Zero-hours Contracts

Jim Shannon Excerpts

Wednesday 27th May 2015 Commons Chamber

[Mr Richard Bacon (South Norfolk) (Con)]

I am pleased to have the opportunity to introduce the first Adjournment debate of the new Parliament. It was a pleasure to follow the hon. Member for Swansea West (Geraint Davies). I would love to tell him that the Scottish National party Members were sitting in their places because of the rumour that he was the most exciting speaker in western Europe, and that the right hon. Member for Gordon (Alex Salmond) was there because he wanted to hear every word the hon. Gentleman had to say, but in fact I know that the right hon. Gentleman is sitting there with some of his colleagues because they want to hear what we on the Government Benches have to say about zero-hours contracts. It may seem unusual for a Conservative Member to be raising this subject, which was controversial at some point during the general election, but at a time when the Labour party is unable to focus on any subject at all, as evidenced by the number of Labour Members now in the Chamber, it is left to the governing party, the Conservative party, and what I think they would probably call the real Opposition to focus on the issues that are important to the nation, and zero-hours contracts is one of those issues.

The expression “zero-hours contracts” is a colloquial term for a contract of service under which a worker is not guaranteed work and is paid only for work carried out. It is fair to say that such contracts have attracted both criticism and praise. Employer organisations tend to stress the role that zero-hours contracts can play in helping businesses to meet fluctuating demand, and they argue that such contracts play a key role in keeping people in jobs. Trade union campaigners and others emphasise how the financial insecurity of those people who are on zero-hours contracts limits their ability to rent property or to access loans or mortgages, so that it becomes more difficult for them to provide for their families, and that the general uncertainty facing workers on zero-hours contracts is compounded because such people are not defined as employees, which means that they do not qualify for most employment rights.

The Office for National Statistics has examined the matter to estimate the number of people who have zero-hours contracts, and it is fair to say that there is a little blurring at the edges about the accurate numbers, depending on how they are counted. The ONS has collected statistics based on the labour force survey, which asks workers rather than employers about their employment arrangements, and this suggests that there may be about 697,000 people on zero-hours contracts. A survey by the Chartered Institute of Personnel and Development produced a rather higher number of about 1 million, but the ONS thinks that that may overstate the sampling of large employers. None the less, there is a small but significant proportion of the total workforce of 31 million people—perhaps between 2.2% and 3.2%—who are on zero-hours contracts.

The workplace employment relations survey estimated that the proportion of workplaces with at least some workers on zero-hours contracts has doubled from 4% in 2004 to 8% in 2011, and what is particularly significant is the concentration of workers on zero-hours contracts in certain sectors. The Financial Times reported in April 2013 that there were more than 100,000 zero-hours contracts in use across NHS hospitals, the number having risen by 24% over two years. In the hotel and catering sector, some 53% of employers make at least some use of these contracts, and it has been estimated that some 61% of workers in the domiciliary care sector are on zero-hours contracts.

A social entrepreneur, Mrs Sheila King, in my South Norfolk constituency has told me of the great value of zero-hours contracts for small charities. Mrs King conceived and developed the Pennoyer centre in Pulham St Mary in my constituency. The centre, which is run as a local village charity, is in a building which is part derelict Victorian primary school and part 14th-century medieval guild chapel, and which is now, with the help of grants Mrs King secured from the Heritage Lottery Fund and other grant-making bodies, a multi-purpose village centre. It serves as a conference centre, an IT training centre, a café, a restaurant, a village hall and, indeed, as a polling station in the recent general election, which I say with particular affection because it was where I cast my own vote.

Of the 13 people who work at the centre, four are on zero-hours contracts and they earn holiday pay for every hour worked. These workers include some women over the age of 60 who are happy to have a few hours’ work here and there, and some sixth formers working for their A-levels who at certain times, when they are studying, want to be able to say no to any work at all, whereas at other times they will tell the centre that they would like as many hours as possible. Mrs King told me that it would be difficult to run the centre without the flexibility offered by zero-hours contracts, which she said were “flexible on both sides”.

[Jim Shannon (Strangford) (DUP)]

Over the election period I had occasion to meet some people who were employed on zero-hours terms and their views were clear. The hon. Gentleman has given us a rosy picture of charities which use such contracts, but many people on zero-hours contracts are temporary agency workers who have no rights, as the hon. Gentleman said, and whose hours and pay are minimal. The companies employing them are successful and are making large profits. Is it not fair that those on minimal hour contracts should receive long-term contracts with better wages if the companies are making a large profit?

[Mr Bacon]

I agree that the picture is not all rosy. I started with the rosy news because I wanted to soften up my hon. Friend the Minister, but there are problems. That is why I applied for this debate. I will come on to some of those problems in a moment.

