homeworkers have appropriate rights and protections.
Yet on the wider question of employment status and distinctions between workers and employees, the Governments position remains that the present legal framework should not be changed. However, I commend the Government for the fair piece rates legislation of 2005, which should ensure that home workers who do piece work receive the national minimum wage when paid by piece rates. That is a great leap forward, although, like all such legislation, it will succeed only if properly enforcedsomething that the
Minister is working hard to achieve and that the Shipley office of the national minimum wage team of HMRC has been set up to do.
Since 1997, the Government have introduced and extended a number of rights to protect people at work, including employee rights, such as the right to request flexible working; maternity and paternity leave; and most recently, making age discrimination illegal. Other rights that also apply to workers include the national minimum wage, working time regulations, including those on holiday pay, and the part-time workers directive. Some of those rights, most notably the national minimum wage, have been introduced in the face of intense opposition from business and dramatic warnings of a devastating impact on employment. In practice, those warnings have been exposed as scaremongering. The Governments economic record demonstrates that protections for workers do not have to come at the expense of jobs. Although the rights that workers and employees can benefit from may have increased under this Government, a growing grey area of atypical workers now find themselves with few protections.
Home workers miss out on employment rights, because they lack employee status or because their status is unclear. Home workers who have worked for a company for several years, often on low wages, find that they have no protection under the law, because they are not employees. Many of them are deemed by their employers to be self-employed, leaving them ineligible even for the minimum wage. The law is unclear: short of taking the employer to a tribunal, it is virtually impossible for home workers to be certain of their rights under the law. As the case of Pamela James shows, going to a tribunal can be extremely traumatic, as well as very expensive. It is deeply unjust that the home workers, who are among some of the lowest paid workers in the country, are also those with the fewest rights.
In a recent strategy paper, the Department for Business, Enterprise and Regulatory Reform, formerly the Department of Trade and Industry, rejected calls to extend employment rights to any group of workers who are not currently covered. It stated that
changes to the legal framework would not prevent instances of abuse or lack of awareness. It could however damage labour market flexibility and result in a reduction in overall employment... The government believes that it meets the labour markets current needs and there is no need for further legislation in this area.
The Departments argument against extending rights seems precisely the same as that used by the employers who opposed the national minimum wage. It is an argument that the Government have discredited through the success of their own national minimum wage policy. It is an anomaly that, while introducing much valued rights for employees, the Government are turning a blind eye to the exploitation of thousands of workers. The welcome extension of employment rights and protections under this Government needs to be accompanied by an extension of those rights to all home workers who are not in business on their own account.
Finally, I should like to thank Nesta Holden and Linda Devereux of the National Group on Homeworking who wrote and published the report Subject to Status
and who organised the launch and reception in the House of Commons on 21 November. I should also like to thank some of my colleagues from Leeds, my hon. Friends the Members for Elmet (Colin Burgon) and for Leeds, East (Mr. Mudie), who have done far more than I have over the years to draw attention to the plight of home workers, and my right hon. Friend the Member for Leeds, West (John Battle) whose work over 30 years or more fighting poverty in this country and overseas is legendary. I thank my hon. Friend the Member for Birmingham, Northfield (Richard Burden), who asked me to co-sponsor his private Members Bill, the Outworking Bill, and who introduced me to the issues and problems facing home workers. I also thank Sharon Jandu who has done a great deal to publicise the NGH and helped to launch the report in Parliament on 21 November.
Richard Burden (Birmingham, Northfield) (Lab): I thank my hon. Friend for his kind words. Going back to the Outworking Bill, he will remember that it focused very much on home working scams and proposed a prohibition on companies demanding money upfront from home workers before they supplied them with the goods that they would make, pass on, produce and so on. Does he agree that there is still a need for such a simple measure, as well as the employment rights, to tackle some of the injustices that home workers face?
Mr. Hamilton: I thank my hon. Friend for that. There is no doubt that the work that he did on the Outworking Bill drew national attention to those so-called scams. It is a disgrace that that kind of fraudulent activity, which is effectively what it is, should deprive some of the most vulnerable and poorest workers in the country of what little savings and money they have, to enrich people in a criminal way. Very simple legislation to outlaw that kind of upfront payment and the other so-called scams to which my hon. Friend drew attention in 2001 is still lacking and could be easily put in place.
