Zero-hours contracts

Fiona O'Donnell Excerpts

Tuesday 9th July 2013 Westminster Hall

[Julie Elliott]

I could not agree more with my hon. Friend. I will come to this later, but I question whether the people working in that field on zero-hours contracts are actually being paid the minimum wage, after all the costs that they must pay themselves are deducted. If they were employed, they would not have to do so.

The numbers simply are not conducive to the world-class care that patients deserve. Reflecting on the corrosive nature of zero-hours contracts, one care worker interviewed for the CESR’s study said:

“I can’t plan my life, not knowing when exactly I am going to be working, I can’t plan things…I have gappy rotas, periods when I am not working, odd half-hours. I take a book with me. I know that I am not getting paid, sometimes it’s really depressing. One of my colleagues said she was going out from 3 pm to about 7 pm, and actually there was only two payable hours in that whole period”.

That confirms what my hon. Friend just said.

How can we expect care workers or NHS nurses to have total commitment to an organisation or company that has none toward them and puts them on zero-hours contracts? They leave nurses and carers worried and looking for other jobs instead of focusing on patient care, leading to worse care for patients.

Not incidentally, we must also look at ourselves—at the House of Commons. We should be setting an example of good employer practice. According to the House of Commons Commission, as of 31 January 2013, nearly 9% of House of Commons staff are employed on a zero-hours contract.

In their responses to my FOI request, many trusts were at pains to explain that workers on zero-hours contracts were not obliged to accept any work offered. That is absolutely right; such an obligation would be illegal. It would be servitude. That is not much of a defence. There is also growing evidence to suggest that the choice to turn down work is illusory. Often, employers will cut the hours of any worker who turns down work, a practice known as zeroing down. The Resolution Foundation interviewed a domiciliary care worker in Newcastle who said:

“When I started out at my current job, I did nine weeks without a single day off and I was regularly working anything up to 55-60 hours a week. Since putting my foot down and refusing to work every other weekend…my hours have dried up.”

For many workers, the flexibility of zero-hours contracts is a one-way street that benefits only the employer. There is even evidence that some employers zero down workers’ hours simply to avoid the costs of redundancy or as punishment for reporting unfair treatment.

What needs to be done? We need to discuss concrete solutions to the zero-hours contracts crisis. Suggestions include regulations that state that if a worker’s average normal working hours are in excess of their contracted hours, they have the right to have their real-world hours written into their contract. We also need to raise awareness of zero-hours contracts first and foremost among people employed on them. Job adverts offering positions on zero-hours contracts should say so explicitly.

My right hon. Friend the Leader of the Opposition has proposed living wage zones and tax breaks to persuade companies to pay their employees a living wage, in order to boost productivity and cut the welfare bill.

[Fiona O'Donnell (East Lothian) (Lab)]

I am grateful to my hon. Friend for securing this debate and giving me the opportunity to contribute. Does she agree that it is essential that any training that staff require should be paid by the employer?

[Julie Elliott]

Of course it should. Not paying is a complete lack of obligation by employers to the people who work for them, whether they are workers or employees. Their businesses prosper because those people work for them, and people should be looked after properly.

Paying employees a living wage would boost productivity and the welfare bill. The Institute for Fiscal Studies has calculated that for every £1 spent paying a living wage, the Treasury saves 50p on tax credits and benefits. The Resolution Foundation has calculated that if everyone now receiving the minimum wage received the living wage, there would be a £2.2 billion net saving, comprised of higher income tax and national insurance receipts. There is growing evidence that living wages boost productivity, motivation and performance, and reduce leaver and absentee rates, thereby offsetting the cost of the higher wage. The people who reject that analysis are the same people who said that the national minimum wage would lead to vastly higher levels of unemployment. They were wrong; it simply led to higher wages.

Progress has been made in the past two decades to protect those on zero-hours contracts and agency workers, who are often the same people. The working time regulations, the national minimum wage and the agency workers regulations have done much to improve the rights of such workers, but zero-hours contracts have reached a tipping point where further regulation is now required, because more needs to be done to tackle the inequalities and unfair treatment inherent in such contracts of employment. We must strengthen efforts to ensure that employers who abuse zero-hours contracts are brought to order. The tax and benefits system should be updated to reflect the changes in the labour market and to support people on zero or small-hours contracts. The contracts are merely the latest in a long line of ingenious tactics by the less scrupulous employers to keep costs down at all costs, all to the cost of their employees. Once we have addressed some of the worst excesses of zero-hours contracts, I do not want to see equivalents pop up and for us to take years to respond to those as well, with the lowest paid suffering all the while at the sharp end of the employment market.

When I asked the Minister present what the Government were going to do about zero-hours contracts, she stated that they would crack down on any abuse of such contracts. I am pleased that the Secretary of State for Business, Innovation and Skills announced last month that he was undertaking a fact-finding review of zero-hours contracts. He says that only anecdotal evidence of abuse is available, but I think that we are well past the stage of anecdotal evidence.

Many people on zero-hours contracts work fairly regular and often long hours. In such cases, zero-hours contracts are not about flexibility for the employer but about control over the employee. We could call it exploitation. Many workers start early in the morning and are expected to stay at work until late in the evening, with multiple unpaid breaks in between. That is a life lived on call. I welcome contributions from colleagues and the response from the Minister. People on zero-hours contracts, whether they treat our sick, look after our elderly or serve our food, need a commitment from the Government. I look forward to hearing it.