Employment: Zero-hour Contracts

Debate between Viscount Younger of Leckie and Lord Stoddart of Swindon

Wednesday 23rd October 2013 Lords Chamber

[Viscount Younger of Leckie]

The noble Lord raises an important point; we are aware that low pay is an issue for workers in the care sector. HMRC, which enforces the minimum wage on behalf of the Department for Business, Innovation and Skills, has been actively conducting enforcement activity in this area. Some investigations are very much ongoing and HMRC has identified relatively high levels of non-compliance, particularly with the national minimum wage. A full project evaluation is being carried out by HMRC and will be completed later this year.

[Lord Stoddart of Swindon (Ind Lab)]

Does the House of Lords employ any people on zero-hour contracts? If so, how many are they and in what grades?

[Viscount Younger of Leckie]

The noble Lord raises some very specific questions. I can confirm that zero-hours contracts are a legitimate form of employment and they were introduced in both Hansard and the catering departments to replace existing casual contracts, so there is an improvement there. The zero-hours contracts, when compared to the previous contracts, give staff the same employment rights as those enjoyed by full-time staff.

Growth and Infrastructure Bill

Debate between Viscount Younger of Leckie and Lord Stoddart of Swindon

Wednesday 6th February 2013 Lords Chamber

[Viscount Younger of Leckie]

I think that I have made the position very clear. The Chancellor is looking at this but I have said that it is taxable.

[Lord Stoddart of Swindon]

I have to say that the noble Viscount has not made the position clear to me. It may well be that everybody else is clear about it but, as I understand it, he is saying that the £2,000 will be taxable, and he appears to be saying that it will be taxable as income. If that is so, the value of the shares in real terms could very well be reduced by 40%. Is that right?

[Viscount Younger of Leckie]

First, it depends on whether the employee shareholders are 40% taxpayers, but I can confirm that tax is payable on the shares that are given.

My noble friend Lady Brinton expressed concern surrounding the share dilution, particularly when small businesses have additional investment. Additional investment shows that a company has potential and this should benefit the shareholders in the long run. We envisage that it will. Minority shareholders already have some protection under company law, and employee shareholders would be able to make appropriate representations under these rules.

I now turn to a question raised by the noble Baroness, Lady Turner, concerning TUPE. She asked whether TUPE will be affected by employee shareholders. Exactly how TUPE would apply would depend on the precise details of the transfer, but there is nothing in the employee shareholder clause as it stands that would require an interpretation incompatible with TUPE. It is important to realise that any employee transferred under TUPE cannot be forced by the transferee into becoming an employee shareholder. The employee will still have a right not to be unfairly dismissed or suffer a detriment as a result of refusing an employee shareholder contract. There is nothing to stop business arrangements being made in such a way as to provide that a person who is an employee shareholder in one company becomes an employee shareholder in another company. It is also possible to agree that the employee shareholder would no longer have employee shareholder status and become a full employee. I also want to clarify that if an employee has bought shares privately in a company, and he has transferred to that company under TUPE, he is not deemed then to have become an employee shareholder of the company by virtue of holding shares in that company. That is because the shares were not given to him as part of the employee agreement to become an employee shareholder.

The noble Baroness, Lady Turner, also raised the issue of Beecroft. I think she said that this was Beecroft by the back door. I reiterate that it is certainly not. The new employee shareholder status is different from the no-fault dismissal proposal because individuals become shareholders of the company at the start of the employee relationship. That is an important benefit conferred by the employee shareholder status. Unlike no-fault dismissal, the employee shareholder status will be freely agreed between employers and individuals in contractual negotiations. Employers will also be free to offer improved contractual terms, such as contractual redundancy payments, as raised earlier, in an employee shareholder contract. After reviewing the evidence, the Government found no compelling reasons to implement the no-fault dismissal proposal.

My noble friend Lord James of Blackheath was concerned that shareholders might be locked in and subsequently would have to pay the debts of the company. The shares must be fully paid up by the company. No financial liabilities are attached to the shares. No personal guarantee can be demanded from an employee shareholder as a condition of the particular status.

BBC: Resignation of Director-General

Debate between Viscount Younger of Leckie and Lord Stoddart of Swindon

Monday 12th November 2012 Lords Chamber

[Viscount Younger of Leckie]

I thank my noble friend for that information. I was alerted to it just before I came into the Chamber. However, I do not have any further details and I would not wish to comment further about the name mentioned. However, I imagine that this issue and the name mentioned will be taken up as part of the inquiry into these issues.

[Lord Stoddart of Swindon]

Does the noble Viscount agree that the selection pool for the BBC Trust is very narrow? Would it not be as well that that pool should be widened so that a perhaps more critical attitude could be taken of the operations of the BBC? Perhaps one of the new candidates could be the noble Lord, Lord Pearson of Rannoch.