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Mr. Lloyd: Let us follow the logic of the hon. Gentleman's argument that there is a need to provide a deterrent. Does he also accept that charging those who respond to tribunals would provide balance and prevent the rogue employer from taking cases to tribunals?
Mr. Whittingdale: The employer does not take a case to the tribunal and legislative provision has already been made for costs to be awarded, but that failed miserably, as costs are awarded on hardly any occasion. If a deterrent is needed, it is one against the people who bring cases in the first place, and those are the employees.
The proposals to help families to meet their responsibilities at home and at work have their attractions. It is clearly a good thing that new mothers and, indeed, fathers should be able to spend time with their children. There is, however, no doubt that such entitlements carry a price that will be borne by employers and other employees.
Large employers face the cost of having to find 8 per cent. of the amount payable to mothers, fathers and adoptive parents and, indeed, the national insurance contributions, to which my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) referred. The Government estimate that that will lead to an annual cost to business of up to £200 million, with a one-off additional cost of up to £30 million.
Although small employers will not be required to contribute to the cost, the provisions could have an even more serious effect on them. Large employers will be able
to provide cover for absent workers without too much difficulty—they can more easily deal with the administration of the new entitlements—but as the CBI says, those new rights pose significant challenges for smaller firms, which may struggle with the increased absence of key staff members.In a small firm employing four people, two pregnancies would result in losing half the work force, possibly at a key time for the business' future.
Mr. Swire: Does my hon. Friend agree that the Bill's similar treatment of small and large businesses is regrettable? The small tourism-related businesses, small residential care homes and farms in my constituency were hit hard by foot and mouth. Some provisions are insensitive and untimely but not only need to be revisited to take account of the seasonal nature of those businesses and their smallness.
Mr. Whittingdale: I entirely share my hon. Friend's view. There is no doubt that the Bill will impose increased costs on all businesses, but the small businesses will bear the biggest burden. As my hon. Friend rightly makes clear, this is already a difficult time for business people and some small businesses are unlikely to be able to bear the additional costs imposed.
Mr. Whittingdale: I give way first to my hon. Friend the Member for Epsom and Ewell (Chris Grayling).
Chris Grayling: This question involves not simply businesses small, medium and large, but the impact on schools and other small public service providers. Many head teachers are genuinely concerned that they will be unable to deliver the same quality of teaching if they lose key people. The issue goes much further than business.
Mr. Whittingdale: I agree. I have no doubt that in my hon. Friend's constituency, as in mine, schools find it almost impossible to get staff to cover teacher absences. If teachers are to be given longer absence entitlements, the pressure on school staff will increase, making it almost impossible for head teachers to provide the cover that they need.
Mr. Chaytor: If the hon. Gentleman owned a small firm with four employees and two became pregnant, what would he do? Would he sack them or work them on the shop floor until their waters broke? He should tell the House.
Mr. Whittingdale: The vast majority of small and large firms will give entitlements. They want to help employees who find themselves in such circumstances. The answer is not legislation, because there will be occasions on which such firms simply cannot afford to give longer leave entitlements. They will suffer as a result of the Bill.
I must touch on the provision to allow smaller firms to apply to the Inland Revenue for advance funding should they find it difficult to meet the extra payment required.
Although I welcome the fact that small employers will be allowed to apply for advance funding, the procedure involves a significant extra administrative burden. As the Federation of Small Businesses points out, it is almost impossible to see how the Bill will reduce red tape.Employers will not be alone in incurring an extra burden as a result of those rights, as there is growing recognition that extra rights for parents will inevitably result in extra burdens on non-parents in the workplace. Big companies offering more generous leave entitlements and benefits to parents already consciously discriminate against non-parents, although there may be good reason to do so. Parenthood is desirable for society generally and it should be encouraged, but it is bound to lead to resentment among childless women and men if they have to work harder for less reward than their colleagues who have children. Yet that aspect of the debate on family-friendly work practices has been ignored by the Government. Again, the matter deserves far more consideration.
Some of those arguments apply equally to the Government proposals on giving employees the right to request flexible working hours. Although they are not yet in the Bill, the Secretary of State confirmed that additional measures will be inserted in Committee to take account of the announcements made a week ago. Like the CBI, we welcome the fact that employees will not be given an automatic right to expect flexible working, but there is no doubt that the proposals will result in another category of cases that must be considered by employment tribunals, adding to their work load.
As proposals to reduce the number of cases going to employment tribunals are to be included, it is ironic that the Government are introducing a new category through their amendments. Again, the measures will result in greater costs to small firms, in particular the expense involved, the additional time required and the disruption to their business.
The Bill seeks to extend to employees on fixed-term contracts the rights enjoyed by permanent employees. In fact, it is already possible to claim unfair dismissal to an employment tribunal in connection with failure to renew a fixed-term contract. The Government now wish to give fixed-term employees equivalent rights, including rights involving pay and pensions, that were not covered by the original European Union directive on which this part of the Bill is based.
That bit of gold-plating by the Government will make some employers ask what is the point of taking on employees on fixed-term contracts. Employers may feel that if such employees are to enjoy terms and conditions identical to those enjoyed by permanent employees, they may as well make them permanent employees and then sack them.
In fact, many fixed-term employees benefit from higher rates of pay, as they do not enjoy other benefits such as pension entitlements. It is therefore essential for the equal-treatment requirement to apply to the overall package of terms and conditions if employers are to retain the flexibility that they need.
Mr. Russell Brown (Dumfries): Has the hon. Gentleman ever worked in a company in which fixed-term
or short-term contracts have operated? Has he ever witnessed what people go through when working on an entirely different basis and in an entirely different environment from others, and the disadvantages experienced by those on fixed-term contracts?
Mr. Whittingdale: The hon. Gentleman appears to be confirming that the Government intend to remove fixed-term employees from the work force. That certainly appears to be the direction in which they are moving. We do not know, however, because—again—we have not yet seen the detailed regulations covering this provision. Not until they are published will we be able to judge properly its impact on business. I hope that the Minister will make it clear that the Government will resist the pressure that has already been exerted from the Government Back Benches today to extend the provision to cover fixed-term workers, such as those supplied by agencies.
The Bill also gives statutory rights to so-called union learning representatives. As the Government's consultation paper states, they constitute a new category of union activists. There are already about 3,000, and under the Bill they will have a statutory right to paid time off.
Earlier, I asked the Secretary of State whether any employers' organisations supported the proposal. She told me that the CBI supported it. In its submission on the Bill, the CBI said that
- "the proposed right for unions to appoint union learning representatives without the employer's agreement is a step in the wrong direction."
Mr. Chaytor: Surely the CBI's objection is not to the establishment of learning representatives as such. Indeed, its submission supports the concept. Its objection is to inability to influence the number of representatives and, hence, inability to control the amount of time off.
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