Unpaid Work Trials

Jim Shannon Excerpts

Wednesday 29th March 2023 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I apologise for being a few minutes late, and I thank you, Mr Hollobone, for giving me the opportunity to contribute. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for leading today’s debate and for setting the scene so well. He referred towards the end of his comments to anyone who can hear the sound of his voice having had experience of this situation. As I always do, I will give an example of someone I know back home in Northern Ireland, to add a regional perspective to the debate—one that is replicated right across this whole great United Kingdom of Great Britain and Northern Ireland.

Unpaid work trials have proven incredibly common among some employers—sometimes I wonder whether they do it on purpose—especially in industries like hospitality, where young people tend to get their first jobs as young teenagers. There are a great many people across this United Kingdom who have good jobs now, but this is what happened when they first began. We must do all we can to enforce paid work trials and make young people aware of their employment rights. When someone is starting off, and has the excitement of a trial that might lead to a first job, they say, “I’ll definitely go and I’ll endure a wee bit of hardship or pain to get this job.” If they get it, that is good. If not, they feel a wee bit taken advantage of.

The advice from His Majesty’s Revenue and Customs is that using unpaid work trials does not contravene any current legislation for businesses, if they are part of a genuine recruitment process, do not last longer than a reasonable amount of time and are required to demonstrate the applicant’s suitability to the work. Are they part of a genuine recruitment process, or are they are a way of taking advantage of some people?

The hon. Member for Glasgow South outlined the issue very well. We look to the Minister, the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), for a response; I am pleased to see him in his place. It is good to see the shadow Ministers for the SNP and for Labour here too, the hon. Members for Glasgow South West (Chris Stephens) and for Ellesmere Port and Neston (Justin Madders).

In Westminster Hall, in a past life for the Minister if not for me, we would have been on the same side, debating issues like banking. We were both lowly Back Benchers then. He has been elevated to greater heights, whereas I am still a lowly Back Bencher. He has reached heights that I will never be able to achieve, and that is a fact—I am not a member of the Conservative party, so it is highly unlikely to happen. I say that in jest!

Work trials are commonly used to allow an employee to see how a business is run and for an employer to see how the employee will settle in. When they are done right, they give the employer a chance to see just what a person can achieve. The problem is that, more often than not, people work an extensive shift and are not paid a penny for it.

One of the young girls who works in my office told me a story similar to that outlined by the hon. Member for Glasgow South, who set the scene so very well. My youngest member of staff recalls a work shift that she did when she was 17 years old—before she ever came to me—for a café in her local area, where she worked from 10 o’clock until 4 o’clock and was entitled to no pay for the shift. Now, that situation was understood between the employee and the employer. However—here’s the story—for the trial she was required to wear a black shirt and black trousers, which she did not have. If she wanted to do the trial and be considered for the job, guess what? She had to go and buy the black shirt and trousers. That cost an additional sum, which would ultimately be wasted once she got her uniform. I found that a bit hard to understand. On certain occasions, these trials just do not seem worth their while when the whole matter is taken into account.

Although there is no legal obligation to pay someone for a trial, I would certainly put forward the argument, as did the hon. Member for Glasgow South, that the individual, by working a trial, is still making money for that company, so they should be reimbursed. That is the crux of the matter. Some employers choose not to take staff on after trial periods, so they should—I was going to say “perhaps”, but they really should do this—offer the minimum wage for the day or for the number of hours worked. That would be fair and justifiable, given the time that the person has provided to make money for the company in their trial period.

I am also shocked to hear plenty of stories of people having been made to work not one day, but a week’s trial at zero payment, only to learn that if they leave that employment within the year, they must pay back the money they made in the trial period. Again, that is immoral, wrong and a disgraceful way to treat employees. Although the legalities around paying people for trial shifts represent a grey area, individual employers should have discretion to ensure that their employees are treated properly.

We know the stories. I gave one example and the hon. Member for Glasgow South has given examples. I am quite sure that my friend the SNP spokesperson, the hon. Member for Glasgow South West, will give more examples than anybody else, because—I agree with hon. Member for Glasgow South—he has a knowledge of these matters, and I look forward to hearing his contribution. Some of the stories we hear are disgraceful, distasteful and just awful.

We have a role to play in ensuring that all employees of or at small, medium or large companies have a good outcome. That is really not too much to ask: simply fair play and fair moneys for time and effort spent. At the moment, that is not the case. There is a duty on the Minister and the Government to sort out the legalities, and ensure that employers pay their employees the wages they should be getting. I very much adhere to and believe in the saying, “A fair day’s work for a fair day’s pay,” which is why I fully support the hon. Member for Glasgow South.

--- Later in debate ---

[Chris Stephens]

I thank my hon. Friend for that intervention. As I recall, it might very well have been in the debate on his private Member’s Bill when the then Minister rose to his feet and said, “I will be concluding my remarks at 2.30 pm.” That was at the beginning of his remarks. That is a completely scandalous way of dealing with it, but my hon. Friend is right. We have had assurances before that Bills would not be talked about and then, lo and behold, on the day that the Bill is up for discussion, that is exactly what happens.

We firmly oppose this practice. Because of the sectors of the economy that my hon. Friend referred to, we also oppose the inappropriate use of zero-hours contracts. Sometimes they go together, where there is an unpaid work trial for a zero-hours contract job. They are both exploitative practices. These non-standard types of employment that offer workers minimal job or financial security really have to end, particularly in a cost of living crisis. If the Government are really serious about helping people to earn more money, they need to put forward legislation to stop unpaid work trials and exploitative zero-hour contracts.

