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It may be accepted that a reasonable qualifying period should allow for equal treatment with a user firm’s staff, but even permanent staff do not receive full employment rights until they have completed a probation period. There is no overall agreement on this issue, although the CBI believes that a period of 12 months would be
appropriate; this is on a par with other time-related employment rights such as protection against unfair dismissal.
Mr. Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): What do they know?
Charles Hendry: In so many of these issues, one finds a fundamental hostility to business and wealth creation. If we want to keep this country as a place where businesses will invest and create the jobs that will create wealth, we must have a partnership, rather than constantly undermine the work of those who create the wealth.
Richard Younger-Ross (Teignbridge) (LD): The hon. Gentleman talks about the need for temporary workers to deal with workplace fluctuations. He has just conceded that the CBI accepts that after 12 months, workers’ rights can be in place. Does he therefore agree that the case that we heard of earlier, involving a temporary worker who was in place for six to eight years, is wrong? Should not such a worker have full employment rights, equal with the other workers in the workplace?
Charles Hendry: I am reluctant to criticise or praise a particular company until I know the circumstances, but the situation in question certainly seems surprising. At the same time and as we have discussed, what suits some individual employees does not necessarily suit others. Some people choose to work for longer periods, although that does not appear to have been the case in the example outlined by the hon. Member for Ellesmere Port and Neston. Nevertheless, every situation is going to be different, which is why a blunt instrument such as the Bill is not the right way forward. There is no overall agreement on when full rights should come into play. Within the EU, countries such as Germany adopt a similar approach in relation to some of the companies here, while others pay agency temps at a special trainee rate.
I do not think that I have said much today that the Minister will disagree with. The question remains, however, as to why the Government are suddenly looking for compromise, and why have more than 100 Labour MPs signed the early-day motion supporting this Bill, given that the Government have made it clear that they are not keen on it? Of course, the answer, I am afraid, is the growing power of the unions within Labour and their demand to call in their Warwick agreement pledges. Will the Minister confirm or deny the report in The Guardian that union leaders met Labour MPs at Westminster on 18 February to underline that they “expect” Labour Back Benchers to stay in London today to ensure that this Bill receives a Second Reading? The reality is that this is a prime example of the trade unions exploiting their new leverage. They have donated £55 million to the Labour party since 2001 and now represent almost 75 per cent. of the party’s annual income.
Since 1997, this Government have introduced 18 Acts and more than 289 statutory instruments that deal directly with employment. The impact has been to increase the complexity and burdens faced by employers, while strengthening both trade union and employee rights. The new and disturbing development is that now,
the Government could be setting the ground to renege on their firm position of supporting agency working and what they have acknowledged as being in the best interests of the British economy.
Mr. Chope: I am, in a sense, disappointed that my hon. Friend is about to conclude his remarks, when there are so many important criticisms to be made of the Bill. Does he have any idea how many of the 1.4 million temporary workers are members of unions? Does he see that as the core of the issue?
Charles Hendry: I do not have that statistic, but 77 per cent. of temporary workers, according to the survey, were not unhappy with the current situation. It is a lesson that many of the people whom the Bill addresses do not see the need for it.
Mr. Chope: My hon. Friend dealt briefly with the bureaucracy involved in the Bill and its comparability. Does he recognise the big difference between the labour market in the United Kingdom, where most contracts of employment are between individuals, and that in many countries in the rest of Europe, where contracts of employment are on a collective basis? The juxtaposition of clauses 1 and 2 would therefore create a bureaucratic nightmare.
Charles Hendry: My hon. Friend is absolutely right. That is one of the reasons why the issue should not be addressed through the European directive, which tries to bring together fundamentally different approaches to employment in different countries. I hope that the Government will continue to resist moves to amend the directive in that way.
We will oppose the Bill today, because its concept, and particularly its approach to achieving its purpose, is flawed. The Minister now has an opportunity to clarify the Government’s position and to stop saying one thing to one audience, and something else to another.
10.21 am
The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): I congratulate my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) on raising the issue of temporary and agency workers through his Bill. I appreciate his deep and genuine concern to protect the vulnerable at work and to ensure fairness for all workers whether they are permanent or agency workers. The Government share that concern and I shall set out our position.
The Bill sets out a series of rules under which agency work—work carried out by working through an agency established to supply labour to a number of different hiring firms or organisations—should be conducted. As my hon. Friend said, the Bill is motivated by a desire to protect vulnerable workers and to combat mistreatment at work.
