Zero-hours Contracts

Sammy Wilson Excerpts

Wednesday 16th October 2013 Commons Chamber

[Vince Cable]

I think that the hon. Gentleman is exaggerating the problem. It is true that we have reformed the tribunal system, and access is less easy than it was. As I have explained, we are trying to create a framework within which small and medium-sized enterprises can expand and take on workers.

[Sammy Wilson (East Antrim) (DUP)]

Much has been made of the potentially exploitative nature of the contracts, but if an employer is up against it, is it not more likely that a zero-hours contract will become an exploitative contract? Should not the Secretary of State consider ways of squeezing and squeezing to make zero-hours contracts not the norm, but very difficult for any employer to enter into such contracts with employees?

[Vince Cable]

The hon. Gentleman has made, in his own way, a point that I have made several times, namely that a zero-hours contract may be a symptom rather than the cause of the problem. Many employers are indeed up against it, on the margin of survival—those in Northern Ireland probably more than most—and use such contracts in order to survive. That presents challenges of its own.

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[Sammy Wilson (East Antrim) (DUP)]

In the interests of other people being allowed to speak, I will not take any interventions because it would be unfair at this stage, although I am usually quite happy to do so.

Let me first say that I do not know how extensive zero-hours contracts are in Northern Ireland. Indeed, the debate so far indicates that we do not know the quantum of what we are dealing with. Anecdotally, however, I am becoming more and more aware of the problem because people come to tell me about how they find themselves being squeezed by this form of employment, whether it is parents complaining about the conditions for their children who are going into jobs for the first time or care workers on contracts in the public sector.

Government Members have said that for many people this situation is acceptable. In many cases that is only because there is no alternative. It is not that people want and welcome this with open arms; it has huge consequences for them. They do not have security of employment. They do not have what many of us have been fortunate to have during our working lives, whereby people can take on loans and mortgages, know that there are prospects of advancement in their work, and know that their employer is investing in them and is therefore prepared to enhance their skills to make them even more employable in future. All that is lost to people on zero-hours contracts.

I understand the need for flexibility in the labour market, but I am increasingly concerned that zero-hours contracts are being used as a tool by managers who are too lazy to look ahead. Sometimes it is not the case that they do not know what is ahead. For example, last Monday, I was with a constituent who told me about her care workers who are on these kinds of contracts. They are called into work in the morning until lunchtime, called in again in the afternoon until teatime, and then called in again in the evening. The employer’s contract is with a health board. I do not believe that he does not know for how many hours he is contracted to undertake work for that health board. Therefore, I do not understand why he cannot properly utilise his work force and take the opportunity to give those individuals more security of employment.

Some Members have drawn a distinction between zero-hours contracts that are normal and those that are exploitative. I do not believe that there is such a distinction, because potentially every such contract is exploitative. When an employer is really squeezed, he or she has the flexibility to say to someone, “There’s no work for you today. I took you on on certain conditions and you accepted that you were on a zero-hours contract. I could probably offer you 12 hours a week, but I’m sorry that’s not available any longer”. Then people can sit for days or weeks with no work. They may have taken on the contract only because the employer said, “Normally this will be what’s available to you” even though it was a zero-hours contract. Those contracts do become exploitative. When the Secretary of State is looking at the way forward, if there cannot be a total ban—for which, in certain circumstances, a good argument could well be made—we should at least start to look at how it can become the exception rather than, as I suspect, increasingly the norm.

Several aspects have been well highlighted in this debate. First, these contracts should not be exclusive because this should not be a one-way relationship. It has been said that it suits both partners, but very often it does not. I think of what has been said by people on zero-hours contracts who have come to see me. The contract is operated by the employer and the employee is afraid to say, “I’m not coming in tomorrow because it doesn’t suit me” because they probably accepted the contract in the first place only because they were desperate for work. At least, as suggested by the Opposition, there should be no exclusivity. That would be one way in which an employee could say, “I’ve got other options open to me.”

Secondly, where zero-hours contracts operate in the public sector—many are found in charities and employers who work on public sector contracts—there should be much more rigour about the conditions attached to those who are employed in firms that win public procurement contracts. That would squeeze out an awful lot of these contracts.

Thirdly, if it is shown that an employee has had regular work over a period of time even though they are on a zero-hours contract, the employer cannot really argue, “I need that flexibility”, because the employee has had regular hours already. That should be another area where we can start to squeeze out these contracts.

Zero-hours contracts are not only bad for employees but bad for the economy. If employers themselves thought about it, they should realise that there is no better way to have a work force that is loyal to them than by treating them right. These contracts, especially when they are used in an exploitative way, do not treat employees right and therefore have an impact on the quality of the work force. In the longer run, as the hon. Member for Wirral South (Alison McGovern) said, what employer is going to invest in their work force if they treat them as people who can be taken on and disposed of when they feel like it?