Employment time has always had a special value in labor relations. An intense request for the regulation to be introduced on working time seemed reasonable 134 years ago. The request made was to limit work to only eight hours per twenty-four hours. As time passed, the care of the European and national legislation for the regulation of the employee’s working and resting time seems self-evident. The relevant issues that arise (legal and conventional working hours, overtime, “overwork”, prohibition of offsetting working hours, etc.) have already occupied us in our previous article [: ” Organization of working time (eight hours: an old, very old, story …)]. That is where the rigidities and distortions of the provisions currently in place in our country today emerged. First of all: the inability to cope with the upcoming, and in the current circumstances unbearable, wave of unemployment. And, in addition, the need for a new rigidity-free perspective…
The equation to be solved and its variables…
Managing the ongoing economic crisis and recession is the main goal. The (possibility) of focusing exclusively on business survival is unreasonable. The intractable equation of rescuing (the maximum possible number) of jobs should also be taken into account.
The equation would prove even more intractable if we added one more variable: employee satisfaction. After all, what good would it do to save jobs in an unfavorable environment for employees? In a work environment similar to that in Chicago in 1886?
We tend to ignore the first quarter of the 21st century. The parameter of employee satisfaction leads (our valuable associates and friends HR managers would tell us) to the increase of the degree of commitment to the business. And, of course, in higher quality and quantity performance.
However, we must not overlook the impact of work on the personal lives of employees. After all: “When work is a pleasure, life is a joy. When work is a duty, life is slavery “(Alexei Maximovich Peshkov, better known as Maxim Gorky, 1868-1936).
In our article mentioned above, we saw that the flexibility in the organization of work presupposes the possibility of offsetting working hours of different days, weeks or months. And, in fact, without increasing salary costs. Based on the changing needs of the business and (why not?) the wishes & needs of employees.
It would be useful, in the present circumstances, to further explore the advantages and disadvantages of a modern, more flexible and, above all, well-structured employment time management system. In addition, to gain some experience from the organization of working time happening within the European Union. What is particularly important during the current situation is to help businesses survive and save jobs. And, in order to be practical, it is necessary to introduce a scheme where both the employer and the employee are satisfied by the employment time management system in place.
Let us start with the example of Cyprus. It looks typical.
The example of Cyprus
The organization of working time in Cyprus is regulated by the Law on the Organization of Working Time of 2002. The system adopted there (Article 7) is very simple and has the following pillars:
(a) weekly working time may not exceed 48 hours on average, including overtime. More favorable arrangements for employees prevail.
(b) In calculating the average, paid annual leave periods and sick leave periods are not taken into account or are neutral.
(c) The reference period is four months.
(d) The above provisions do not apply when the employee does not consent to the provision of this type of work and, in addition, there is no consequence if they do not agree to perform this work,
In other words: The employer and the employee can agree on what they want within a very broad framework (subject to, in principle, the provisions on the health and safety of employees but also any more favorable arrangements).
The framework described immediately above provides for flexible forms of employment. Among them:
“Flexible Working Hours: The employees decide for themselves on the time of their arrival and departure each day within certain frameworks determined by the employer but covering a basic core of working hours. The flexibility framework should not be less than one (1) hour.
Individual Work Time Accounts: The Working Time of each employee is kept in total on a time basis (annual, semi-annual, quarterly, etc.) and there is a possibility of distribution- “consumption” according to the needs of the business or the wishes of the employee, so that periods of leave and / or part-time work, for which no salary reduction is provided for, alternate.
Compressed work week: The employee can work their total weekly hours in less days”.
Advantages and disadvantages of a well-structured time management system
Generally
By adopting a well-structured system of managing working time, like the one that applies in Cyprus but also in other European countries (Germany, for example), a number of advantages, some of which we will mention, are enjoyed. Those advantages are enjoyed by businesses, employees, society as a whole and the national economy.
The advantages
As for the business
The business manages its staff more effectively – based on its real (sometimes seasonal) needs.
The business meets its changing needs without the (significant) additional financial burden of overtime and overwork. This way, its inelastic (salary) costs are reduced.
The business is not discouraged by having to retain jobs entailing completely inelastic obligations.
As for the employees
The employee enjoys (significant) freedom in managing their working time. Their ability to manage their free time increases their level of satisfaction, promotes welfare and has a beneficial effect on their physical and mental health. The employee maintains the ability to organize their working time, according to their own needs.
