Employment Rights

Lord Harrington of Watford Excerpts

Thursday 12th September 2013 Commons Chamber

[Madam Deputy Speaker (Dawn Primarolo)]

Order. There is a seven-minute time limit on Back Bench contributions. It may be necessary to revise that time limit down, depending on how we proceed.

[Richard Harrington (Watford) (Con)]

rose—

[Madam Deputy Speaker]

When the occupant of the Chair stands, Members are supposed to sit. Now that I have finished speaking I will sit down, the hon. Gentleman can stand up and I will call him.

[Richard Harrington (Watford) (Con)]

I must apologise for my lack of co-ordination in sitting down and standing up, Madam Deputy Speaker. I will endeavour to correct that in future.

I listened carefully to the speech by the right hon. Member for Oldham West and Royton (Mr Meacher) and wondered if he was living in the Britain of Benjamin Disraeli’s book “Sybil”, or the United States of “The Grapes of Wrath” by John Steinbeck. It is not the Britain I recognise today. Historically, I agree and accept that in the industrial revolution and beyond—I include his point about the 1920s—there was large-scale exploitation of workers by organised capital and its management. I know that that sounds a bit Marxist for Conservative Member, but I accept that that happened. Today, however, thanks very much to trade unions and, I might say, the endeavours of the Labour party in the past, there is now a situation where the rights of organised labour, and labour that is not organised, have reached an equilibrium with the rights of capital and management. I accept that right hon. and hon. Members on the Opposition Benches will disagree with that.

I am very pleased to say that the days of images of employers sitting in their brown leather chairs in gentlemen’s clubs in Pall Mall sacking workers at will, and the images of people driving up and hiring those who are desperate for employment for a day or two days, have long gone. Workers have won their rights the hard way and I would oppose any attempt to take them away. However, it is my contention that while low pay is a significant problem and I would never make light of it, and while poverty is a significant problem and I would never make light of it, the balance today is very different.

The argument that private sector employment spends its time trying to get around the labour laws by coming up with devices, such as zero-hours contracts and casual labour, is not only misleading but insulting to the many businesses, small and large, in my constituency that are expanding. They are taking on labour and apprentices—whoever they can—because they have confidence in the economy and in their employees. Employees are a very expensive commodity for employers, because of training and the time it takes for recruitment, and employing people is not done lightly. It is not something that employers do just because they think, “Well, I’ll try it for a few weeks and then if it doesn’t work I’ll fire them and make them get on with something else.” Life today is not like that. I can say that, having been an employer most of my life. In our current position we are all employers, albeit on a small scale.

[Julian Smith]

Will my hon. Friend clarify how many people he has created employment for in his long career?

[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 ---

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

I congratulate my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) on securing this long overdue debate. Parliamentary protocol is such that I could not participate in the debate over the past three days, but I have observed the unedifying spectacle of the coalition Government acting out of sheer arrogance in forcing through legislation that will impinge on millions of workers. That was somewhat disappointing. It was equally unedifying to observe the pigeon carriers for the coalition Government forcing through the legislation, and refusing to answer questions about its impact on workers. My hon. Friend the Member for Edinburgh South (Ian Murray) asked perfectly honest questions of the pigeon carriers of the coalition Government, but it was extremely difficult to get any answers. I do not think that I have much influence with the Labour leadership, but in the unlikely event of Labour not gaining an overall majority at the next election, I sincerely hope that we can resist any temptation to go into a coalition with the Liberals, having seen what they have done this week.

Earlier this year, several colleagues and I visited Azerbaijan to talk to trade unionists there. Azerbaijan is not exactly the most democratic place in the world, but to our horror we discovered that the trade unions there enjoyed better relationships and more employment rights than we do here in the UK. Azerbaijan is a young democracy and we are the oldest, yet we are still fighting for employment rights. That, too, was somewhat disappointing.

[Richard Harrington]

Will the hon. Gentleman give way?

[Jim Sheridan]

No, I am sorry, there is not enough time.

