Unpaid Work Trials

Fuel Costs: Rural Households and Communities – in Westminster Hall at 4:25 pm on 29 March 2023.

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Photo of Stewart McDonald Stewart McDonald Scottish National Party, Glasgow South 4:25, 29 March 2023

I beg to move,

That this House
has considered the matter of the use of unpaid work trials.

It is always good to see you in the Chair in Westminster Hall, Mr Hollobone. You will remember, because I think you might have been present, that I introduced in the previous Parliament a Bill to amend the National Minimum Wage Act 1998 in order to outlaw the practice of unpaid work trials. I will come back to the substance of that Bill, which is now a piece of history, but I want to begin with the genesis of this entire issue and why I decided to take it up as a Member of Parliament in the private Members’ Bills selection.

There is a bubble tea company called Mooboo, which had an outlet in Glasgow that was offering unpaid work trials—the practice of inviting applicants to apply for a job and making them work for a trial period for which they are not paid. Although there are many variations on what an unpaid work trial looks like, this was perhaps the most extreme version that I have come across, because the applicants were invited to work for a full 40 hours without payment, at the end of which they were or were not offered a job. That is a particularly egregious and extreme example, but when I decided to take up the case on behalf of a constituent who went through that process, I started to find that this practice was rife and much more common than I had first thought. As I mentioned, it presents itself in many guises.

Although that example is at the extreme end of the practice of unpaid work trials, there are many intricacies and differences in the way it presents itself. When I started to talk about this issue publicly and wrote to Ministers and His Majesty’s Revenue and Customs, I started to gather in my inbox various horror stories about the practice of unpaid work trials across the country. A study in November 2017 by Middlesex University and the Trust for London, called Unpaid Britain, shows that unpaid work trials contribute to about £3 billion in missing wages in the United Kingdom. That figure is six years old, and I do not know what it is today—perhaps the Minister has a better idea—but I would wager that it is probably higher now than it was then. Polling from YouGov shows that 65% of Brits say that such a practice is unfair and only 24% think it is fair.

The way in which unpaid work trials present themselves is often different, as I mentioned, but it is none the less insidious. Quite often an applicant will apply for a job where the trial period may be an hour or two, so that they can come in and show what they are made of—whether that is in a restaurant, a cocktail bar, a hotel, a retail setting or whatever it might be. I discovered that quite often those trials were being offered to applicants for jobs that did not actually exist. Applicants were being exploited to cover staffing shortages and busy periods, such as Christmas trading. Those poor people had often spent hours applying for jobs, sending in CVs and filling out application forms, often going through the soul-destroying process of hearing nothing back. They were being invited to unpaid trials for jobs that did not exist, that were never going to materialise and that they would never be offered.

I suspect the Government position is the same as it has always been—that legislation is not required. I think we can all agree that that it is an egregious thing to ask somebody seeking employment to go through. It is fraud; it is morally fraudulent and must almost certainly be legally fraudulent—except it is not. I have no ambition to relitigate the Government talking out my Bill. The Minister who did so is no longer a Member of Parliament, and I am, so I like to think I won that fight with that Member at the time. When I talked to Ministers and officials about this at the time, we all agreed it was an abhorrent and unacceptable practice, but the Government position was that legislation was not required to fix it.

I would say to the Government today that the fine guidance they produced for employers on unpaid work trials has not had the effect that we all wanted, which was that they would not be used at all and certainly not used in the egregiously fraudulent way that I described. At the time, there was some good will on the Government side, among Labour colleagues and on my own side, which even in today’s Scottish National party environment still exists.

The fact that the practice is still going on and partly contributing to billions of pounds in missing wages that people should rightfully receive—

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

I am listening carefully to the hon. Member’s speech, and he is making some very valid points. I agree that such behaviour is egregious. Is the £3 billion he quotes for unpaid work trials or unpaid work? There is an important difference between the two.

Photo of Stewart McDonald Stewart McDonald Scottish National Party, Glasgow South

Yes—and no, in terms of the Minister’s final point about there being a difference. The unpaid work trials contribute to the figure of £3 billion. I am not saying that the trials are worth £3 billion, but the study by the university concluded that that was part of the bigger £3 billion picture. I confess I do not think there has been an updated study. I do not know if the Government have anything to share with us this afternoon. I would be amazed if that figure had not grown since that study was done six years ago.

Among all the good will to try to stop this miserable exploitation, the Opposition and the Government arrived at different conclusions. I was of the view, supported by colleagues in the Opposition, that legislation was required —an amendment to the National Minimum Wage Act 1998—to outlaw the practice. The Government took the view that guidance was adequate, but it is not. It was proven not to be as recently as December last year in a court ruling. The ruling in Ms P Karimi and Ms C Patricio v. Fadi Ltd, published by His Majesty’s Courts and Tribunals Service on 2 December 2022, found that the claimant was entitled to the minimum wage for all hours worked during the trial period. Reasoning the judgment, the employment judge, Judge D Wright, stated that the

“legislation does not give explicit guidance” as to how long these unpaid trial shifts may last.