Thank you very much, Mr. Olner, for the chance to illustrate the plight of home workers, and I hope that the Minister is listening and that the Government will finally close the loopholes that allow this most vulnerable group of workers to be exploited in the way that they have been.
John Battle (Leeds, West) (Lab): May I thank my hon. Friend the Member for Leeds, North-East (Mr. Hamilton) for raising this debate again? I also pay tribute to the National Group on Homeworking, which for years has championed home workers and insisted that they should not leave our agenda. I congratulate my hon. Friend on his research. He dug up reports that were compiled some 100 years ago. I am reminded again of how much unfinished business there is in the House that we have to return to again and again. In his first manifesto, Keir Hardie, the first Labour MP, said that his main aims were to tackle unemployment, introduce a minimum wage and do something about housing conditions. Those issues are still on our agenda.
We have made some great progress in the last 10 years on the first two issues. We have introduced a minimum wage and we are working very hard to ensure that we have high levels of employment in Britain. Keir Hardie
also warned that if we do not understand the relationship between trade and international solidarity, all our efforts will be doomedand that was before the new world of economic globalisation.
Eighteen years ago, I raised the issue in the House of home workers in my own constituency, in Bramley. Those home workers were mainly women who worked wrapping Christmas cards in cellophane and threading the little strings on to gift cards. How did it work? A company in Bradford employed an agent on the estate, who took the packages around in a van, dropped them off in the house and told the women to have them finished by Friday. The women worked and worked to finish them, but more work was always piled on them than they could actually complete. Wage rates at the time worked out at less than 50p an hourwell below the average in the low-paid market. Then, as usual, the van failed to turn up on Friday with the money to pay the women and their families who had helped to meet the deadline, so the boxes were left stacked in their hallways and front rooms for ages as we tried to sort out the problem. It was a mess. Eventually, we managed, through the supply chain, to track down the employer and we had a real go at them, saying that they had to act responsibly towards those people.
It must be remembered that that was the age when people thought that home working was a good thing. We should distinguish between types of home worker. People who worked in an office might be told, Please go home and work from your computer therethat will be much more relaxed. That was 10 years ago. Today, we read reports of people wanting to get back into the office and do hot desking because working at home is so stressful.
There are not only office workers. I like the expression that some of my hon. Friends have used: outreach workers. That refers to people who have work pushed out on to them, who are in a different position from those in the middle income brackets who are working at home on computers, because if they complain, they lose the work altogether and lose the vital income that is propping up their family budget. I was told, Please, John, dont take the issue up with the company, because it might just cut off the supply line. It is true that the company in Bradford employed some of the people, but others lost their jobs altogether.
One million people in Britain are still doing home working. Some are packing Christmas cards and tags; some are knitting and sewing; some are doing inspections of industrial seals; and others are making souvenirs for sports shops. When I learned of that last one, I was tempted to wonder whether, in the supply chain of life, when we buy our products, we think about who in the chain is paying the highest price for those goods. Home workers are still right at the bottom of the pile.
I would like to add another dimension. In the search and struggle for what we now gloriously call joined-up government, which I believe is incredibly difficult, we must bridge across Departments. The global is now local, and the local is global. We are in an interdependent world writ large, particularly economically. In the past five years, people have thought that home working has gone offshore: it is done in China, India and the Philippines, where the footballs, football shirts and so on are made; it is not a British issue. Well, it is. Of course it is a two-thirds world issue, in the poor countries of the
world, as a result of globalisation, but I say to the Minister that we need to tackle poverty worldwide as well.
I serve on the Select Committee on International Development, which is a great privilege. We all know of the millennium development goals. Which one is missing? We can work on health care, HIV/AIDS and education, but the issue that is missing is employment and wages. There is no MDG to ensure fuller employment or decent wages. That is a big lacuna in the international system. In Oxfams 2004 report on home working entitled Trading away our rights, for which it surveyed 12 countries, it demonstrated that if the poor are paying the highest price in one country and a campaign is started to do something about that, the company is shut down and people are out of work and the practice moves across the world to another country. We cannot do that; we have to join things up.
