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Session 2007 - 08 Publications on the internet General Committee Debates Temporary and Agency Workers (Equal Treatment) Bill |
Temporary and Agency Workers (Equal Treatment) Bill |
The Committee consisted of the following Members:Chris Shaw, Committee
Clerk
† attended the
Committee
Public Bill CommitteeWednesday 7 May 2008[Mr. Mike Hancock in the Chair]Temporary and Agency Workers (Equal Treatment) Bill9.30
am
The
Chairman:
Before we begin, I wish to say for the comfort
of hon. Members that if anyone wishes to take off their jacket, please
do so. Will they also ensure that mobile phones are on vibrate or
silent? I remind the Committee that, as a general rule, adequate notice
has to be given of amendments. I do not intend to call starred
amendments.
That, if
proceedings on the Temporary and Agency Workers (Equal Treatment) Bill
are not completed at this day’s sitting, the Committee do meet
on Wednesdays (except for Wednesday 4th June) when the House is sitting
at half-past Nine
o’clock.
This
is the second time that I have served under your chairmanship,
Mr. Hancock, and the first when I have been leading on a
Bill. You and I go back rather a long
way.
Andrew
Miller:
Too long, but no doubt we agree wholeheartedly
that any attempt to amend the sittings motion so that the Committee
sits on 17 May should be regarded as out of order, given that there is
an important match on that day.
It is
something of an unusual sittings motion for a private Member’s
Bill, given that we are sitting on Wednesday mornings with the
exception of 4 June. The Regulatory Reform Committee of which I am
Chairman is undertaking a small study that will result in the hon.
Member for Solihull and I being out of the country on that day. That is
the reason for the exception.
With your
indulgence, Mr. Hancock, and that of your fellow Chairman,
Mr. Martlew, I shall at an appropriate time come back to the
Committee with an amendment to the sittings motion to enable us to
complete our business, but several events make that inappropriate at
present. My hon. Friend the Minister for Employment Relations and
Postal Affairs and the hon. Member for Huntingdon referred to such
matters last night in the debate on the money
resolution.
A
discussion is being held outside this place to address a matter that
all members of the Committee believe needs to be resolved at the
earliest date. It concerns a proper mechanism and whether the solution
lies with the Bill or with a different process that no doubt my hon.
Friend the Minister will explain in some detail. It is appropriate that
the Committee is appraised of the progress that has been made in
discussions. That will be particularly helpful because it will set the
tenor of how we progress through the Bill and identify the fundamental
divisions between the parties. That started to show itself yesterday
evening when we were discussing the money resolution.
Of course, the vote on the
money resolution has yet to take place. If it is negatived or if we get
to clause 4 today—I doubt that we will—we will be in a
slightly difficult position. If the vote on the money resolution is
negatived this afternoon, I propose to come forward with amendments to
remove the necessity for a money resolution. However, that would not
give the kind of flexibility that I think the current Minister and
future Ministers would need to create the right mechanism to address
the problem before
us.
You will chastise
me, Mr. Hancock, if I go into too much detail on the
substance of the Bill, but suffice it to say its core aim is to create
equal treatment for a class of workers who are currently in a
disadvantaged position. I would have thought that in this day and age
there would be no difference of opinion across the political parties on
the need to address such an issue.
The
Chairman:
Order. I have to interrupt you, Mr.
Miller, as you are inviting chastisement if you continue down that
line. We are talking about the sittings motion and you have got as far
as you can on
that.
Andrew
Miller:
I spotted where I was going and
was gradually bringing the sentence back round to be in order. The
purpose of the approach that I am adopting with the sittings motion is
to create the maximum opportunity for the discussions that are going on
outside this place to come to a conclusion so that we will, I hope, be
in a position either to invite the Committee to amend the Bill further
or consider a different approach, depending on where the Government get
to in those
discussions.
Because
of the constraints of the sittings motion and the need to keep in
order, I will stop my remarks there, but I hope that you will agree
with me, Mr. Hancock, that it would be extremely helpful to
the Committee in facilitating its plans if Her Majesty’s
Government could give us a clear picture on where those discussions
have got
to.
Mr.
Greg Knight (East Yorkshire) (Con): I apologise for
missing the beginning of the hon. Gentleman’s opening remarks.