An exploitation had taken place, whereby someone had worked in an unpaid trial, and the tribunals service determined that they should have been paid for it, but the judge said that the guidance is not sufficient on the regulation of work trials. I am not against work trials. I entirely support an employer’s right to say to someone, “Come in and show us what you are made of. Come in and show us that you actually have the skills and experience that you set out in the interview process.” What I do not support is exploiting people for jobs that do not exist, or for covering staffing shortages and doing so for 40 hours, as in the extreme examples that I mentioned at the start of my remarks.

Forty hours is an extreme and unusual example. What I thought I would find initially was that the norm would be two or three hours—half a shift or a morning. What I found more often than not was that the time was longer, and the physical experience of the unpaid work trial was demeaning. The number of people—mostly young people—who would work their unpaid trial shift and then just be left, not told whether they had a job, confused as to what was supposed to happen next, clearly tells us that better regulation of trial periods needs to be forthcoming from the Government. I do not think that that is too much to ask in this day and age. A fair day’s work for a fair day’s pay; it could even be said that it is a broadly Conservative value. It is something that even my colleague, Chris Stephens can rally around.

Let us be clear about what my proposed legislation was not; it was not about banning trial periods, and it did not concern itself with things like unpaid internships. Although I find them objectionable, I felt that would require its own piece of separate legislation. The aim of my proposal—the banning of exploiting people through unpaid work trials—remains an entirely just one.

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Levelling Up)

I thank my good friend and constituency neighbour for giving way. There is another way of dealing with this issue. As my hon. Friend will be aware, the Government have been promising an employment Bill for the last six years. For some reason it is yet to become a reality. Does he agree that if the Government were to put forward an employment Bill, that would allow both of us to table amendments to address this topic?

Photo of Stewart McDonald Stewart McDonald Scottish National Party, Glasgow South

With all things around employment law, in my party I defer to my hon. Friend. He has a strong history of standing up for employment practices and a knowledge that surpasses mine when it comes to the detail of modern-day employment law.

To conclude my remarks, I think the aim of my Bill —although I suppose it is now an ex-Bill—was entirely just and reasonable. It has been shown in the time that has passed since the falling of that proposed legislation that the guidance the Government produced, although perfectly sensible and reasonable, is not enough. I still get emails, as do many Members from across the House, from people who are being exploited by unpaid work trials or, worse, fake work trials for jobs that do not even exist.

I will end with the example of a young Glasgow student, Ellen Reynolds, who petitioned Parliament a few years ago. She successfully gained the number of signatures required to have a debate in Westminster Hall on an unpaid trial shift that she was asked to take part in. There was no guarantee of a job at the end of it and she even had to buy here own uniform to take part in that unpaid trial shift. That is not an uncommon experience. All across Britain today, there are people working a couple of hours, half a shift, or half a morning —whatever it is—to show what they are made of, and they are not being paid for it, and they should be paid for it. They are not getting expenses for it, and they should be, at the very least.

We have a quirk of the system here, where exploitation is rife. I would bet that every person who can hear the sound of my voice knows somebody who has gone through an unpaid work trial at some point in their life, especially if they know groups of young people. The Government and this House have a duty to bring this exploitation to an end. That would not cost industry enormous amounts of money. It would bring in a bit of regulation that is right and proportionate. It would give some dignity to applicants, and some dignity into the workplace that is currently missing.

This is a small gap in the broad structure of employment law, but one that very much needs attention and could very easily fixed be with an amendment to the National Minimum Wage Act 1998. When the Minister gets to his feet today, I suspect he will not be able to furnish the House with new legislation, but I hope he will be able to say something positive on statutory changes to end the exploitation of unpaid work trials and closing that loophole, which at the minute means that people do not get a fair day’s pay for a fair day’s work.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health) 4:41, 29 March 2023

I apologise for being a few minutes late, and I thank you, Mr Hollobone, for giving me the opportunity to contribute. I thank Stewart Malcolm McDonald for leading today’s debate and for setting the scene so well. He referred towards the end of his comments to anyone who can hear the sound of his voice having had experience of this situation. As I always do, I will give an example of someone I know back home in Northern Ireland, to add a regional perspective to the debate—one that is replicated right across this whole great United Kingdom of Great Britain and Northern Ireland.

Unpaid work trials have proven incredibly common among some employers—sometimes I wonder whether they do it on purpose—especially in industries like hospitality, where young people tend to get their first jobs as young teenagers. There are a great many people across this United Kingdom who have good jobs now, but this is what happened when they first began. We must do all we can to enforce paid work trials and make young people aware of their employment rights. When someone is starting off, and has the excitement of a trial that might lead to a first job, they say, “I’ll definitely go and I’ll endure a wee bit of hardship or pain to get this job.” If they get it, that is good. If not, they feel a wee bit taken advantage of.

