Zero-hours Contracts — Question

– in the House of Lords at 11:11 am on 11th June 2015.

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Photo of Baroness Quin Baroness Quin Labour 11:11 am, 11th June 2015

To ask Her Majesty’s Government what plans they have to undertake a review into zero-hours contracts of employment.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, the Government’s previous review showed that zero-hours contracts have a place in today’s labour market, offering flexibility to both individuals and employers and helping business to meet varying demand. However, people on these contracts deserve a fair deal, which is why the Government have banned exclusivity clauses in such contracts—and I am glad to say that the ban came into force on 26 May.

Photo of Baroness Quin Baroness Quin Labour

My Lords, I am grateful to the Minister for listening to some of my concerns when we spoke recently about this, but can I urge the Government to look at two things in particular? First, the use of these contracts in the care sector is undermining continuity of care, which is so important to carer and client. Secondly, there are huge problems facing those who seek permanent employment but are simply offered zero-hours contracts, which means that they face permanent financial insecurity, are unable to access the housing market and are forced on, off, and on benefits, which causes great stress and hardship. If the Government are serious about helping working people to get on, as they say in the Queen’s Speech, surely these abuses of zero-hours contracts need to be tackled urgently.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, most employers using zero-hours contracts value the opportunity and flexibility that they offer, and individuals on them are able to earn as much or as little as they choose. In the minority of cases when they are not used responsibly, banning exclusivity clauses will free up individuals to secure additional income elsewhere. The Department of Health is working with local authorities to ensure that the providers from which they commission services have a high-quality workforce with fair terms and conditions, and we are getting on with creating a route of redress against employers who ignore the ban.

Photo of Viscount Ridley Viscount Ridley Conservative

My Lords, the focus is often on the negative aspects of zero-hours contracts. Could my noble friend explain a bit more about the advantages to individuals of some of these contracts? Surely a lot of people in work these days do not want to, or cannot, work nine to five.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

Indeed, my noble friend is right. For some, this type of flexible working is a way to enter the labour market. It can open a door to employment for parents or students. The CIPD research shows that 60% of those on zero-hours contracts are satisfied with their job compared to 59% of those in permanent employment, and 65% are happier with their work/life balance compared to 58% in permanent employment. They have an important role, but of course it is important to make sure that the detail is right, and that is why we have banned exclusivity.

Photo of Lord Laming Lord Laming Convenor of the Crossbench Peers

My Lords, does the Minister agree that there is a huge difference between someone working in the same place on a zero-hours contract and someone who has to move from place to place in their work? A carer is a very good example. A carer may be given only 15 minutes—which seems extraordinary—to deal with the personal needs of some very vulnerable person, and then there is the travel time. Will the Minister say something more about whether the Government are going to address this fundamental issue about the difference between somebody who is located in one place and somebody who is moving perhaps six or seven times during the day?

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, as I have already said, the relevant authorities are looking at this to ensure that we have a high-quality service and that the terms are fair. I should make it clear that time spent travelling directly between assignments or on standby at work during quiet periods generally counts as time worked for national minimum wage purposes. This often works better than we think, but it is of course an important area to look at.

Photo of Lord Stoneham of Droxford Lord Stoneham of Droxford Liberal Democrat Lords Spokesperson (Business, Innovation and Skills)

I declare my interest as chair of Housing & Care 21. Surely any Government seeking to improve the efficiency and quality of public services should be monitoring the impact and growth of zero-hours contracts. Will the Minister tell us whether the Government have an estimate of the number of zero-hours contracts paid for out of public funds?

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, this is an issue I would need to look into. We have 697,000 people on a zero-hours contract as their main job, but I do not have a breakdown between the public and private sectors.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Labour

My Lords, most people on zero-hours contracts are also in minimum-wage jobs. They are very low paid. In the past 48 hours, we have learnt that the Government are expecting something like £5 billion out of the £12 billion welfare cuts to be saved from working tax credits. Those people on zero-hours contracts survive because of those tax credits. How will they survive in future?

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, zero-hours contracts allow people to come into the workforce who could not otherwise come in for the reasons I have explained, participate and get a job. The social security welfare framework continues to apply. This seems to me to be a good thing, not a bad thing, as the noble Baroness suggests.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, my noble friend is making a very eloquent case for flexible working, but that is not the same thing as zero-hours contracts where people have to turn up to find out whether they have a job and are not reimbursed under their employment contract. Given the Government’s record in bringing flexibility into the labour market, is this not a matter which needs urgent attention?

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I am glad my noble friend mentioned the value of flexibility. We have asked officials to look at issues facing those on zero-hours contracts to see whether any further voluntary or statutory action is necessary because of the sort of points he has made.

Photo of Baroness Falkner of Margravine Baroness Falkner of Margravine Liberal Democrat

My Lords, will the Minister answer my noble friend Lord Stoneham’s point that the Government need to collect the data to be able to get a picture of what is going on with these contracts? Will she at least write to him and place a copy in the Library so that we know what information the Government have?

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, I am happy to write with what data we have through the ONS and, indeed, to explain some of the methodological problems in this.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, what happens if an individual is offered a zero-hours contract but turns it down? Does that mean that that individual does not then qualify for benefits that he would otherwise qualify for because he has turned down what in the Government’s view is a reasonable possibility? Is he not allowed to claim benefits if he turns down a zero-hours contract?

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

This is not an area that I am an expert in, but my impression is that the local Jobcentre Plus and so on are actually very helpful on these points. However, I will look into this issue further and write to the noble Baroness.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

What will be done to make people aware of the exclusivity issue no longer applying? Only last week I spoke to a carer who had an opportunity to earn other money but was not allowed to do so because their zero-hours contract had exclusivity very clearly written in.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

I am disturbed to hear that. The provision has certainly come in and will be publicised in the normal way. As part of the work we are now doing, we consulted in February on redress. We will be bringing in a route of redress against employers who ignore the ban, and this will give a further opportunity for people to know about this exclusivity. An issue that I have often discussed on these Benches is how you get information about new legislation out. I take the point in general, but I assure the noble Baroness that the new provisions have come in and we are taking steps to publicise those.

Photo of Lord Young of Norwood Green Lord Young of Norwood Green Shadow Spokesperson (Business, Innovation and Skills)

My Lords, I reassure the noble Viscount, Lord Ridley, that we are not opposed to zero-hours contracts. However, when someone is on a zero-hours contract for six months or more, surely they deserve an offer of a permanent contract. The Minister talked about flexibility and a fair deal. Is it a fair deal to continue in the same employment without any pension contribution or guarantee of holiday payment? That does not seem like our idea of a fair deal, and it does not seem in accord with the Government’s recent re-espousal of “one nation”.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

My Lords, I think there is a fundamental disagreement between us. We believe in the value of zero-hours contracts. We also believe that we need to look at how they work in practice. There are parts of business where, just because you have worked in some area for 12 weeks, that does not actually mean that what is required by the employer will be the same 12 weeks later. There is a fundamental problem with the proposal put forward by the Labour Party. However, I assure the noble Lord that we continue to look at this with the objective of trying to ensure that it really works well in our flexible economy.