We all know that there are people who are vulnerable or mistreated at work. The Government are committed to protecting people in those circumstances, whether they are permanent employees or temporary or agency workers. Just as some permanent employees feel themselves poorly paid and treated, so do some agency workers. Together with the National Association of
Citizens Advice Bureaux, my Department recently commissioned a survey of those who had inquired at citizens advice bureaux around the country about employment rights issues. The survey was perhaps not scientific, as it was a self-selecting sample of those who had turned up at citizens advice bureaux. Nevertheless, it showed that 95 per cent. of complaints came from permanent employees and just 2 per cent. from agency workers. Therefore, vulnerability and mistreatment are issues, but it would be wrong to equate agency work with exploitation and permanent work with an absence of exploitation.
Mr. Evans: John Cridland, the CBI deputy director-general, has said in a press release:
“Any firms that do mistreat their temporary staff are breaking existing rules and deserve to be hauled over the coals. This type of abuse demands more effective enforcement, not a raft of new laws”.
Is that the Government’s position?
Mr. McFadden: I certainly agree that, where breaches of existing law take place, the existing law should be enforced. It is one of the features of the debate that some of the abuses raised are breaches of existing law. I shall say more about that.
Looking at the labour market as a whole, things are significantly better for people at work in the UK than a decade ago. Employment is up, with more than 29 million people in work, and the UK enjoys the highest employment rate in the G7. Unemployment is down and wages have increased by some 51 per cent. over the past decade. Workers in the UK also enjoy better rights, many of which extend to agency workers, including rights to the minimum wage, coverage by discrimination legislation, working time legislation, and statutory maternity, adoption and paternity pay. The Labour Government have not, through improvements that we have made, somehow created a situation in which employment cannot grow in the UK. In the past decade, unlike what happened under the Conservative Government, we have had growth in employment and an improvement in standards for people at work.
Philip Davies: I was delighted that, in response to my hon. Friend the Member for Ribble Valley (Mr. Evans), the Minister agreed with the CBI. Does he also agree with the CBI that the Bill as it stands could lead to 250,000 job losses?
Mr. McFadden: That is the CBI’s figure, not the Government’s. I shall deal with the detail of the Bill shortly.
The debate has naturally concentrated on mistreatment at work. The UK has a higher proportion of its work force in permanent work than many other countries. Indeed, the UK has the second highest proportion of work force in permanent work in the European Union. Analysis from Eurostat also shows that the UK has significantly fewer people than many other EU countries working in the so-called informal economy, beyond the reach of employment law and protection.
As we have heard, agency work is a relatively small but important part of our labour market. It allows both public and private sector employers to fill gaps in
demand and deal with seasonal variation and cover for leave or long-term illness, and it generally adds to the flexibility with which the economy operates. It can be rewarding for many people and helpful to companies.
Mistreatment can happen in a variety of circumstances, not just with agency work. Research carried out by King’s college, London showed that on issues such as well-being, general health and positive attitudes towards work, agency and temporary workers were certainly no worse off and in some cases felt more positively than their permanent counterparts. In terms of the overall labour market picture, the Work Foundation, in a report published last year, said that the position of UK workers had improved over the past decade, in stark contrast to the decade that preceded it.
None of that is to deny that there are occasions when there is mistreatment at work or that there should be a debate on the rights of temporary and agency workers, but it is useful to put the debate in the context of the overall UK labour market. A cornerstone of the success of the UK labour market over the past 10 years is that we have combined the flexibility that both workers and employers seek with improved conditions for people at work.
Mr. Evans: We are talking about the mistreatment of workers being against the current law. For instance, it would be against the law for anybody to be paid less than the minimum wage. As long as both employer and employee know what the minimum wage is, action can be taken. Does the Minister therefore believe that agency workers have a whole swathe of rights that they do not know about? Do the Government have a job of work to do to inform agency workers of their current rights?
Mr. McFadden: It is certainly true that all workers are entitled to the minimum wage. To reinforce that right, the Government have increased expenditure on minimum wage enforcement by some £3 million a year. If the hon. Gentleman is so minded, he can visit the minimum wage bus that is touring the country, stopping at 30 towns and cities to advertise that right, and the helpline that people can contact if they feel that they are not being paid the minimum wage.
It is critical that we do not underestimate the importance of work and access to work to individuals, families and the country as a whole. It gives not just a financial reward but self-belief, a sense of purpose and a route out of poverty. It is therefore important to keep the barriers to work low and to help people to move from a world of inactivity to a world of activity, not only for the economy’s good but for the good of individuals. Of course, the rationale for the Bill is not to deny the advantages of agency work, some of which my hon. Friend the Member for Ellesmere Port and Neston set out, but to offer protection for agency workers subject to mistreatment.
