Unpaid Work Trials

Debate between Kevin Hollinrake and Stewart Malcolm McDonald

Wednesday 29th March 2023 Westminster Hall

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

I beg to move,

That this House has considered the matter of the use of unpaid work trials.

It is always good to see you in the Chair in Westminster Hall, Mr Hollobone. You will remember, because I think you might have been present, that I introduced in the previous Parliament a Bill to amend the National Minimum Wage Act 1998 in order to outlaw the practice of unpaid work trials. I will come back to the substance of that Bill, which is now a piece of history, but I want to begin with the genesis of this entire issue and why I decided to take it up as a Member of Parliament in the private Members’ Bills selection.

There is a bubble tea company called Mooboo, which had an outlet in Glasgow that was offering unpaid work trials—the practice of inviting applicants to apply for a job and making them work for a trial period for which they are not paid. Although there are many variations on what an unpaid work trial looks like, this was perhaps the most extreme version that I have come across, because the applicants were invited to work for a full 40 hours without payment, at the end of which they were or were not offered a job. That is a particularly egregious and extreme example, but when I decided to take up the case on behalf of a constituent who went through that process, I started to find that this practice was rife and much more common than I had first thought. As I mentioned, it presents itself in many guises.

Although that example is at the extreme end of the practice of unpaid work trials, there are many intricacies and differences in the way it presents itself. When I started to talk about this issue publicly and wrote to Ministers and His Majesty’s Revenue and Customs, I started to gather in my inbox various horror stories about the practice of unpaid work trials across the country. A study in November 2017 by Middlesex University and the Trust for London, called Unpaid Britain, shows that unpaid work trials contribute to about £3 billion in missing wages in the United Kingdom. That figure is six years old, and I do not know what it is today—perhaps the Minister has a better idea—but I would wager that it is probably higher now than it was then. Polling from YouGov shows that 65% of Brits say that such a practice is unfair and only 24% think it is fair.

The way in which unpaid work trials present themselves is often different, as I mentioned, but it is none the less insidious. Quite often an applicant will apply for a job where the trial period may be an hour or two, so that they can come in and show what they are made of—whether that is in a restaurant, a cocktail bar, a hotel, a retail setting or whatever it might be. I discovered that quite often those trials were being offered to applicants for jobs that did not actually exist. Applicants were being exploited to cover staffing shortages and busy periods, such as Christmas trading. Those poor people had often spent hours applying for jobs, sending in CVs and filling out application forms, often going through the soul-destroying process of hearing nothing back. They were being invited to unpaid trials for jobs that did not exist, that were never going to materialise and that they would never be offered.

I suspect the Government position is the same as it has always been—that legislation is not required. I think we can all agree that that it is an egregious thing to ask somebody seeking employment to go through. It is fraud; it is morally fraudulent and must almost certainly be legally fraudulent—except it is not. I have no ambition to relitigate the Government talking out my Bill. The Minister who did so is no longer a Member of Parliament, and I am, so I like to think I won that fight with that Member at the time. When I talked to Ministers and officials about this at the time, we all agreed it was an abhorrent and unacceptable practice, but the Government position was that legislation was not required to fix it.

I would say to the Government today that the fine guidance they produced for employers on unpaid work trials has not had the effect that we all wanted, which was that they would not be used at all and certainly not used in the egregiously fraudulent way that I described. At the time, there was some good will on the Government side, among Labour colleagues and on my own side, which even in today’s Scottish National party environment still exists.

The fact that the practice is still going on and partly contributing to billions of pounds in missing wages that people should rightfully receive—

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

I am listening carefully to the hon. Member’s speech, and he is making some very valid points. I agree that such behaviour is egregious. Is the £3 billion he quotes for unpaid work trials or unpaid work? There is an important difference between the two.

[Stewart Malcolm McDonald]

Yes—and no, in terms of the Minister’s final point about there being a difference. The unpaid work trials contribute to the figure of £3 billion. I am not saying that the trials are worth £3 billion, but the study by the university concluded that that was part of the bigger £3 billion picture. I confess I do not think there has been an updated study. I do not know if the Government have anything to share with us this afternoon. I would be amazed if that figure had not grown since that study was done six years ago.

