Employment Rights

Andy Sawford Excerpts

Thursday 12th September 2013 Commons Chamber

[Andy Sawford (Corby) (Lab/Co-op)]

I thank the Backbench Business Committee for scheduling time for this important debate. It is a particular pleasure to follow my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), who set out many important issues, as well as other colleagues who highlighted some of the issues that I want to speak about.

The living standards crisis that people are facing is not only an issue of pay and the rising cost of goods, but of security. People now feel less secure and more pressured at work than at any time in the past 20 years, according to the latest UK skills and employment survey. Our country already has the third most liberal labour market in the OECD, but since taking office the coalition has shown real determination to undermine people’s protections at work, making it easier to fire people but not easier to hire people. In effect, they have heaped further insecurity on working people. I shall speak today about two aspects of that insecure working that I have campaigned on before and since my election to the House—the rise in the use of zero-hours contracts and the use of employment agencies.

Zero-hours employment is now widespread in many sectors of the economy, and it is especially prevalent in areas of higher unemployment, where the lowest-paid and most vulnerable workers in Britain exist without knowing when the next payday might come. That is certainly the case in my constituency. People on zero-hours contracts tell me about waiting for a call or turning up to the workplace day after day, only to find there is no work, but their contracts make it difficult to find alternative employment or to claim jobseeker’s allowance. I have heard examples of people making child care arrangements or paying for transport to work and then waiting for hours before being told that they are not needed. Other people have told me that because of zero-hours contracts they are unable to get a bank overdraft, a mortgage or car finance. For those people who are getting regular work on a zero-hours contract, they know that it could end at a moment’s notice and they could be left without sick or holiday pay.

In an exchange with me over the summer, the Office for National Statistics has confirmed that later this year it will start asking about zero-hours employment in its regular surveys. Everyone recognises that its estimate of 250,000 people on such contracts is well wide of the mark. We know that people working in McDonald’s, Burger King, JD Wetherspoon, Sports Direct, Cineworld and Boots are on such contracts, as well as 307,000 workers in the care system, according to the Government’s own figures. We know that the NHS has almost 100,000 workers on zero-hours contracts, which the BMA has described as a real risk to patient safety.

I fully accept that for some people casual contracts can work, such as the students who work as lifeguards at my local swimming pool, or the retained firefighter who also works occasionally for the Co-operative Funeral Service. If casual contracts are fair, reciprocal and appropriate, they can have a place in the labour market. But there is a clear distinction between such employment and the way in which millions are now being exploited on zero-hours contracts. It is important that we draw the distinction, and there are three main practices that must stop.

The first is requiring an employee to be available for work when no work is guaranteed. The second is requiring an employee to sign an exclusive contract when no work is guaranteed, so they cannot take work elsewhere, and the third is when employees are working regular hours over a sustained period but their contract does not reflect that. I have introduced a private Member’s Bill to address the issues with zero-hours contracts, and I will set out how I hope we can give effect to changes that would protect people in such circumstances.

[Richard Harrington]

Given the hon. Gentleman’s views on zero-hours contracts, will he condemn the Labour councils mentioned by the hon. Member for Eastbourne (Stephen Lloyd), who have so many employees on zero-hours contracts?

[Andy Sawford]

Corby borough council employs some people as lifeguards in the local swimming pool on casual contracts that are not exclusive and do not require people to attend for work or else breach the contract. Those are clearly casual employment. Any council, of whatever stripe, that uses such contracts must do so in a way that is fair and reciprocal. I urge Labour councils to give a lead in that, and they are doing so. They are looking at the care sector, for example, where insecure employment has a real impact on the quality of care, as well as on the employees, to address the issue. I applaud them for that and think that the Conservatives’ attempts to use it as a smokescreen is unhelpful in such an important debate.

I urge companies not to wait for 2015, when my right hon. Friend the Leader of the Opposition has promised to take clear action on this. That is why I met McDonald’s and talked about employment in its business. This week I also met the managing director of Starbucks, and I have talked to employers across my constituency and to councils about care workers. I want them to take action now, because that would be good for their reputation and for retaining a motivated, loyal and trained work force. I am pleased that companies such as Tesco, Asda and Morrisons—whose human resources director will lead a review of this issue for the Opposition—are already showing that such contracts are not necessary for a successful business.

