Zero-hours Contracts

Paul Farrelly Excerpts

Wednesday 16th October 2013 Commons Chamber

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Mr Speaker, I am glad to see that the House rota with Madam Deputy Speaker is working, so that you all know what guaranteed hours of work you have in this place.

With up to 1 million or more people subject nowadays to the sometimes pernicious insecurity of zero-hours contracts, it is timely that we return to this subject now that the House has returned. For me and for many people, not least those in the trade unions, it comes with a weary, sad sense of déjà vu. It was back in 1995, nearly 20 years ago now, when I worked at The Independent, that I remember first pursuing the issue of the abuse of zero-hours contracts, as they have come to be known. Those with long memories like mine will recall that the controversy was sparked by the case of Michael, a 17-year-old student in Glasgow who was asked to clock off and on up to four times a day at Burger King, and was sent home unpaid when there were not enough customers around. Burger King was then owned by Grand Metropolitan, part of the old-school “beerage”, and the irony was not lost at the time that its charitable arm, the Grand Met Trust, was in line to run a big, privatised careers service—of all things—in London.

Burger King eventually paid more than £100,000 in compensation to nearly 1,000 employees who had been either sent home or made to stand around, unpaid, until business picked up. Craig Bushey, Burger King’s then managing director in western Europe, said all the way back in 1995 that

“the action taken by Burger King puts this issue to rest and demonstrates our commitment to equitable employment practices.”

I do not know where Mr Bushey is now, but I wonder what he would have to say about Burger King still being right up there at the top of the list of users of these contracts, along with other high-street names ranging from Sports Direct to Wetherspoons.

However, by no means all, or the biggest or most successful, high-street names use these contracts. Tesco, Sainsbury’s and Morrisons, for example, see no need to use them; my hon. Friend the shadow Business Secretary also mentioned Asda. Responsible employers, they recognise a trade union, the Union of Shop, Distributive and Allied Workers. They negotiate with that union flexible contracts that provide workers with guaranteed hours, and other rights that most of us take for granted in a civilised society, but that also mean the work force can respond to fluctuations in consumer demand, as in other industries.

If Burger King’s Mr Bushey were still around, one might expect him and his counterparts to ask, “Why does my business need these contracts when these other great high-street names and other businesses do not?” One would certainly expect him, if only for damage limitation purposes, given the controversy now, to look at all his outlets to investigate what was happening in practice, and to see whether poorly paid, unrepresented workers were being abused these days in other ways. One would certainly expect him, having done so, to have no fear of engaging full on with the full-blown consultation and formal call for evidence over the use of these contracts which Labour’s motion calls for today.

Along with other Labour Members, I welcome the content and tone of the Secretary of State’s response to this debate and his plans for November. After all, there is a recent precedent: the last Labour Government did exactly the same in the run-up to the agency workers directive, another measure that we discussed to promote fairness in the workplace. I will say a little more about that in a moment. Following the debate in recent months, there is already ample evidence to support such a call, to look at the causes and sometimes deeply damaging effects of zero-hours contracts and short-hours working, and, indeed, how the agency workers legislation is functioning in practice.

We have mentioned examining the use of these contracts in respect of care workers and the effects on the care at home of the most elderly and vulnerable people in our society. We also need to look at their use in further and higher education, at their growing use in contracted out publicly commissioned services and the public sector, generally, and at their overall effect on the services provided. Last but not least, we need to examine their use in the private sector, on the high street and beyond, and their effect on young people and on families, on their further education and training, and, therefore, on our society and economy as a whole.

[Charlie Elphicke]

The hon. Gentleman is making a thoughtful and considered speech. My constituents in Dover and Deal are also deeply concerned about zero-hours contracts and that there should be fairness in the workplace. Does he agree that it is important that we understand how many of these contracts there are? The Office for National Statistics says that the number has not changed much over the past 10 years, whereas Unite gives a figure of 5 million and the Chartered Institute of Personnel and Development has another figure. Is it not really important that we nail down exactly how many of these sorts of cases there are?

[Paul Farrelly]

The hon. Gentleman is correct; getting the right statistics is absolutely germane to implementing proper evidence-based policy. Coming from Dover, he will appreciate the example cited by my hon. Friend the Member for Halifax (Mrs Riordan) from her constituency, which sounded tantamount to some of the practices employed at ports in years gone by.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

My hon. Friend is making an excellent speech. Like him, I have long been a trade unionist, in my case with the GMB, which shares his concerns. What he said about care workers was right, but will he also take on board the impact on their clients of the uncertainty that is created?

[Paul Farrelly]

My right hon. Friend is right to say that we must focus on the effects on not only the people themselves, but the services they provide. Only at the beginning of this week, on the “Today” programme, we had a vibrant discussion about what these employment practices mean on the ground for the amount of time that care workers are able to give to the people they are supposed to be looking after. That should be part and parcel of this continuing debate.

I welcome the Government’s call for consultation, but hope it is implemented properly, with a wide-ranging call for evidence. I wish to conclude with a few choice words for my own Front Benchers, too. I welcome my hon. Friend the shadow Business Secretary’s opening remarks and my right hon. Friend the Leader of the Opposition’s commitment to remove some of the insecurity and vulnerability involved in these sorts of contracts, because taking advantage of vulnerability, a relationship where power resides all on one side, lies at the root of exploitation that a civilised society should simply not tolerate in the modern age.

