UK officials had argued that scrapping the opt-out would reduce flexibility and choice in the workplace, damaging the European economy and, according to the BBC, managed to garner sufficient support from countries such as Germany, Austria and Cyprus to prevent the changes being voted through.
"The opt-out remains," Trade and Industry Secretary Alan Johnson told the BBC. "All of us need to be flexible."
The draft Directive, which revises the existing Working Time Directive, cannot progress further until the Council of Ministers reaches a compromise and approves it. And with the UK taking over the Presidency of the EU in less than a month's time, it has been suggested that no such compromise is likely to be reached soon, and the proposals are likely to be mothballed until the Presidency changes hands again at the start of 2006.
Dave Prentis, general secretary of Unison, the UK's biggest trade union, told reporters: "We think it's appalling that our Government should be persisting with the opt-out."
"We already work the longest hours in Europe. If other countries can manage without the opt-out, why should British workers be singled out for different treatment?," he added.
TUC General Secretary Brendan Barber said: "It is no surprise that the EU is in crisis when a small UK-led minority can block this compromise on working time. The Commission proposals already went a very long way to meeting employer concerns – far more than the much more balanced position put forward by the Parliament."
Ben Doherty, an employment law specialist with Pinsent Masons, the law firm behind OUT-LAW.COM, commented:
"While the delay by the council of ministers provides a period of grace for employers and employees to continue to benefit from the opt out provisions, it is likely that the council will come to a decision.
"Whilst the full extent of that decision is not yet known, it is extremely unlikely that the opt out provisions will remain in their current format. Any change will be a disappointment to UK employers who believe that it is likely to make the economy less competitive."
Background
The Working Time Directive currently provides that workers in all sectors, public or private, must not work longer than 48 hours a week, including overtime. The Directive also specifies requirements for rest periods, breaks and no less than four weeks' paid holiday per year. Its aim is to protect workers from the health and safety consequences of overworking.
In 1993, the UK negotiated an opt-out which allows Member States not to apply the limit to working hours under certain conditions: prior agreement of the individual; no negative fall-out from refusing to opt-out; and records kept of working hours of those that have opted out.
While the UK is the only country to have made extensive use of the opt-out, France, Germany, the Netherlands, Spain and Luxembourg are preparing or have passed legislation to make restricted use of the opt-out, in certain sectors.
The opt-out, and in particular the UK's use of the opt-out, was one of the main concerns raised in a Commission report into the operation of the Directive and led to the Commission putting forward proposals in September for a new Directive that would keep the right of opt-out while tightening the conditions for its application.
These proposals were comprehensively rejected by the European Parliament in May, when MEPs voted that they did not go far enough, calling for the opt-out to be scrapped all together.
On Wednesday the Commission issued its response, revising its original draft so that while the opt-out would only be available for three years after the adoption of the Directive, Member States making use of the opt-out would "for reasons relating to their labour market arrangements", be entitled to ask for the option to be extended beyond the period of three years.
The Commission also made amendments to its definition of on-call time and the reference periods for calculating the 48-hour maximum working week.
Ministers have so far been unable to approve any version of the draft Directive.