The advice from His Majesty’s Revenue and Customs is that using unpaid work trials does not contravene any current legislation for businesses, if they are part of a genuine recruitment process, do not last longer than a reasonable amount of time and are required to demonstrate the applicant’s suitability to the work. Are they part of a genuine recruitment process, or are they are a way of taking advantage of some people?

The hon. Member for Glasgow South outlined the issue very well. We look to the Minister, the Under-Secretary of State for Business and Trade, Kevin Hollinrake, for a response; I am pleased to see him in his place. It is good to see the shadow Ministers for the SNP and for Labour here too, the hon. Members for Glasgow South West (Chris Stephens) and for Ellesmere Port and Neston (Justin Madders).

In Westminster Hall, in a past life for the Minister if not for me, we would have been on the same side, debating issues like banking. We were both lowly Back Benchers then. He has been elevated to greater heights, whereas I am still a lowly Back Bencher. He has reached heights that I will never be able to achieve, and that is a fact—I am not a member of the Conservative party, so it is highly unlikely to happen. I say that in jest!

Work trials are commonly used to allow an employee to see how a business is run and for an employer to see how the employee will settle in. When they are done right, they give the employer a chance to see just what a person can achieve. The problem is that, more often than not, people work an extensive shift and are not paid a penny for it.

One of the young girls who works in my office told me a story similar to that outlined by the hon. Member for Glasgow South, who set the scene so very well. My youngest member of staff recalls a work shift that she did when she was 17 years old—before she ever came to me—for a café in her local area, where she worked from 10 o’clock until 4 o’clock and was entitled to no pay for the shift. Now, that situation was understood between the employee and the employer. However—here’s the story—for the trial she was required to wear a black shirt and black trousers, which she did not have. If she wanted to do the trial and be considered for the job, guess what? She had to go and buy the black shirt and trousers. That cost an additional sum, which would ultimately be wasted once she got her uniform. I found that a bit hard to understand. On certain occasions, these trials just do not seem worth their while when the whole matter is taken into account.

Although there is no legal obligation to pay someone for a trial, I would certainly put forward the argument, as did the hon. Member for Glasgow South, that the individual, by working a trial, is still making money for that company, so they should be reimbursed. That is the crux of the matter. Some employers choose not to take staff on after trial periods, so they should—I was going to say “perhaps”, but they really should do this—offer the minimum wage for the day or for the number of hours worked. That would be fair and justifiable, given the time that the person has provided to make money for the company in their trial period.

I am also shocked to hear plenty of stories of people having been made to work not one day, but a week’s trial at zero payment, only to learn that if they leave that employment within the year, they must pay back the money they made in the trial period. Again, that is immoral, wrong and a disgraceful way to treat employees. Although the legalities around paying people for trial shifts represent a grey area, individual employers should have discretion to ensure that their employees are treated properly.

We know the stories. I gave one example and the hon. Member for Glasgow South has given examples. I am quite sure that my friend the SNP spokesperson, the hon. Member for Glasgow South West, will give more examples than anybody else, because—I agree with hon. Member for Glasgow South—he has a knowledge of these matters, and I look forward to hearing his contribution. Some of the stories we hear are disgraceful, distasteful and just awful.

We have a role to play in ensuring that all employees of or at small, medium or large companies have a good outcome. That is really not too much to ask: simply fair play and fair moneys for time and effort spent. At the moment, that is not the case. There is a duty on the Minister and the Government to sort out the legalities, and ensure that employers pay their employees the wages they should be getting. I very much adhere to and believe in the saying, “A fair day’s work for a fair day’s pay,” which is why I fully support the hon. Member for Glasgow South.

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Levelling Up) 4:48, 29 March 2023

It is a pleasure to see you in the Chair, Mr Hollobone, and to follow Jim Shannon. I hope he enjoyed his birthday celebrations at the weekend; I noticed that he was a social media sensation, with all the well-wishers wishing him a happy birthday.

I congratulate my good friend and constituency neighbour, and fellow left winger—I use the definition loosely—my hon. Friend Stewart Malcolm McDonald on securing this debate on an important issue that affects far too many people in these islands. My good friend talked about one of the more extreme examples, the tea company Mooboo, but he undersold what was going on at that particular workplace. That situation really did go from the bizarre to the ridiculous. I recall that when this story hit the headlines, myself and my good friend were actually sitting next to each other in the Chamber of the House of Commons on a Thursday morning at business questions—the Minister was usually at business questions in those days—as we discussed this great matter.

