In a series of case studies, including one involving a Unilever Foods margarine plant, the UK's department of trade and industry attempts to show how it is possible to increase productivity whilst moving away from long working hours.
Unilever Foods UK at Purfleet in Essex is the world's largest spreads factory. About 300 employees run a 24-hour, seven day operation that produces about a million tubs per day of brands such asFlora, Stork and Bertolli.
The report's publication is driven by the European Commission publication of proposed amendments to the EU's rules on working hours. The changes will put additional limits on how companies can getemployees to work longer hours than is allowed under the law.
As a result an increasing number of organisations are looking for ways to maximise productivity whilst moving away from routinely relying on workers and managers working long hours, the departmentstates in a report released today.
"Whether it was a drive to increase efficiency and cut unit costs better to compete in the global economy, a need to transform organisational culture and working practices in a changingindustry, a desire to improve employees' work-life balance, or a need to find ways of attracting and retaining new talent, each business champion was clear about the reasons for embarking on change,"the report states.
The case studies describe a variety of techniques that companies have used to change employees' working times. These include a move to annualised hours and an introduction of flexible working andlean manufacturing.
"What stands out from these case studies is that there is a need for demonstrable leadership from the top of the organisation and a clear business rationale for the changes planned,"the report states.
The winning companies highlighted the need to involve employees in every step of the process. Unions were recognised as part of the partnership approach. Effective communication was crucial and insome cases additional resources were available to help individuals adapt to the change.
Most of the businesses cited in the case studies as "champions" of the new workplace encountered some opposition along the way. However effective planning and a clear business rationaleensured that companies achieved tangible results, the department stated.
One such example was Unilever's margarine plant in Purfleet, which was becoming increasingly vulnerable to both external and internal competitors, with spiralling labour costs and low productivity.
The company responded by introducing annualised hours, abolishing overtime and moving to seven-day continuous shift working. This resulted in increased employees' leisure time and dramaticimprovements in operational efficiency, the report stated.
In the late 1980s, an overtime culture that led to chronic overmanning, spiralling labour costs and low productivity had left Purfleet as a laggard in Unilever's highly efficient Dutch and Germanoperations.
The company made the changes following 18 months' negotiations with its unions, resulting in a new employment contact. Every employee was contracted to work 1,779 hours in a year. About 1,700of these hours were accounted for by rostered shifts, leaving a bank of 75 to 80 for training, meetings and other activities.
The company could also ask workers to supply up to 282 additional paid hours, called 'Committed Hours', for contingencies such as short-term sickness, poor efficiency or plant failure.
The changes led to dramatic improvements in operational efficiency - from around 40 to 50 per cent in the first year, climbing to a peak of around 70 per
cent by 2000. Productivity per head is now higher than in any other Unilever spreads factory.
Absenteeism halved since the changes to about two per cent - below the industry average.
While wages increased by about 30-35 per cent, total labour costs did not rise because of huge reductions in overtime pay.
Benefits to the employee include higher levels of basic pay, all of which is pensionable. Employees have also benefited from a huge increase in leisure time. Four 12-hour shifts are followed inwinter by a five-day break and in summer by a three-day break. There are three rostered holidays. two of 12 days and one of 18.
Practical problems arose from employees' initial lack of trust in the annualised hours system and how it would affect their leisure time. Many were difficult to contact which meant the systemrelied on a committed few who were called in disproportionately.
Unilever solved the problem by splitting each shift into three standby groups. Standby times were rostered into shift patterns so people knew when they were
likely to be called in.
The company promised they could only be called in once during a three-day break or twice in a five-day break, and that they would have at least 36 hours
break between calls.
On 22 September 2004 the European Commission published legislative proposals for amending certain aspects of the Working Time Directive.
The Commission's main proposals are:
- a new version of working time, called "inactive time" to cover on-call time spent at rest;
- retention of the opt-out by collective agreement. Individual opt out available in limited circumstances only and with stricter rules applying;
- a 65 hour maximum working week for workers who have opted out;
- a requirement for employers to record the hours worked of all employees, in addition to other measures intended to provide additional safeguards to opted-out workers.
The Working Time Regulations came into force on 1 October 1998.