Zero-hours contracts

Nadine Dorries Excerpts

Tuesday 9th July 2013 Westminster Hall

[Nadine Dorries (in the Chair)]

Gentlemen, it is very warm outside and this is a one and a half hour debate, so if anyone wishes to remove their jacket, I am happy for them to do so. Also, because this is obviously a popular debate and we are assuming 15 minutes for the opening speech and 30 minutes for the wind-ups, I ask for speeches to be kept to 15 minutes as I suspect there will be a number of interventions.

[Julie Elliott (Sunderland Central) (Lab)]

It is a great pleasure to serve under your chairmanship, Ms Dorries. I am grateful to have secured this debate on an issue on which I and many other hon. Members have been working for some time.

Zero-hours contracts are contracts whereby a worker is guaranteed no minimum hours and no minimum pay. In this country, we essentially have a large pool of workers, and employers have no legal obligation to pay them when they are not needed.

Zero-hours contracts have a widespread and deeply damaging effect on workers, and I call them “workers” advisedly. People employed on zero-hours contracts are treated differently to employees, and as such they are second-class staff. People employed on zero-hours contracts earn 40% less than those in fixed-hours employment. A study by the Resolution Foundation shows that, before tax, people on zero-hours contracts earn an average wage of just £9 an hour, juxtaposed with £15 an hour for people with set contract hours. Among graduates, the difference is £10 an hour versus £20 an hour. Firms that use zero-hours contracts have a higher ratio of low-paid staff than firms that do not use such contracts. Zero-hours contracts have traditionally been employed in the hospitality and leisure sectors, but they are increasingly being used in the health, social care and further education sectors.

--- Later in debate ---

[Lisa Nandy]

I completely agree, and I was about to say that I have been astonished by the slow response of my own local authority. I have tried and tried to get it to take the issue seriously, but the response has simply not been good enough. We should not be spending public money on enabling such employment practices to continue, whether nationally or locally. We all have a responsibility to stop them.

The women also told me about the serious problems that they are having budgeting. They work for the minimum wage, so they do not earn a lot to start with; we all know that the minimum wage is not enough to meet essential needs, so they are already earning poverty pay. On top of that, they do not know what they will be bringing in from one week to the next. As my hon. Friend the Member for Sunderland Central said, that is pushing people into the hands of legal loan sharks. Payday lenders have sprung up throughout Wigan—walking down the high street now, more payday lenders can be seen than practically any other sort of shop. We are collectively colluding in pushing people into the hands of those appalling lenders who cause such misery in people’s lives.

As well as zero-hours contracts, I have come across women with small-hours contracts. They are supposed to be guaranteed a certain amount of work but are not given that work, even though that is specified in their contracts. I have seen several examples of contracts not being upheld at all.

The point I want to impress on the Minister is that when employers treat people on zero-hours contracts in that way and where their use is widespread, it is likely that they are poor employers across the board. One firm in my constituency, Cherish, provides care to elderly people in their own homes. It breaches the minimum wage requirements because its employees are not paid for travel time, which is often hugely variable in my large constituency. Most of those women do not have transport because they cannot afford it as they are not paid enough, so they must travel long distances on several bus routes, which takes a long time, but they are not paid a penny for that. Lunch is not factored in and their payslips are confusing and incomplete. A whole host of problems have been brought to me about Cherish, and when I wrote to the firm I received what can only be described as a sarcastic letter thanking me for my interest in the company. I was astonished at the lack of response from the CQC and the local authority.

I echo what my hon. Friend the Member for Sunderland Central said. It cannot be beyond our wit to devise a statutory framework to crack down on those unscrupulous employers, but that must go with a culture of valuing our workers. I have been dismayed by the coalition Government’s attack on the trade union movement in the last few days, which can only hinder the situation of those women and not help it.

[Nadine Dorries (in the Chair)]

Mr Sawford, may I remind you that the time limit on speeches is six minutes?