Those of us who were contacting Mooboo tea on the social media platform Twitter were finding ourselves blocked for asking why unpaid work trials were happening in that workplace. Members of the pubic who were asking Mooboo, “Why are you blocking Members of Parliament for asking basic questions?”, were finding themselves blocked. It was getting to the stage where Mooboo was blocking more people than it had followers. It was one of those ridiculous situations. Even journalists were asking Mooboo those questions and finding themselves blocked, until Mooboo relented and started to engage with Unite—Bryan Simpson, who is a fantastic trade unionist and a constituent of my hon. Friend the Member for Glasgow South, and who does great work in organising trade unions in such areas, where exploitation takes place.

I want to make it very clear that the SNP is still calling on the UK Government to ban exploitative unpaid work trials and to protect workers, but we should not have to wait for the Government to act. As I alluded to in my intervention, we have waited six years for this employment Bill to appear before us. In 2017, the Government said they would bring forward an employment Bill to ban exploitative practices that were happening in the workplace, and then we were told, “Well, Brexit’s taken over.” Recently we have been told, “We’ll bring forward an employment Bill if there’s sufficient parliamentary time,” but that does not stop them introducing immigration Bill after immigration Bill. They can find parliamentary time for that, rather than for the very real issue of the exploitative practices that are happening in far too many workplaces across these islands. Will the Minister update the House on when we will finally see an employment Bill tabled by the Government to address unpaid work trials and all the other issues that come with it, which I will come to?

As my good friend, my hon. Friend the Member for Glasgow South, said, he introduced an Unpaid Trial Work Periods (Prohibition) Bill in July 2017. Guess what, Mr Hollobone—I know you will be shocked when I say this—it was talked out by a Minister. How many private Members’ Bills have been talked out by a Minister? I hope that we will review how private Members’ Bills are put forward in this place and that we stop the practice whereby Ministers are allowed to keep talking until 2.30 pm on the button, when the Bills disappear. That is really disappointing, and that view is shared by others across the House.

My hon. Friend has led in a number of debates and been a consistent campaigner on unpaid work trials. I hope that the shadow Minister, Justin Madders, and indeed the Minister, will praise him for his work in shining a light on these issues.

In response to a written parliamentary question from my hon. Friend the Member for Glasgow South about legislative proposals, the UK Government said:

“Existing legislation already bans unpaid work trials that are not part of a legitimate recruitment process”,

yet he has given example after example, as did Jim Shannon, of unpaid work trials happening all over the economy and not being part of a recruitment process. As my hon. Friend and constituency neighbour said, they are being used to deal with staff shortages or fill in for people who have been off sick, which is a scandalous practice. Then there are those who are having to buy uniforms to go to unpaid work trials, which is an absolutely ridiculous practice—I hope the Minister noted what my hon. Friend and the hon. Member for Strangford also said about that. The Minister will need to answer for how we can deal with that kind of exploitation, because that is what it is.

As my hon. Friend said, trial periods can be a legitimate way to assess a candidate’s skills and suitability. They also give individuals the opportunity to assess whether a workplace suits them, which can be just as important. I note that the Department for Work and Pensions is trying to force people to take up more hours, and there are issues in relation to that. However, if an employer offers someone a trial period, it should be paid. There should also be feedback. Many examples have been given of unpaid work trials where nobody hears anything afterwards—whether it is a day, a couple of days or even a couple of hours, they do not hear anything from the employers. That practice needs to end. Perhaps an employment Bill could deal with some of that.

It is interesting that the UK Government have confirmed that unpaid working time, which can include unpaid trial shifts, was a factor in 29% of cases when 208 employers were named for failing to pay £1.2 million to around 12,000 workers, and ordered to pay £2 million in penalties. If there is adequate legislation in place, and the practice is still happening to the degree outlined by my hon. Friend and the hon. Member for Strangford, perhaps there is an enforcement issue.

Perhaps the Minister can tell us what enforcement is taking place within Government to ensure that unpaid work trials are not exploitative. Perhaps he could start by telling us how many vacancies currently exist in the national minimum wage compliance unit. If we had more workers employed by the state to enforce the national minimum wage, as the Government said in their parliamentary answer to my hon. Friend—if we had more enforcement officers—perhaps we would find out that the practice is as the two hon. Members suggested: still widespread, and still happening in too many workplaces.

The UK Government could have supported my constituency neighbour’s private Member’s Bill, or they could have brought in their own legislation. Perhaps the Minister will tell us what legislation is proposed and what timetable will be allowed for an employment Bill. We might not agree with every single provision in that employment Bill, but it would give every single Member of the House an opportunity to raise other issues, put forward amendments and deal with this issue.