He might have covered this point, but could he explain, if for no one
else’s benefit but mine, why he does not want to sit on the 4
June if we do not complete matters
today.
Andrew
Miller:
I explained that, and it is on the record. It is
simply because I will be out of the country on Select Committee
business, as will the Liberal Democrat
spokesman.
The
Chairman:
It is slightly out of the ordinary but to
facilitate the working of the Committee, it would be helpful if the
Minister could make a brief statement. I discussed that with the
Opposition and with the Liberal Democrats and it will be a brief
statement that is open to challenge if Members so
choose.
The
Minister for Employment Relations and Postal Affairs (Mr.
Pat McFadden):
May I welcome you to the Chair,
Mr. Hancock? I should begin by congratulating my hon. Friend
the Member for Ellesmere Port and Neston on his success in bringing the
Bill to Committee stage. On Second Reading, I stated that the
Government’s position was that we do not support the Bill, but
share many of the overall aspirations of its promoter and its other
supporters. It is not the best vehicle for achieving such aims, but I
will say something about the Government’s view on these
issues.
The backdrop
to the measure begins with the draft European directive on temporary
and agency workers, which has been under discussion for some time in
Europe. The Government are engaged with the Commission and other member
states in trying to seek agreement on the directive. That route is the
best mechanism for dealing with the issue of temporary and agency
working. If we legislate through the Bill or something similar, the
danger is that such legislation would be subject to change in the
relatively near future, should the directive become law.
Part of the
impetus behind the Bill has been the view that the directive is
unlikely to become law, and therefore we should legislate domestically.
However, at the meeting of the European Employment Council in December,
the Secretary of State for Business, Enterprise and Regulatory Reform
made it clear that the UK would continue to work with the European
Commission and other member states to try to reach agreement on the
directive.
A number of
issues in the directive remain open for discussion with regard to the
extent of equal treatment and where and how it should apply. We have
made it clear that from the Government’s point of view, the
current text on some of those issues is not satisfactory. Our proposal
tries to deal with those issues and to square this circle. The
directive is not only about the equal treatment of agency workers, but
about the liberalisation of the agency sector—something on which
the Bill is silent. That is an important part of the package at
European level.
The
Government’s proposal tries to take the issue forward. The
backdrop is a draft directive that allows flexibility for other member
states with different types of labour markets and different traditions
of engagement between unions, business organisations and social
partners on such matters. That includes draft derogations for certain
member states with specific institutions that relate to payment between
assignments, or the fixing of basic working and employment conditions
by collective bargaining for member states who use that labour market
model. The Government proposal is a carefully drawn alternative measure
underpinned by a bottom-line requirement to ensure an adequate level of
protection for workers. We seek to bring social partners together to
consult at a national level and to discuss basic working and employment
conditions to achieve the directive’s goal of fair treatment for
agency workers. That is important because it relates both to UK
conditions and European
measures.
The
Chairman:
Order. When I suggested a brief statement, I
implied that it should be brief. We have now embarked on to what could
be considered a Second Reading speech.
Mr.
Jonathan Djanogly (Huntingdon) (Con): On a point of order,
Mr. Hancock, will this statement be on the
record?
I urge you to draw your remarks
to a conclusion, Mr. McFadden, now that you have described
what has gone on. I will then invite members of the Committee to
comment. One or two Members have suggested that this has nothing to do
with the sittings motion, but I was endeavouring to help the Committee
get a feel for where the Government were going on the issue in order to
enable the debate to move forward in what I hope will be a progressive
manner. Mr. McFadden, I invite you to bring your remarks to
an
end.
9.45
am
Mr.
McFadden:
I appreciate your guidance, Mr.
Hancock. You have been extremely helpful in guiding me and the
Committee. The point I am trying to make is that the Government have
introduced a proposal to consider the issue of agency workers at a UK
level in a way that would fit with the directive and obviate the need
for us to legislate on the issue twice, which is the
danger.
On
the sittings motion, I believe that we are meeting in Committee at the
same time as discussions are taking place. A conclusion has not yet
been reached, and our social partners have not yet agreed to take part
in the process. The Government see significant potential in the kind of
process that I have set out. It would involve our social partners and
would have the advantage of our not having to return to legislate on
the same issue after these deliberations have
concluded.
Mr.
