Unpaid Work Trials

David Linden Excerpts

Tuesday 5th February 2019 Westminster Hall

[David Linden (Glasgow East) (SNP)]

It is a pleasure to see you in the Chair and to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald), not just on securing this debate but on the legislation he introduced under the private Member’s Bill process. It is an area of deep regret that that legislation has not been pursued. It highlights the absolute folly of the private Member’s Bill system in this place, but that is a debate for another day.

I rise to make similar points to those already made. We need action on this today. I think, “Okay, fine, great, guidelines,” but the reality is that we need this enshrined in law. In the time I have been in this House, I have already seen a number of areas of employment legislation and employment practice that do not do justice to our constituents, quite frankly. Some of it is about unpaid work trials, which I reckon will be even more of a thing after Brexit. The hospitality sector largely relies on EU nationals. When the drawbridge is brought up as a result of the Immigration Bill, the chances are that the hospitality sector is going to rely more on people in the local population working in those jobs. I would be very concerned if hotels and restaurants decided that they were going to deploy unpaid work trials.

[Patricia Gibson]

The UK Government have said that they are of the view that unpaid work trials are permissible in legitimate recruitment processes. Does he agree with me that the problem is that nobody is monitoring what is permissible and what is legitimate?

[David Linden]

My hon. Friend makes a powerful point; that is something the Minister should consider. When we say that this place just does not deliver for workers’ rights, we look at the absolute lack of any action on zero-hours contracts. We look at, for example, the age discrimination in the national living wage, which is not applicable to those under 25. Those are areas where the Government have been told time and time again that Parliament wants action, but they sit back and say, “Oh well, we’ll do guidelines, or we’ll do consultations.” I certainly welcome consultations, but at this stage we need to see legislation.

The hon. Member for Ellesmere Port and Neston (Justin Madders) has made the point that, even though the National Minimum Wage Act 1998 is on the statute books, only 14 employers have been found in breach of the legislation since it came into force. I do not think that is helpful at all.

The point I would make, which people would expect to come from a Scottish Nationalist Member of Parliament, is that if Westminster is not willing to take action on better employment conditions, then surely it should look at devolving that legislation to the Scottish Parliament, where we have a track record of taking action. Take, for example, the business pledge, whereby companies make commitments to say that they are investing in youth, do not have zero-hours contracts and do not discriminate based on someone’s age. There is clearly action in Scotland that can and will be taken to provide better employment conditions for people.

I regret that a number of parties in this Parliament blocked the devolution of employment legislation. If hon. Members are going to stand up in this Chamber today and say that they want better employment rights for people, that is fine—I would like to see better employment rights for people across the UK—but I do not want to come to another debate and make this point again and be stonewalled by the Government. If the Government are not willing to do it, then the Scottish Government will.

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[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for securing this important debate and for his excellent opening speech. Like him, I highlight the fantastic campaigns by trade unions, particularly the “Better Than Zero” campaign.

As several Members have set out, unpaid work trials have become a widespread practice in the hospitality, entertainment and retail sectors, but it is important that we place that development in the wider context of the so-called gig economy, as my hon. Friend the Member for Glasgow North East (Mr Sweeney) did. Characterised by increasingly exploitative working practices and conditions and insecure work, the gig economy affects millions who are struggling to make ends meet, making it harder for someone to say no to unreasonable and exploitative conditions set by employers.

That is the reality for so many, but it is being ignored, and even—dare I say it—encouraged by a Tory Government that represent only the wealthiest few. Everything about the current crisis of work is a consequence of an environment that is designed to reduce the burden on the employer at the expense of millions of workers.

In addition, more than £3 billion is lost in wages every year through unpaid work, with the continuing practice of unpaid work trials a key contributing factor. After a long campaign by the TUC and trade unions, and after attempts by Members—notably the hon. Member for Glasgow South—to introduce legislation have been repeatedly ignored, the Government attempted last December to set out when unpaid trial periods are acceptable. It was about time. As we have heard, a growing number of workers, particularly younger workers and those with learning disabilities, have been asked to work for free in recent years. Research by Unite has shown that, over the past three years, there has been a six-fold increase in complaints about unpaid shifts.

It is not only the trade unions and those who represent workers who say that the current system is not working. The Federation of Small Businesses has expressed concerns that unpaid trial shifts are shading into exploitation. Far too many employers have made people who are seeking work do a full-day trial shift, and in some cases employers have even demanded a full week of free work. That is not limited to small businesses; it includes large companies, as highlighted by my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Coatbridge, Chryston and Bellshill (Hugh Gaffney), and the hon. Member for Strangford (Jim Shannon).

