Zero-hours contracts

Debate between Ian Murray and Andy Sawford

Tuesday 9th July 2013 Westminster Hall

[Ian Murray]

That is a good point. We should have another Westminster Hall debate on the agency issue, in terms of how that all fits together. It is not only about zero-hours contracts, as there is a tapestry of problems in the employment industry that are worth looking at.

Many hon. Members—including my hon. Friend the Member for Wansbeck (Ian Lavery), who always speaks very passionately about such issues—have said that people get no pay and no hours. People sometimes go to great expense to turn up at work. They arrange child care and sometimes they do not even get a call to say they have got hours—actually, sometimes they do not even get a call. I have a screen grab here from someone’s iPhone, where a message says, “You’re not needed today.” That is all it says. It was sent at 12.40 in the afternoon, so they sometimes do not even get a call from their employer to say they are not required.

Many Members have spoken about the increasing numbers of contracts, so I will not run over that again. However, I would like to concentrate on the law behind the issue. A body of law sets out what someone is classified as when they are at work. They are either an employee, a worker, or self-employed. We shall set aside the fourth, new category of someone who is an employee shareholder, as that is a different debate altogether. If we look at those three categories, it is clear what someone who is self-employed is. There is a whole body of case law about what the definitions of an employee and a worker are. Many would argue that someone on a zero-hours contract is, in fact, a worker, but that worker needs to have some kind of mutuality of obligation, and there cannot be a mutuality of obligation if the worker has to turn up for work at their expense, but the employer has no need to give them any hours. That does not seem to me to be any sort of mutuality.

[Andy Sawford]

I agree that the important point about an employment contract is that there must be a mutuality of obligation, but the contract also must impose an obligation on a person to provide work. Therefore, I cannot understand why it is not unlawful as it stands, in the current body of law.

[Ian Murray]

There is an argument about whether zero-hours contracts are currently unlawful, but mutuality of obligation is case-law terminology and is therefore not written in statute. That is how, over many years, the case law has built up about the definition of employment tribunals, in terms of whether someone is in work or, indeed, whether they are a worker, an employee or self-employed. So there is a definition. My hon. Friend the Member for Wansbeck has said that what we are talking about is not a job. It perhaps is not a job. It cannot be right for people to be in this situation and not end up with any hours.

Let us consider some of the damaging effects. For staff, zero-hours contracts have huge drawbacks compared with permanent regular work. There is no guaranteed level of regular earnings that provides any certainty with regard to meeting bills, meeting rent or planning for the future. The need to respond to calls to attend work, frequently at short notice, disrupts life outside work and places a particular strain on families in terms of arranging care for dependants. The Government have put a heavy emphasis on being family-friendly, but we have yet to see any evidence of that. Zero-hours contracts fly in the face of the flexible working legislation that the Minister, to be fair to her, has pushed through and championed in government. They slightly contradict that aspect of employment.

There is a detriment to business as well. That is why I cannot see why business wants to use zero-hours contracts, particularly in some of the areas that have been spoken about. There must be reputational damage to employers who use these contracts. There must be an inability to attract and to retain high-quality staff. There is undoubtedly a direct correlation between continuity and the quality of the services involved. Some hon. Members have spoken clearly about health and social care and how continuity and quality of services are significantly affected. A loss of training and skills development tends to accompany zero-hours contracts, particularly if people have to pay for their own training, which is a huge issue with these contracts.

There is an overarching ethos and ideology. The Government have a one-track mind on this issue. They look at regulation and employment law as a burden on business. We have seen that with the Beecroft report. I am delighted that my hon. Friend the Member for Wansbeck used the phrase “Beecroft by the back door”—we have copyrighted that now. This is Beecroft by the back door. There are all these ideological moves, in terms of the legislative programme that the Government are pushing through at the moment, that are simply an attack on workers’ rights and the ability of people to earn a living. Their central argument about removing workers’ rights in order to encourage businesses to grow surely cannot be right. It flies in the face of the evidence. Let us say that we accept that the Government have created 750,000 private sector jobs in the past two years as a fact, whether it is challengeable or not. Those jobs have been created under the current framework of employment rights, so that flies in the face of what they are saying.