Djanogly:
I shall want to speak later to the sittings
motion, Mr. Hancock, but on this point, if that is the case,
why do the Government not suggest that, or table a motion to the effect
that, the Committee adjourn until such time as the discussions in
Europe have been
completed?
Mr.
McFadden:
The sittings motion is in the
hands of my hon. Friend the Member for Ellesmere Port and Neston, but I
point out to the Committee that the danger of our reaching a conclusion
on a domestic Bill such as this is that we would have to return to the
issue. That is why the Government believe that a UK proposal that
reflects the directive is the best way to deal with the
matter.
Adam
Price (Carmarthen, East and Dinefwr) (PC):
The Minister mentioned the discussions happening at
EU level. Could he say a little about the discussions happening in the
UK between trade unions and the Government? To what extent do they have
a bearing on the
issue?
The
Chairman:
Order. We must be careful not
to resurrect the Second Reading debate and go back over old ground. I
understand the question, Mr. Price, and I hope that the
Minister will briefly answer it. Then we will move on quickly to other
Members who want to comment on the sittings motion and on what the
Minister
has said. To be fair to the Bill, we need to do it in that way. The hon.
Member for Ellesmere Port and Neston, who is presenting the Bill, has
to think long and hard about what has been said by Members, which might
not be
unhelpful.
Mr.
McFadden:
Thank you, Mr. Hancock; again, I take
your guidance. The discussions are ongoing. They are active, but they
have not reached a
conclusion.
I
do not need to detain the Committee further. I have set out the
Government’s broad proposal, which I reassure the Committee is a
live proposal. We believe that it is the best way to deal with the
issue. I have spoken about it today to inform members of the Committee
about it before we begin consideration of the
Bill.
Mr.
Knight:
On a point of order,
Mr. Hancock. I do not think I have ever served on a Bill
Committee where the Minister has been so critical of the sittings
motion. It appears that the Committee has a dilemma. The sittings
motion has been moved, yet the Minister says that it would be better to
delay our deliberations. Moreover, in the light of the fact that the
House has not yet determined the money resolution, would you be
prepared to accept a manuscript amendment to the sittings motion,
Mr. Hancock, to deal with the difficulties that have arisen
during the
debate?
The
Chairman:
It is up to the Committee to
decide how to deal with the sittings motion. Members should think long
and hard about what has been said and the advice that has been given. I
do not believe that it would be right for the Chairman to accept a
manuscript amendment at this stage; that is the advice that I am
getting.
We must now
discuss the sittings motion and the implications of what the Minister
has said. I urge the hon. Member for Ellesmere Port and Neston to think
long and hard about the
matter.
Mr.
Knight:
Further to that point of order, Mr.
Hancock. Will you advise the Committee where it would leave us if we
negatived the sittings motion and the Bill therefore had before it no
sittings
motion?
The
Chairman:
Were that to happen today, the Member in charge
would have to facilitate a further meeting of the Committee to enable a
further sittings motion. That is in the hands of the Committee. It is a
bit messy, I am sorry to say, but an inevitability of that would be
that we would have to find another date, set the Committee again, and
the Member would have to come forward with a further sittings
motion.
Mr.
John Heppell (Nottingham, East) (Lab): Further to that
point of order, Mr. Hancock. If the sittings motion is
agreed to today, would it be possible to amend it at a future
meeting?
Mr.
Djanogly:
Thank you, Mr.
Hancock, and good morning. I appreciate that this has been a tough one
for you because in some ways, we are continuing a conversation that
started rather late last night, as you have probably
gathered by now. We addressed this issue then—or, more to the
point, I addressed it. I pointed out clearly the dilemma and the
contradictions in the Government’s position on the timing of the
negotiations on the directive in Brussels, the ongoing negotiations
with various parties to the Bill, and the Government’s rather
weak and failing earlier attempt at a compromise—setting up a
commission between the unions and business, which seems to have been
going rather pear-shaped. The net effect is that three different
processes are
running.
