Zero-hours Contracts

Debate between John McDonnell and Jenny Willott

Wednesday 19th March 2014 Westminster Hall

[Jenny Willott]

As I said, zero-hours contracts can have a place in the labour market. They can suit some people—students, people with caring responsibilities and others—but clearly they are not appropriate for everyone. Anecdotal evidence, including that highlighted by the hon. Member for Wirral South and by the hon. Member for Hayes and Harlington (John McDonnell), suggests that some individuals are being pressured into working when it does not suit them and have the implied threat hanging over them of being denied future work, which removes the flexibility for those individuals.

[John McDonnell]

I will give hon. Members just one example. The bakers’ union convened a meeting of fast-food workers a month ago, and a Costa worker turned up. Because he had not smiled enough that day, he was not going to get any work for the following week. These contracts are used as an intimidatory tool by managers, and we all have to condemn that, do we not?

[Jenny Willott]

I completely agree. The behaviour that the hon. Gentleman describes is not right and is not appropriate for a responsible employer. I am sure that hon. Members on both sides of the House completely agree with that.

Some individuals have been working regular hours for long periods only to find that they are “zeroed-down”—their hours are brought down—when demand falls, perhaps due to the loss of an order. Clearly, that dramatic change in working hours and the resultant income loss will have a significant impact on the individual, especially if they are the only person working in the household. When individuals have their income supplemented by benefits, an increase or decrease in hours and income can have quite a significant impact on their benefits, which can be very difficult to manage in terms of household income.

Hon. Members raised issues about the link between jobseeker’s allowance and zero-hours contracts. Clearly, the Government’s priority is to help people on benefits to move off them and into work as soon as possible. However, as the hon. Member for Wirral South highlighted, some media reports suggest that people claiming jobseeker’s allowance are being told that they must apply for vacancies that are advertised as zero-hours contracts. I must stress that that is not the case. In such cases, someone’s benefit would not be sanctioned. DWP decision makers cannot mandate claimants to apply for zero-hours contracts, although they are obviously free to apply for such a job if it would suit them. The uncertainty about the hours of work offered by the employer and about the amount earned and so on can present difficulties for individuals, so someone would not be sanctioned for not applying for one of those jobs.

It is very important that individuals make informed choices when applying for or accepting work, and employers must ensure that both job adverts and employment contracts are transparent. People have the right to know up front that a contract does not guarantee work, if it is a zero-hours contract, so that they know what they are signing up to. The evidence that we have received in the Department is that that certainly is not the case for everyone on a zero-hours contract, and that needs to be resolved.

Hon. Members have also raised issues about the care sector and the entitlement to payment for the time spent travelling between jobs. I want to be clear that employers must ensure that their workers are paid at least the national minimum wage for the hours that they work. Time spent travelling on business, including between house calls, counts as time worked for minimum wage purposes. Where the travelling time is time for which the minimum wage should be paid, any associated expenditure incurred by the worker in respect of that travelling is classified as being in connection with the employment. A worker who is paid at minimum wage rates would therefore need to be reimbursed the expenses for the travelling in order for the employer to be in compliance with minimum wage legislation.