Among all the good will to try to stop this miserable exploitation, the Opposition and the Government arrived at different conclusions. I was of the view, supported by colleagues in the Opposition, that legislation was required —an amendment to the National Minimum Wage Act 1998—to outlaw the practice. The Government took the view that guidance was adequate, but it is not. It was proven not to be as recently as December last year in a court ruling. The ruling in Ms P Karimi and Ms C Patricio v. Fadi Ltd, published by His Majesty’s Courts and Tribunals Service on 2 December 2022, found that the claimant was entitled to the minimum wage for all hours worked during the trial period. Reasoning the judgment, the employment judge, Judge D Wright, stated that the

“legislation does not give explicit guidance”

as to how long these unpaid trial shifts may last.

An exploitation had taken place, whereby someone had worked in an unpaid trial, and the tribunals service determined that they should have been paid for it, but the judge said that the guidance is not sufficient on the regulation of work trials. I am not against work trials. I entirely support an employer’s right to say to someone, “Come in and show us what you are made of. Come in and show us that you actually have the skills and experience that you set out in the interview process.” What I do not support is exploiting people for jobs that do not exist, or for covering staffing shortages and doing so for 40 hours, as in the extreme examples that I mentioned at the start of my remarks.

Forty hours is an extreme and unusual example. What I thought I would find initially was that the norm would be two or three hours—half a shift or a morning. What I found more often than not was that the time was longer, and the physical experience of the unpaid work trial was demeaning. The number of people—mostly young people—who would work their unpaid trial shift and then just be left, not told whether they had a job, confused as to what was supposed to happen next, clearly tells us that better regulation of trial periods needs to be forthcoming from the Government. I do not think that that is too much to ask in this day and age. A fair day’s work for a fair day’s pay; it could even be said that it is a broadly Conservative value. It is something that even my colleague, the hon. Member for Glasgow South West (Chris Stephens) can rally around.

Let us be clear about what my proposed legislation was not; it was not about banning trial periods, and it did not concern itself with things like unpaid internships. Although I find them objectionable, I felt that would require its own piece of separate legislation. The aim of my proposal—the banning of exploiting people through unpaid work trials—remains an entirely just one.

--- Later in debate ---

[Kevin Hollinrake]

I do not want to get too distracted from the issue at hand, but I am happy to address that point in detail afterwards. We think those measures strike a balance. The recommendation from Matthew Taylor was not that there be a right to insist; it was the right to request. The employer could reject that request only on one of eight grounds, and in doing so, has to adhere to a process. We think that strikes a balance and meets the needs of businesses. For example, businesses can refuse a request in order to ensure that they have the right customer service availability and are not put under an undue burden. Those criteria have been set out, and I am happy to have that discussion with the hon. Member after the debate.

On the issue that the hon. Member for Glasgow South raised, there are two things that the Government would question about his policy: is it necessary, and what is the extent of the problem? It is important that we reflect the actual extent of the problem. He said that there is £3 billion of unpaid work; clearly that is a different issue. Following my intervention, he clarified that unpaid work trials are an element of that. The figure of 29% is also about unpaid work; the hon. Member for Glasgow South West said that among the 29% of employers that use unpaid work, work trials were a factor. The extent of the problem is not clear. I would describe people who are abusing the system as rogue employers, rather than something to benchmark.

Anybody who is defined as a worker should receive the national living wage. We updated the guidance in 2018, probably prompted by the work of the hon. Member for Glasgow South. The guidance is clear on the time that someone is allowed to have a work trial for. It says:

“in the Government’s view an individual conducting work in a trial lasting longer than one day is likely to be entitled to the minimum wage in all but very exceptional circumstances”.

Employment tribunals, for example, have a basis on which to make a judgment, and there are other bases.

[Stewart Malcolm McDonald]

I am unclear. Do the Government and the Minister’s Department collect data on the use of unpaid work trials?

[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.