Workers (Predictable Terms and Conditions) Bill

(Limited Text - Ministerial Extracts only)

2nd reading
Friday 3rd February 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)]

I thank my hon. Friend the Member for Blackpool South (Scott Benton) for proposing this important Bill, and I thank all hon. Members who have spoken on this subject. I am pleased to say that the Government support the Bill and are committed to ensuring that the UK is the best place in the world to start and scale a business—a phrase hon. Members will hear a lot more, after the Business Secretary’s recent speech from Davos about scale-up Britain, which is music to my ears. To do that, we need a strong and flexible labour market that supports participation and economic growth.

I would like to take a little time to talk about the Bill before addressing some points raised by hon. Members on both sides of the House. It is good to see cross-party support, for the third time today. Unlike the shadow Minister, we believe that zero-hours contracts are an important part of the UK’s flexible labour market, both for employers that do not have a constant demand for staff and for individuals who need to balance work around other commitments such as childcare and study. Around 1 million individuals are on zero-hours contracts—around 3% of the UK workforce.

The Government are keen to ensure that everybody can enjoy the benefits of flexible working. We are determined to tackle unfair working practices, such as the issue of one-sided flexibility where workers have to be available to their employer, with no guarantee of work. Employers may schedule or cancel shifts with little notice, leading to insecurity of work and income. I declare my interest, because my daughters are in a similar situation—one is of school age and works at the local pub, and that has happened to her. To be fair, a zero-hours contract works for her to provide flexibility from her side, too.

We recognise that receiving unpredictable and varying levels of income each month can make it difficult for some workers to meet the cost of rent, mortgage and household bills, especially during a cost of living crisis. My hon. Friend’s Bill will allow workers to request more predictable working arrangements, addressing the issue of one-sided flexibility, while ensuring that workers are able to continue working on a zero-hours contract or another form of non-guaranteed hours or temporary contract, if that is the type of arrangement that works best for them.

[Wera Hobhouse (Bath) (LD)]

Does the Minister agree that it is important that employers feel that there is loyalty to their companies and loyalty to the work that the employee is doing? It should very much be a win-win.

[Kevin Hollinrake]

I agree entirely. That is what modern employers are looking for. One of the biggest pressures that employers are facing is recruiting and retaining people. This is another measure where people can demonstrate that the workplace is fairer and more flexible, which should attract more people back into it.

The Bill will allow individuals and businesses to strike the right balance between flexibility and job security. Workers will be empowered and encouraged to start conversations with their employers about their work patterns, with the confidence that starting such a conversation will not result in detriment. We expect that employers will benefit from the new right, too—the point that the hon. Member for Bath made—through improved worker satisfaction and productivity. By allowing employers to retain skilled staff as workers, those workers will not have to look for a new role in order to secure a working pattern that meets their needs.

Facilitating higher productivity, both through this measure and the other five private Members’ Bills that we are supporting, will help to drive higher employment, wages and economic growth. As my hon. Friend the Member for Blackpool South has explained, the right will function in a similar way to the existing right to request flexible working. An employer will be able to refuse a request for more predictable working patterns on specific statutory grounds similar to those established for flexible working. We know how important it is to balance new workers’ rights with the impact on businesses, and those grounds will ensure that employers do not experience disproportionate burdens.

The Government consulted in 2018 on the right to request a more predictable contract, and the vast majority of respondents agreed with the creation of a right to request a more predictable working pattern.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

I congratulate the Minister on his usual excellent summation of the legislation. On that final point, does he agree that giving employers certainty and giving employees the ability to have flexible working is a win-win and a good thing for both sides?

[Kevin Hollinrake]

I entirely agree. That is why we have carefully struck a balance so that there will not be too much of a burden on employers. That would be detrimental to employees, too, because employers would be less likely to take people on. The right to consider it is clear, and the process is clear, but if it cannot work for the business, the process of saying, “I’m sorry, we can’t do that” is simple and set out in regulations.

The Government consulted in 2018 on the right to request a more predictable contract, and in response to that consultation we committed to introducing a right to request a more stable working pattern for all workers, including those on zero-hours contracts. Those workers will be able to make a request if their existing work pattern lacks predictability in terms of the length of their contract or the days or hours that they are required to work. The 2019 Conservative manifesto contained a commitment to introduce for workers

“a right to request a more predictable contract”.

I am therefore delighted that the Bill introduced by my hon. Friend the Member for Blackpool South reflects our previous commitments on this important issue.

The Bill will also build on the progress that the Government have already made in bringing forward measures allowing additional flexibility for workers on zero-hours contracts and those in low pay. As my hon. Friend the Member for Devizes (Danny Kruger) pointed out, in 2015 this Government banned exclusivity clauses in zero-hours contracts, helping workers on zero-hours contracts to secure additional employment and boost their incomes. As of December 2022, that ban has been extended to workers who have a guaranteed weekly income equivalent to or below the lower earnings limit of £123 per week. On top of that, on 1 April 2023 the Government will increase the national living wage for workers aged 23 and over by 9.7%, to £10.42. That keeps the Government on track to achieve our manifesto commitment for the national living wage to equal two thirds of median earnings by 2022 if economic conditions allow.

This is the sixth private Member’s Bill on employment rights that the Government are backing. As a package, those Bills will increase workforce participation, protect vulnerable workers and level the playing field, ensuring that unscrupulous businesses do not have a competitive advantage. The Bills build on the strengths of our flexible and dynamic labour market and give businesses the confidence to create jobs and invest in their workforce, allowing them to generate long-term prosperity and economic growth.

I will address some of the specific points made by colleagues. This is the Bill of my hon. Friend the Member for Blackpool South, and I am pleased to be able to explain the Government’s policy position on any points that he has raised. My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who is no longer in her place, made a point about the over-50s. It is important that we try to attract more over-50s who have left the workforce back into the workplace. We know that about 575,000 people of working age have left the workforce since the start of the pandemic. I joined a cross-ministerial group, put together with business groups, to look at how we can attract those people back into the workforce. That body of work is ongoing, and we are very keen to find solutions, which will be partly about making the workplace fairer and more flexible, as this legislation will do.

As my hon. Friend the Member for Blackpool South pointed out, the legislation will lead to a happier and more engaged workforce. He also mentioned the 26-week qualification period, which aligns with other, similar measures in employment law. As he points out, this results from a manifesto commitment, which is why we are delighted to be able to support his Bill today.

My hon. Friend the Member for Devizes made similar points and also talked about the balance to be struck between employer and employee and the other work we are doing and have done to improve workers’ rights, including that ban on exclusivity clauses. The shadow Minister, the hon. Member for Bradford East (Imran Hussain), said that the Opposition were considering banning zero-hours contracts and other measures if they ever got into government—I very much hope that day will not come. By implementing things like that, there could be some serious damage to the economy, were that situation to come to pass. Nevertheless, we will let the electorate decide on that.

To conclude, this Bill will introduce an important new right that will help to address the issue of one-sided flexibility and support those with unpredictable working arrangements to gain security of hours and income. It has been encouraging to see support across the House for this Bill, as is evident from today’s good-natured debate. The Government look forward to continuing to work closely with my hon. Friend the Member for Blackpool South to support the passage of these measures, and I commend the Bill to the House.