Employment Bill

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Mrs. Joan Humble (Blackpool, North and Fleetwood): I am sure that my hon. Friend is aware that about 10,000 civil servants, many of them my constituents, are employed on the Fylde coast. Many of those who had casual jobs on fixed-term contracts and are now on full-time contracts are pleased and proud to be civil servants.

12.30 pm

Alan Johnson: My hon. Friend makes an important point. Under the previous Government, there was evidence that people on fixed-term contracts could have been on permanent contracts, and those who were defined as casuals could have had more stable terms and conditions. We are addressing that.

In the national health service—the hon. Member for Runnymede and Weybridge has some experience of that from his previous job in Opposition—junior doctors are employed on fixed-term contracts because a series of developmental postings form part of their training. However, the general NHS Executive policy is to encourage the use of permanent contracts, not least to encourage recruitment and retention.

I hope that the hon. Member for Weston-super-Mare will withdraw the amendment and that members of the Committee will understand why we do not think it necessary. First, we are complying with the directive. Secondly, the directive specifically excludes agency workers, and we are discussing a directive that deals with that group. Thirdly, we have uncovered no evidence of a problem. Fourthly, most of the groups quoted and mentioned and most of the people who are considered casuals—in agriculture, in the Post Office at Christmas, and so on—would be covered by their contracts of employment. Finally, and most importantly, we shall review the issue soon and address the anomalies that have been mentioned.

Mr. Hammond: The Minister said that the consultation uncovered no evidence of a problem in respect of fixed-term employees. I understand that the Government have to comply with EU directives even in the absence of evidence, because that is the way the world is, but why do they wish to gold-plate the directive?

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Alan Johnson: I meant that there was no evidence of an abuse in the particular circumstances. However, 5 per cent. of employers in the Department of Trade and Industry's 1998 review did not give the same pay to fixed-term contract staff as to permanent staff, and 10 per cent. did not give the same pension provisions. Some of the evidence submitted in our consultation by the Equal Opportunities Commission and by the TUC, from people working on the shop floor, so to speak, suggested that the problem was greater than that.

We cannot find evidence of the problem for workers—the term used in the amendment—because they are non-employee workers who would not be covered by the directive. We expect most non-employee staff to be covered by the directive.

Norman Lamb: Is the Minister at all concerned about a legal challenge? We hear of that from various trade unions, and it happened with the parental leave directive. The Government had to change the regulations, which resulted in wasted time and money for them and everyone else and confusion for those who try to claim their rights. There may be a legal challenge, given that the word ''worker'' was used in Europe, although I accept the point about agency workers. Would it be sensible to use the same terminology to ensure that there is proper compliance with the European directive?

Alan Johnson: I do not accept that. Let me digress briefly to discuss parental leave. We were among the first three countries—Luxembourg, the Republic of Ireland and the UK—to introduce the directive. We all read the directive as not being retrospective.

On the issue of workers, the words of the directive are:

    ''fixed term workers who have an employment contract or employment relationship as defined by national law and/or practice.''

We are confident that we are complying with the directive. If we worried about legal challenges to legislation on public policy concerns, we would never do anything for fear of a challenge. The threat of legal action always exists. I do not have concerns on that matter, and I hope that members of the Committee, having heard my explanation—particularly on agency workers—will withdraw the amendments.

Brian Cotter: I thank the Minister for covering the contributions of other hon. Members. I was interested by his comment that there is no real problem. I take it that the forthcoming employment review will consider that point more closely. I sat this morning on a deregulation committee dealing with the registration of births and deaths. A proposed Government deregulation had to be withdrawn because there had been no proper consultation or investigation over a long period; the official solicitor had not been consulted at an early stage and the matter had been left to a late stage. Sometimes consultation and investigation is said to have been done, but the details are overlooked. I urge the Minister to look into the problem much more closely.