I am chair of the all-party parliamentary group on occupational safety and health, and I see the legislation that is being proposed as somewhat disappointing. Every week at Prime Minister’s questions, the Prime Minister and the Leader of the Opposition quite rightly give recognition to our armed forces personnel, but let us put this in perspective. Last year, there were 44 tragic fatalities among our armed forces personnel in Afghanistan, but there were 49 fatalities in the UK construction industry. We rightly place an emphasis on our armed forces, but we do not pay enough attention to those people who lose their lives in the construction industry, because their deaths do not create sexy headlines.

Fatalities are not the only issue in the construction industry that we should be concerned about. There are 5,000 cases of occupational cancer every year. Mesothelioma is still a terrible issue. Asbestos is still a danger in our schools, with more than 140 teachers dying from mesothelioma in the past 10 years—not to mention the number of janitors, administrative staff and cleaners. Despite this, employment rights are still being trampled on by this coalition Government.

Much has been said about zero-hours contracts and about blacklisting—the arguments have all been rehearsed—but I want to take colleagues back to the tragic Piper Alpha incident, which happened because of the lack of safety on the oil rigs. The major oil companies had made it clear that they were not going to invite trade unions on to the oil rigs, and it was not until after Piper Alpha that the trade unions won the recognition on the oil rigs that they had fought for. It is no coincidence, notwithstanding the tragic Puma accident a couple of weeks ago, that safety standards went up when the unions got recognition on the oil rigs.

I am a great believer in manufacturing, which we need, as we cannot survive by cutting each other’s hair. This country’s manufacturing base—I am talking about this Government and the previous Government—is in such a state because manufacturing companies could decide on a whim to close a factory, or whatever it may be, and there was nothing the workers could do.

For me, there is nothing more frustrating than people coming to my surgery and saying, “I worked for a company for 25 years and I’ve just been told I’m being sacked. They are transferring my job to the Czech Republic to exploit cheap labour.” My hon. Friends and I get frustrated and angry about not being able to do anything to help those workers. The free marketeers, as they call themselves, believe that the market will deliver the jobs. It is delivering the jobs—jobs with zero-hours contracts, part-time jobs and jobs for the self-employed. It is important that we try to get a grip of the issue.

In my early days—before I came into this place and when I worked for a living—I was with Thales, a well-respected company. Last week, I was at its 125th anniversary and the Thales management went out of their way to tell people of the positive role that trade unions have played in that company, which has survived for 125 years. I suggest to those who try to paint the trade unions as demons to listen to the Thaleses of this world, because trade unions are a positive force for good.

--- Later in debate ---

[Andy Sawford (Corby) (Lab/Co-op)]

I thank the Backbench Business Committee for scheduling time for this important debate. It is a particular pleasure to follow my right hon. Friend the Member for Oldham West and Royton (Mr Meacher), who set out many important issues, as well as other colleagues who highlighted some of the issues that I want to speak about.

The living standards crisis that people are facing is not only an issue of pay and the rising cost of goods, but of security. People now feel less secure and more pressured at work than at any time in the past 20 years, according to the latest UK skills and employment survey. Our country already has the third most liberal labour market in the OECD, but since taking office the coalition has shown real determination to undermine people’s protections at work, making it easier to fire people but not easier to hire people. In effect, they have heaped further insecurity on working people. I shall speak today about two aspects of that insecure working that I have campaigned on before and since my election to the House—the rise in the use of zero-hours contracts and the use of employment agencies.

Zero-hours employment is now widespread in many sectors of the economy, and it is especially prevalent in areas of higher unemployment, where the lowest-paid and most vulnerable workers in Britain exist without knowing when the next payday might come. That is certainly the case in my constituency. People on zero-hours contracts tell me about waiting for a call or turning up to the workplace day after day, only to find there is no work, but their contracts make it difficult to find alternative employment or to claim jobseeker’s allowance. I have heard examples of people making child care arrangements or paying for transport to work and then waiting for hours before being told that they are not needed. Other people have told me that because of zero-hours contracts they are unable to get a bank overdraft, a mortgage or car finance. For those people who are getting regular work on a zero-hours contract, they know that it could end at a moment’s notice and they could be left without sick or holiday pay.

