UK and the EU: Work and pay

By Andrew Walker
BBC World Service economics correspondent

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The stats and facts

Some view the EU as protecting working conditions and living standards. Others see an unnecessary and costly burden on business.

The European Commission says the EU sets minimum standards for working and employment conditions and for informing and consulting workers. Member countries are, however, free to set higher standards.

One of the most significant (and controversial) pieces of legislation in this area is the Working Time Directive. It requires countries to impose a limit on average weekly hours, minimum rest periods and paid annual leave.

Another important item is the Temporary Agency Workers Directive. Its basic principle is that temporary workers supplied by agencies should not face discrimination over pay and working conditions when they are doing the same work as the employer's own staff.

Open Europe, an independent think-tank, used the government's own assessments of a number of EU rules and found these two employment directives are among the five most burdensome EU-derived regulations. The combined costs of these two items to the British economy was £6.3bn a year.

EU law also means that employers cannot discriminate between nationals of different EU countries.

There are many health and safety rules covering, for example, exposure to asbestos and the manual handling of loads.

Bankers' bonuses have been restricted by the EU (to 100% of basic pay or 200% if shareholders agree) though this is not part of the EU's employment legislation. It's intended to promote financial stability, by reducing bankers' incentives to take excessive risks.

What does the EU do?

Legislate on working conditions, including health and safety. This legislation often has to be converted into national law and is generally enforced by national authorities.

…and what doesn't it do?

Set levels of pay, including minimum wages. Where they exist, including the UK, minimum wages are national decisions.

UK opt-outs to EU rules?

The UK used to have an opt-out from what was known as the social chapter, which included working conditions. The opt-out was negotiated by the government of Sir John Major but was abolished in 1997 by Tony Blair's administration.

The argument for leaving the EU

Much EU employment regulation imposes an unnecessary burden on business, which increases costs and is a disincentive to firms to take on new employees. Much of it could be removed if the UK were to leave.

The argument for staying in the EU

Trades union representatives say the European Union has played an important role in protecting working people from exploitation and combating discrimination. Outside the EU, the UK would want to keep many rules (for example, safety at work) and might need to keep some to negotiate the best access to the EU market.

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