Examination of witnesses (Questions 60
- 67)
WEDNESDAY 1 MARCH 2000
MR ALAN
JOHNSON, MISS
NICOLA CARTER
and MR DAMIEN
NUSSBAUM
Mr Brady
60. I should put the record straight, there
is no longer a representative of Asda in the House. There have
been some problems raised about that. One point I wanted to raise
finally, Minister, which I pursued when we were taking evidence
before producing our report, clearly if there are employers of
7 per cent of part-time workers for whom there will be a change
as a result of these regulations, there will be an increase in
the costs of employing part-time workers for that percentage,
albeit a relatively small percentage. There are various different
ways in which a business might react to that. I know the Government's
view generally has been that the workers will be much happier
and therefore the business will be more profitable and they will
be fine—well, I will leave that to one side, I tend not
to accept that—but there are various other avenues which
could be pursued. One might be to reduce the level of the workforce
and there might be fewer jobs altogether. That is one possibility.
I am not saying that is what would happen. Another possibility
it seems to me would be that since the cost benefit of employing
part-timers in that business has been removed, they may shift
to a policy tending to employ full-timers instead. I am interested
to know whether you have made any assessment whether that is likely
to happen, whether any of those businesses which have responded
to the consultation have suggested what their response will be
if it is not simply to increase the rate of pay for part-time
workers?
(Mr Johnson) I do not think that particular point
has registered on our Richter Scale. Actually all the surveys
show—and the biggest one of all is the WERS, the Workplace
Employee Relations Survey which is huge and has been copied in
Canada and Australia because it is so comprehensive—there
is a genuine shift in morale, people feel more committed to the
company and that is particularly important when the British workforce
these days, the same as everyone in the rest of the workforces
in Europe, under globalisation has to cope with change, almost
continuous change, and the way to get them on board for that change
is to give them fair terms and conditions. So we are on the side
of the angels in terms of this Directive. But the research shows
the main reason for the use of part-timers is because they want
to achieve flexibility, it is not on the basis of cost. Indeed,
if they decided to go from part-timers to full-timers it would
be very unfortunate but they will not make a cost saving in that
respect in terms of the hourly rates they are paying. I would
look at all our experience with the minimum wage—and I am
not saying you were one of the Jeremiahs but—
Ms Atherton
61. Yes he was!
(Mr Johnson)—places like Kensington and Chelsea
were saying things like this. If we monitor it sensitively and
we do it properly, there are real benefits for employers in this.
They will get the flexibility, they will get more flexibility
in terms of increasing the numbers for part-time employment, and
so as it is fairly clear from all the research that the purpose
of them going for part-timers is not to make savings on costs
but to get the flexibility, we will not see that kind of outcome.
I am not sure whether that was raised in the consultation period
but it has certainly not registered very strongly on our Richter
Scale.
Mr Brady
62. I am very much in favour of part-time working,
I think it is a good thing if we can promote it. It seems to me
the majority of businesses go for part-time workers to promote
flexibility which would be consistent with your finding that 93
per cent of employers are already offering the same terms and
conditions because they are getting the benefit of flexibility.
The 7 per cent who are not offering the same terms and conditions
are enjoying a cost saving through doing that and there may be
reasons in those businesses for that, and we took evidence from
textile manufacturers where there was a cost for a shift change-over
because it took time to set up a machine, for instance. So there
are examples where there may be a cost in changing from one part-time
worker to another. In those circumstances I am concerned it is
possible in the percentage of businesses where there is a cost
saving at the moment that the outcome might be therefore a negative
one, which none of us wants, that there will be less flexibility
and fewer part-time jobs available rather than more.
(Mr Johnson) I honestly do not think that is going
to be the case. In terms of all the changes we have introduced,
what has been remarkable is that employers, for instance, on the
minimum wage are ringing our Inland Revenue hotline to blab on
a fellow employer in the same industry who is unfairly competing
with them by paying poverty wages. I think the vast majority of
employers already pay their employees the same terms and conditions
and for those that do not we need to ensure as adroitly as we
can that we introduce these measures to make sure part-timers
get equal treatment with full-timers. I really do not see that
being in any way some kind of dampener leading to job losses and
for companies saying, "We will get rid of part-timers because
of this Directive". That has not come up in our consultations
with the CBI and the Confederation of Small Businesses, they have
all been positive about this. There have been differences of approach
in guidance and timescales, et cetera, but not on the general
principle of fairness.
Mr Pearson
63. Can you say something, Minister, about those
part-time workers who operate under zero hours contracts? What
assessment have you made of the recent House of Lords' decision
in the case of Carmichael and another v National Power
which seems to open the way for more zero hours contracts? How
would the part-time regulations affect the people on these contracts
and are we going to outlaw them?
(Mr Johnson) I have not had a chance to look at the
actual case. We did have zero hours contracts under review, we
were considering tackling them under the Employment Relations
Act but we decided not to on the basis—as I recall, I was
not Minister at the time—we needed to do further work here
because there were some concerns we may blunder into an area where
we were not quite sure what the effect would be. Do you want to
say something on this?
(Miss Carter) From memory, at the time we looked at
this very hard. We felt we did not want to go out and make zero
hours contracts illegal, to ban them altogether, because we have
seen circumstances in which they were mutually beneficial to the
person employed and the employer, although there were abuses of
the hamburger flipper variety which we had in our sights. Our
feeling was when we had a look at it that the interaction of the
Working Time Directive and the national minimum wage was actually
such that that sort of open abuse of contract was no longer possible,
you could not keep people hanging around because if they were
there they were working. So the interaction of those two we thought
would clear the ground without then going in and trying to frame
some sort of legal instrument which would ban zero hours contracts
and become over-oppressive and have perverse effects on other
sorts of arrangements like casual work, for example. So that was
the point we reached but of course these things can always be
looked at again.
64. How will these regulations of part-time
working affect those on zero hours contracts, some work seven
hours, some work 15 hours, some work 20 hours, how specifically
is it going to apply to them?
(Mr Johnson) I guess the weeks they are working seven
hours or 15 hours or 20 hours, if there is a full-time comparator
in the company they should get the same terms and conditions as
the full-timer whether it is seven hours or ten hours. If the
going rate is six quid an hour, they should get six quid an hour.
We will look carefully at that judgment and it is a perception.
There should be a variable percentage of rights to an occupational
pension depending on what they work each week.
Chairman
65. Minister, there is a final question which
has been drawn to my attention. The fact that only those part-time
workers will be affected by the Directive where there is a full-time
comparator, have you got any evidence that the Directive will
disproportionately affect men?
(Mr Johnson) No, not that I am aware of.
66. Is that something you can look at? Obviously
there would be sensitivities with the majority of part-time workers
being women if we found that the Directive actually disproportionately
affected men rather than women, it would be rather a strange effect.
(Mr Johnson) Yes.
67. Perhaps you can look at that and send us
something.
(Mr Johnson) Sure.
Chairman: Can I thank you very much indeed.
We have all been under considerable strain, as you say, through
being here through the night. I can confirm that no-one has fallen
asleep around the table, the Minister has been wide awake. In
his first outing in front of a Select Committee I think he has
acquitted himself very well, if I may say so. Thank you for your
patience and for the way in which you have answered the questions.
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