I
am pleased that the timing implications are now at least being admitted
by the Government, which I do not think they were by the Minister last
night on the Floor of the House. At least this morning he admits that
this process is undermining the Government process that is running in
Brussels, and that we need to address that. I am not entirely sure that
the debate so far has addressed that. In some ways, the situation is
looking even more confusing than ever. The only rational outcome that I
can see of what the hon. Member for Ellesmere Port and Neston and the
Minister had to say is that we defer the Committee until we know what
is going on in Europe, and until the Government have heard from the
committee they set up to take soundings on this issue. Until that
happens, I think that we must oppose the motion. I hope that the
Government see sense on this and support us. Yes, we will discuss this
issue, but we do not want contradictory Bills running through the
House. If anything, that would create a huge headache for the
Government.
There is a
difference between the positions of various Government Members. The
Minister made a case for what is happening in Europe, and talked about
some key issues for employment in this country. If anything, the
Government should make a statement on the Floor of the House, not an
aside in a sittings motion debate in a Committee. He may therefore wish
to consider whether he should make such a statement on what is a very
important issue for British business. On the other hand, the hon.
Member for Ellesmere Port and Neston seems to be using this as leverage
for the union rebels’ position, keeping it hanging over the
Government’s head just in case. Given the seriousness of the
issues we are discussing, that is unacceptable and I ask him to
reconsider. Let us face it—all parties are in agreement that the
Bill should not be passed. I therefore ask that he reconsider and that
the Committee be
adjourned.
I
find myself in agreement with the hon. Member for Huntingdon. Given
what we have heard so far, it would be best on all sides if we deferred
the Committee stage. I understand the strength of feeling among Members
on the Labour Benches who have striven for a long time for this Bill,
which they consider would rectify an inequality that exists for agency
workers. It is important that they have their say, even though I and
Conservative members of the Committee will not necessarily subscribe to
the view that it is an inequality. However and as the Minister said,
all three parties, in the main, do not support the Bill. The Government
are engaged on European legislation that duplicates the work of the
Committee, and on Second Reading on 22 February the Minister said that
he would create a commission with the TUC and the CBI to take the issue
forward. We are not trying to ditch the Committee stage, but it would
help if we applied a
more appropriate time frame to the Bill. That is why deferment of
consideration would be appropriate at this stage, and for the benefit
of
all.
Mr.
Knight:
I join others in welcoming you to the Chair,
Mr. Hancock. I make no criticism of the hon. Member for
Ellesmere Port and Neston for exempting 4 June; I was grateful for his
explanation, and one can understand why he does not want the Committee
to sit on that date. However, I found it bizarre that he went on reveal
that if the House took a negative view of the money resolution, our
deliberations today might be in vain because he would have
substantially to amend the Bill. For that reason alone, we should not
proceed with today’s sitting. The Minister then gave other,
perhaps even more weighty reasons for doing so when he referred to
discussions taking place
elsewhere.
I
understand the attitude of the hon. Member for Ellesmere Port and
Neston—the Bill is his baby and he wants to get on with
it—but it is incumbent on the Committee to take a more objective
view and to ask, “What is the best way to proceed?” I do
not want to deny the hon. Gentleman a Committee stage, but I would
prefer it to take place after we know the view of the House on the
money resolution and after the Minister has concluded at least some of
the negotiations that are taking place, so that he can tell us what the
position is, which hopefully will crystallise in the near future. The
more that I hear the promoter of the Bill and the Minister, the more
there is an overwhelming case for not proceeding
today.
The
Chairman:
In the absence of anyone else indicating a wish
to speak, I invite the hon. Member for Ellesmere Port and Neston to
respond.
Andrew
Miller:
The difference between us is somewhat academic.
The Conservatives indicated, I think, last night that they intend to
oppose the Bill hook, line and
sinker.
Andrew
Miller:
So I am correct on that. I intend to get the Bill
to Report and Third Reading stages by the fifth of the six Fridays
available for private Members’ Bills. The right hon. Member for
East Yorkshire knows the score on that
well.
10
am
We could
conduct the debates slowly and steadily through the various clauses,
with the possibility that an agreement is reached between the
Government and the social partners prior to the Bill coming back to the
House from the Lords, and that we are in a position to say that we do
not need it. Alternatively, the Bill could come back from the Lords
with no agreement having been reached—then, the position would
be that the express will of the House on Second Reading was that we
need the Bill. That is the logic of the position that I have
adopted.
I
am hopeful that we can make progress. The hon. Member for Huntingdon is
absolutely right that three processes are on the go simultaneously.
