The end of a hard day's night: will the EU remove our right to work... and work?

Commissioners from the newly expanded European Union will meet on Wednesday to duscuss important changes in UK employee rights. On the table are proposals to make it harder for companies to dodge EU rules limiting the working week to 48 hours.

Commissioners from the newly expanded European Union will meet on Wednesday to duscuss important changes in UK employee rights. On the table are proposals to make it harder for companies to dodge EU rules limiting the working week to 48 hours.

The British Government is opposed to the removal of the right of workers to opt out from the limit in the European Working Time Directive - a clause which the UK has made the most use of. Britain's European Commissioners, Neil Kinnock and Chris Patten, are expected to argue to keep the opt-out at their final meeting this week before they are replaced by Peter Mandelson.

British employer groups are also strongly opposed to the proposed changes revealed last week in a leaked internal European Commission document. They believe these will eliminate what they see as the UK's key advantage: a highly flexible labour market. The UK Government estimates that the directive is already costing business £2.6bn a year because around two-thirds of employees have not opted out of the maximum working week.

Trade unions are also un- happy, but this is because the proposals do not remove the opt-out altogether. They recognise, though, that their position could be strengthened as the plans include giving them veto power over the opt-out.

The leaked proposals also seek to offer further protection to workers. They include setting an absolute weekly maximum of 65 hours, an annual review of opt-out contracts, and a prohibition on the signing of opt-outs at the time as work contracts or during probationary periods.

However, one labour market thinktank, The Work Foundation, argues that all parties are missing the point. Senior researcher Alexandra Jones says the directive is trying to address serious health and safety issues, but thinks the focus should be on finding more effective ways of working. She says: "Flexibility is all about working smarter, not harder or for longer hours. Companies need to look at work organisation and job redesign."

She says longer working hours have not given Britain the edge over European rivals that some claim. Statistics show, for example, that French workers put in 5.6 fewer hours a week than those in Britain, yet have much higher productivity levels. While UK productivity, measured by GDP per worker, has improved, it is still 13 per cent below the average performance of other G7 countries.

One source says the push by many EU countries to limit our use of the opt-out has been encouraged by private EC research that reveals evidence of "widespread abuse" by UK businesses - though UK employers see this not as abuse but as effective use of a clause permitting greater flexibility.

David Yeandle, a spokesman for the EEF manufacturers' organisation, says that the arrival of new member states makes the outcome of Wednesday's meeting difficult to predict. He says the majority of old member states have been anti-employer. Earlier this year, the European Parliament recommended the removal of the opt-out.

However, two of the new states, Malta and Cyprus, have followed Britain's lead in embracing the use of the opt-out across all industries. "The new countries comprise a very different group of individuals and, hopefully, they will take a more pragmatic approach," says Mr Yeandle.

The EEF fears one recommendation - to increase record-keeping of hours - will lead to "a considerable administrative burden, particularly in areas where people are not paid by the hour". It says this could also break down the trust between employer and employees because of the "big brother element" in monitoring hours.

The Institute of Directors has criticised the proposed reforms, saying the current system provides flexibility for both employers and workers. A spokesman said: "We would like to see the opt-out maintained. The system we've got at the moment works relatively well."

According to a CBI survey, nearly three-quarters of employers think that losing the individual opt-out will damagebusiness. They say it will undermine their ability to meet customer needs. Nearly one-third of employees have signed opt-outs.

One proposal that employer groups have welcomed is the averaging of hours over 52 weeks. This gives businesses greater seasonal flexibility.

The Trades Union Congress has criticised the leaked EC report's failure to recommend the immediate removal of the opt-out, because it believes it is broadly misused.

General Secretary Brendan Barber says the proposals fail to tackle important health and safety problems faced by British workers. "The Working Time Directive is supposed to protect workers from working long hours and there's nothing in these proposals which addresses this."

According to a 2003 TUC poll, one in three who signed an opt-out said they were given no choice. Nearly two-thirds said they regularly worked more than 48 hours.

Investec Securities' chief economist, Philip Shaw, believes there is a general understanding that there needs to be greater flexibility in the workplace, reflected by recent moves in France and Germany towards less rigid working practices. He says: "Having a 35- or 40-hour working week sounds like a very attractive scenario. But, more importantly, Europe has to compete with the more aggressive economies such as the Far East. That's the reality of the global economy.

"While it's important to stop any exploitation of workers, long hours are an unfortunate by-product of modern business." Mr Shaw says that being outside the eurozone makes it "a little easier for the UK to take a more global perspective".

The day the EU commissioners meet is also the deadline for submissions to the Department of Trade and Industry's own consultation paper on the issue. This was commissioned in anticipation of the proposed EU changes.

The results will be too late to affect the proposals being hammered out by the commissioners this week, but may prove useful for lobbying members of the European Parliament before they vote on the issue.

The DTI was coy about the level of interest in its consultation paper, but it is believed that many key bodies are yet to lodge their response despite the timeliness of the issue.

Many groups are gearing up to lobby against any changes once the reforms agreed this week make their way through to the European Parliament. Whatever the outcome, the proposals will provide an important test of the views of the enlarged European Union of states - and of the future of labour market regulation.

TIME AT WORK

Average hours worked per week, full-time employees, 2002

UK 43.3

Germany 39.9

Ireland 39.5

Italy 38.5

France 37.7

Source: EIRO/Eurostat