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Part Time Workers Draft Regulations

Summary of Regulatory Impact Assessment

The Government is committed to removing discrimination against part time workers because it is unfair and inefficient. The Regulations will ensure that part time workers are not treated less favourably than workers doing the same job full time.

Options

The Government is obliged to introduce legislation to implement the European Directive 97/81/EC and Section 19 of the Employment Relations Act committed the Government to produce Regulations.

Expected benefits

Due to a lack of information about workers, the estimates presented in the RIA are based on employees. Benefits and costs may, therefore, be understated. However, it seems likely that any underestimation will be very modest and should not affect the estimates by more than about 5%. There are approximately 6 million part time employees in Great Britain - all of whom will benefit from added security. We estimate that 1 million have a comparable full time employee. Equal treatment could directly benefit 400,000 part time employees through increases in pay and non-wage benefits. The financial value of this improvement is estimated to be £23.4 million per year. There should be wider benefits to employers and society. Greater confidence about equal treatment could help increase movement between full time and part time jobs (increasing labour market flexibility) and increase attachment to the labour market. Employers will gain if this results in an increase in the labour supply. The economy and society will gain as a whole if people are able to achieve a better balance between work and family responsibilities.

Estimated compliance costs for employers

Total recurring costs are estimated to be £27.4 million per year. There are two main elements of compliance costs: bringing pay and non-wage benefit entitlements into line with full time employees where there is currently less favourable treatment (£6.7 m and £20.0 m respectively). The right to receive a written statement of reasons for less favourable treatment is also likely to generate a cost to employers (£0.7 m).

Sectors affected

Most employers will not be affected at all by these regulations as equal treatment is already common practice. A high proportion of establishments in the financial sector had some difference in provision of non wage benefits, although only 2% of all part time employees work in this sector and only 15% of all employees in this sector work part time. The sector where a high proportion of employees work part time and where a high proportion had a difference in non wage benefits is wholesale and retail.

Small businesses

A high proportion of part timers (46%) work in small workplaces. However, a relatively high proportion of small establishments did not employ anyone on a part time basis. Of those small establishments that did have part time employees, a high proportion did not have full time comparators. However, where there were comparators only 10% of smaller establishments had a difference in non-wage benefits, and would therefore have to review at their current arrangements, compared with a third of larger establishments.

Other costs

There should not be a significant net change in the number of tribunal applications.

Previous consultation

The Directive implements an agreement between the Social Partners. The intention to legislate was stated in the Fairness at Work White Paper. The RIA makes use of a specially commissioned survey of a representative sample of employers of all sizes and sectors. Enforcement If they believe their rights have been infringed, workers will be able to bring a complaint to an Employment Tribunal. The DTI and ETS will monitor the cases brought.