Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000

– in the House of Lords at 8:13 pm on 22nd May 2000.

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Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, the Government are strongly committed to providing fair minimum standards without imposing unnecessary burdens on business. The part-time work regulations are an important building block in this agenda. The measures announced on 3rd May, and due to come into force on 1st July, will ensure that part-time workers are protected against unjustified discrimination. They have an important role to play in protecting part-timers while opening up new part-time opportunities, and encouraging people to return to the job market part-time.

The basic aim of the regulations is simple: to make it unlawful for employers to treat part-timers less favourably than comparable full-timers. This will ensure that part-timers have a right to receive the same treatment as comparable full-timers. This includes the same hourly rate of pay as comparable full-timers; the same access to occupational pension schemes; the same access to training; the same entitlement to annual leave as well as parental and maternity leave on a pro rata basis as comparable full-timers.

Once the regulations come into force, part-timers could be treated less favourably only where this treatment can be objectively justified. In all their terms and conditions, part-timers will have a right to be valued just as highly as their full-time colleagues.

The regulations are only part of the Government's campaign to promote part-time work. The Government will build on these legislative foundations with a programme of information. This will provide more information on the legal position as well as providing examples of best practice. The first part of this programme has already been published on the DTI's part-time work web page. The programme will be rolled out over the next few months in consultation with interested parties.

The Government have created the right framework for a flexible and fair approach to part-time work. We have listened to the concerns expressed in the consultation process, and amended our measures where necessary. We believe that we have struck the right balance between regulation and best practice guidance. I commend the regulations to the House.

Moved, That the draft regulations laid before the House on 3rd May be approved [18th Report from the Joint Committee].--(Lord Sainsbury of Turville.)

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, these regulations are being introduced as part of the Social Chapter that Labour hastily and recklessly signed up to as soon as the Prime Minister stepped through the door of No. 10 three years ago.

Labour signed up to the part-time workers directive on 7th April 1998. But despite having had two full years to implement the measure it had humiliatingly to ask for an extension of time on 7th April this year. Perhaps that is not so surprising because the Secretary of State had a dress rehearsal for his speech on the order on 10th May. Where was that? It was on the BBC, where most government statements seem to be made these days. The information he gave to his listeners was at variance with everyone else's understanding of the proposals and implied that many more workers would benefit than is the case.

The Secretary of State had to be publicly corrected by the TUC, whose spokesperson said:

"Poor Mr Byers, his head must have been softened by a strenuous week".

My honourable friend, the Member for Tiverton and Honiton, requested Madam Speaker to try to get the order withdrawn until the Secretary of State knew exactly what the order was about, and that was refused, presumably on the ground that it is not necessary for a Minister to understand the legislation he is introducing.

I have to assume that part of the delay in introducing this order--apart from the time it has taken to explain it to the Secretary of State--may have been as a result of the haggling that has been going on with the unions. Employers who may have to familiarise themselves with the new regime will have had less than what may be regarded as a decent period to do so because of the Government's dithering. On the other hand, I have no doubt that the unions with their massive resources and their fingerprints all over the document will be well prepared to deal with it.

I turn to the contents. Fortunately the Government have seen sense. Under Regulation 2 the comparison of part-time workers is going to have to be like with like; that is, between workers with the same type of contract. So without an identical contract a part-time worker cannot claim parity with a permanent employee and claim a pension, sick pay and the like. We congratulate the Government on having resisted the demands that part-time workers for whom there was no direct comparison in the same firm should compare themselves with a hypothetical worker instead. What a feast that would have provided for the lawyers.

Nevertheless, the Government have again failed to resist the temptation to gold plate the already burdensome EC regulations. Despite the original directive entitling member states to exclude part-time casual workers, the Government have not seen fit to do so. The European directive gave member states the opportunity to opt out of applying it to casual workers. Our Government have seen fit to impose this voluntary burden on business. Agency workers are also included. One National Health Service trust has complained that that will push up the cost of hiring agency nurses and care workers. Part-timers employed by the NHS already have the same rights as full-timers. As with the working time directive, the regulation will simply swallow up more of NHS funds.

However, we believe that the worst and most blatant piece of gold plating is the requirement that within 21 days an employer must give an employee who thinks that he or she has been treated less favourably a written statement in order to justify himself. Failure to do so gives rise to an inference that there has been unfair treatment. The statement itself is to be treated as evidence against the employer but not against the employee.

Nowhere in the EC regulations is there a requirement for a written statement, which a prudent employer would probably be well advised to have his lawyers draft for him. In any case, the employee already has a right to go to the employment tribunal for protection. It is absolutely no use the Prime Minister sanctimoniously lecturing the other member states of the EU that they should conduct themselves more like the USA when it comes to business regulation, when his Government lose no opportunity to pile more and more regulation and expense on our industry and apply the most rigorous and bureaucratic interpretation of every edict that comes from Brussels.

