Employment Bill

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Brian Cotter: Does the hon. Lady accept that increasing numbers of people are employed in the categories that we are discussing?

Judy Mallaber: Indeed, there is a strong possibility that those numbers are increasing. That is why the Select Committee considered part-time work and the implications of greater casualisation. I am asking the Minister whether the law covers many people under the employee definition, of which I have heard differing interpretations. I am not clear about whether there is a major problem. The legislation clearly creates confusion about where ''worker'' is used and where ''employee'' is used.

If that cannot be clarified in the legislation in relation to fixed-term work, would the Minister make some commitment on the section 23 review timetable? At the moment, even if casual workers are covered by the part-time directive, they would have to work out which legislation applied. That can be quite complicated for somebody in the work place. It would be helpful to know what the timetable might be when for applying the section 23 provisions.

12 noon

Mr. Hammond: I suppose that I should start by observing that I, like every other member of the Committee, am a fixed-term worker, my reappointment being dependent on things almost completely beyond my control.

It is self-evident that, partly as a result of the things that the Government are doing in this Bill, there will be an increase in fixed-term work. We are seeing the extension of statutory leave rights, for longer periods and to more people. It will become increasingly necessary for employers to appoint people for specific fixed periods to carry out work that is permanent work in their workplace but, because of the rights that permanent employees have to take long periods of time off, will have to be done by people who will not acquire rights to remain by virtue of having been appointed to that role. This is in addition to the large number of genuinely fixed-term positions that already exist.

The figures from the latest labour force survey suggest that the overwhelmingly largest number of fixed-term workers are employed for a fixed period or for a project, as opposed to being seasonal or casual

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workers. There are a significant number of casual workers, but fixed period or project workers are the largest group.

Perhaps it is no surprise that whenever we see legislation being reached for to deal with a perceived problem we find that the good old Government are in fact the largest employer involved in the problem. As I understand it, at the time of the last labour force survey, out of the 797,000 fixed-term or project workers, 441,000 were employed in public administration, health and education. There is clearly a sense that if there is a problem it can be addressed by the Government in their role as an employer or a funder of public sector employers, rather than reaching for the sledgehammer.

Mr. Osborne: Let me reinforce the point that my hon. Friend is making. According to the brief from the Library, the public sector also accounts for over 70 per cent. of the fixed-term workers who have been in their jobs for over two years. One of the things that is missing in the regulatory impact assessment—perhaps, through my hon. Friend, I can ask the Minister about this—when it talks about costs to employers—indeed, it says that the cost is between £19 million to £29 million for pay and somewhere between £33 million and £38 million for pensions—is how much of that cost will actually be borne by the taxpayer because the employer in question is a public sector employer.

Mr. Hammond: My hon. Friend raises an important point and no doubt the Minister will address it in his response.

We are essentially talking about two different things here. We are talking about non-discrimination against fixed-term workers—which is the essential purpose of the Bill—and the Government's decision to extend that parity of treatment significantly beyond the EU directive requirements. In this amendment we are talking about the definition of fixed-term workers or employees that should be covered by the provision.

Some examples of fixed-term workers have been given. Although it is dangerous to make snap judgements without knowing all the facts, on the face of it, these examples look like abuse. It appears that people are being called fixed-term workers when they are clearly permanent workers. We are not in the business of supporting abuse or artificial mis-categorisation of employees or workers, simply to avoid them receiving what they should, or preventing them from receiving what other members of the permanent work force are entitled to.

People should be treated as fixed-term workers only when they are fixed-term workers. The public sector example is good, and I will use the health service as the classic example. It is irresponsible for a public, or private, body to appoint someone permanently if it does not have the funding to support the position. However, it is common in the health service and, I am sure, other parts of the public sector, for funding to be made available for a specific period of time. If there is two years' funding, why not appoint someone for two years? It would be grossly irresponsible to offer

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someone a permanent job if a body knew that the budget funding for that position lasted for only two years.