The issue of temporary workers working through employment agencies is a particular concern in Corby and east Northamptonshire. For historic reasons, we have a large proportion of jobs through employment agencies, with a disproportionately large number of agencies operating in the town. Rogue agencies that do not adhere to the basic framework of legislation to protect workers are a particular problem.

With great regret, I read recently that the Government intend to abolish the employment agency standards inspectorate, which plays an incredibly important role. I was pleased that the Minister agreed that it could undertake inspections in my constituency. It found more than 70 separate breaches of the law, and also found, working with HMRC, £100,000 owing to local workers because of minimum wage issues. My constituent, Irene Hamilton, said:

“I am so glad I never have to go to work for an agency now that I am retired…I felt that I was invisible…Don’t be sick, don’t go on holiday, no family or funeral problems are expected of agency workers. It was soul destroying.”

Her example is typical of so many people in my constituency.

There are a wide range of issues. The use of the Swedish derogation, a giant loophole that must be addressed, has been mentioned. I am working locally to implement a code of practice. We must get much better at enforcement. I have also introduced a private Member’s Bill to extend the powers of the Gangmasters Licensing Authority to all sectors of the economy—not to license, necessarily, in all sectors of the economy, but to be able to enforce the law in all sectors of the economy. The abuses are widespread, and I hope to have more time on another occasion to speak about some of the issues.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The last two speakers will have a time limit of five minutes each in order that we can hear the wind-ups.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) on securing this debate. It has been wide ranging, with contributions of great interest from Members on both sides of the House.

The Government’s vision for the UK’s labour market is for it to be flexible, effective and fair. We want people to be able to access the type of work that they want and employers to be able to create jobs and manage their work forces effectively. We can help to do this by minimising the burden of regulation so that employers are free to create jobs and hire new staff. At the heart of our approach is a belief that employers and individuals are in the best position to decide what works for them. The role of Government is to provide the right framework to facilitate that, not to dictate outcomes through heavy regulatory approaches. Crucially, we need to ensure that people are treated fairly at work and that employers can compete on a level playing field without being undercut by unscrupulous employers who break the law and exploit their staff. We therefore launched a comprehensive, Parliament-long employment law review to tackle the perceptions and the reality of employment law burdens and to implement our strategy in practice.

The Government have introduced a range of different measures that have been mentioned by hon. Members. I want to talk about two that have not had a huge amount of focus in this debate but are radical and important. My hon. Friend the Member for Skipton and Ripon (Julian Smith) mentioned the proposals on shared parental leave. That is a radical reform to employment law allowing mums and dads to choose how they share the time off after their baby is born. That is good for children, particularly because the involvement of dads early on in the process can help child development. It is good for parents, making it easier for them to balance their responsibilities with their work. It is also good for employers, who can benefit from a more motivated, productive work force, with a more flexible system that enables working mums who want to return to work to do so earlier.

We are also extending the right to request flexible working that will come in from next April. It has already been available to parents, having been introduced by the previous Government, and it has been a great success, with four in five of the requests made being granted. There are all sorts of reasons why people might want to work flexibly, not just because they are parents. Perhaps they have other caring responsibilities. Perhaps they volunteer in their community. Perhaps they are older workers nearing the end of their working life who, rather than working full time one day and not at all the next, would like to taper their working as they ease into retirement. We need to move towards this situation being much more the norm than an anomaly. We have no need to keep our workplaces stuck in the 1950s with a culture of presenteeism. Modern technology has revolutionised the way that we can work, making people much more productive at different times. Indeed, employers can see the benefits of flexible working too.

Unsurprisingly, I disagree with some Labour Members’ characterisation of what the Government have been doing. Certainly, the right hon. Member for Oldham West and Royton used some analogies that I would not agree with, but I do agree with many of the things he said. He rightly highlighted the fact that many of the employment rights enshrined in EU legislation can be very important. He talked about the problems of directors’ pay differentials. There is great agreement in all parts of the House that that situation has become unacceptable, particularly where there has been payment for failure. Where there has been great success with a company growing, employing more people and bringing more wealth to the country, I do not think people mind payment being made accordingly, but where there has not been that success, there should not be unearned large packages. That is why the Government’s proposals to empower shareholders so that there is much more accountability on directors’ pay are important.