[Jim Shannon]

When that Bill was introduced approximately six years ago, we anticipated that it would go through Westminster and address this anomaly. Does the hon. Gentleman, like me, feel aggrieved—I am sure he does—that, in the six years since this legislative change, people have been exploited and thousands have lost out on what was rightly theirs?

--- Later in debate ---

[Kevin Hollinrake]

I do not have access to that data. The hon. Member refers to a survey that was done some years ago. It is our belief that unpaid work trials are not widespread, and there are measures to deal with the problem, which I will set out shortly. As the hon. Member for Ellesmere Port and Neston (Justin Madders) said, there are six criteria applied to unpaid work trials.

[Jim Shannon]

Some of the responses have been very positive. The Carer’s Leave Bill, which I have been following, is really welcome. The Minister mentioned the outcome of tribunals, but a person cannot take a case to a tribunal if they have not been in the workplace long enough, which means that a tribunal may not be an option. Can the Minister also give some direction on the uniform issue?

[Kevin Hollinrake]

I thank the hon. Gentleman for all the good work he does in this House. In all the debates he speaks in, he is a champion for doing the right thing. As he said, we have been on the same side of the fence in debates on many occasions, and I am sure that will continue despite my ministerial position. I will come back to both of those points shortly.

Six different criteria apply in deciding whether an unpaid work trial is appropriate. The first is the length of time. The trial should be no longer than a day. Observation is another: is the employer observing, or is somebody just working unobserved? Other criteria relate to the nature of the work, and the value to the employer—is there a value to that work? That would be inappropriate. If the worker is observed, the work would have less value, because somebody has to observe them, and they might as well be doing the work themselves. All those things are taken into account in judging whether that shift should be paid.

There are reasons for having an unpaid work trial; for example, a teacher might be required to do a model lesson. It might be appropriate to ask teachers who are being interviewed to show what they would do in the actual situation. It would not be right to ban the practice altogether.

On having more specific guidance, which the hon. Member for Glasgow South mentioned, the problem is that being too specific in guidance could result in a race to the bottom by some employers—something that he is looking to clamp down on. If we said, “This categorically is the perimeter of work trials,” rogue employers may well take advantage. There needs to be a balance of judgment, rather than exact criteria.

The Government think that work trials can be a legitimate recruitment exercise at times, which is why we are not legislating in this area and do not intend to. I know the hon. Member disagrees, and I respect his opinion, but we do not think it is right to legislate further in this area. What we already have strikes the right balance.

[Kevin Hollinrake]

Of course, we will always look at information and evidence. As parliamentarians, we get information and evidence from lots of different sources, but we tend to work by seeing where there is obvious detriment and therefore loopholes that we need to close. I do not think it is practical for the Government to look at every single problem and then decide where to legislate; it is usually the other way round. I think we disagree on that, but we will always look at information. If the survey was updated and specified unpaid work trials as an issue, the hon. Gentleman would have a more compelling case.

On uniforms required for a place of work, deduction of the cost of the uniform should not take a person’s earnings below minimum wage. If it did, the employer would be guilty of an offence under the National Minimum Wage Act 1998. It can be appropriate for an employer to say that there is a uniform that an employee must wear, at the employee’s cost, but that must not take that employee below the minimum wage.

[Jim Shannon]

The example I gave was a true one—I bring all my examples with honesty. The person had to buy a black shirt and black trousers to have the trial. If they did not get the job, they were out of pocket. Where is the comeback? It might be better for the employer, who will probably have spares, to make them available.

[Kevin Hollinrake]

I agree with the hon. Member, but that is a different point; I am speaking more to uniforms and how they relate to the minimum wage. It would be entirely inappropriate for an employer to say, “I want you to come on an unpaid work trial, and I want you to buy a new shirt and a new pair of trousers to do that.” I would define them as a rogue employer for taking that approach. As I have said, I was an employer for 30 years, and we would never have even considered that kind of behaviour.

The hon. Member for Strangford talked about awareness. His Majesty’s Revenue and Customs undertakes a programme on best practice for employers. It is an enforcement body, as well as one that tries to help employers meet the relevant employment conditions.

A number of contributors said that an employment tribunal is the only way to deal with the issue. I quite understand that employment tribunals can be expensive and time-consuming. There are other processes; if people feel that they have been wrongly and inappropriately asked to do an unpaid work trial, they can report that to ACAS or His Majesty’s Revenue and Customs, through its online form. All reports are investigated.

We are keen to expand the reach of HMRC’s enforcement capability. We have doubled our investment in national minimum wage enforcement since 2015-16. We spend nearly £28 million every year on ensuring that employers meet their legal responsibilities. Employers who are found to underpay their staff must repay all arrears that they owe to their staff and a penalty of up to 200% of the underpayment, and may be eligible to be publicly named by the Department for Business and Trade.

In 2021, HMRC returned more than £6.7 million in arrears to over 155,000 workers, and issued fines totalling more than £14 million to businesses that had failed to pay the minimum wage. Since 2015, the Government have ordered employers to repay over £100 million to more than 1 million workers, which demonstrates that it is never acceptable to short-change hard-working employees. The shadow Minister rightly asked when we will do the next naming and shaming. It has been too long. The last one was in December 2021. I have absolutely met my officials and said, “We need that list out very shortly.” It will happen very shortly.

I conclude by again thanking the hon. Member for Glasgow South. We absolutely agree that it is vital that the right of workers to be paid the minimum wage continues to be upheld. That is why the Government listened to concerns relating to work trials, and issued new guidance in 2018—prompted by his work, I would say, though I was not in this role at the time. That revised guidance, combined with strong enforcement of existing legislation, will continue to ensure that workers are not exploited through unpaid work trials.