I remind my hon. Friend the shadow Business Secretary that fair treatment of agency workers was there in black and white in our 2005 manifesto. It was long before his time but he gets the point that I am coming on to, as he is nodding. In 2007, I and many of my hon. Friends sought to put that pledge into effect through a private Member’s Bill, the Temporary and Agency Workers (Equal Treatment) Bill. The Government, though—and it was before my hon. Friend’s time—far from welcoming that with open arms fought us, bayonets fixed, in the trenches. It took our late colleague, the former Member for Crewe and Nantwich, Gwyneth Dunwoody, at her magisterial best to press a closure motion in the Chamber against Government filibustering even to give that Bill an airing.

The Bill was followed by another private Member’s Bill in 2008, sponsored by my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) and again contested. Eventually the Prime Minister—our Prime Minister—relented, the agency workers directive was implemented but the compromise, with a 12-week qualifying period open to all sorts of abuse, was not a happy one. I am not recounting this for old time’s sake or gratuitously to open old wounds. That measure was aimed at tackling the unfairness and insecurity, the fear of substitution by cheaper agency workers, people on cheaper contracts which, for example, lay at the root of many people’s support for parties such as the British National party and their fears about immigration. Business opposed that measure, as it opposed the minimum wage.

The Government were content to go along with and, frankly, acquiesce in what I would call economic growth on the cheap, but nothing comes cheap. Nothing comes for free. There is always a price to pay and we certainly saw the political effects with the rise of the British National party, and in many areas the UK Independence party. I am glad to see that we on the Opposition Benches have now got it fully, as is clear from everything that my right hon. Friend the Leader of the Opposition has said about levelling up, not levelling down, and not engaging in a doomed race to the bottom.

To conclude, I look forward to continuing to pursue the Government to have a proper consultation on zero-hours contracts and to look at wider aspects of the issue, such as short hours working and the use of agency workers. I look forward also to safeguards being included in our manifesto and being implemented by a Labour Government after 2015.

--- Later in debate ---

[Julie Elliott (Sunderland Central) (Lab)]

I am delighted that my hon. Friend the shadow Business Secretary has secured this Opposition day debate, which is about an issue that many hon. Friends and I have been campaigning on for months, if not years.

In July, as we have heard, I led a debate in Westminster Hall on zero-hours contracts. I do not intend to condense that rather longer speech today. In it, I referred to individual cases in care homes and explored the wide-ranging use of these contracts in the NHS, including for tens of thousands of nurses and midwives. Instead, I intend to take a broader approach and look at what the widespread use of these contracts says about our labour market.

I am pleased to note the presence of Conservative and Liberal Democrat colleagues, because in my Westminster Hall debate in July I was dismayed to see not a single Conservative or Liberal Democrat Back Bencher in attendance. Although the 17 Labour MPs who spoke led to an interesting and worthwhile debate, I have attended many Labour party meetings in my time and the debate was a missed opportunity for real cross-party dialogue.

It cannot be that not a single person in coalition constituencies is employed on zero-hours contracts. In fact, unlike the hon. Member for Hexham (Guy Opperman), who has said that he has not come across anybody in rural Northumberland who is unhappy with these contracts, I have met such people and they are out there.

I have spoken to many people who are on these contracts. Some are happy with them, but the vast majority are not. We should all be concerned that this country essentially has a large pool of workers living permanently on call, without guaranteed incomes, who do not know whether they will be able to pay their bills. We cannot sit by while workers on zero-hours contracts earn, according to research by the Resolution Foundation, 40% less than those on regular contracts.

A Labour Government would ban employers from insisting that zero-hours workers be available when there is no guarantee of work; stop zero-hours contracts that require workers to work exclusively for one business; and end the misuse of these contracts where employees are, in practice, working regular hours over a sustained period.

I believe that an outright ban would be neither helpful nor practical. Labour is clear on that. The hon. Member for Braintree (Mr Newmark) seemed to be under the illusion that we were calling for an outright ban, but that is not the case. A ban on zero-hours contracts could lead many less scrupulous employers simply to introduce one-hour contracts. We know that that is a realistic possibility, as the rise of zero-hours contracts seems to be linked to the closure of loopholes by the introduction of temporary and agency workers regulations.

As I have said on previous occasions, the issue is not zero-hours contracts, which have always been around, but the massive increase in what seems to be exploitation of workers, by which I do not mean employees, because the people on these contracts are not classified as such.

[Paul Farrelly]

My hon. Friend will remember from her time at the GMB—which, to correct the record from earlier, represents Asda employees in my constituency—that many agency workers find it hard to get mortgages, because they are not considered to be full-time employees. If someone on a short-term, zero-hours contract is asked whether they are a full-time employee and they answer honestly, does my hon. Friend agree that they, too, may find it difficult to get a mortgage at a time when mortgages are far more difficult to get hold of?

[Julie Elliott]

I agree. In fact, those people face difficulties in getting not just a mortgage, but a rental agreement, because they are not classified as an employee.

We need to take a more holistic approach to reforming the labour market. We need to understand that zero-hours contracts are just one of many ways that people in this country are having their rights eroded and their living standards squeezed. Energy costs, food costs, rail fares and private rental costs are hitting people’s pockets on the one hand, and unfair working practices are making them feel insecure for their incomes on the other.

The Labour party, like everyone in Britain, wants to see economic growth, but there is more than a lingering sense that sustained economic growth, when it comes, will not halt this cost of living crisis, because rail fares will still go up, the price of food will still soar and the cost of rent will continue to go through the roof. The hundreds of thousands of Britons who are on zero-hour contracts, temporary contracts or the minimum wage will not see the fruits of that growth.