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Having said that, I wholeheartedly support the point of my hon. Friend the Member for North Norfolk (Norman Lamb) that there seems to be a mish-mash so that we cannot include workers or a standard designation. I do not understand all the different regulations and rights that have to be addressed but it seems disconcerting that we cannot find a standard term. I accept that the Minister believes that we will comply with the EU directive, and we all hope that that is correct. I also accept that another directive will deal with agency workers. Bearing in mind all those points, and those made by the Minister, and in anticipation of addressing the issues later, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Hammond: I beg to move amendment No. 230, in page 47, line 33, at end insert

    'of an employee by an employer where the employment has the nature and characteristics of permanent employment and where the successive periods have, in aggregate, exceeded two years'.

Let me first say something about the architecture of the clause. The whole clause is effectively permissive. It allows the Secretary of State to make regulations for the purpose of preventing abuse from arising from the use of successive periods of fixed-term employment. The amendment seeks to narrow the scope of the Secretary of State's interpretation of what constitutes an abuse of successive periods of fixed-term employment. In cases under subsection (1)(b) where the Secretary of State acts to prevent abuse, we would support measures to prevent abuse by the incorrect categorisation of a person's status.

The amendment proposes two tests. First, the person has to have been employed for successive fixed-term periods, which, in aggregate, amount to a period of not less than two years. Secondly, the employment has to have the nature and characteristics of permanent employment—that is a woolly phrase but I do not think that, given the way in which legislation works, there would be any problem with it. In plain English, that means someone who has been in post for two years on successive six-month fixed contracts and who is to all intents and purposes—according to an objective, common-sense look at the way in which they work, their relationship with their employer and the way they operate in the work place—part of the permanent work force. The Secretary of State would have the power, for example, to treat a shorter period of continuous employment by successive fixed-term contracts as an abuse. She should not, however, have the power to treat as an abuse all cases where somebody has worked for more than two years under fixed-term contracts, if the nature and the character of the work do not suggest that it is abusive. For example, someone may be appointed for 18 months to manage a construction project on the clear understanding that the employment would terminate when construction finished. Let us assume that we are talking about a public sector, Government-funded construction project, that it ran over, as they are wont to do. If it became apparent that it would take not 18 months, but two and a half years, the employee would have two further six-month periods. I suggest to the Minister

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that there is no evidence of abuse in that example, because all the circumstances tell us that that would be a proper fixed-term employment.

I seek to narrow the scope of discretion, so that we can actually achieve some consensus and get away from fighting over these issues. We are all committed to addressing genuine abuse of the system, but we will have to make sure that the Secretary of State's discretion is constrained where practices are not abusive.

I have suggested some definitions in the amendment. If the Minister accepts the principle, but has a problem with specific definitions, I would be very interested to hear his thoughts about what would be an abusive situation.

Mr. Prisk: I support the amendment, not least because my hon. Friend has said that the clause is very open-ended, and he has raised one of the dangers. The amendment is right in the sense that two tests lie at the heart of its purpose. First, it is right because it would be fairer in applying the first steps of the second test that my hon. Friend just referred to, namely that the employment has the nature and characteristics of permanent employment. The amendment genuinely seeks to equate like with like, which is an important principle that seems to be absent from the clause as it stands.

My second reason for supporting the amendment is that it would make the process far more manageable. In that sense, it would try to tackle the real problem that I believe the Government have in their sights, namely situations in which someone is, to all intents and purposes, providing a permanent contribution to an enterprise or an organisation, but is on ever-renewing contracts and is not being treated fairly.

There is also the issue of the third sector. We have heard in this debate, and in previous debates about the public sector and the private sector, but I would like to raise the issues of the third sector—not the third way, but the voluntary sector. One of my concerns about clause 45, is that in excess of 60,000 people work in the voluntary sector for local charities. By the very nature of their work, they depend on small grants and their contracts tend to be short. They are able to look ahead only six or 12 months. As the clause stands, a local charity—for example, one that I am pleased to support: the East and North Hertfordshire breast cancer appeal—would struggle under the clause if it applied for a grant. The danger is that it would not be able to provide permanent employment, yet the clause would require it to make a commitment that it genuinely cannot finance. For those reasons, the amendment makes considerable sense. It brings the nature and characteristics of permanent employment into the clause and sets a limit of two years, which I think is manageable and reasonable.


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