The collapse of conciliation talks in Brussels mean that the UK will keep its opt-out from the EU Working Time Directive.
As a result, UK employees will continue to be allowed to agree to work longer than an average 48-hour week.
Last December, the European Parliament had voted to abolish the opt-out clause over a three-year period, but a number of member states, including the UK, opposed the move.
Conciliation talks were then held between MEPs, government ministers and the European Commission in an effort to broker a compromise deal. But discussions ended this week with no agreement.
The latest round of negotiations failed to find a way of meeting the demands of MEPs for a timetable for the scrapping of the opt-out and an offer from member state governments of an absolute limit of 65 hours a week in return for the right of employees to work more than 48 hours.
With European elections looming in June, there was little scope left for further talks, and the opt-out stays in place.
The current European Commission will be leaving office at the same time as the elections. However, the new Commission may well decide to put forward alternative proposals later in the year, recommendations that could involve changes to the status of the opt-out.
Pat McFadden, the Employment Relations Minister, said: “We refused to be pushed into a bad deal for Britain. We have said consistently that we will not give up the opt-out and we have delivered on that pledge.
“Everyone has the right to basic protections surrounding the hours that they work, but it is also important that they have the right to choose those hours.
“In the UK and many other member states, choice over working hours has operated successfully for many years. The current economic climate makes it more important than ever that people continue to have the right to put more money in their pockets by working longer hours if they choose to do so.”
Lord Mandelson, the Business Secretary, added: “Millions of people are better off because of the opt-out and I am relieved we have been able to resist its removal.”
John Cridland, the CBI’s deputy director-general, said: “We welcome the retention of the opt-out, which we have been calling for in London and Brussels. It allows people to make their own decision about the hours they work. Keeping the opt-out is a victory for common sense and is good for the UK economy.”
David Frost, the director general of the British Chambers of Commerce, commented: “The Department for Business has done a good job on behalf of British companies. Maintaining our opt-out sends a strong message to the world that the UK is a good place to do business.
“It is our flexible labour market that has been one of the key strengths of this economy over recent years, and it will be crucial in helping businesses drive the UK out of recession.”