Mrs King told me:

“Just because it is not for everyone doesn’t mean it is wrong for everyone and that it is somehow toxic. Implemented legally and fairly, zero-hours contracts can be a brilliant way for small charities like ours to run more effectively.”

The whole issue of zero-hours contracts, as the hon. Gentleman said, featured in the general election campaign, particularly after the right hon. Member for Doncaster North (Edward Miliband), the former leader of the Labour party, said that the Labour party, if returned, would abolish zero-hours contracts, although the manifesto does not say that. It does not call for the complete abolition of zero-hours contracts. It says:

“Labour will ban exploitative zero-hours contracts.”

The hon. Member for Streatham (Mr Umunna), who was for a few minutes a candidate to succeed as leader of the Labour party, was quite explicit when he told the Labour party conference that Labour

“will act to outlaw zero hours contracts where they exploit people.”

Meanwhile, the Conservative manifesto promised to

“take further steps to eradicate abuses of workers, such as non-payment of the Minimum Wage, exclusivity in zero-hours contracts and exploitation of migrant workers.”

I am pleased that the new Government are now in a position to follow through on these commitments.

With reference to the comments from the hon. Member for Strangford (Jim Shannon), what struck me about the issue during the general election was how frequently voters mentioned it to me, unprompted, often while talking about their grown-up children entering the workforce, which suggests that it may be a bigger issue than the statistics suggest. In one election debate in a church, a member of the audience explained how his son travelled to Norwich each day to work in a retail outlet. When he got there at 9 o’clock in the morning he was told to go and sit in a store room at the back. Later in the morning, if it got busy, he would be called out on to the shop floor, for which he would be paid. He would then be ordered back to the store room to wait for his next slice of paid work later in the day.

I do not know anybody who would defend such arrangements. They are indefensible and, by the way, they are almost certainly illegal already, because the law states that “time workers” must be paid at least the national minimum wage when they are on standby at or near the place of work and are required to be available. I do not want to get this out of proportion. It is not a universal problem. Indeed, I met a young man earlier this week who was delighted with the flexibility that his zero-hours contract gives him, but who also said to me, “What you cannot do is take someone’s time and then not pay them for it.”

--- Later in debate ---

[Nick Boles]

I thank my hon. Friend for raising that issue, which was the subject of the third request from my hon. Friend the Member for South Norfolk. I was going to say that I do not know what the whistleblower arrangements are, but I will undertake to find out tomorrow and make sure that they are better publicised to citizens advice bureaux and to relevant charities that can make sure that people are able to report abuse.

My hon. Friend’s second request, which will give me great pleasure to fulfil, is to work closely with the Minister for Community and Social Care, my right hon. Friend the Member for North East Bedfordshire (Alistair Burt). He is one of the most popular Members of Parliament and former Ministers, who I am delighted to say will now be on the Front Bench again. He is a deeply humane man, and I know that he will want to make sure that the people looking after the most vulnerable in our society are not exploited by their employers.

[Jim Shannon]

Will the Minister also look at firms that employ temporary agency staff and at their rights? Those I spoke to on the election trail told me that their rights have also been diminished.

[Nick Boles]

I am happy to look at that. If I may, I want to extend to the hon. Gentleman, as well as to hon. Members from all around the House, an invitation to bring me specific examples of bad practice—ideally with the identities of the employer, but if not, nevertheless with such examples—and I will try to find out what we can do about such practices if we have not already banned them, as was the case for the worker put on standby unpaid.

My hon. Friend the Member for South Norfolk asked me to get in touch with HMRC about the pursuit of breaches. He will be pleased to know that the previous Government, of which we formed a major part, introduced the idea of naming and shaming employers who breach national minimum wage laws. We will continue that, and I am very happy to direct officials to look specifically at breaches of national minimum wage laws in the care industry, where, as he has rightly highlighted and others have agreed with him, there is a problem.

On my hon. Friend’s fifth request, he is right that the whole question of the design of housing falls outside my ministerial portfolio. However, he knows that I share with him an absolute passion for the issue of housing—about how we must build more and better houses that work for modern families in all their shapes and sizes. I will continue to work with him as a private citizen and as a Member of this House to further that aim.

It has been a great pleasure to wind up this debate on the first day of Parliament. May I conclude by saying that today we have had a model of democracy and free speech? I know that all hon. Members from whatever party will be as dismayed as I was to learn that one of our number, the hon. Member for Clacton (Mr Carswell), was attacked outside by a group of, frankly, hoodlums simply because they disapprove of his views. I think that that is shameful. The hon. Gentleman is a man I like and respect. I think he is hugely misguided and that he is in the wrong party—I think he is beginning to realise that—but he has the right to express himself freely and openly, as we all do, and this House must defend the rights of hon. Members to do just that.

Question put and agreed to.