That is part of the problem of enforcement, in that we do not know what mechanisms could be used for it. That is why we tabled the amendment to ask the Secretary of State to bring forward proper proposals
for enforcing these rights. My hon. Friend is right. If an employer has offered someone a zero-hours contract containing an exclusivity clause, I suspect that most will have done so on a take-it-or-leave-it basis. Does that person then have the qualification period needed to enter the employment tribunal system? The answer is clearly no, because they have not worked for two years. Do they have the status of being a worker or an employee? The chances are that the courts would probably deem them not to be in employment at that stage.
That is why it is important for the Government to come back with proposals on how they will prevent exclusivity clauses.
Sarah Veale from the Trades Union Congress said in one of the evidence sessions:
“It is actually quite extraordinary to have a breach of employment rights proposed in a Bill without any kind of penalty—or rather, without any compensation for the individual, because that is largely the way it works in employment law.”––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 14 October 2014; c. 71, Q162.]
The Government need to be clear about how individuals can enforce the provision against exclusivity. We cannot just hope that employees who refuse to work exclusively for an employer will not subsequently be discriminated against in the workplace.
It is very easy to construct a scenario in which that might be the case, and I have already mentioned one to my hon. Friend. In future, if an employer offers a zero-hours contract with an exclusivity clause, the employee might be incredibly knowledgeable about employment rights, and say, “Under section 145 of the Small Business, Enterprise and Employment Public Act, an exclusivity clause is against the law.” However, the employer could turn round, and ask, “Well, what are you going to do about it? You can either take or refuse the job and the contract, but if you do not abide by its terms, we’ll zero you out,” meaning that the employee would not be offered any hours at all. The employer could in effect have exclusivity by threatening the employee with losing their employment altogether.
That is a very real issue for the economy. I am not talking about businesses or individuals that welcome the use of zero-hours contracts, but mainly about people at the lower end of the employment scale who need to be properly protected. We need to ensure that there is effectively no exclusivity and that people are not zeroed out.
We need the Government to make a proper proposal about how they will enforce the prevention of a practice that is against the law. If someone driving down the motorway at slightly over the speed limit is caught doing 75 or 77 mph in a 70 mph zone, they receive a ticking off and a fine, but if there were no need to pay the fine or if no fine were levied, where would be the deterrent against breaking the law? I shall be interested to hear the Minister’s response on that point.
Amendment 10 is about compensation. People often go to great expense to turn up at work: they arrange child care or pay train or bus fares, and that takes time to organise and costs money from their much reduced resources. Having been told that they are needed for work, people sometimes get a text a couple of hours beforehand or on arriving at their workplace saying that they are not needed that day. In a modern workplace, that is completely and utterly unacceptable.
The CBI has recognised that point and has expressed its support for it. In its March 2014 zero-hours briefing, it stated:
“a ban on offering short notice for work…is not in the interests of the workers on zero hours contracts, whose interests are best served by always being offered work opportunities with the freedom to decline them. An intervention which creates a simple formula for compensation due to zero hours employees when a shift is cancelled at short notice—two hours’ pay for example—would be better targeted.”
I think that everyone in the House would agree that there should be some kind of compensation if people are unable to do their shift at short notice because the employer has changed the particular shift pattern.
The House needs to look seriously at this matter. It is quite clear that the vast majority of employers in this country are respected for looking after their employees as their business’s No. 1 asset. Many businesses that do the right thing spend an inordinate amount of time—I did when I ran my own small business—making sure that all employees get the hours they want and are contracted to do, so that they can gain the salary they are contracted to earn and can pay their rent or mortgage and maintain their standard of living.
Most reasonable people would say that it was unacceptable for such businesses to be undercut by companies that decide to take on a vast number of workers on zero-hours contracts without offering them regular hours and regular pay. That is why I think that the Government have really missed an opportunity by not going slightly further on zero-hours contracts.
I now move on to the right to fixed hours. My right hon. Friend the Leader of the Opposition said last week:
“We are going to change…the zero-zero economy… Under Labour, if you work regular hours you will have a legal right to a regular contract.”
Iain Birrell, a partner at Thompsons Solicitors, said in his evidence in Committee:
“The Chartered Institute of Personnel and Development research of last November noted that 83% of staff on zero-hours contracts have been engaged for longer than six months and 65% have been engaged for two years or more. We have a situation, then, in which 65% of staff on zero-hours contracts have been there for two years or more. That is not short-term need”.––[Official Report, Small Business, Enterprise and Employment Public Bill Committee, 14 October 2014; c. 27-28, Q54.]
We appreciate that there are situations in which employers require workers on a zero-hours basis. However, employers should be able to refuse an employee’s request not to be on a zero-hours contract only if they can demonstrate that their business needs cannot be met by any other form of flexible contract. For example, seasonal work may be a legitimate exemption. In the United Kingdom, someone who makes ice cream might require people on zero-hours contracts to deal with seasonal needs.
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Our amendment 10 would allow a worker to receive a regular hours contract after a continuous period of employment. If an employer has an employee on a zero-hours contract for more than two years, that must mean that the employee has regular hours and regular employment. Employment law should reflect such a situation. We need flexibility in the labour market—in fact, the UK has the third most flexible labour market
in the OECD—but we must prevent flexibility from being used as an excuse for exploitation, with the business risk being transferred from the employer to the employee.
In the House yesterday, the Government refused to stand up for small businesses that are going under simply because they are waiting to be paid by large customers, or for pub landlords who are struggling to make a living because of unfair beer ties. They now have a chance to stand up for workers on zero-hours contracts rather than continuing to allow them to be exploited by unscrupulous firms, and for people on low wages by taking proper action rather than letting them down. If the Government choose not to agree to our amendments, it will be up to the next Labour Government after May to stand up for the many and carry out the changes needed to make our employment market both fair and equitable.