Moreover, their arrangement of working time, based on their own needs and desires, will undoubtedly have a positive effect on their qualitative and quantitative performance.
An employee who has special (personal, family or other) responsibilities increases the chances of finding the right job for them.
Relaxation in arranging working time reduces travel times (when there is no teleworking regime) as it makes sense to avoid rush hour travel.
In terms of society as a whole and the economy
Employment opportunities and conditions for reducing unemployment are expanding.
The conditions are created for concluding flexible forms of employment-benefits for the business and the employee.
The configuration of the employee’s free time will logically have a positive effect on the increase in consumption. The increase in consumption will logically have a positive effect on reducing unemployment and, consequently, on GDP growth.
The (absolutely) flexible arrangement of working time has a positive effect on the environment and the economy. Most importantly: In saving valuable jobs in the current environment and, of course, business survival.
Disadvantages
Indeed, one should make an effort to identify disadvantages in a system of managing employment time. One of them could (possibly) be the reduction in the income of employees who will be called to work overtime. But this, in the end, is debatable…
The institution of arranging working time in our country
We always manage to turn a simple situation into a complex one. Feeding, among other things, the monster of over-regulation. By offering, of course, work to our lawyers and to the courts. But not by helping entrepreneurship and the economy grow. In contrast to the pre-described system of Cyprus, let us take an (absolutely concise) look at the only current relevant provision in our country. An absolutely distorted arrangement and therefore, in practice, a complete failure.
The provision of article 42 of law 3986/2011 provides for two systems of arrangement of employment time. They both concern businesses with a conventional weekly working time of 40 hours.
The first work system: Provides for the possibility of providing additional working hours for a specific period (: increased employment) and subtracting them, respectively, from the working hours of another period (: reduced employment). The total time of periods of increased and decreased employment may not exceed a total of 6 months in a period of 12 months (article 42 §1 par. A).
The second work system: Accepts as possible the distribution of 256 working hours within a calendar year in periods of increased work that cannot exceed 32 weeks per year. During the remaining period of the year, reduced working hours are provided for -in relation to the maximum legal working time limits (article 42 §2 par. A).
Employment during periods of increased employment may not exceed (in both systems mentioned above) ten hours per day. In addition, during the reference period (6 months or one calendar year respectively) may not exceed per week – on average:
(a) 40 hours (excluding overwork and legal overtime) and
(b) 48 hours (including overwork and legal overtime)
The arrangement of working time cannot be agreed upon with the agreement of an employed employer. It necessarily presupposes an operational NCEC. Alternatively, an agreement between the employer and a trade union or employees’ union or association of persons of their business (in more detail: article 42 §6).
In other words: Regardless of the complexity of the regulation (even to understand it, one still needs legal advice), we come to a conclusion of a fact that lacks of seriousness: If there is no trade union in a business, it is not possible to apply a time management system(!!!)
The coronavirus and the “wisdom” it bequeathed to us (?)
The coronavirus offered us, without a doubt, experience. And (possibly-in some cases) some, minimal, wisdom.
It proved, in the clearest way, that the (strict) eight-hour weeks is not the only way for the effective operation of a business (let us accept the exceptions – the businesses of continuous operation, for example).
It also proved that eight hours may not be the best choice for employees.
And even more: It forced us to adapt immediately to the new data. It helped us to look elsewhere – in searching for the optimal management of situations new to us.
It made us care more about human life. Health. Business survival. Saving jobs.
The measures introduced, however, are gradually being lifted. What will happen to the businesses that will not survive? And those that are on the verge? What will happen to the jobs that are lost and those that are difficult to save?
Can we take action to prevent the impending disaster? And, if so, what actions should be taken?
The “constant” and the need NOT to reinvent the wheel
What is the constant that we do not need / can / want to change: the weekly working limits (40 hours, for example, in a five-day work week and 45 hours in a six-day work week) and what the European Legislation requires.
What can we do to improve the situation?
Help businesses and growth?
Make employees happier?
Reduce unemployment?
It does not seem, really, necessary to (rediscover) the wheel!
We can easily (?) Adopt three alternatives:
Alternative I: Inaction – we leave things as they are…
This is the safest option in the direction of not causing, in the first phase, any reaction. At least at the beginning. As time will go by, and hundreds of businesses will shut down, we will complain (and blame each other) for the phenomenon.
