Draft Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015

Christian Matheson Excerpts

Wednesday 18th November 2015 General Committees

[Anna Soubry]

The reality is that complainants at a tribunal who are in receipt of universal credit, have less than £3,000 in savings and have gross annual earnings of less than £6,000 will automatically qualify for the full remission of fees. As with any other complaints admitted to an employment tribunal, anyone who feels that they cannot afford to pay the costs associated with making the complaint can apply for a fee remission and have the fees waived or reduced. An individual can apply for remission at the fee-paying stage so that they are not out of pocket. That seems very fair and I hope that it allays some of those fears.

[Christian Matheson (City of Chester) (Lab)]

Does the Minister share my concern that employers might be more cavalier in enforcing the exclusivity clauses if they know that it is not guaranteed that claimants will be able to achieve the discounts that she describes? As costs are still associated with the tribunal, and if the decision has to be taken at the time of the cost hearings, employers might still be keen to push forward with exclusivity.

[Anna Soubry]

The legislation stipulates that exclusivity clauses cannot be enforced. It applies when an employer goes over or above the existing powers available. If it is known there is a problem with fees, there is an automatic full remission of fees, so I am satisfied that this is the right and fair thing to do. People on such contracts should feel that they have the security that we would expect, so the measures are good.

Importantly—this may relate to the two questions that have been asked—the ability to go to a tribunal will create a deterrent for employers, making them think twice about ignoring the exclusivity ban. In the consultation, it was a strongly held view that employers should face consequences if they treat their zero-hours contract workers unfairly as a result of the ban. We will be laying an order that will ensure that those on zero-hours contracts will be subject to the early conciliation regime, which is important. If early conciliation does not resolve the issue, these regulations will allow the individual to bring their case to an employment tribunal in the same way as with any other issue. If successful, the tribunal will be able to set a level of compensation that reflects the detriment caused. With all those things borne in mind, there will be a real deterrent to employers abusing the system and thwarting the will of Parliament.

In conclusion, both Government and independent evidence have shown that zero-hours contracts have a place in today’s labour market. They support workplace flexibility, make it easier to hire new staff and provide pathways to employment for young people. Many young people like zero-hours contracts, particularly students, and I think we sometimes forget that. Zero-hours contracts allow businesses to adapt to changes in their circumstances. They can support business flexibility and make it easier to hire new staff, as well as provide pathways to employment for young people, retired people or those with caring responsibilities, who often welcome that flexibility. In fact, many people choose to work in this way. These contracts and other flexible arrangements give individuals more choice and the ability to combine work and other commitments.

Evidence has highlighted that the use of exclusivity clauses in zero-hours contracts is wrong, and that is why Government have banned them, and properly so. The regulations strengthen the ban on exclusivity clauses in the 2015 Act, adding another layer of protection for individuals and ensuring that employers cannot simply ignore the law. By creating a route of redress, individuals will have the right to make a complaint to an employment tribunal if they are dismissed or treated unfairly as a result of their employer attempting to demand exclusivity. The Government believe that the regulations are essential in strengthening the ban on exclusivity clauses, so I recommend the regulations to the Committee.

--- Later in debate ---

[Christian Matheson]

I intend to speak very briefly, Mr Evans, which is a shame because under your chairmanship it would be a pleasure to speak all day. [Hon. Members: “Ah!”] Hon. Members have not heard that tribute to a Chair before; it is a new one in this House. I should say to the Minister that there was absolutely no need for her to announce herself as a substitute because she was a safe pair of hands, as always, and gave a clear introduction to the regulations. I pay tribute to her ability.

The Minister is right that zero-hours contracts work well for some people; we talked about students and parents with children who might want to juggle their hours around. However, it concerns me that there are people on zero-hours contracts who do not wish to be.

For example, I know an airline pilot who was flying for a well-known low-cost airline. He had an exclusivity clause—this was a little before the introduction of the regulations that the Minister spoke about earlier—and was not allowed any further work. After three weeks, he was given a job flying reserve out of Stockholm and had to pay for his own hotel in Stockholm, but he did not fly at all, so he was not paid. Obviously, at the end of the three or four weeks, he would not have had enough money to buy a cup of tea, let alone to pay the tribunal fees that my hon. Friend the Member for Cardiff West mentioned. He asked the company whether he could have some bar work, and it flatly refused. As the Minister has described, the regulations will, we hope, challenge such insecurity, but it still bothers me.

The Minister was very positive when she answered my genuine question, but again I float my slight concern about people with well-paid jobs who do not have enough work, for whatever reason. If they seek reduced or discounted tribunal fees and fail to get them, they will not be able to afford to pursue their cases and will go back to their employer in a much weaker position. All of a sudden, the employer will be in a much stronger position to enforce a somehow legitimised exclusivity deal, albeit that the deal is unlawful. Contesting that unlawfulness will be difficult or nigh on impossible.

Will the Minister look again at mitigation so that low-paid people can get better access to justice? An economy that continues to rely too much on zero-hours contracts is not one built on firm foundations. I hope the Government will take this opportunity to consider ways of eradicating zero-hours contracts that are not entered through choice, which would give real security in pay and work to hundreds of thousands, if not millions, of people who do not necessarily want to remain on zero-hours contracts.

It is with great regret that I now cease speaking under your chairmanship, Mr Evans.