Whatever happens with the discussions in Europe, there has to be
domestic legislation—either a directive emerges, or the
Government simply abide by their commitment to addressing the
problem. If I have understood the hon. Gentleman’s position, he
will oppose such legislation, full stop, so we know where we
stand.
Mr.
Djanogly:
We will look at the legislation as put before
the House at the time. We are now addressing the hon.
Gentleman’s Bill, which we will
oppose.
Andrew
Miller:
I hear what the hon. Gentleman says. He is clearly
on the record as being opposed to agreeing to equal treatment of that
class of
workers.
Mr.
Djanogly:
The hon. Gentleman must be careful about putting
words in my mouth. I will say that the Conservative party is against
the proposed European directive in its current
form.
Andrew
Miller:
I do not seek to put words in the hon.
Gentleman’s mouth, but he ought to reflect on what he said last
night.
Our
position is that changes could occur, because of changes in Government
and in the strategy being adopted elsewhere in Europe. However, the
Government are committed to addressing the problem—with or
without
Brussels.
Adam
Price:
The draft directive has been
there for four years. Does the hon. Gentleman not agree that if we wait
for agreement at European level, we may be waiting for ever? That is
why his motion is so important, and why the Committee should get on
with the work of putting something on the statute
book.
Andrew
Miller:
I agree entirely with that view.
The delay in delivering the necessary change—the Government have
been blamed for some of the reasons for that, and other Governments
have been blamed for others—resulted in my introducing the Bill.
It is a perfectly modest Bill, which falls within the scope of private
Members’ legislation. It is not seeking to rewrite all
employment law and affects only a small group of workers, who,
nevertheless, constitute a vulnerable group; exactly who we will
discuss as the Bill
progresses.
With those
observations in mind, I ask the Committee to support the sittings
motion as
it stands.
Question
put:—
The
Committee divided: Ayes 7, Noes
6.
Division
No.
1
]
AYESNOES
Question
accordingly agreed to.
Resolved,
That,
if proceedings on the Temporary and Agency Workers (Equal Treatment)
Bill are not completed at this day’s sitting, the
Committee do meet on Wednesdays (except for Wednesday 4th June)
when the House is sitting at half-past Nine
o’clock.
<++++>
Clause 1Equal
treatment of agency
workers
Lorely
Burt:
I beg to move amendment No. 1, in clause 1, page 1,
line 2, leave out ‘, or employment
agency,’.
I had
wanted to table an amendment to deal with the lack of a definition of
“temporary worker” in the Bill, and thus to leave out any
reference to the term. I have been unable to do so because such a
description is part of the long title, but I will table an amendment of
that nature in the future. A “temporary worker” could be
a synonym for an agency worker, in which case it is not required, but
it could be something else, such as a worker supplied on secondment by
an employer to a client. It could be a temporary worker engaged
directly by the employer, but it is difficult to make progress on a
Bill when we do not know what the reference to “temporary
worker” means. I should therefore be grateful if the hon. Member
for Ellesmere Port and Neston would explain what he means by a
temporary worker as that may enable us to make progress on the
Bill.
This
amendment would leave out the reference to “employment
agency”. That expression is not appropriate and it is an example
of the confused thinking that unfortunately is found in the Bill.
Employment agencies find employment for employees with employers. They
do not employ workers, so how we can compare whether they have meted
out less favourable treatment in employment when the relationship
between themselves and the worker ceases when the worker has the
job?
Mr.
Djanogly:
I am also unsure why employment agencies have
been included in the provision. Under the definition in the Employment
Agencies Act 1973, an employment agency provides services for the
purposes of finding individuals employment or of supplying employers
with employees. When that service is being carried out, the individual
seeking work has no contract with the employment agency. It therefore
makes no sense to compare the treatment of the said individual by the
employment agency with a person who is employed under contract as a
direct
worker.
Amendment
No. 2 is a strike-out provision with which we agree, but we consider
that it should be discussed in the context of the clause as a whole. I
therefore intend to include it in my comments on the clause stand part
debate.