Alternative II: Intervention in the already existing institution of working time arrangement
We can intervene in the existing (pre-described) institution of the regulation of working time (article 42 of law 3986/2011):
- Allowing the possibility of an individual agreement between employer and employee.
- Offering them the possibility for a daily schedule of up to eleven (instead of ten) hours of employment.
- Maintaining, as it were, the other provisions.
And finally,
Alternative III: Adopting a very simple system
The core
Gaining knowledge from the existing systems in place in other countries of the European Union (including: Cyprus and Germany) to create a, new, corresponding – absolutely simple system.
This system can be based on the institution we would describe above as a “basket of working hours” or, alternatively, an “individual employee hours account”. Relevant to the standards set by other countries, ie those in Cyprus (and/or Germany-among others). One or two verses at most would be enough in a relevant regulation:
“The working time of each employee is observed on a total time basis – reference period (annual, semi-annual, quarterly, etc.) and there is a possibility of distribution -” consumption “according to the needs of the business or the wishes of the employee, so that periods of intensive employment provision alternate with periods of leave and / or part-time work, for which no fluctuation of remuneration is provided”.
And it would be useful, if we are not afraid (which we should not be) of reactions, distortions or rigidities, to add the following dimension:
“The employee and the employer are entitled to agree (instead of remuneration for the overtime of the employee – if the work provided is not covered by their salary or instead of their overtime pay) that the employee will receive (additional) reduction of working hours, corresponding rest days (days off) or a combination of reduced working hours and rest days (days off) “.
The (unnecessary and problematic) details…
It is true that we are accustomed to highly complex and unnecessarily detailed regulations — even when they prove to be completely ineffective. It’s time to try to simplify. In any case, if such an arrangement (like the one mentioned above) seemed, to some, alarmingly simple, we could add:
(a) Possibility of an agreement between the employer and the employee regarding increased working hours in periods when the business has increased needs, up to eleven (or, under certain conditions, up to thirteen) hours per day (without differentiation in the agreed salary of the latter).
(b) Possibility of an agreement between the employer and the employee regarding reduced working hours (and / or fewer working days) in periods when the business has fewer needs and / or regarding the employee’s obligation to complete the total agreed-due working hours (without differentiation in the agreed salary of the latter):
- (in the case, for example, where the employee works ten hours a day for four days a week it is possible to agree not to work on the fifth day),
(c) Possibility of an agreement between the employer and the employee to “transfer” working hours from one working week to the next – until the end of the reference period (subject to the consent of the employer).
(d) Maintaining the current existing legal (or contractual) weekly schedule (eg 40 hours per five-day week) and requiring the employee to work during the reference period per week-on average, in accordance with the above existing legal ( or conventional) weekly schedule.
(e) Payment for the entire reference period of a salary equal to the agreed (eg for 40 hours of work) without variation either during the period of increased employment or during the period of reduced employment.
The next day…
..it will be difficult – we all know that.
And on the other hand: 1886 has begun to fade in the mists of the past.
The needs and desires of today’s employees are not equivalent to those of their colleagues of that time. Neither are the businesses’.
Determining the time of employment is very important. It is also important that the life, health and safety of the employee continue to be put before the needs of the business. It is important to see the degree of employee satisfaction but also the commitment to the business (which comes after, as a consequence).
However, it is important to turn our attention to the long-suffering business. The one that is already struggling to survive in the midst of a global crisis. The one that (uninterruptedly will continue to) struggle to stop the intensity of the recession.
Flexible forms of employment (as they formed in the light of the pandemic and have already occupied us) are an absolutely necessary, and not just useful, relevant tool.
But let’s move on to the next step:
Would it be bad to recognize margins of flexibility in the organization of working time (with full respect for European directives on working and rest time)? A flexibility that can meet the needs of businesses and employees? A flexibility that will, under the current circumstances, prove valuable for business survival and savings jobs? A (proven) flexibility that, in the end, will make employees and entrepreneurs happy?
Is it really time to try it?
Will the stakes, otherwise, be unexpectedly high?
Stavros Koumentakis
Managing Partner
Disclaimer: the information provided in this article is not (and is not intended to) constitute legal advice. Legal advice can only be offered by a competent attorney and after the latter takes into consideration all the relevant to your case data that you will provide them with. See here for more details.