The TUC makes it clear that testing skills and abilities should be part of a structured recruitment process. Having worked in industry for 20 years before I came to Parliament, I support structured recruitment processes, which are far better than the old boys’ networks they often replace. However, there is absolutely no justification for employers demanding a period of free work as the price of entry into a job. In my view, and in the view of the TUC and other campaigners on this issue, employers who require candidates to do any productive work should be made to pay them at least the minimum wage—which, by the way, will be at least £10 an hour under a Labour Government. Why does the Minister think that productive work should go unpaid? Why will she not commit to a £10-per-hour minimum wage?

[David Linden]

I realise that this is probably an unpopular point to mention in this place, because the practice is rife, but does the hon. Lady agree that we need to have a conversation about the use of unpaid internships in this building? Often, people will work for an MP for several weeks and there is a possibility that they might get taken on afterwards. It is not quite an unpaid work trial, but there is still a culture, in this building and in other Parliaments across the UK, of unpaid internships.

[Chi Onwurah]

That is an excellent point, and I would welcome a debate on unpaid internships in this building. I myself offer living-wage paid internships. It also happens in other areas, such as the media, where the BBC and others offer unpaid internships. It is a barrier to entry into certain professions and a form of exploitation.

It is clearly bad employment practice to ask for real work and not pay for it. It also means that employers avoid paying taxes and making a relevant contribution. That leaves the taxpayer and the entire country out of pocket. Will the Minister commit to ending such tax avoidance by preventing unpaid trial shifts?

As the hon. Member for Glasgow East (David Linden) emphasised, without strong enforcement the new guidance is not worth the paper it is written on, but the organisations tasked with enforcement have faced huge cuts since 2010. The employment agency standards inspectorate has lost half its budget. That is why a Labour Government will invest in enforcement through a new Minister of Labour. How will the Minister prevent companies from simply choosing to ignore what are, after all, just guidelines?

Employers who require candidates to do any productive work should be made to pay them the national minimum wage. Will the Minister commit to these basic requirements when it comes to trial periods, and if not, why not? Workers deserve more. Ending exploitative unpaid trial shifts is just one aspect of redressing the balance in favour of workers, and that is why we will set up a new Ministry of Labour. If the Minister cannot match that, she should at least commit to ending unpaid trial shifts.

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[Kelly Tolhurst]

I will carry on, because I want to give the hon. Member for Glasgow South time to wind up at the end.

HMRC investigators consider work trials on a case-by-case basis. They explore the precise detail of the arrangements, including what the worker is being asked to do and for how long. Where they come to the view that the arrangements constitute work under national minimum wage regulations, they will require the employer to repay any arrears and will impose a fine. HMRC has taken enforcement action where workers were expected to complete an unpaid work trial.

The Government are actively taking steps to tackle non-compliance with the national minimum wage, and to respond robustly to employers who fail to pay their workers correctly. We have doubled our investment in enforcement since 2015-16 and we now spend more than £26 million every year to ensure that employers meet their legal responsibilities. Employers who are found to be underpaying their staff must repay arrears and pay a fine of up to 200% of the underpayment, and may be eligible to be publicly named by the Department.

The hon. Member for Glasgow East (David Linden) mentioned that there had been only 14 prosecutions. As I have already outlined, the figure is actually more than 1,000 businesses in one year. The stat is not 14 but 1,000 in one year.

[David Linden]

On the issue of enforcement, does the Minister believe that the team in HMRC is adequately resourced?

[Kelly Tolhurst]

From the feedback I get from business, and from some of the work that I know is going on, I would say absolutely yes. We are enforcing and doubling investment, and we are making sure that HMRC investigates the case of every worker who complains. As the Minister with responsibility for the national minimum wage, that is exactly what I would like to carry on seeing.

I want to answer some of the questions that have been put to me during the debate. I also want to reassure hon. Members that workers’ rights are a big priority for the Government and particularly for me. In the advent of the Taylor review and the good work plan, we have seen a step change in a generation in terms of workers’ rights. We have announced that we will ban tipping, which will come further down the line, and we have laid legislation to firm up workers’ rights.

I thank the hon. Member for Glasgow South for securing the debate. It is essential that workers are paid the minimum wage. The Government have listened to concerns relating to work trials and issued new guidance, which, combined with robust enforcement, will help to ensure that workers are not exploited through unpaid work trials.