Andrew
Miller:
This is an important amendment, and I hope to
explain in a few moments why it should be opposed. It would leave many
unprotected, because only employment businesses would be covered. The
previous Bill on the same subject that the House looked at last year
was confined to employment businesses, but it is not entirely clear
from the record why that was the case. These businesses employ workers
on a temporary basis for an end-user, so it follows that an employment
business is responsible for paying their employees. Colleagues will
remember that on Second Reading I dealt with an example of exactly that
circumstance from Calor Gas, where two people had been employed as
temps for 12 and eight years respectively.
Confusingly,
the employee of an employment business is often referred to as an
agency worker. An employment agency will introduce a work seeker to a
hirer or end-user. The hirer may take the work seeker on with a
permanent contract as an employee at the outset and pay a fee for that
introduction. There is a reputable agency in my constituency that
prides itself in doing just that: seeking to place people into
temporary situations with a view to planning their progression into
permanent employment with that employer. That is a welcome approach by
that agency, and fees will be paid for that
introduction.
Lorely
Burt:
I am trying hard to follow exactly
what the hon. Gentleman is saying. The idea of permatemps is very
welcome, and it is one that many employment agencies use, as he has
just mentioned. However, at the same time, he is encompassing within
the net all employment agencies, whether or not they supply temporary
workers, so I am still concerned that employment agencies who have
nothing to do with temporary workers will fall within the compass of
the
Bill.
Andrew
Miller:
That is precisely why I referred to the example I
gave on Second Reading regarding Calor Gas, when it transpired at the
closure of the depot that two people had been employed through an
agency for 12 years and eight years respectively. I am sure that the
hon. Lady, in tabling her amendment, is not seeking to justify that
kind of employment practice.
Lorely
Burt:
Indeed, not. I hope that the discussions between the
Government, the TUC and the CBI will result in some sort of resolution
for the workers that have been referred to as permatemps. Their status
should really be that of employees. However, that is not what we are
referring to
here.
Andrew
Miller:
The hon. Lady is right and wrong simultaneously. I
understand where she is coming from in relation to certain categories,
and it may be that the scope that is set out later in the Bill for
defining categories of workers through secondary legislation could be
finessed so as to take on board that legitimate concern and to address
some of my observations at the same
time.
Lorely
Burt:
I am grateful, because the hon.
Gentleman is being very patient with me. Does he agree that it is not
necessary to include the term “employment agency” in the
Bill because we can finesse temporary agency in definitions to include
temporary staff who are then taken on as
employees?
10.15
am
Andrew
Miller:
I cannot see the merit in doing
what the hon. Lady says. I would rather do it the other way round and
ensure that all categories can be encompassed by the Bill, and that any
class of employee who should not be covered by our attempts to address
the needs of vulnerable people in difficult situations is covered
through secondary legislation allowing groups to be
excluded.
An
agency workseeker might be required on a temporary or fixed-term basis,
and the hirer might pay the agency, on an hourly basis, a proportion of
what is passed on to the worker. In addition, a contract between a
worker
and an agency often states specifically that the worker is not an
employee of the agency and that the agency does not guarantee work.
There will be no contract between the worker and the hirer in most
cases.
Those
circumstances are incredibly unsatisfactory, and while it is feasible
to identify areas, as the hon. Lady has done, in which one might
question the need to use an all-embracing approach, as I have sought to
do in the Bill, it would be inappropriate at this stage to exclude any
category.
Philip
Davies (Shipley) (Con): I am grateful to
the hon. Gentleman for giving way because I am becoming confused. I
certainly support the points made by the hon. Member for Solihull. Is
not there a distinction between employment businesses that employ
temporary workers and then place them with specific companies, and
employment agencies that simply point people in the right direction of
a post and have no employment for them? I do not understand how on
earth there can be a requirement on employment agencies when they have
nothing to do with the
employment.
Andrew
Miller:
That is because, as I tried to explain earlier,
that simple definition does not hold because not all employment
agencies are like Jobcentre Plus. They are not just placement agencies,
and therein lies the difficulty. I understand what the hon. Gentleman
is saying about people who are appointed to a temporary or permanent
job when the agency no longer has any responsibility for them, other
than perhaps to collect a one-off fee. That category of person is not
the same as the category that is appointed through an agency and
continues to have a daily relationship with the agency. The categories
are different and both can come through employment agencies. There is
confusion about what happens in the
marketplace.
