My Lords, I support the amendments in this group. The daughter of a friend works for a burger company and is on a ZHC. She does not know until the previous Friday what hours she will get for Monday. She cannot plan her life; she cannot budget; she cannot buy any large goods; she cannot study. She cannot do another job alongside it—I am delighted that the Government are moving to stop that ban continuing—and, if she were not living it home, she could not rent, as landlords want evidence of steady income. The Unite union, which has done splendid work on this, was told by a call-centre worker, who had worked for a multinational firm for five years: “I am only informed if I have shifts one week in advance and the hours I am given can range from nought to 48. I feel regularly anxious about whether I will be able to pay the rent and put food on the table.” She too is on a ZHC. A third person on a ZHC, a lone parent, expects, and is expected, to work on Fridays and had arranged and paid for childcare, as she must. Her shift was cancelled an hour before and she was told to work on Saturday instead. She had to pay for the childcare she did not need on Friday but could not find childcare for the Saturday when she needed it, so she refused. Her hours were cut the following week as punishment.
As my noble friend Lord Young said, we estimate that nearly 2 million people are on ZHCs in cleaning and domiciliary care, retail, hospitality, catering, call
centres, construction and customer services, with wages at or around the minimum wage. Some 75% of those on ZHCs find that their hours vary every week and 40% are not allowed to work for anyone else, although we welcome the fact that this Bill begins to address that problem. They are on call—unpaid—and required at an hour’s notice. They are hoarded but not used, a sort of just-in-time stock control applied not only to tinned tomatoes but to staff. Of course, after six months they should be given a proper fixed-hour contract. We may be in a 24/7 economy, which needs a flexible labour market, but, as Pickavance argued in his report, fluctuating demand—the excuse for flexible labour and ZHCs—is largely predictable.
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In response to the noble Lord, Lord Stoneham, why does Boots need zero-hours contracts but not Marks & Spencer? Why McDonald’s, Burger King, JD Wetherspoon and Subway but not Pret A Manger? Why Sports Direct but not Halfords? Why Cineworld but not Center Parcs? Why, apparently, Lloyds but not Barclays?
Ministers often state—I am sure that we will hear this today, as indeed we did just a moment ago—that zero-hours contracts are preferred by some workers, but they always overstate that. A few welcome such contracts—students, perhaps—and my research shows that the recently retired, looking to top up their pensions, are happy with their flexibility. I also accept that there may be a place for zero-hours contracts in better-paid jobs at the upper end—in IT, for example; in FE, where extra teaching cover may be necessary; for irregular arts events; and even for nursing banks. However, all the evidence from other groups that I have seen—a pile this high—is that staff want the right, whether or not they take it up, to regular hours. At the minimum wage end, ZHCs are lazy, exploitative management by employers and HR staff who want to take short cuts in their own jobs and short-change other people’s jobs.
I ask the Committee to think about the implications for those on ZHCs who also need help from the benefits system, which is largely why I am engaging in this debate today. Say that over a month, a lone parent on a ZHC works 20 hours in the first week, 15 in the second, 10 in the third and 22 in the final week. In weeks one and four, because she is working more than 16 hours, she gets working tax credits from HMRC to top up her pay. In the two middle weeks, working 15 hours and 10, she does not get tax credits. If she gets fewer than 16 hours a week, she may be able to claim JSA from the DWP—if, of course, she is available for work, but on an exclusive contract you are not able to do that. So what does she live on in those two middle weeks? Tiny earnings, topped up by payday loans because she has no rights to top up by benefits.
Not surprisingly, according to the Resolution Foundation, nearly 1 million people are spending more than 50% of their disposable income on debt repayment —debts taken to smooth their income in a zero-hours world. Each week there are different earnings to report to different government departments: in my example, weeks one and four to HMRC, weeks two and three to the DWP. This is all paid in arrears, of course, so the
money does not come when you need it. What is more, each month you have different earnings to report to the council and local authority for your housing benefit and your council tax reduction. It can take weeks to process each claim, and that too will eventually be paid in arrears. In the mean time—I should perhaps declare an interest here as chair of a housing association —your rent arrears may grow and you face eviction.
How many of us could live like that, dealing with three or four different agencies week by week as well as the employer, never knowing what your earnings and income will be, what any benefit top-up will be and when any of it may arrive? Are we then surprised that many lone parents prefer the security of low but predictable benefit income to the snakes and ladders of ZHCs? Universal credit will help, but its payment methods—claims filed only online, with no possibility of correcting errors, and a single monthly payment made in arrears—will worsen many people’s plight.
It seems therefore right and fair, as Pickavance recommended, that you should be able to move on to a fixed-hour contract after six months so that you know what your income will be.
It seems right that if you remain on ZHCs, you should, if a shift is cancelled at short notice, be given compensation for loss of earnings, travel expenses and, possibly, childcare. Of course, employment tribunals must be able to require exploitative employers to conform. We need proper contracts to corral the cowboys. The sadness is that so many of those cowboys are high street names which we have held in high regard—no longer.