In this country, as my hon. Friend the Member for Leeds, North-East said, a million workers are without proper remuneration or employment rights, which has something to do with the fudge of the definitions of an employee, a worker and the self-employed. He spelled that out eloquently, so I need not repeat it. Our employment law provides different levels of protection for those different categories. Those who are classified as employees have a range of employment rights, which we have been strengthening: protection against unfair dismissal, sick pay, some maternity rights and the right to redundancy pay. We are even encouraging people to take up resources to get child care so they have some space to work. However, all those rights fall away from a person who is not an employee and works from home. They fall down the gap between the different categories. We have never properly resolved that issue.
The present Government introduced the national minimum wage. That was not my personal responsibility, although I was in the Department of Trade and Industry when it was introduced. At that time, we were saying, Well, we cant introduce it for home workers. That would be too complicated. Why? Because we had not sorted out their employment status. We cannot give them the wage if we have not clarified their status. That is unfinished business.
One part of the problem is that many different Government agencies deal with the issue. There are agencies that deal with legal definitions of employmentthat involves the Department for Business, Enterprise and Regulatory Reform. There are rights that relate to health and safety at work that are not covered there. Even rights relating to child care come through a different Department. I simply suggest that, even with all our best intentions for the legislation in this place, home workers are falling between the frameworks of different Departments. I am making a plea to my hon. Friend the Minister: the sub-committee that draws together different Ministers in different Departments should take this small issue seriously, put together a working party on it and crack it. It should drive through a means of joining up the agendas.
I would like international and national law to be brought together with good practice. There is a home workers code. That has something to do with the whole business of checking sourcing. If we could regularise legislation and sort out where home workers fit in the piece so that they have protection, that would be a start.
In 2004, a report entitled Made at Home was published by, interestingly, the TUC, the National Group on Homeworking and Oxfam. At the ground floor level, people are joining together the agendas: the TUC for workers rights, Oxfam, which works internationally as well in Britain, and the NGH. That group could be a means of demonstrating how such joining up can be done. The general secretary of the TUC, Brendan Barber, said at the time:
The main problem is that homeworkers are often isolated, without the support of workmates or a union to speak up for them. Many are not employees and so lack even the most basic employment rights including protection against unfair dismissal and maternity leave. Legally all homeworkers should be getting the minimum wage and holiday pay, but the reality is that many employers prey upon and exploit their vulnerable position for their own ends.
The situation is made worse because the law covering homeworkers is unclear. If they complain, its likely that their supply of work will stop without notice, so many homeworkers stay silent and abuses go unreported. Homeworkers should get the same employment rights as all other employeestheir status as third class workers cannot be allowed to continue.
If that is the legal framework, we need to do more. How should I put this? It is in the light of the question asked by my hon. Friend the Member for North-West Leicestershire (David Taylor) about the company referred to by my hon. Friend the Member for Leeds, North-East. We need to do much more as a societyby which I mean civil society, campaigning organisations, Members of Parliament and Departmentsin tracking where company profits come from. We are not doing enough to track the sourcing. Who pays the highest price? I have been quite shocked. In the International Development Committee we have been considering the ethical trading initiative, but if people go through the reports, they will find that the companies in Britain that are signed up to the ETI are the very companies that, through the chain of supply, are employing home workers and hoping that no one notices. We need to track them and say, You cant sign up to ethical trading initiatives and claim the moral high ground when at the same time, four layers down, you are exploiting workers in the most atrocious way because you are exploiting gaps in the law. Tracking supply chains is a job that still needs to be done.
We need to regularise and fuse together at national level legal protections such as the minimum wage, employment law and those relating to health and safety and child care. We need to track supply chains and to push for more international action with regard to the work of the International Labour Organisation to get the standards in place so that we are not simply saying, Well, if youre a home worker here and your job has moved elsewhere in the world, those workers will be exploited. What are we doing about building this issue into the framework of the World Trade Organisation, for example, and fusing the ILO and WTO together to ensure that workers do not continue to be exploited anywhere?
