Insecure Work and the Gig Economy

Chris Stephens Excerpts

Wednesday 20th June 2018 Westminster Hall

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to see you in the chair, Mr McCabe. I congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing this debate and on her private Member’s Bill, of which I am a sponsor. I also want to take the opportunity to commend the work of Better Than Zero, an organisation primarily organised through the Scottish Trades Union Congress youth committee, which continues to expose rogue employers in Scotland.

Mr McCabe, you and I sit on the Select Committee on Work and Pensions. You will know that there are 4,504 full-time equivalent posts chasing social security fraud estimated at £1.2 billion. There are 400 workers from the state who are employed to chase minimum wage compliance. If the minimum wage compliance unit had 4,504 full-time equivalent posts, I just wonder whether there would be 200,000 workers in the United Kingdom not being paid the national minimum wage.

Another piece of legislation, in addition to the hon. Lady’s, is the Workers (Definitions and Rights) Bill. It is in my name, and it proposes a number of key things as solutions for workers in the gig economy. First, it looks at zero-hour contracts. I think they should only be in place where there is a collective agreement with a recognised trade union. That will be the test of whether the claim that people like zero-hour contracts is actually true or not. Mainly people tell us that people like zero-hour contracts, but I have never met anyone who went to a careers adviser at school and said, “I want wan o yon zero-hour contracts.” It just does not happen.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

Has the hon. Gentleman considered alternative contracts such as they have in other countries? In Holland, for instance, they have contracts by agreement, which are fixed-term agreements paid by the hour with a legal route to permanent contracts. Is that something that he would consider in his legislation?

[Steve McCabe (in the Chair)]

Order. Just before the hon. Gentleman replies, I would point out that if people keep taking interventions, some people are going to drop off the end.

[Chris Stephens]

I am not opposed to what the hon. Member for Leeds North West (Alex Sobel) suggests.

I want to deal with the important issue of shift changes. Some of us in the Chamber attended a TUC event earlier this year. It is clear that two things are happening: sometimes shifts are cancelled, which means that people miss out and have to pay for childcare, and sometimes people are told they have to work additional hours. There is a real case for saying that if people turn up at work and are told that they have to work additional hours or that their shift is cancelled, they should be paid double time so that they are compensated for childcare.

We must also look at worker status. I have a very real concern about the Taylor review trying to introduce additional tiers of worker. There should be a single definition of a worker. It is clear that if someone provides their labour to an employer, they are a worker—full stop. Self-employment is also easily defined. It seems clear to me that a window cleaner with 200 customers is self-employed. We really need to address the issue with worker status to help the many people who are told that they are self-employed when, in actual fact, that is bogus.

I want to touch finally on an issue that we have seen with Carillion and in other places, such as a Hilton hotel in Scotland, where a hairdresser absconded with £80,000, leaving four workers without a job, and the hotel said, “Not our responsibility.” We need to deal with that issue, too. Where an employer absconds or goes bust, the principal contractor should be responsible for the wages and the terms and conditions of its workers.

I thank you, Mr McCabe, for calling me to speak, and I thank the hon. Member for Barnsley East for securing the debate.

--- Later in debate ---

[Andrew Griffiths]

I completely understand the hon. Gentleman’s point. That is why we have recognised that those opportunities come with risks, and that some in the workforce need greater protections.

The UK’s flexible, dynamic labour market has allowed the economy to bounce back from Labour’s recession and has delivered record employment; unemployment is at the lowest rates for 40 years. However, we recognise that it has not worked for all. It was for that reason that Matthew Taylor was asked by this Government to examine the current labour market and employment law framework, to help us to understand the opportunities of future working practices as well as to identify areas where the labour market was not working for everyone.

That is why in February the Secretary of State for Business, Energy and Industrial Strategy made a commitment in the industrial strategy to take responsibility for the quality of work, which was the first time ever that a Government focused on quality as well as quantity of work. Our aim is to drive forward the change required to ensure that creating quality of work is given equal priority to the quantity of work that is created.

