Employment Rights

Graham Stuart Excerpts

Thursday 12th September 2013 Commons Chamber

[Richard Harrington]

In one business, I started with two employees, of which I was one. When I left, the business was responsible for 2,000 employees in seven countries, but I cannot claim full credit for that since the purchase of the company, when there were 600 employees. I therefore have some experience of being an employer, and of seeing different regimes in different countries. I am absolutely appalled by the exploitation of labour, in whatever country it may be, by those who employ people on wages that are not living wages. Whatever the law is, I believe that a morality applies: employers should not employ the labour if they cannot afford it.

In the limited time available, I would like to say a few words about zero-hours contracts. It is very easy to criticise them, without really understanding what they are. The general public might think, from reading newspapers, that these contracts are like the casual labour of old. Actually, they are not. This may sound like a GCSE question, but are they about modern employment flexibility or old-fashioned exploitation? It is clear from his speech that the right hon. Member for Oldham West and Royton feels that these contracts are very much like industrial revolution-type exploitation of labour.

It is certainly true that there are some abuses of these zero-hours contracts, and that should not be tolerated. I am delighted that the Department for Business, Innovation and Skills—I am pleased to see in her place the Under-Secretary of State for Business, Innovation and Skills, the hon. Member for East Dunbartonshire (Jo Swinson)—is conducting a full inquiry into zero-hours contracts, and we all very much look forward to hearing its findings.

My proposal is that many companies in all types of industry use zero-hours contracts responsibly. They provide work, for example, to parents who have different needs for child care and to students, and they provide opportunities for people to join the work force in a flexible manner, perhaps while they study or carry out other commitments. Companies that use these contracts responsibly offer full training, paid holiday and all the other things that people in normal employment receive—and so they should, both legally and morally. They do not ask people simply to be on call at all times or prevent them from knowing how much they are going to earn.

Let me cite McDonald’s as an example. Here I must disclose an interest in that my younger son has been working for the company over the summer. Interestingly, McDonald’s employs 92,000 people in 1,200 restaurants. Many Opposition Members sneer at this kind of work; they call it “McD work” and there are many other clichés that go with it. McDonald’s, however, takes a pride in the employment it offers and in the training it gives people. During the application procedure, it asks how many hours people want to work, and it organises its shift systems accordingly. I ask all hon. Members not to view zero-hours contracts in completely black-and-white terms; I think there is a place for them.

To finish, let me explain that during my employment career, I did a lot of business in Spain and a lot in the UK. I regret to have to tell you, Madam Deputy Speaker, that in Spain, where youth unemployment stands at more than 53%, much of the problem stems from the fear of employers knowing that if they recruit people but things do not work out, they will be left with a terrible liability. They are not employing people and not giving people a chance because of the type of laws that certain Opposition Members would have us embrace in this country.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The latest unemployment statistics in Beverley and Holderness are 3.3%—considerably down from the general election—and we have one of the highest apprenticeship rates in the country. Does my hon. Friend agree that the only way we will be able to get the living wage and above as the norm for everyone is by improving our skills? Is that not what the Government are trying to do by strengthening the quality of apprenticeships, some of which lasted for just six weeks when the Labour party was in power?

[Richard Harrington]

As ever, my hon. Friend makes a very good point.

To conclude, the future for labour and recruitment will, in my opinion, come about by making labour as flexible as possible. Employers do not want to hire and fire people; they want to invest in people and train them. I commend the Government for putting in resources to help them do that. This old idea of a perpetual battle between labour and capital, and between management and working people, makes me wonder which century some people are living in. It is not like that in the real world. The last thing that the 1,400 businesses that employ between two and nine people in my Watford constituency are thinking about is how to recruit people as cheaply as possible in order to exploit them. Taking people on is a huge thing; businesses want to give them good and well-paid jobs. They do not want to take away any moral rights, let alone legal rights, that they have.