In an exchange with me over the summer, the Office for National Statistics has confirmed that later this year it will start asking about zero-hours employment in its regular surveys. Everyone recognises that its estimate of 250,000 people on such contracts is well wide of the mark. We know that people working in McDonald’s, Burger King, JD Wetherspoon, Sports Direct, Cineworld and Boots are on such contracts, as well as 307,000 workers in the care system, according to the Government’s own figures. We know that the NHS has almost 100,000 workers on zero-hours contracts, which the BMA has described as a real risk to patient safety.

I fully accept that for some people casual contracts can work, such as the students who work as lifeguards at my local swimming pool, or the retained firefighter who also works occasionally for the Co-operative Funeral Service. If casual contracts are fair, reciprocal and appropriate, they can have a place in the labour market. But there is a clear distinction between such employment and the way in which millions are now being exploited on zero-hours contracts. It is important that we draw the distinction, and there are three main practices that must stop.

The first is requiring an employee to be available for work when no work is guaranteed. The second is requiring an employee to sign an exclusive contract when no work is guaranteed, so they cannot take work elsewhere, and the third is when employees are working regular hours over a sustained period but their contract does not reflect that. I have introduced a private Member’s Bill to address the issues with zero-hours contracts, and I will set out how I hope we can give effect to changes that would protect people in such circumstances.

[Richard Harrington]

Given the hon. Gentleman’s views on zero-hours contracts, will he condemn the Labour councils mentioned by the hon. Member for Eastbourne (Stephen Lloyd), who have so many employees on zero-hours contracts?

[Andy Sawford]

Corby borough council employs some people as lifeguards in the local swimming pool on casual contracts that are not exclusive and do not require people to attend for work or else breach the contract. Those are clearly casual employment. Any council, of whatever stripe, that uses such contracts must do so in a way that is fair and reciprocal. I urge Labour councils to give a lead in that, and they are doing so. They are looking at the care sector, for example, where insecure employment has a real impact on the quality of care, as well as on the employees, to address the issue. I applaud them for that and think that the Conservatives’ attempts to use it as a smokescreen is unhelpful in such an important debate.

I urge companies not to wait for 2015, when my right hon. Friend the Leader of the Opposition has promised to take clear action on this. That is why I met McDonald’s and talked about employment in its business. This week I also met the managing director of Starbucks, and I have talked to employers across my constituency and to councils about care workers. I want them to take action now, because that would be good for their reputation and for retaining a motivated, loyal and trained work force. I am pleased that companies such as Tesco, Asda and Morrisons—whose human resources director will lead a review of this issue for the Opposition—are already showing that such contracts are not necessary for a successful business.

The issue of temporary workers working through employment agencies is a particular concern in Corby and east Northamptonshire. For historic reasons, we have a large proportion of jobs through employment agencies, with a disproportionately large number of agencies operating in the town. Rogue agencies that do not adhere to the basic framework of legislation to protect workers are a particular problem.

With great regret, I read recently that the Government intend to abolish the employment agency standards inspectorate, which plays an incredibly important role. I was pleased that the Minister agreed that it could undertake inspections in my constituency. It found more than 70 separate breaches of the law, and also found, working with HMRC, £100,000 owing to local workers because of minimum wage issues. My constituent, Irene Hamilton, said:

“I am so glad I never have to go to work for an agency now that I am retired…I felt that I was invisible…Don’t be sick, don’t go on holiday, no family or funeral problems are expected of agency workers. It was soul destroying.”

Her example is typical of so many people in my constituency.

There are a wide range of issues. The use of the Swedish derogation, a giant loophole that must be addressed, has been mentioned. I am working locally to implement a code of practice. We must get much better at enforcement. I have also introduced a private Member’s Bill to extend the powers of the Gangmasters Licensing Authority to all sectors of the economy—not to license, necessarily, in all sectors of the economy, but to be able to enforce the law in all sectors of the economy. The abuses are widespread, and I hope to have more time on another occasion to speak about some of the issues.