That is the principal reason why people are appointed to fixed-term positions in the national health service, and why there are many people who have carried out repeated fixed-term contracts for a long time. When it comes to the point of letting X thousand nurses go, the Government rightly realise that they have to put up more money, and the nurses get another fixed-term contract. Unless long-term budgets are permanently raised, there is not the scope to make those positions permanent. I ask the Government to consider the problems that they have in dealing with those issues and realise that private sector employers will have them as well.

The issue goes beyond those employment areas in which one would expect to find fixed-term workers—for example, construction projects, which often have a fixed lifespan of one, two or three years. In the case of some construction infrastructure projects, it would be perhaps more realistic to appoint people on a permanent basis, but let us take the millennium dome as an example. If the project is supposed to last two and a half years, it makes sense to appoint a person involved in its management for a fixed term of two-and-a-half years.

A flexible work force is in the interests of UK plc, and consequentially the greater work force in the country. We must have the ability to deploy a flexible work force, and a fixed-term work force will be a part of that. That does not mean that we will stand by and condone or allow abuse of the system. If the Minister is focused on dealing with cases of abuse, we will support him in that, but I have not seen evidence of a substantial problem. The consultation document does not appear to find any evidence of substantial abuse.

The examples quoted have typically been people in low-paid employment. If we examine the TUC survey from last year and the breakdown between different occupations, we discover that 27 per cent. of fixed-term workers are managers, administrators or professionals. A further 9 per cent. are associate professional and technical staff. Those are not typically the people who find themselves abused by employers. Indeed, I have spoken to employers who are given the run-around by highly skilled professional people who are in short supply, particularly in information technology, and will simply not become permanent employees. They want to work on fixed-term contracts, and they extract a high price from the employer for the privilege of being able to employ them.

Mr. Osborne: May I reinforce my hon. Friend's point? The Department of Trade and Industry's own regulatory impact assessment says that outside the public sector—about which my hon. Friend has already spoken—the industry sector with the largest number of fixed-term employees is the banking, finance and insurance sector, which is not one noted for paying its employees nothing.

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Mr. Hammond: I am grateful to my hon. Friend for reinforcing my point, and I hope that the Minister will tell us where the abuse is with which he wants to deal. Just to continue the numbers: a further 19 per cent. of fixed-term workers are in clerical and secretarial roles—that is not too surprising—and, interestingly, 15 per cent. are in personal and protective services. I do not know quite what those services are, but the Minister may be able to help us. I guess that it does not just include the bouncer at the nightclub door. That is an interesting mix of occupations, and many of those people will be at the upper end of the income scale.

On the worker-employee debate, the Government have substantive legal advice that the Bill complies with the terms of the European Union directive. The TUC has legal advice to the contrary, which just goes to show that if two lawyers spot the opportunity to earn a fee, people can get as many opinions as they want to pay for. My understanding is that the TUC intends to challenge the Government on the issue in court. As public money is involved, if the Government take on the TUC, I hope that they are marginally more successful than the last time. They stared down the TUC on the parental leave directive and then settled on the steps of the court, agreeing to pay costs and fees without having the strength of their position tested. The Minister will remember that.

The substantive worker-employee point seems to concern the question of abuse. It has been suggested that there may be attempts to use captive employment agencies to avoid the scope of the legislation, and if the use of the term ''employee'' allows abuse of what is intended by people being recategorised, that would seem to be abusive. If extending the legislation to all workers captures those whom it would not be proper or appropriate to include—in particular, people who are employed by an agency for a fixed-term period to fill a gap in an employer's work force—the case is much more suspect. I am not an absolutist; we are at the margin. We want to ensure that the intention is properly implemented so that there is not scope for massive evasion, but I would not want the measure to be extended to all workers, because that would go much further than what is required to deal with the kind of abuse that was mentioned by the hon. Member for Weston-super-Mare, who described how two workers employed by the same employer and doing the same work could have different conditions of employment.

We do not support the Liberal Democrat amendment because it would take a blanket approach, which is inappropriate. I have no doubt that the Minister will tell us that he is sensitive to the concern that is being raised and that it will be addressed in much more detail in the review that is about to be undertaken. I hope that there will be a good opportunity for parliamentary debate on its findings before any legislation is proposed.

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