. It is worth noting that this applies to any one week and there is no provision for an average, as is the case with the 48-hour limit.

In addition, the opt-out under the new proposals will only be valid for one year, after which it would have to be renewed. Employers will also have to keep records of the number of hours actually worked and make these records available to the relevant authorities, if required. These provisions will mean an additional administrative burden on employers, which could be significant.

The proposals also deal with the reference period over which the 48-hour week is calculated as an average. The proposal keeps the basic reference period as four months but gives member states the possibility to increase it to one year (provided they consult with both sides of industry). However, it is clear that the reference period cannot be longer than the duration of the contract. If the UK introduces a one-year reference period, the management of working time is likely to be simplified, allowing employers to respond more effectively to fluctuation in demand.

On 1 October, the Disability Discrimination Act (DDA) was extended to take into account the European Framework Employment Directive. The amendments will affect the way disability discrimination cases are dealt with and make it even more important for employers to consider their employment practices to avoid falling foul of the new legislation.

Under the old rules, there were three forms of unlawful discrimination: less favourable treatment for a reason related to disability, failure to make reasonable adjustments and victimisation. The first two could be justified in certain circumstances.

The main changes introduced by the new legislation include a new classification of discrimination, "direct discrimination", which occurs where discrimination is on the ground of the employee's disability. This type of discrimination cannot be justified in any circumstances. Less favourable treatment for a reason related to disability remains, but is now known as "disability-related" discrimination under the new rules. This may still be justified. However, it will no longer be possible to justify a failure to make reasonable adjustments. This means that if a Tribunal considers that an adjustment is reasonable, the employer will be liable for discrimination even if it believes that the treatment is justified. Employers therefore need to consider all possible adjustments carefully before making any decisions in relation to a disabled employee.

Other changes include removing the small-employer exemption (which used to exclude employers with fewer than 15 employees from the DDA) so that the DDA now applies to all employers, regardless of size. In addition, the new rules include the specific right not to be harassed for a reason related to disability, shift the burden of proof to employers in line with other discrimination legislation and introduce a new right to complain of post-employment discrimination.

There are further proposed changes to the DDA that are expected to come into force in late 2005. These changes will extend the protection of the DDA to people with progressive conditions and will remove the requirement that a mental illness should be "clinically well recognised" from the definition of disability.

If you need any further advice on these or any other employment law matters, please call: James Libson 020 7440 7132 james.libson@mishcon.co.uk Joanna Blackburn 020 7440 7162 joanna.blackburn@mishcon.co.uk