Solicitors in Leeds

The Working Time Regulations (1998)

It is important that Employers, of all sizes, understand the Working Time Regulations 1998. Failure to do so can lead to sanctions by the Employers local authority and can provide employees with stronger grounds for claims against the company such as unfair constructive dismissal, bullying/harassment, injuries at work, discrimination and/or victimisation.

Alternatively it is important that employees understand their rights under UK employment law, to allow them to work in a safe and productive environment. the Working Time Regulations 1998 recognise that employees will often wish to exceed the recommended 48 hour week and allow for opt out provisions, which provided they are implemented properly allow both parties to agree additional hours.

As with any variation of terms it is important that the employer ensures that any agreement is recorded in writing. Ideally at the beginning of employment, alternatively by a variation in terms signed by both parties. Employers should seek legal advise when drafting employment contracts to ensure that adequate provisions are made to deal with the Working Time Regulations 1998.

The Working Time Regulations 1998 implement the European Working Time Directive into UK law.

The Working Time Regulations 1998 were amended, with effect from 1 August 2003, to extend working time measures in full to all non-mobile workers in road, sea, inland waterways and lake transport, to all workers in the railway and offshore sectors, and to all workers in aviation who are not covered by the Civil Aviation (Working Time) Regulations 2004. The Regulations applied to junior doctors from 1 August 2004.

The weekly maximum working hours

Adult workers cannot be forced to work more than 48 hours a week on average – this is normally averaged over 17 weeks. You can work more than 48 hours in one week, as long as the average over 17 weeks is less than 48 hours per week.

Your working week is not covered by the working time limits if you have a job:

• where you can choose freely how long you will work (eg a managing executive)
• in the armed forces, emergency services and police - in some circumstances
• as a domestic servant in private houses

Since 1 August 2009 if you are a trainee doctor the 48-hour maximum working hours applies to you.

Opting out of the 48 hour week

If you are 18 or over and wish to work more than 48 hours a week, you can choose to opt out of the 48 hour limit. This must be voluntary and in writing. It can’t be an agreement with the whole workforce.

You shouldn’t be sacked or unfairly treated (for example refused promotion or overtime) for refusing to sign an opt-out.

You can cancel your opt-out agreement whenever you want – even if it is part of your employment contract. However, you must give your employer at least seven days notice. This could be longer (up to three months) if you previously agreed this in writing with your employer.

Your employer is not allowed to force you to cancel your opt-out agreement.

Daily rest breaks

Employees who work more than 6 hours per day are entitled to a daily rest break of at least 20 minutes. The employee must be allowed leave his work station. This right can be excluded where the working time is unmeasured, where the work is a “special case” or where the workforce has agreed otherwise.

Employees who work in hospitals, security, prisons, tourism etc are “special case” activities.

In the above exceptions, an employer should provide for an equal amount of rest at alternative times. If this is not possible the employer should take action to protect the workers health and safety.

Daily rest period

Employees are entitled to a rest period of 11 uninterrupted hours every 24 hour period. This entitlement is excluded where the employee is engaged in “special case” activities, where working time is unmeasured, where shift workers cannot take a rest period between the end of one shift and the start of the next one, where work is split up over the day or where a workforce vote to exclude the right.

In the above exceptions, an employer should provide for an equal amount of rest at other times or else take action to protect the workers health and safety.

Weekly rest period

Employees are entitled to 24 uninterrupted hours every 7 days in addition to the daily rest period mentioned above. The weekly 24 hour rest period should be taken consecutively with the daily 11 hour rest period. An employer can insist employees take weekly rest periods consecutively over one 48 hour period within a 14 day period.

The weekly rest period can be excluded in the same circumstances as mentioned in the daily rest period above. A rest period is when employees are not at their employer’s disposal.

A maximum of 48 hours a week can be enforced by an employer unless there has been an opt-out agreement.

Sanctions, the working time regulations 1998

An employer who fails to provide the above weekly working hours will be subject to the sanctions of their local authority’s health and safety legislation and also under the health and safety executive where improvement and prohibition notices can be issued and in extreme cases the employer may be fined and criminal proceedings can be taken.

Summary

Employers should operate a policy of transparency. If they consider that workers hours will exceed 48 per week then they need to ensure that relevant opt out provisions are included in Employment Contracts. It is important to consult with workers to ensure that they are satisfied with such terms and avoid any prolonged sick leave or issues at a later date.

Pre-emption rights

If an individual or company wants to make sure that they are able to acquire certain property before anyone else, what can they do about it? Can they make sure that the owner of the property has to offer it to them in preference to anyone else? The answer is that ‘pre-emption rights’ may provide the legal solution to this conundrum.

Pre-emption rights mean that someone is granted the right to acquire property ‘in preference to any other person’. As a rule, this right normally applies to ‘new’ property, such as the right to acquire newly issued shares from a company. If someone acquires the right to property that is already in existence, then it is called a ‘right of first refusal’ – for example, A agrees that if he decides to sell his house, he will offer it to B (on certain terms) before offering it on the open market to anyone else.

There are two common scenarios for using pre-emption agreements. First is the right of existing shareholders to acquire newly issued shares and secondly, the rights to property as part of a real estate transaction, such as the right to a new flat within a development. In terms of company law, the Companies Act 2006 incorporated provisions to protect existing shareholders. The worry was that existing shareholders could have their shareholding diluted if the company simply issued more shares to another person. For example, if a shareholder owned 10 shares out of 100 issued shares, his shareholding is 10%. If, however, the company issued another 100 shares to another person, the shareholder’s interest is reduced to 5%.

So how does the law operate to protect the dilution of these shareholdings? A company is not allowed to allot ‘relevant shares’ for cash unless it offers them on the same (or more favourable) terms to existing shareholders. Consequently, existing shareholders can choose whether or not to buy up new shares. ‘Relevant shares’ include all company shares save for those set out in a specified list such as those in an employee share scheme and non-participating preference shares in certain circumstances.

Sometimes a company can get around these rules about offering relevant shares to existing shareholders first, but in order to do so, the company has to follow a prescribed procedure and usually has to be a private, rather than a public company. As the law is complicated, anyone interested in working out what the rights of pre-emption in their company are, or wanting to disapply the rights of pre-emption, should consult a lawyer who would advise on the correct procedure.

As far as land agreements are concerned, it is often the case that a prospective buyer of property wants the right to ‘be the first in the queue’ if the seller decides to sell his land. Again, it is necessary to be careful how this sort of transaction is documented and legal advice is needed. In such instances there may be taxes to pay and the solicitors need to take care in drafting the documents to make sure that the transaction works as the parties intend it to. It must be made very clear what is subject to the agreement, what the terms of the sale would be and how long the pre-emption period would last for (amongst other considerations). If the person who benefits from this arrangement wants to pass his benefit onto someone else, again this needs to be properly documented. There are also special rules relating to land and agreements for it to be transferred. A solicitor would know how to make sure these rules are complied with.

Sometimes people get ‘options’ and ‘pre-emption rights’ muddled up when it comes to land agreements. An option to purchase land means that the option-holder can demand that the property is transferred to them as long as they comply with the terms of the option agreement. Sometimes there is a trigger event that allows the option to become ‘live’, depending on the terms of the agreement. Someone who has a right of pre-emption, however, simply has the right of first refusal if and when the property owner decides to sell the property in question. This distinction is important because very different rules apply to each situation.

Whatever the form of right is under consideration, it would be a shame to be tripped up by the legal technicalities. To make sure an individual achieves what he wants to achieve in terms of granting or receiving rights of pre-emption, it is always best to take the advice of a solicitor to document things correctly.

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