Photo of Stewart McDonald Stewart McDonald Scottish National Party, Glasgow South

My hon. Friend speaks to an important issue that he touched upon earlier, which is the practice of talking Bills out. I got an assurance from the then Minister that the Bill would not be talked out, and that it would be given a fair hearing and allowed to go through the process, but he then rather dishonourably did the opposite of what he had told me. We ended up with the Bill not having a fair hearing in the House, and not being given the proper readings that it ought to have been given as a Bill from a Member of Parliament. The result is that we are back here six years later, discussing the same problem.

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Levelling Up)

I thank my hon. Friend for that intervention. As I recall, it might very well have been in the debate on his private Member’s Bill when the then Minister rose to his feet and said, “I will be concluding my remarks at 2.30 pm.” That was at the beginning of his remarks. That is a completely scandalous way of dealing with it, but my hon. Friend is right. We have had assurances before that Bills would not be talked about and then, lo and behold, on the day that the Bill is up for discussion, that is exactly what happens.

We firmly oppose this practice. Because of the sectors of the economy that my hon. Friend referred to, we also oppose the inappropriate use of zero-hours contracts. Sometimes they go together, where there is an unpaid work trial for a zero-hours contract job. They are both exploitative practices. These non-standard types of employment that offer workers minimal job or financial security really have to end, particularly in a cost of living crisis. If the Government are really serious about helping people to earn more money, they need to put forward legislation to stop unpaid work trials and exploitative zero-hour contracts.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

When that Bill was introduced approximately six years ago, we anticipated that it would go through Westminster and address this anomaly. Does the hon. Gentleman, like me, feel aggrieved—I am sure he does—that, in the six years since this legislative change, people have been exploited and thousands have lost out on what was rightly theirs?

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Levelling Up)

I agree.

I will remind the House why the promise of an employment Bill came about: it was because of the Taylor review. It was the Government’s own task. Matthew Taylor reviewed the working practices taking place across these islands, and the Taylor review listed a whole series of recommendations, many of which have still not been dealt with through legislation. If the Government are going to ask people to carry out that sort of work, we would expect them to back it with action. As the hon. Member for Strangford said, it is quite extraordinary that they have refused to do that.

The Scottish Government and the other devolved Administrations can do their bit, but they can do only so much, because employment law is reserved to this place, unfortunately. I would suggest that if employment law was devolved, including to the Scottish Parliament, work practices across the board would be a lot fairer.

I am conscious of the time. Let me end by saying that if the Government viewed trade unions as a key social partner in this country, these sorts of practices would come to an end in the workplace. I wholly support what my constituency neighbour, my hon. Friend the Member for Glasgow South, is trying to do in this area.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy) 5:02, 29 March 2023

It is a pleasure to see you in the Chair this afternoon, Mr Hollobone. I thank Stewart Malcolm McDonald for securing the debate and for the work he has done over six years to try to deal with this wholly egregious situation.

We can probably start on a note of common concern, because every right-minded person would regard it as wrong that workers should be expected to work for free. In many cases, as we have heard, they actually end up out of pocket after working a trial shift. I firmly believe that we should all adhere to the principle that there should be a fair day’s pay for a fair day’s work, and any action to stop exploitation—whatever form it takes—should be welcome.

As we have heard, there clearly ought to be means by which an employer can test an individual’s suitability for a position, but—call me old-fashioned—I have always thought that that was what a job interview was for. If not that, what about a paid probationary period for someone to be assessed for their suitability? Let us not forget that people have to work somewhere continuously for two years before they get any protection against unfair dismissal, which could be seen as a very long trial period, albeit one that is paid. When we consider the many options available to employers to assess the suitability of potential employees in the round, we inevitably get drawn to the conclusion that, in the main, trial shifts are not necessary—certainly not unpaid ones. When we are confronted with the evidence that we have heard today and on previous occasions, the suspicion continues to grow that they are often used as a quick way to get free labour.

We have to ask what is being done to stop jobseekers being exploited. Although it is welcome that the Government have published guidance on the practice of unpaid trial shifts, it is not worth the paper it is written on without proper enforcement. There is a problem with both the wording of the guidance and the Government’s general attitude to upholding UK employment law. In particular, I have concerns about the fact that, as the guidance notes, there are no definitive rules or tests for whether a trial shift is legal.

As we know, there are six factors in the guidance that a court or tribunal will consider when making a judgment about whether a trial shift should be paid. I ask the Minister to consider how many people have the legal knowledge, patience, time or money to pursue an employer for a handful of hours of lost earnings at the tribunal, particularly if they are in a legally vulnerable position from having no employment protection at that point. Does the Minister agree that the threat of being taken to a tribunal for an unpaid trial shift is self-evidently a hollow threat to employers, and that the Department should be much more proactive in pursuing complaints on behalf of workers? Does he agree that, given that the majority of people in these sectors are young people, because of the nature of the work, and are unlikely to be members of a trade union, they need support in enforcing their rights?