Finally, I want to quote from the Government's Regulatory Impact Assessment.

"We do not believe that there is widespread unfavourable treatment of part time employees. Job satisfaction amongst part time workers is higher than among full time workers. The 1998 Workplace Employment Relations Survey found that part time employees were much more likely to regard themselves as fairly treated than were full time employees; 61 % compared with 45%".

Like the CBI, the Opposition support the principle of giving part-time and full-time workers the same pay and conditions on a pro rata basis. The CBI believes that most employers already do so. Part-time employees are a valuable segment of the workforce, especially to smaller employers who may not need or be able to afford full-timers. These regulations, while on the face of it being for the benefit of part-time workers, are likely to lessen their employment prospects and damage small business.

I wonder whether the Minister will clarify one point. I am sorry that I was unable to give him notice of it, but the matter was brought to my attention only late in the afternoon. The Official Report of the other place was late in printing due to the burden of work. At col. 9, the honourable Member for St Ives commented on press speculation that the European judgment on part-time workers entitled to occupational schemes could cost the Exchequer up to £17 billion because of the way it would work retrospectively.

When the matter was debated in the other place, the Minister said in reply that that was an extremely valuable point and at col. 20 he said that it was an important point. But, having read the rest of his reply, I am not sure whether it was likely to cost up to £17 billion. It would be helpful if the Minister could give me an answer today or in writing. I apologise for the delay in mentioning the matter.

I return to the regulations before us. The assessment of the extra burden that this piece of legislation alone will impose on businesses is, in using the Government's own figures, £27.4 million. We on this side of the House are not happy with the regulations, first, because of the extra cost and, secondly, because of the gold plating in the written statement that I mentioned; the inclusion of casual and agency workers.

However, reluctantly and in accordance with the custom of your Lordships' House, we shall not oppose the passage of the regulations, although we believe that they may put a hard burden on businesses.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

I declare an interest, having been part of the origin of the negotiations. Perhaps I may remind the House how the Social Chapter works. Ten years ago, a framework agreement in Brussels meant that all the European trade unions and employers were able to come together to deal with the matters in the social action programme. We can take some satisfaction from the fact that this is the third such measure to come before Parliament after a number of years of negotiation in Brussels.

When the Labour Government signed the Social Chapter, to the regret of the Conservative Party, they were in a position to catch up on some of the matters that had taken time in Brussels. In that process, some of the topics have reached this Parliament in a tight timetable. However, the House should take confidence from the fact that the broad framework was agreed by the CBI, which is part of the European Employers Federation. It is therefore reasonable to infer that this is a modest proposal in a series dealing with atypical work.

We ought to reflect on the fact that during recent months we have had many debates in this House about the rapidly changing nature of the labour markets. What is in Brussels jargon called "atypical" work--part-time work, fixed-term contract work and agency work--is in some industries becoming typical work. Therefore such employees need to be covered pro rata and these regulations are a modest way of dealing with the problem.

It is worth making the point that of the 6 million part-time workers in Britain, 80 per cent are women. In recent years it has been most difficult to deal with such problems by way of collective agreement, and the regulation is a half-way house between a detailed statutory scheme and a collective agreement. It was written in the form of a collective agreement in Brussels and it was signed by the trade unions and employers in Brussels. If five or six years ago people in this country or in any other part of Europe had said that many of these issues would be the subject of successful framework collective agreements in Brussels, it would have been thought most unlikely. A great deal of progress has been made and because of the way in which the matter was handled in Brussels there is a preparedness in industry to take this step forward at this stage. If we had made the move on our own, we would have been open to the charge that we would have lost competitiveness and so forth.

The measure means that we are operating on a level playing field in Brussels. We are not losing competitiveness against any other European country; we are going forward together. These high standards for part-time workers will stand us in good stead of integrating atypical workers into the labour force. I am pleased therefore to associate myself with the regulations before the House tonight.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, I ought to make one point to the noble Lord, who has spoken so eloquently on what he believes to be the correct position. I made the point that the timing was difficult because small businesses have only six weeks to ensure that they get it right. The noble Lord mentioned that the CBI was involved in the timing structure. Originally, businesses were given two years from 7th April 1998, but they had to have an extension. The regulations must be implemented in only six weeks' time, on 10th May. I do not know how many small businesses the CBI represents--it usually talks about big businesses--but I know that for those which do not employ many people in their personnel and accounts departments implementation will be difficult.