The abuses mentioned in the debate often represent breaches of existing law. We have heard in recent days about people being asked to work machinery without safety guards and so on, which is a breach of the existing law and would not be covered by either the Bill or the draft European directive, which serves as the backdrop to the debate and focuses on pay. That was why we announced, through our 2006 policy statement,
“Success at Work”, that we would focus on vulnerable workers of all types and make a significant effort to ensure that the law as it stands is better enforced. We have made significant efforts to enforce the law on vulnerable workers, and I shall set some of those out.
We have completely revised and updated regulations governing the British recruitment industry—the so-called conduct regulations, which came into force in April 2004. They have been amended to ensure new protections for agency workers, so that from April they will have a specific right to withdraw from services provided alongside the job, such as housing or transport, without any detriment to themselves. The regulations are enforced by an agency inspectorate in my Department, which is soon to be increased in numbers.
We have also ensured that all workers, including agency workers, are covered by anti-discrimination laws and have core employment protections, including the minimum wage and the working time regulations, on the back of which we have recently increased access to paid annual leave. Perhaps it is worth reminding colleagues that the regulations governing rights to paid leave were top of the Opposition policy commission’s hit list to abolish, should they ever find themselves in a position to do that.
More broadly, we have taken forward the issue through the vulnerable workers enforcement forum, which I chair and which includes representatives from business, including agency employers, trade unions, citizens advice bureaux and enforcement agencies across Government. That body has been considering issues such as how to make it easier for people to report abuses and how to ensure better co-operation between the enforcement agencies. I stress those efforts because, whatever the merits or demerits of the Bill or the draft European directive, they would not tackle breaches of the current law. The answer to that is better enforcement, which we are determined to achieve.
The minimum wage has been mentioned once or twice. Labour Members supported it because we wanted to put a floor under the labour market, beneath which no worker should fall.
Mark Pritchard: Does the Minister agree with the hon. Member for Ellesmere Port and Neston (Andrew Miller), who said that temporary workers should be given the same remuneration as permanent workers from day one?
Mr. McFadden: The Government’s view has been that there should be a qualifying period before those rights apply. I shall come to that later.
When we established the minimum wage, we wanted to develop a consensus about it among not just employees but employers. That was why we set up the Low Pay Commission—to recommend rates, after consulting both business and workplace representatives and taking into account wider economic factors. That model has been successful, and the minimum wage has not had the adverse consequences that the Opposition predicted. This year is no exception: the Government estimate that more than 1 million workers have benefited from the uprating last October.
In this Session, we will also introduce our Employment Bill, which is intended to improve the effectiveness of dispute resolution in the workplace and of the application
of employment law more widely. It will strengthen the enforcement framework for the national minimum wage, give workers better recourse to arrears if they are underpaid and stiffen penalties for the minority of employers who do not comply with the law and thereby undermine the efforts of legitimate employers.
The Employment Bill will also give greater investigative powers to agency inspectors, increase the potential fines for breaching work regulations and reform the system of dispute resolution. That is all driven by a desire to have proper protections in the workplace while continuing policies that foster high employment and low barriers to entry to the job market.
Mark Pritchard: Will the Minister give way?
Mr. McFadden: I have given way to the hon. Gentleman a couple of times, so I shall proceed.
As I have said, the Bill before us is prompted by a genuine concern about protecting agency workers who might be subject to abuse or mistreatment. The backdrop is the draft EU directive on agency workers, which has been discussed in the EU for some years. Much has been said about the Government’s commitments and what we said before the last election, so I shall be clear with both sides of the House about what we said:
“We recognise there are abuses of the system, for example ‘permatemps’ and agency workers who can find themselves in and out of completely casual work, not knowing from one morning to the next whether they will be earning anything.
There are also questions about the status of some ‘agencies’ who work on the margins and exploit the vulnerable.
Although many of these abuses would not be tackled by the current draft Agency Workers Directive, we support the principle of the Agency Workers Directive and will engage with the Commission with a view to reaching an early agreement on the proposed Directive.”
We did not say that we would sign any draft of the directive, regardless of its content, or reach an agreement that we did not believe would be in the interests of the UK labour market. Indeed, together with a number of other member states, we were unable to support the draft that was placed before the Employment Council in December.
Mark Pritchard: Will the Minister give way?
Mr. McFadden: I can detect that, even though the hon. Gentleman has moved, he has not transformed into someone else.
Mr. Ian McCartney (Makerfield) (Lab): rose—
Mr. McFadden: I shall give way to my right hon. Friend.
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