Let me give an example from my own family of what is probably a pretty typical situation. My son has plenty of experience working in bars—quite often in Glasgow, actually. He has applied for various jobs in bars, including one at a bar in Chester. He had an interview. He has all the experience needed to work there, but was offered a trial shift despite the fact that he clearly could do the job. It transpired that the trial shift would run for eight hours and finish in the early hours of the morning, when there is no public transport, so he would have to pay for a taxi out of his own pocket to get home. That looked to me like blatant exploitation. Luckily for him, his father was the shadow employment rights Minister so he could be guided on what to do in that situation, but it begs the question: how many other times have they gotten away with that? How many hours each week are young people being asked to work trial shifts for which they get no payment? The Minister should be tasking his officials with trying to find out exactly how many times this happens each week, because we are probably seeing only the tip of the iceberg.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

What guidance did the hon. Member give his son in that situation? I would be interested to know.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

I am not sure Hansard can record in a polite way the suggestion that I conveyed to him. Let me put it this way: the employment relationship did not continue.

The six factors contained in the guidance are useful, but a lot of subjectivity is applied to them. For example, how is observation—which is one of the criteria—defined? How long is a reasonable period of observation? Ultimately, how can a jobseeker be expected to know if their employer has acted in line with the guidance, given how ambiguous it is? The ACAS website does not make any reference to trial shifts at all. People need a lot more support to understand when they are being asked to do something that is unlawful.

Ambiguities aside, the guidance needs to be properly enforced. As has been mentioned, we have this figure of £3 billion for unpaid work in various forms—it is probably is an even greater figure now. The continued reliance on an underfunded and overstretched tribunal system is failing our workers. Surely it is time for a single enforcement body to follow through for workers to ensure that their rights are enforced. I know the Government promised that along with an employment Bill, which we unsurprisingly have touched on. Will the Minister give us a timescale for when this single enforcement body will emerge?

The Government’s record on national minimum wage enforcement in recent times has been concerning. A naming and shaming list has not been published since December 2021, and I know the Minister has expressed his support for that as an important pillar of enforcement. As I have mentioned to him on previous occasions, a number of Departments have awarded lucrative contracts running into the hundreds of millions of pounds to companies that have appeared on the list of shame. What kind of message does it send to companies about the importance that the Government place on enforcement of the national minimum wage if they are then rewarded with Government contracts? I hope the Minister can give us an update on when the next list will be released.

In conclusion, the debate is a useful reminder that this is unfinished business. We can see very clearly how current ambiguities are being used to exploit workers. I want to hear from the Minister about what more can be done to ensure that people get paid for the work they do, and to ensure that these ruses, in all their forms, are put to an end, so that we get to a point in this country where a fair day’s work means a fair day’s pay.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade) 5:10, 29 March 2023

It is a pleasure to speak with you in the Chair, Mr Hollobone. I congratulate Stewart Malcolm McDonald on introducing this important debate, and on his persistence. I think it is his seventh year of talking about this issue. He rightly feels strongly about it. He, like me, the rest of Government and probably every parliamentarian, absolutely believes that people who are at work should get paid the national living wage. I am delighted to be the Minister responsible for national living wage policy and workers’ rights.

Broadly, I agree with the points the hon. Member made. As others have said, if employers are engaging in the behaviour to which he referred—I accept that there is some evidence that some are—that is a scandalous practice. It is absolutely our case that all workers should be fairly rewarded for their work. Most people think that. Who would not agree with the point that a fair day’s work should mean a fair day’s pay? We are all on the same page on that.

We are also all on the same page on a related and very important point. As Minister responsible for national living wage policy, I am pleased to see the largest ever increase to the national living wage: a 9.7% increase to £10.42. That applies from Saturday. It is great to see it go over that £10 mark. Some 2.9 million people across the country will benefit from that measure, including 210,000 in Scotland and 160,000 in Northern Ireland. It is a very welcome move.

We should pay tribute to the vast majority of businesses and employers who—I think we all agree—are decent, do the right thing and do not engage in these scandalous practices. It is really important that we reiterate that, as well as the fact that lots of businesses are already struggling in the cost of living crisis, not least because of high energy bills, for example. They are suffering because of numerous cost pressures, and their paying this increase in the national living wage will not only affect the people on the bottom rung of the pay ladder, but have a knock-on effect on others in their workforce. We are determined to build the high-skill, high-wage economy that most people would like to see.

We have further ambitions. We want the national living wage to reach two thirds of median pay by 2024. That remains our ambition. It is the right thing to do. We are putting in place other measures that reinforce our point that we are absolutely protecting and indeed strengthening workers’ rights. Chris Stephens made an interesting point about finding parliamentary time; we are effectively finding parliamentary time for a number of pieces of legislation, including six private Members’ Bills for which I am personally responsible. Those Bills include measures to ensure workers get full allocation of tips and service charges; to protect neonatal care for new parents who have difficulties with a newborn, ensuring more leave—up to 12 weeks; to entitle everybody to at least a week’s carers’ leave, which could help many people in the workplace look after dependent relatives; and to ensure redundancy protections pre and post maternity, which, again, is a welcome change.

