Growth and Infrastructure Bill

Chuka Umunna Excerpts

Monday 17th December 2012 Commons Chamber

[Gordon Birtwistle (Burnley) (LD)]

My first question is: where are all the Members who are supposed to be supporting this Bill?

I believe in freedom of choice. If an individual wishes to work for a company on a contract such as that which is proposed, they should be able to do so. That will not be the case in the big industries. Rolls-Royce and Jaguar Land Rover are not going to get involved. This scheme is for small niche companies in the high-risk sectors, such as high-tech firms and website designers, which employ recent graduates who want to get involved in such firms because they hope they will become a second Google. These companies are the gamblers that grow and create jobs in the future. I cannot understand why this Parliament should stand in the way of these people and say, “I’m sorry, but you can’t do that, even if you wish to do so.”

I think back to the 1960s when I was 24 and I had just come out of my apprenticeship. I went for a job as a contract draughtsman. I was offered two alternatives by the company. It was a good company, and it said I could have all the schemes it had, such as holiday pay and a contract for 44 hours of work a week—those were the hours we used to work in those days—and I would have a fixed rate. Alternatively, the company said I could have none of those schemes and have four shillings an hour more than everybody else was getting. I was keen to earn extra money, because I wanted to save up and put a deposit down on a house, so I decided not to have any of the conditions laid down by the company. I decided, on my own back, as I had the freedom to do so, to take extra money for working as many hours as I wished while having no contractual employment. I did that for two years and managed to raise enough money to put down a deposit on a house. That was my choice and it was the company’s choice to offer it to me. Other people worked there who wished to carry on with the conditions they had, but other young guys like me wanted to raise as much money as they could to put down deposits on houses, buy new cars and so on, and they went ahead and did it. They were free to do it—there was no pressure.

[Mr Chuka Umunna (Streatham) (Lab)]

The hon. Gentleman’s central argument is that the proposed scheme is voluntary, but my problem, in addition to all the comments made by my hon. Friend the Member for Edinburgh South (Ian Murray), is that the Government have singularly failed to give any guarantee that a prospective employee in receipt of JSA who does not wish to take up such employment will not be penalised for not wishing to take a job without basic fundamental rights. That is, in fairness, the point that the right hon. Member for Hazel Grove (Andrew Stunell) has made: we have received no guarantees whatsoever. How can the hon. Member for Burnley (Gordon Birtwistle) say that this is voluntarily, if people could face such sanctions?

[Gordon Birtwistle]

I thank the shadow Secretary of State for his observation. My name is on the amendments tabled by my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and I am waiting for the Minister to answer the questions they raise. I am sure he will give us some advice. If a the jobcentre advertisement for a job makes it clear that it involves giving away rights in return for shares, the person going for it will know that before they apply and will be completely open to the idea. If the jobcentre does not advertise those conditions, and the applicant is told about them only when he goes in for interview, my concern is whether he will still get his benefits when he tells the job centre the conditions he has been offered. I hope that the Minister will advise me that that applicant will still get their benefits, and if he does not I shall be extremely concerned and will have to consider which way to go. However, I am sure that the queries raised by our amendments will be answered.

--- Later in debate ---

[Michael Fallon]

I certainly accept that point. What comes between the intentions and the outcome is the guidance. There is currently guidance to all staff in jobcentres, and I have already undertaken for my right hon. Friend that we will amend it. However, we will not simply amend it to put my words of tonight into it; we will consult all the various stakeholders involved on how we can make sure that it properly reflects what both he and I want to do.

[Mr Umunna]

I am not very comforted by the Minister’s comments, because he seems to be suggesting that there would be circumstances in which it would be unreasonable for a prospective employee to turn down a job offer if it were conditional on employee-owner status. Will he, for the benefit of Jobcentre Plus employees, make it clear that if they have a jobseeker’s allowance claimant who refuses to take a job offer because they do not wish to have employee-owner status and lose their rights, no sanctions should be levied on that prospective employee in terms of the deduction of any benefit or any other adverse consequence? Will he make that clear for the record?

[Michael Fallon]

I am happy to make it as clear as I can. By the way, I think that it is somewhat unlikely that the jobcentre applicant in this case will be offered a significant number of shares and then still find himself unable to take up the position. Let us be clear about how the jobcentre system works: these decisions about sanctions are taken on an individual, case-by-case basis. What I am announcing tonight is that the guidance will make it very clear as to the reasons that the employee had to have before having his benefit sanctioned.

Let me turn to the second point raised by my right hon. Friend the Member for Hazel Grove, which is the only really serious issue about this new employment status. As he and my hon. Friend the Member for Burnley have said, it is a voluntary status. No one on the Government Benches wants employees to be pressurised, harassed or bullied into accepting it. We therefore want to ensure that no individual can be coerced into accepting an employee-shareholder contract. Throughout all the discussions since the policy was announced, there have been concerns that existing employees—not new employees, but existing employees—might be coerced into accepting these contracts. I have been very clear that the new status is entirely voluntary, but I wholly accept that it needs to be seen as such.

Amendment 40, tabled by my right hon. Friend the Member for Hazel Grove, seeks to ensure that existing employees are not coerced into the new employment status. The principle behind the amendment is right and the Government support that principle. Indeed, we think there is a stronger way of ensuring that no detriment will arise in the Bill than by relying on secondary regulation, and that is why we have tabled amendments 64 and 65.

Government amendment 64 creates a new right not to suffer detriment if an employee refuses to sign an employee-shareholder contract. This means that if an employee has been overlooked for promotion or has been disadvantaged in any other way because of that refusal, he may then be able to present a claim to an employment tribunal.

Government amendment 65 creates a new unfair dismissal right. This means that if an employee is sacked because he has refused to accept an employee-shareholder contract, this will be regarded as automatically unfair. Importantly, both these rights will apply from day one of an employee’s contract. That means that employees are protected from the first day of their service. I want to place that beyond doubt. Employees cannot be taken on and then, on day two, be forced to become employee shareholders.