Our detailed response to the Taylor review was published on 7 February. In that response, we committed to take forward 52 of the 53 recommendations. Our response clearly demonstrates that we are progressing with our commitment to take firm action to protect the most vulnerable, the lowest paid and those who work in a non-traditional way.

For example, we have consulted on state enforcement to ensure that vulnerable workers get their holiday and sick pay; we have asked the Low Pay Commission to consider higher minimum wage rates for workers on zero-hours contracts; we are providing all 1.2 million agency workers with a clear breakdown of who pays them, and of any costs or charges that are deducted from their wages; we are ensuring that all workers get an up-front statement of terms and conditions from day one; we are making it easier for flexible workers to accrue employment rights, by extending the permissible breaks in continuous service; and we are creating a right to request a stable contract for all workers. To progress that work, we have very recently completed four consultations on employment status, agency workers, transparency and enforcement, which are necessary to deliver the change that this Government wish to see.

The hon. Member for Barnsley East asked whether we would give workers the same equal pay rights as other employees. The Government do not support or condone the use of Swedish derogation contracts to circumvent equal pay entitlements. Let me be absolutely clear on that. That is why we have consulted to gather views and evidence on our response. Options include repeal or regulation in relation to the use of the Swedish derogation. Before taking a final decision, it is right that we consider the views coming forward properly in that consultation.

The hon. Member for North West Durham (Laura Pidcock) accused the Government of ruthless whipping. As a former Whip, I take great exception to that. She raised the issue of zero-hours contracts, but the number of people reporting that they are employed on a zero-hours contract is down from 905,000 last year to 901,000. Some 6% of businesses use some form of a zero-hours contract. There are 1.7 million temporary workers in the UK, but 28.4% of them said that they did not want a permanent job.

My hon. Friend the Member for Chichester (Gillian Keegan) made a magnificent speech, and pointed out the challenges and the opportunities of the gig economy. She rightly said that 90% of gig economy workers are satisfied with the jobs they are doing.

The hon. Member for Glasgow South West (Chris Stephens), in his usual determined manner, said that there should be more people enforcing the minimum wage. I am delighted to tell him that the Government have continued to invest heavily in minimum wage enforcement. We have doubled the budget to £26.3 million, up from £13 million last year. As a result, we secured £15.6 million in arrears last year, covering 200,000 workers in this country who had redress thanks to the Government’s support.

[Chris Stephens]

Will the Minister confirm that 25% of the posts at the national minimum wage compliance unit are still lying vacant?

[Andrew Griffiths]

I do not think that is right. I will write to the hon. Gentleman, but I assure him that those figures are wrong.

The hon. Member for Batley and Spen (Tracy Brabin) asked what the Government have done about pregnancy and maternity discrimination—a subject that is dear to my heart and that of the hon. Member for North West Durham. In response to Taylor, we are working to improve the guidance and advice on pregnancy and maternity rights and employers’ obligations. We also committed to review redundancy protection within the next 12 months. The hon. Member for Batley and Spen asked about shared parental leave for self-employed people. As she recognises, it is under review. I cannot commit to that today, but once again she makes that point loud and clear.

The Taylor review considered not only the plight of agency workers, which many hon. Members raised. In his 2018-19 strategy, the director of labour market enforcement published recommendations to support those workers. In response to Matthew Taylor’s recommendations on agency workers, the Government have already committed to take action and improve transparency on pay and on the rate workers will receive on taking up assignments. Quite simply, it is not right that individuals do not receive the advertised rate of pay.

I have mentioned the issue of the Swedish derogation. We are also considering extending the Employment Agency Standards inspectorate’s remit better to protect agency workers from emerging challenges in the labour market. We are looking at whether it should include umbrella companies, about which we all have concerns. I am sure the hon. Member for Barnsley East understands that I cannot pre-empt the results of the Taylor consultation. It is clear that Members on both sides of the House agree that agency workers’ employment rights need special consideration and protection.

The Government are committed to ensuring that the UK is a great place not just to grow a business, but to work. We understand that being employed is not enough if the employee is at risk of being exploited or mistreated by their employer. We have consulted on options for what would be the most radical shake-up of our employment law in decades and we will take the necessary action to protect workers across the United Kingdom.