A further change, and a key measure in the Taylor review, to which the hon. Gentleman referred, is the right to request predictable terms and conditions. It will give people on, for example, zero-hours contracts the right to request predictable hours. We support legislation on that, and on making flexible working something that people have the right to request on day one. Those are all things that we are doing to strengthen workers’ rights and make the workplace more attractive.

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Levelling Up)

I have been listening to the Minister very carefully, and I welcome what he says about the right to request, but a right to request does not necessarily mean that the right will be given. Will the Minister talk about how he intends to enforce that legislation, and increase enforcement around unpaid work trials?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

I do not want to get too distracted from the issue at hand, but I am happy to address that point in detail afterwards. We think those measures strike a balance. The recommendation from Matthew Taylor was not that there be a right to insist; it was the right to request. The employer could reject that request only on one of eight grounds, and in doing so, has to adhere to a process. We think that strikes a balance and meets the needs of businesses. For example, businesses can refuse a request in order to ensure that they have the right customer service availability and are not put under an undue burden. Those criteria have been set out, and I am happy to have that discussion with the hon. Member after the debate.

On the issue that the hon. Member for Glasgow South raised, there are two things that the Government would question about his policy: is it necessary, and what is the extent of the problem? It is important that we reflect the actual extent of the problem. He said that there is £3 billion of unpaid work; clearly that is a different issue. Following my intervention, he clarified that unpaid work trials are an element of that. The figure of 29% is also about unpaid work; the hon. Member for Glasgow South West said that among the 29% of employers that use unpaid work, work trials were a factor. The extent of the problem is not clear. I would describe people who are abusing the system as rogue employers, rather than something to benchmark.

Anybody who is defined as a worker should receive the national living wage. We updated the guidance in 2018, probably prompted by the work of the hon. Member for Glasgow South. The guidance is clear on the time that someone is allowed to have a work trial for. It says:

“in the Government’s view an individual conducting work in a trial lasting longer than one day is likely to be entitled to the minimum wage in all but very exceptional circumstances”.

Employment tribunals, for example, have a basis on which to make a judgment, and there are other bases.

Photo of Stewart McDonald Stewart McDonald Scottish National Party, Glasgow South

I am unclear. Do the Government and the Minister’s Department collect data on the use of unpaid work trials?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

I do not have access to that data. The hon. Member refers to a survey that was done some years ago. It is our belief that unpaid work trials are not widespread, and there are measures to deal with the problem, which I will set out shortly. As Justin Madders said, there are six criteria applied to unpaid work trials.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

Some of the responses have been very positive. The Carer’s Leave Bill, which I have been following, is really welcome. The Minister mentioned the outcome of tribunals, but a person cannot take a case to a tribunal if they have not been in the workplace long enough, which means that a tribunal may not be an option. Can the Minister also give some direction on the uniform issue?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

I thank the hon. Gentleman for all the good work he does in this House. In all the debates he speaks in, he is a champion for doing the right thing. As he said, we have been on the same side of the fence in debates on many occasions, and I am sure that will continue despite my ministerial position. I will come back to both of those points shortly.

Six different criteria apply in deciding whether an unpaid work trial is appropriate. The first is the length of time. The trial should be no longer than a day. Observation is another: is the employer observing, or is somebody just working unobserved? Other criteria relate to the nature of the work, and the value to the employer—is there a value to that work? That would be inappropriate. If the worker is observed, the work would have less value, because somebody has to observe them, and they might as well be doing the work themselves. All those things are taken into account in judging whether that shift should be paid.

There are reasons for having an unpaid work trial; for example, a teacher might be required to do a model lesson. It might be appropriate to ask teachers who are being interviewed to show what they would do in the actual situation. It would not be right to ban the practice altogether.

On having more specific guidance, which the hon. Member for Glasgow South mentioned, the problem is that being too specific in guidance could result in a race to the bottom by some employers—something that he is looking to clamp down on. If we said, “This categorically is the perimeter of work trials,” rogue employers may well take advantage. There needs to be a balance of judgment, rather than exact criteria.

The Government think that work trials can be a legitimate recruitment exercise at times, which is why we are not legislating in this area and do not intend to. I know the hon. Member disagrees, and I respect his opinion, but we do not think it is right to legislate further in this area. What we already have strikes the right balance.

Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Levelling Up)

On the one hand, the Minister says that the Government do not collect data, and on the other, he says that legislation is not necessary. That seems a bit confusing to those of us in the House who study these matters. Before the Government decide whether to legislate, would it not be better to do some investigation into the root of the problem to see how widespread it is?