The right hon. Gentleman raised an important point about the normalisation of zero-hours contracts, which many others also talked about. As the hon. Member for Corby (Andy Sawford) said, these contracts are not inherently bad. They can be applied in a fair and appropriate way, and people generally have no problem when there is flexibility on both sides and no imbalance of power in the relationship. Equally, many employers recognise that it would be counterproductive for them, as a matter of course, to put all their employers on to zero-hours contracts, because where the employee is, in effect, taking the place of a permanent full-time worker, or even a permanent part-time worker working 20 or so hours a week, that does not necessarily create the most positive and productive relationship between the employer and the employee. Of course, that is why many employers do not routinely have employees on zero-hours contracts. The point about normalisation is interesting and the Government have been doing significant work on zero-hours contracts. The hon. Gentleman raised some sensible points.

[Andy Sawford]

Will the Minister give way?

[Jo Swinson]

I will address some of the hon. Gentleman’s points before taking his intervention.

The hon. Gentleman discussed exclusivity, which is one of the issues highlighted in the Government’s work to date. If somebody is not getting guaranteed work on a contract, there is an inherent sense of injustice in the suggestion that they cannot seek work elsewhere. On the balance-of-power relationship, can a worker actually refuse work, or is it thought that if they do so they will not be asked to do shifts in future? Does the contract reflect the employment situation and is the proper information available? When they apply for a job, does the employee know that it is a zero-hours contract that is being offered, or do they think they are applying for a permanent job? We have been investigating genuine issues over the summer and we will look at how we can address any abuses.

[Andy Sawford]

I simply want to ask what action the Government have taken.

[Jo Swinson]

I hope the hon. Gentleman will be a little more patient. As I have said, we undertook a review over the summer and are looking at the information. I hope he will not have to wait too long before we announce the next steps.

My hon. Friend the Member for Watford (Richard Harrington) made an interesting contribution, particularly with regard to his comments about morality, which is not always a word associated with debates about capitalism and employment, but I think it is important. There is a legal framework for minimum rights, but it is fair to point out that we all have additional responsibilities to one another as human beings and individuals.

As my hon. Friend the Member for Eastbourne (Stephen Lloyd) said, most employers are good employers. I do not think that anyone in the House would wish to suggest that that is not the case. We are, therefore, dealing with a minority of rogue employers who can be unscrupulous. Most employers take their responsibilities seriously and want to make sure that they are treating their workers well, not only because they realise the business benefits of doing so, but because it is the right thing to do. It is important to remember that.

My hon. Friend the Member for Beverley and Holderness (Mr Stuart), who is no longer in his place, intervened a couple of times to point out the great success in the apprenticeship sector. I agree with him about that and how important it is that we have made things easier for low-paid workers by cutting their income tax bills, a policy that went straight from the front page of the Lib Dem manifesto to the pockets of hard-working people. I am delighted that my hon. Friend and other colleagues are now so supportive of that particular policy.

The hon. Member for Hayes and Harlington (John McDonnell) raised a range of specific concerns about employment issues. We discussed blacklisting yesterday and in previous debates, and the Government will continue to keep a very close eye on that. I urge Members and others to be aware that free and confidential advice is available if people are worried about their employment rights. They should get in touch with the pay and work rights helpline, which is available online or on 0800 917 2368. Anybody can access it, and if they have concerns about national minimum wage payments, such cases can be passed to Her Majesty’s Revenue and Customs for enforcement action. Indeed, national minimum wage problems are prioritised on that helpline.

My hon. Friend the Member for Eastbourne has achieved great success in his own work in improving the number of apprenticeships. He also raised the important issue of employers who do not pay out the award after losing an employment tribunal. He knows that we have been working on that and we will hold further discussions, particularly with the Ministry of Justice, on what action to take.

The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) mentioned the positive role that trade unions play and how they have driven up safety standards on oil rigs. He was right to highlight that and the role they can play in improving workplaces. The hon. Member for Inverclyde (Mr McKenzie) talked about zero-hours contracts and the hon. Member for Bolton West (Julie Hilling) echoed many of the points made by the hon. Member for Paisley and Renfrewshire North.

Unemployment is now falling. There are 1 million more apprenticeships and 1.3 million more jobs in the private sector. That is a good record, but despite this we must avoid complacency and make further improvements to create more jobs, so that people can get the work they want and employers can take on the skilled workers they need in order to grow.

Question put and agreed to.

Resolved,

That this House has considered employment rights.