The other point that I wish to make is that we do not object at all to the EU directive as such. We object to the gold plating on the objective. When one talks about competitiveness, as did the noble Lord, it does not help us to be competitive when it is made more difficult for employers in this country than it is for those in the rest of Europe. That is the point that I was making.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative 8:30 pm, 22nd May 2000

My Lords, before the Minister rises to reply, perhaps I may also say to the noble Lord who has just spoken that it may well be that by these arrangements we do not lose competitiveness with our so-called partners or competitors in Europe. However, of course, we do lose competitiveness with, shall we say, the United States of America, the recovering markets in the Far East and the rest of the world. This is another classic example of EU harmonisation bringing us into line with the sclerotic and declining European market and, in doing so, damaging us in our competition and trade with the rest of the world.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, I believe that the Government's measures on part-time work will ensure that Britain's 6 million part-timers are no longer treated as second-class citizens. In response to the last speaker, perhaps I may say that most businesses, particularly in the service area, have been well ahead on this issue for a long time. It is now well appreciated that part-time workers are an absolutely essential and important part of the workforce and therefore should not be treated as second-class citizens. I would argue strongly that an important part of competitiveness is having a part-time workforce who believe that they are treated fairly and not as second-class citizens.

So far as delay is concerned, we took slightly longer than the regulatory right, although we are allowed a slightly longer period. That seemed to me to be correct in terms of getting the regulations absolutely right, and I believe that several other EU members have taken more time in the same way as the UK have done.

So far as concerns the question of casual and agency workers, I believe that there is a misunderstanding as to how the employment status is defined. Some casuals are employees, some are workers, and the same argument applies with regard to agency workers. If we were simply to exclude workers, that would increase enormously the scope for legal action to determine the legal status of individuals.

So far as concerns the written statement, it seems to me to be a simple case of good practice that everyone should be agreed about the facts before legal action is started. If there is a case for objective justification, that should be put down. I cannot believe that that simple process, which would seem to be good practice and potentially could stop legal actions being taken, is in any way harmful.

The noble Baroness, Lady Miller, raised the rather complicated question of occupational pensions. A decision was taken by the European Court on 16th May that UK legislation, which places a two-year restriction on claims for backdated contributions in respect of occupational pensions, is not compatible with European law. That means that claims for employer contributions from part-timers who were denied access to occupational pension schemes could go back as far as 1976, which was the date of the earlier ECJ ruling. That, of course, is in relation to other rights. So far as concerns this measure, rights begin to accumulate only now. Clearly, this particular point will not impact for two years and we shall review the situation during that period. If it is incompatible with European law, we shall examine that and amend it accordingly.

I believe that the point behind the regulations is that part-time work has become important and will be increasingly important in the years ahead. All businesses knew that the legislation was imminent and had plenty of time to prepare for it. I believe that the Government have set the right framework for a flexible and fair approach to part-time work. I commend the proposals to the House.

Photo of Lord Pearson of Rannoch Lord Pearson of Rannoch Conservative

My Lords, I wish to press the Minister on what he has just said, particularly with regard to pensions. I believe that to some extent he echoed what his honourable friend, the amazingly titled Minister for Competitiveness in the other place, Mr Alan Johnson, said in Standing Committee last Thursday, 18th May. Like the Minister, Mr Johnson appeared to be uncertain as to the effect of the backdating of pensions, possibly to 1976, under the European diktats.

Therefore, in the first instance I ask the Minister to give the House an absolutely clear assurance that the figure of £17 billion which has been put upon this aspect of the problem is absolutely not accurate, that it will not happen and that we need not worry about it any more.

Secondly, when he says that the new regulations will not bite for two years and that no one can make a claim until they have been operating for a period of time--in other words, that it will not be until the year 2002 that any court could rule that someone is entitled even to two years' retrospection, which is what I believe the noble Lord said--can we have some idea of the cost of that? It may not be £17 billion, but if we are looking at these regulations introducing that prospect, then what will the cost be of two years' retrospective pension which may then be applied? Is that figure included in the £27.4 million, which I believe is the figure that the Government have already put on these regulations, or is that extra? And who will pay the retrospective pensions for the two years which may be adjudged in the year 2002? And who will pay the £17 billion, if we come to that?

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, I make it clear that the £17 billion does not in any way relate to the regulations that we are debating tonight. So far as concerns the regulations under discussion tonight, a question would arise with regard to backdating only if people failed to be paid what, under this legislation, it was their right to be paid. However, it is hardly likely that there will be a failure to do that. But, if they failed to be paid what was due to them under the legislation, then of course the amount would depend entirely on how many people failed to receive the rights that they have under this legislation for whatever period. This is backdating for a right for which people have not been paid. Therefore, it depends entirely on the extent to which they have not been paid. Therefore, at this stage it is not possible, even remotely, to say what that would be.

So far as concerns the £17 billion, that figure is not accurate. Our figures are much lower than that; £4 billion is probably closer to the figure. However, we need to examine that in more detail.

On Question, Motion agreed to.