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

Of course, we will always look at information and evidence. As parliamentarians, we get information and evidence from lots of different sources, but we tend to work by seeing where there is obvious detriment and therefore loopholes that we need to close. I do not think it is practical for the Government to look at every single problem and then decide where to legislate; it is usually the other way round. I think we disagree on that, but we will always look at information. If the survey was updated and specified unpaid work trials as an issue, the hon. Gentleman would have a more compelling case.

On uniforms required for a place of work, deduction of the cost of the uniform should not take a person’s earnings below minimum wage. If it did, the employer would be guilty of an offence under the National Minimum Wage Act 1998. It can be appropriate for an employer to say that there is a uniform that an employee must wear, at the employee’s cost, but that must not take that employee below the minimum wage.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

The example I gave was a true one—I bring all my examples with honesty. The person had to buy a black shirt and black trousers to have the trial. If they did not get the job, they were out of pocket. Where is the comeback? It might be better for the employer, who will probably have spares, to make them available.

Photo of Kevin Hollinrake Kevin Hollinrake Parliamentary Under Secretary of State (Department for Business and Trade)

I agree with the hon. Member, but that is a different point; I am speaking more to uniforms and how they relate to the minimum wage. It would be entirely inappropriate for an employer to say, “I want you to come on an unpaid work trial, and I want you to buy a new shirt and a new pair of trousers to do that.” I would define them as a rogue employer for taking that approach. As I have said, I was an employer for 30 years, and we would never have even considered that kind of behaviour.

The hon. Member for Strangford talked about awareness. His Majesty’s Revenue and Customs undertakes a programme on best practice for employers. It is an enforcement body, as well as one that tries to help employers meet the relevant employment conditions.

A number of contributors said that an employment tribunal is the only way to deal with the issue. I quite understand that employment tribunals can be expensive and time-consuming. There are other processes; if people feel that they have been wrongly and inappropriately asked to do an unpaid work trial, they can report that to ACAS or His Majesty’s Revenue and Customs, through its online form. All reports are investigated.

We are keen to expand the reach of HMRC’s enforcement capability. We have doubled our investment in national minimum wage enforcement since 2015-16. We spend nearly £28 million every year on ensuring that employers meet their legal responsibilities. Employers who are found to underpay their staff must repay all arrears that they owe to their staff and a penalty of up to 200% of the underpayment, and may be eligible to be publicly named by the Department for Business and Trade.

In 2021, HMRC returned more than £6.7 million in arrears to over 155,000 workers, and issued fines totalling more than £14 million to businesses that had failed to pay the minimum wage.[This section has been corrected on 17 April 2023, column 1MC — read correction] Since 2015, the Government have ordered employers to repay over £100 million to more than 1 million workers, which demonstrates that it is never acceptable to short-change hard-working employees. The shadow Minister rightly asked when we will do the next naming and shaming. It has been too long. The last one was in December 2021. I have absolutely met my officials and said, “We need that list out very shortly.” It will happen very shortly.

I conclude by again thanking the hon. Member for Glasgow South. We absolutely agree that it is vital that the right of workers to be paid the minimum wage continues to be upheld. That is why the Government listened to concerns relating to work trials, and issued new guidance in 2018—prompted by his work, I would say, though I was not in this role at the time. That revised guidance, combined with strong enforcement of existing legislation, will continue to ensure that workers are not exploited through unpaid work trials.

Photo of Stewart McDonald Stewart McDonald Scottish National Party, Glasgow South 5:26, 29 March 2023

We have had a good debate, with all the obsequiousness that is customary in the House. I thank the Minister, who I know to be diligent, but I briefly have to pick up on a couple of things that he said. He cannot have it both ways: he tells the House that he does not have data on the issue, but also that the problem is not widespread. I promise you, Mr Hollobone, that the problem is widespread and very real. The Minister cited the amount of money that HMRC has forced businesses to repay to workers. That is not the sign of a system that is successful. It is the sign of an unsuccessful system when the Government have to go around forcing people to pay money that they should have paid. It is welcome that the Government have done the enforcement, but this should never have been allowed to happen in the first place.

I accept entirely that the Minister does not see the need for legislation, but I think that he is wrong; legislation would be entirely proportionate and is necessary. He tells me to be specific; the title of the Bill was the Unpaid Trial Work Periods (Prohibition) Bill. I cannot think of a more specific title for a Bill trying to solve a very specific problem, via an amendment to the National Minimum Wage Act 1998. The Minister mentions various Bills that he is seeking to bring in. I think he will agree that his job is one of the best in Government, because he can make a material difference. He is choosing not to, and that needs to change.

Question put and agreed to.

Resolved,

That this House
has considered the matter of the use of unpaid work trials.

Sitting adjourned.