It is time for us politicians to give credit to those who employ people. They are not the enemy. Being able to employ people is a great privilege in life, while waking up in the morning and thinking how responsible we are for so many people’s livings is a big responsibility and burden. It is even more of a burden than the one that we politicians bear. I do not think that the situation is black and white. I do not take these matters lightly, but the fact is that, in the modern age, there must be a balance that enables workers to choose where to be employed and enables employers to plan their businesses with good, well-qualified labour. Employees should not have to pretend that they are stuck there for life, or that their employers are stuck with them for life if things do not work out.

--- Later in debate ---

[Stephen Lloyd (Eastbourne) (LD)]

I congratulate the right hon. Member for Oldham West and Royton (Mr Meacher) on securing the debate.

It is a pleasure to follow the hon. Member for Hayes and Harlington (John McDonnell). I know that employment rights are an issue for which he has fought for a long time and I appreciate some of the information that he discussed, especially in relation to Network Rail and the maritime industry. I want to explore those topics further because I support his comments.

I compliment my hon. Friend the Member for Watford (Richard Harrington). It is not the first time I have tended to agree with him when he has spoken in the House. Although employment rights are very important—crucial in many ways—and I will discuss them as my speech progresses, to me the most important thing that the coalition Government have achieved in the past three years is a remarkable success on the jobs front. I have only to look across the sea to see what has been happening in Europe, where France, Spain and Italy have been devastated by the numbers of people who have become unemployed, and compare that with what we have achieved in the UK through considerable effort by employers in the private sector, by Government in the public sector and by our fellow citizens.

We have employed almost 1.5 million people in the toughest recession I have ever been through. I am 56 years old. I was in business for many years before I went into politics. This is my fourth downturn and it is far and away the toughest one that the country has been through in my experience. Despite that, by working together to give so many people jobs in comparison with the rest of Europe is testimony to the enormous effort and work that so many people have done in this country. It is brilliant.

In Eastbourne, following close working between the chamber of commerce, the Federation of Small Businesses, the council and the training colleges, the latest figures for August show that unemployment is down to 3.9%, the lowest rate since 2009. We have seen more than 2,500 apprenticeships since I launched the 100 apprentices in 100 days campaign two and a half years ago.

My point is that this has been an appalling recession. I know so many business owners and staff who have worked so hard over the past few years to keep jobs and get through the recession. I know employers who have said to their staff that no one would get a pay rise for the next 12 months, or 24 months, including directors, so that they can get through. Other employers have said that they will take a 20% pay cut to get through. I have never known anything like it.

I compare that with previous recessions, when unemployment shot up and there was tremendous animosity between employers and employees. This time, despite what some Opposition Members say, that has not been the case. There has been an understanding, particularly in the private sector, that, “My God, if we are going to get through this we have to roll up our sleeves.” It has really worked, because we have 1.4 million new employees after such a shocking recession, and we are not out of the woods yet. I think that should be lauded to the skies. It is absolutely magnificent. I think that it has worked only because both parties have worked together.

[Mr Graham Stuart]

Will my hon. Friend give way?

[Stephen Lloyd]

Where?

[Mr Stuart]

Behind you.

[Stephen Lloyd]

Yes, of course.

[Mr Stuart]

My hon. Friend is absolutely right to highlight the 1.4 million new private sector jobs. The credit for that should go to the people who displayed solidarity, because they put their immediate, personal interests behind the group interest. That is one of the reasons that so many people have stayed out of the dole queues, contrary to what all the experts and economists predicted. It is a success, and it is enormously to the credit of those people. What we need to do now is improve our skills and earn more money so that everybody can have a decent wage.

[Stephen Lloyd]

I thank my hon. Friend for that intervention. That is precisely my point. It has been an exceptional example of community work between employees and employers. I should also explain that unfortunately I have hearing only in my right ear, which is why I was not sure where the intervention was coming from.

From the Liberal Democrat perspective in the coalition, the issue of employment rights is important issue because it is about fairness. Although it is incredibly important to me, as a Lib Dem, that employees have as many sensible rights as possible, I want flexibility. I recognise that the vast majority of employers are good employers, and that the vast majority of employees are hard working and dedicated. The challenge with regulation is how to make it flexible while at the same time preventing grotesque employers.