My view in this saga of unfinished business is that, at the end of the day, as usual, it is the most vulnerable, the poorest, who subsidise the economy, the growth and the profits and prop up the rich and the better-off. Furthermore, the poor always pay the highest price, whether that
relates to energy costs, borrowing money from loan sharks, or indeed doing the work at basic level. We owe them the responsibility of saying that they should not pay the highest personal and family price. We should take legislative and practical action as a society, locally, nationally and internationally, to ensure that they get the same employment rights and protection as everyone else. That is part of the campaign to make poverty history and the campaign for fairer trade; but it is also part of the campaign for treating human beings decently. Sadly, after 100 years, we still have quite a way to go.
Lorely Burt (Solihull) (LD): I welcome you to the Chair, Mr. Olner, for this extremely important debate and I congratulate the hon. Member for Leeds, North-East (Mr. Hamilton) on introducing this subject for discussion.
It is interesting to look at the wider perspective on home working. There is a spectrum, from home working that has the potential to be liberating, through to home working that is enslavingwe have heard descriptions of the sorry state of some home workers. There are a great number of people involved in home working. The Economic and Social Research Institute says that 8.4 per cent. of people regularly work from home; the Department of Trade and Industry says that 3.1 million people work at home; and the National Group on Homeworking talks about 1 million people who are home workers. The discrepancy in the figures is because the National Group on Homeworking focuses on women, and on the least powerful and the most exploited people. Their situation was eloquently described by both the hon. Member for Leeds, North-East and the right hon. Member for Leeds, West (John Battle).
On the happier end of the spectrumthe flexible working endI introduced a private Members Bill last year to extend the age of the children for whom an employee can request flexible working to 18. I am delighted that the Government will introduce such a measureI see it as greatly enlightening. At some stage, I should like everyone to have the opportunity to request flexible working. However, it is important that such a right is protected. For the vast majority of workers, greater working flexibility would greatly increase equality in our society. I would love to see the end of the culture of presentism, whereby when a child is born, one parent must make the economic sacrifice. It is usually the woman, which contributes to the economic inequality of the work unit and to womens lack of ability to catch up when they return to work.
More flexible working would bring benefits to the environment. Savings in carbon emissions would come because people would no longer travel to work. People would have more time, so there would be an improvement in work-life balance. A growing number of mothers are turning to self-employmenttrue female entrepreneurship because it fits in to their work-life balance. It has become a lifestyle choice. If as many women as men turned to an entrepreneurial lifestyle, 500,000 additional companies would be set up in this country. That would make a difference to our balance of payments and prosperity.
That is the good side of home working, which definitely has benefits: for the employer, it can mean a motivated work force, and reduced staff turnover, sick days and
infrastructure costs. There is a social responsibility aspect: carers and people with disabilities have much more flexibility for their work. Although it can be liberating, it can also be enslavingat least it can be where irresponsible companies are concerned.
John Battle: I am grateful to the hon. Lady for expanding the debate. She is absolutely right on work for women: they could have what I believe is called a better work-life balance, and there would perhaps be a better gender balance. However, I am thinking particularly about people who are not self-employed, even those who are more mobile in the labour market, if I may put it that way, who have decent jobs and qualifications and who work in offices but who sometimes go home to work. In a sense, it is about the attitude of employers to home workers. They do not see home working as a way of helping people to be liberated; rather, they are looking at how to reduce their costs. There are now rows about who pays for the lighting and the electricity, and people are pleading to go back into a workplace because on-costs are being pushed on to them. More than a million people who are at the behest of an employer rather than self-employed are picking up hidden costs for the employer. That is the real exploitation. Such people are paying a high price. Not only do they not receive a wage, but by paying their lighting bill and other on-costs they are subsidising their employer.
Lorely Burt: I am grateful for that pointit gives another perspective on the matter. However, I have recently been through the trauma of completing my tax return. I have been advised that a proportionone eighth for a Member of Parliamentof ones lighting and heating costs can be claimed against ones final tax Bill, so the Government try to make allowances for employees who work at home[Laughter.] It was news to me too, but I am assured that that is the casea House of Commons approved company told me. In answer to the right hon. Gentlemans important and significant point, there are circumstances in which those costs can be offset.
Of course, thousands of people are missing out on basic employment rights because of the ambiguity of their employment status, as was admirably outlined by the hon. Member for Leeds, North-East and the right hon. Member for Leeds, West. The Department for Business, Enterprise and Regulatory Reform, in a leaflet entitled Contracts of Employment, summarises the difference between employed and self-employed as follows: