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It seems to me therefore that this Bill is actually a solution looking for a problem. Lots of employers are very happy with the current arrangements for employing agency workers, because they suit their needs and help their businesses grow. Many temporary workers are happy with their pay and conditions already, without any intervention from Government Members. Many people are being given opportunities that they would otherwise never get, and many people will be in work as a result of current arrangements, when they would otherwise not be. We tinker with the state of play at our peril. We all know that the Bill will cause job losses. I did not come to this House to introduce legislation that costs people their jobs. I came
here to try to create a thriving economy that puts more people in employment and creates more wealth for this country, but the Bill will have the opposite effect. The Government know that the Bill will have a negative effect on employers, and I urge them to have the courage of their convictions and vote against it on Second Reading.
12.45 pm
Mr. Christopher Chope (Christchurch) (Con): The frustration that I felt in waiting so long to be called has been more than compensated for by the quality of the contribution by my hon. Friend the Member for Shipley (Philip Davies). It is vitally significant that he has put on the record the views of employers. He curtailed his remarks, because he was going to tell us a lot more about the attitude of temporary workers and agency workers. Perhaps it will interest Labour Members if I pick up my hon. Friend’s point that 66 per cent. of agency workers are satisfied with their pay—I am not sure whether 66 per cent. of MPs are satisfied with their pay—which indicates the high level of satisfaction among agency workers.
I declare an interest, because I employ a gap-year student on a temporary employment contract. I pay that student well in excess of the minimum wage and comply with all national regulations. It would ridiculous to say that MPs or others cannot take on gap-year students as temporary employees. My constituents and I have significantly benefited from the work of that particular employee and others whom I have previously employed in similar positions.
Although I congratulate the hon. Member for Ellesmere Port and Neston (Andrew Miller) on having chosen this subject following his success in the ballot, I am concerned that he couples his position as the promoter of the Bill with being the Chairman of the Regulatory Reform Committee, which I suspect entails a conflict of interest. This Bill is highly regulatory. Indeed, the fact that the Government are not enthusiastic shows that it must be an incredibly highly regulatory measure, because they normally go along with regulation.
Many hon. Members support the Bill, and, perhaps in defiance of the Government Whip, they have signed early-day motion 692, in the terms of which lies the fallacy of their position. Early-day motion 692 states that
“there are 1.4 million agency workers in the UK”
“that many new jobs are considered temporary and are often filled by agency staff; recognises that such staff are often used to cope with fluctuations in demand and form a legitimate part of the labour market”,
which is fine. However, it goes on to say
“that they are subjected to inferior pay and conditions and blatant exploitation”.
According to early-day motion 692, the 1.4 million agency workers are all subject to inferior pay and conditions and blatant exploitation. We know from the evidence provided by organisations on all sides of the argument that the proportion of agency workers and temporary workers who are subject to exploitation is smaller than the proportion of permanent employees who experience that condition. Early-day motion 692 immensely exaggerates the problem.
“further recognises that agency workers are sometimes employed to undercut permanent workforces”.
At least, that is more moderate language, because of the use of the word “sometimes”, although I do not know whether that means 50, 100 or 1 million times, given that there are 1.4 million agency workers—but I do not quarrel with the use of that word. However, the early-day motion overstates the case when it refers to “divisive conditions and resentment”.
“calls on the Government to take appropriate action to establish the principle of equal pay and conditions for agency workers compared with their permanent counterparts.”
That is why this is such a significant debate, because we are considering the issue not just in terms of whether the Government should support the Bill, but in the context of what is happening in Europe. Unfortunately, when the Government removed the UK’s opt-out from the social chapter, they opened our country up to regulation by the European Union on the basis of majority voting. We have often found that our particular circumstances governing employment in this country are at odds with what happens on the continent. We have found that the imposition of the 48-hour working time directive has had perverse consequences in our labour market, probably including being partly responsible for an increase, following a period of decline, in the number of agency and temporary workers employed in the UK economy in the last two years.
Philip Davies: My hon. Friend is making a powerful point. Does he agree that the competitive advantage that the UK has always traditionally had over lots of EU countries has been eroded by this kind of legislation being inflicted upon us in the same way as it has always been inflicted upon those other countries? Not allowing people to work more than 48 hours might be well-meaning, but it often works against the wishes of the employees. Sometimes they wish to work longer hours. Such legislation works against their interests.
Madam Deputy Speaker (Sylvia Heal): Order. The hon. Gentleman must keep to the terms of the Bill before us.
Mr. Chope:
I am grateful to you, Madam Deputy Speaker, and I am grateful to my hon. Friend for his intervention. The core of all this is sovereignty. Why should not we in the United Kingdom Parliament decide what terms and conditions should be imposed and what terms and conditions should be freely negotiated between willing employers and willing employees in the UK labour market? My inclination is to be on the side of the right-to-work campaign. Emphasising the other side of the argument, which places a lot of regulations and burdens on employers, often has the perverse consequence of denying people who have a natural disadvantage in the labour market the opportunity to exercise their own right to work and to choose their own terms and conditions. That regulatory burden is one of the main contributors to the fact that 2 million people, including 1 million in the younger age group, are unemployed. They are not unemployable, but it will be very difficult to get many
of them back into the labour market unless we introduce more flexibility rather than reduce flexibility, which is the purpose behind the Bill.
I understand that the Minister has to face up to the reality of an enormous split in the Labour party on this issue. He knows that as we approach a general election the resources of the trade unions will be vital, and that, if the Government do not deliver on the Warwick agreement, they will be in trouble as far as those resources are concerned. Even he has recognised that we cannot just throw in the towel to appease the trade unions under the Warwick agreement if that will cause a disaster for the UK economy. For many months, the Minister and the Government have stood out against this Bill and its predecessor and stood out against the ill-conceived European regulation covering the same subject. However, right at the end of the Minister’s speech, during which he refused to take any interventions, and after setting out in great detail all the Bill’s shortcomings, he said that the Government would not actually vote against it. It is disappointing that they do not have the courage of their convictions. It would be better for them to be seen to be going down fighting on behalf of the United Kingdom’s flexible labour market. That would have sent a strong message to our European so-called partners ahead of the negotiations on the directive. I fear that the way in which the Government are dealing with the Bill is showing them to be indecisive and the poodle of their backwoodsmen—and backwoodswomen, I imagine.
The Minister especially criticised the Bill because it does not specify the moment at which equal treatment will be required for agency workers. However, he did not spell out the fact that because the Bill does not define that point—it was not defined in the similar Bill to which the Government objected on Fridays in the previous Session—the rights that it sets out would come into effect from the very moment that an agency worker was employed. No one in their right mind thinks that that proposal is sensible, but, interestingly, despite all the protracted negotiations that preceded the Bill’s publication, the promoter and sponsors of the Bill have not tried to introduce a figure to meet the Government’s objection. The Bill is fundamentally flawed for that reason, if for no other.
I applaud what my hon. Friend the Member for Wealden (Charles Hendry) has said from the Front Bench. These days, the Conservative party is sometimes accused of being rather wishy-washy—albeit not as wishy-washy as the Liberal Democrats—and of sitting on the fence. Journalists on The Daily Telegraph and The Sunday Telegraph, and elsewhere, think that we are especially wishy-washy on taxation and public expenditure. However, leaving that aside, I welcome the fact that we are not wishy-washy on this Bill. I doubt that we will be able to muster sufficient numbers to defeat the Bill on Second Reading—we will find out whether the Liberal Democrats vote for the Bill or abstain, as the hon. Member for North Southwark and Bermondsey (Simon Hughes) indicated that they would—but it is more important to be right than to go along with the majority.
During my time in the House, I have always been interested in defending minority rights. Agency and temporary workers are in a minority—that goes without saying. Their rights are important. Individuals who are
out of work have a right to test out different types of work through different employers via the use of agencies, or job brokers, as they are increasingly called.
The Department for Work and Pensions is setting up a network of job brokers, some of which will be encouraging employers to take on temporary staff and giving them temporary subsidies so that they can take on those staff. That will happen in recognition of the fact that the value to an employer and work force of an individual taken on in such circumstances is not as great as the minimum wage that must be paid. Such a proposal is a welcome introduction of flexibility and a way of avoiding the rigid consequences of the minimum wage legislation, which many Conservative Members criticised when it was introduced. The minimum wage has now been increased across the country to a level that puts employers in a position whereby they cannot afford to take on the inexperienced or those without much recent time in work without some sort of subsidy. The Government recognise that in the job-broking system, and that is a way forward. However, it is at odds with their approach to this Bill: they do not like it, but do not have the courage of their convictions to vote against it. At a time when our economy is entering, if not a crisis, a period of significant downturn, with the prospects for growth far below what has been forecast by the Government, organisations outside the House will want to see whether Parliament is on their side in ensuring that we get a more flexible labour market and that we do not put more people out of work.
At a time when many of us are thinking about the implications of the Olympic games for our country, the points made about the Olympic Delivery Authority are pertinent. It is inconceivable that all the people who will work on the Olympic games, which will take place over a concertina period of three or four weeks, should be employed permanently. It would be ludicrous to say that. I suspect that some people who would have been taken on for four-year fixed-term contracts have not been taken on because we have not quite got to the four-year trigger point.
The legislation to implement the regulations on permanent workers, on which the Bill is modelled, introduced a rigidity into the employment market. If someone is on a fixed-term contract of more than four years from 2002, that person is deemed to be on a non-fixed-term contract as soon as the contract reaches four years and, on the termination of that employment, is entitled to compensation for loss of office, to redundancy pay and so on. We have seen the consequences of that in the case of some chief executives of local authorities who were employed on fixed-term contacts on the basis that that would give them a higher salary. However, when the fixed-term contract has expired, they have still been entitled to severance or redundancy money because of the four-year rule.
Philip Davies:
My hon. Friend makes a powerful point. Does he agree that if temporary workers have to be given the same pay and employment rights as permanent workers, the same argument can be used the other way around? Given that the time scale for the Olympics means that people will probably be paid more as temporary workers because of their skills,
which will be used for a short period of time, the argument will be that permanent staff should be paid the same amount.
Mr. Chope: My hon. Friend is on to a good point. Again, it is another reason why the Bill as drafted is wholly inadequate and unsatisfactory.
It is regrettable that there are no explanatory notes. I notice that the next Bill for discussion does not have any explanatory notes either. I do not know whether that is because this Bill’s promoter thinks that it is self-explanatory or whether he wishes to keep people in the dark. It is customary for Bills to have explanatory notes. Indeed, I think it is obligatory, under the rules of the House, for Government Bills to have them. In the absence of explanatory notes, one has to speculate about the meaning of some of the expressions in the Bill.
My understanding is that it introduces three new rights for temporary and agency workers under clauses 1(1), 3(1) and 3(4). I am not going to go through the Bill line by line, as we were promised we would be allowed to do with the European constitutional treaty. Certainly, Madam Deputy Speaker, you would not allow me to go through this Bill day by day, as the Prime Minister said that we would go through the European Union (Amendment) Bill. I would, however, like to highlight one or two provisions that should be tightened up in Committee should this Bill be given a Second Reading.
As has been said, clause 1(2)(b) does not define the “objective grounds” to which it refers. In clause 1(3), “pro rata temporis”—the meaning of that phrase will be familiar to anyone who did Latin at school or university, but not to others—would not cover overtime. That is a good point in the Bill, in comparison with the European Union directive, and it is a pity that the Minister did not highlight it. That is a positive feature, but vague language is deployed in clause 2, particularly in subsection (1)(b), which uses the expressions, “broadly similar”, “having regard”, “where relevant”, “seniority”, “similar level” and “qualifications and skills”. There is no reference, however, to age or experience. All those vague concepts are used to try to derive a comparator, which under the provisions of clause 2 could be a hypothetical person, which is quite ludicrous.
The Union of Industrial and Employers Confederations of Europe consistently argued against giving rights to individual agency and temporary workers that would enable them to access the terms and conditions of permanent staff. I do not think that the employers are wrong: it is perfectly reasonable that terms and conditions of employment in individual contracts should remain a private matter between the employer and the employee. That is a particularly significant factor in the UK, where most contracts of employment are with the individual, as opposed to the collective basis often used on the continent.
The rights given by clause 3(1) would impose a particularly onerous burden on employers, as their existing contracting terms that prevented someone from becoming a permanent employee would be made void. If an employer had a policy or an agreement with trade unions that temporary workers could not be taken on as employees, such a condition would be null and void . What is the point of that? It is unnecessarily oppressive
and regulatory, and it discriminates against the rights of individuals to reach agreements based on their assessment of what is in their best interest.
“An agency worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, of the end user or the employment business, or employment agency, done on a ground specified in subsection (5)”
That is a serious issue, which will create a substantial burden for employers, and runs counter to the principle of privacy of contract.
Philip Davies: My hon. Friend makes a powerful point. We know that the Labour party is pushing the Bill as a payback for the Warwick agreement and the money given at the last general election, but what does my hon. Friend think is in this for the unions? Is this not about not what is in the best interests of temporary workers, but the fact that very few temporary workers are members of trade unions, so the unions want the temporary working arrangements in this country to be undermined to boost their flagging membership rates?
Mr. Chope: Absolutely; my hon. Friend is on to the real point that trade union membership has been declining and the unions would like to be able to access a new cohort of potential members. That is really what underlies this, because with membership comes money, and with membership and money comes more influence in the Labour party and over the Government. We have seen examples recently of the consequences of that for the Great British people.
The issue of detriment in clause 3(4) is serious, and that is another reason why employers are so concerned about the Bill.
One has to take a deep breath when one realises that clause 4 is promoted by the Chairman of the Regulatory Reform Committee. It talks about
“the appointment of a regulatory authority with suitable duties and powers for the purpose of enforcing the rights afforded to agency workers”,
“the appointment of statutory officers with suitable duties and powers”
and so on, and “alternative dispute resolution”, but with matters ultimately going to an employment tribunal. We know about the costs and delays in the employment tribunal process.
We also know how employers, particularly small employers, are held to ransom by the threat of cases being taken to the employment tribunal. Were the Bill to be enacted, it would only need a temporary or agency worker even to suggest that they would take the issue to an employment tribunal for the small employer to quake in his boots and say, “Well, I can’t possibly face the costs that might be involved in going to a tribunal, in terms of my time and that of other employees who might have to give evidence; I certainly can’t afford to employ counsel or solicitors to make representations on our behalf; and I certainly can’t afford all the delays and hassle in preparing the case.” Therefore, as so often happens, the threat is made by an employee and the case is settled and the employee goes away with some money, often quite a large sum of money, on the basis that the employer feels that it is better to pay a lump sum to get rid of the problem than to defend rights in the tribunal.
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