I have a good example that I have addressed to the Minister. As she knows, one of the campaigns I have been working hard on, both personally and as chair of the all-party group on Citizens Advice, relates to something I discovered in my constituency and later discovered was true nationally. Many employees, some of them very vulnerable people, go to an employment tribunal for unfair dismissal or non-payment of wages. The employer might lose, but the vulnerable employee never gets any money because the employer either does not pay or deliberately forces themselves into bankruptcy so that they can start again under a different guise. I know that the Minister is looking into that, and I would be keen to have an update today on how we can strengthen the law so that the small proportion of disreputable employers are not allowed just to ignore civil cases.

Zero-hours contracts are an important issue that I have been studying. I regret to say this in a Back-Bench business debate, but I sometimes get frustrated by the element of humbug from the Labour party. The Labour Government had 13 years to address zero-hours contracts but did nothing, so I find it tiresome when vitriol is poured on us and the coalition is accused of ignoring the issue, as if the previous Government had a good record. They did not. Furthermore, more than 20,000 members of staff working for Labour councils are on zero-hours contracts. This is a challenge for both sides. My personal view is that we need much more robust research to identify the scale of the problem. I can see how unscrupulous employers are abusing zero-hours contracts, but I know from my own experience of talking to people who work in the university sector and the NHS that some of them like those contracts.

I have had meetings with the Secretary of State about this, and my personal request to the Minister is that we conduct some really robust research involving consultation with all sides, including the trade unions and employers, so that we can make an informed decision. A much more robust code of practice would certainly be helpful. However, the most important thing is that this is about jobs, and on that the coalition is delivering.

--- Later in debate ---

[Julian Smith]

My hon. Friend is right: we are the envy of most countries in terms of our employment law. The shareholder initiative has received a lot of criticism but it is just another attempt to make it easier for new, smaller, principally technical companies to take people on, give them a shareholding, maintain their fundamental rights but provide a bit of flexibility. It is not just about making things easier for employers, however, as the Government have a good track record on employees. We have introduced the commitment to flexible working and are bringing forward shared maternity and paternity leave. Labour Members talk about a high level of pay, but the Government have introduced shareholder votes for executive pay, and we are pushing forward with numbers of women on boards. We are reviewing zero-hours contracts and the minimum wage has risen under this Government. I think we can be proud.

[Mr Graham Stuart]

May I take issue with my hon. Friend because he missed out the fact that we have also raised the threshold at which someone pays tax? By rising to £10,000, that threshold will make a huge difference to people on low earnings, creating an incentive to work.

[Julian Smith]

My hon. Friend is absolutely right. There is a long list, and I think we can be proud. These are modest changes but they are intended to help both employer and employee.

I do not agree that unions cannot be helpful in relationships between employers and employees, and I think they play an important role, particularly in bigger companies. I believe, however, that the current tactic of the unions on the relationship between employee and employer is barking mad, and I will give two examples of that. First, a gentleman in a village in my constituency runs a big company. He outsourced some of his work, and that outsource company laid off some staff. That gentleman and his family have been harassed by a particular union for months, with people coming on coaches to invade the village and demonstrate against a decision for which he was not responsible, using a tactic that the union has imported from America.

The second example is a piece of information sent to, I think, Unite members over the past few weeks, suggesting that they see the employer as an opponent and someone with whom they should be deliberately having a fight. That is what upsets me most about the way that the unions are looking at the issue. I have attended most debates on employment law since becoming a Member of Parliament, and the fact that so many Labour Members take the view of the unions, as in the examples I have given, means that they are not taking an objective view of the importance of employment law. The shadow Minister has employed people and knows full well that these reforms are the right way forward, but for whatever reason, he is blinkered by other constraints.

In conclusion, the employment law world is changing, and changing fast. This debate on zero-hours contracts will be writ large in years to come, and there will be more part-time working, more multiple employment and working from home, and probably much more self-employment and entrepreneurship. It will be a wholly different way, and if Labour Members do not look at that trend and look five or 10 years ahead, they will fail to represent workers and those people they have often represented so well through the unions, as in the cases we heard earlier. I urge them to consider the Government’s reforms, support them and see them in the light of incremental change, rather than as a radical return to a past that possibly never existed.