Philip
Davies:
But does the hon. Gentleman
accept that without the amendment his Bill would cover all those
businesses, irrespective of where they are, and would put unnecessary,
burdensome and unfair regulations on
businesses?
Andrew
Miller:
The Bill would put no burden on someone who placed
an employee in a temporary or permanent post and no longer had a
relationship with them after collecting a one-off fee. I do not think
that it would have any bearing on them, and it would certainly not be
burdensome. If they were on a nice little earner, however, by
collecting money from their relationship with that employee for a
period of time, they ought to be covered. Some categories of agency
could fall within the scope of the Bill, but others act in the same way
as Jobcentre
Plus.
Adam
Price:
In a nutshell, is the hon.
Gentleman’s fear that the distinction between an employment
agency and an employment business could be used by unscrupulous end
users as a means of avoiding the requirements of the
Bill?
Andrew
Miller:
That is exactly correct. It is incumbent on
Parliament to create definitions that will work. It is easier to
exclude people later than to return to the
House and say, “We did not get it right, because we did not
include a category of employee.” We need to cover all categories
that might be
involved.
Philip
Davies:
I am further confused. The
clause covers employment businesses and end users. The amendment would
simply remove employment agencies, so it would not reduce or diminish
any responsibility on end users or employment businesses. It would
merely remove the anomaly of including employment agencies that have
nothing to do with the employment of the people
concerned.
Andrew
Miller:
I do not know at what point
either of us will get stamped on for repetition. I thought that I had
just responded to that point. An agency might use part of its business
to provide permanent or temporary work to people with whom it has no
further contractual relationship, and another part to place people with
whom it has a continuing financial relationship. I do not think that I
can be any clearer than that, and that is why I urge the Committee not
to accept the amendment.
The discussion has been useful,
and I take the point of the hon. Member for Solihull that we need to be
cautious and ensure that we get the definitions right, but as I
indicated to the hon. Member for Carmarthen, East and Dinefwr, my
preferred route is to start with all-encompassing definitions from
which we exclude groups, rather than having to return to Parliament to
build a
list.
Mr.
McFadden:
The debate has highlighted the importance of
definitions. As far as I can see, the debate about fair treatment for
agency workers has been focused on people in temporary placements who
work alongside permanently hired staff. There is perceived injustice
and unfairness. There are some confusing terms because while we talk
about agency workers and employment agencies, we also talk about
employment businesses. The type of business that conducts a three-way
relationship among the supplying organisation, the hiring end user and
the worker in between is often an employment business, whereas
employment agencies can include organisations, usually called
head-hunters, that are engaged in the recruitment business, but in a
different way. This is about having a client group of businesses and a
client group of individuals, and matching up the two for the purposes
of permanent employment.
As I understand my hon.
Friend’s Bill, its aim is to legislate for equal treatment for
those hired on a temporary basis, which can extend for longer than
would normally be considered a temporary placement, and permatemps, as
described by the hon. Member for Solihull. We are all concerned about
people who have been engaged in placements lasting for years and years.
On any normal understanding of the term, they would be regarded as
permanent, but they do not have the status, protection and rights of
permanent workers. That is somewhat different from someone who might be
filling in on a sort of seasonal basis or to cover for short-term
leave, or perhaps just working for events where there is a build up
over a significant period although the event itself might last only a
few days.
The first
question that we must ask is what are we trying to legislate for. My
understanding, both of the European directive and my hon.
Friend’s Bill, is that there is an attempt to legislate for
temporary placements and people who are covered by that. We will go on
to
have many discussions about qualifying periods during our consideration
of the Bill, but we must start by saying that we are talking about
people who are placed on a temporary
basis.
Mr.
Djanogly:
The Committee might be interested in the fact
that as far as I can find out—I am prepared to be proved
wrong—the Bill does not include a definition of a temporary
worker.
Mr.
McFadden:
This is the heart of what we
are discussing. If the Bill covered the activities of head-hunters, it
would take us into a new field. It is one thing to try to regulate and
legislate for the pay relationship—essentially we are talking
about the pay relationship—between temporarily placed agency
workers and permanent workers whom they work alongside. That in itself
may be difficult, and sometimes there are no permanent workers working
alongside. There is a difference between those people and those who are
placed in a permanent post. I think it would take this legislation into
a whole new area if we
attempted—
Adam
Price:
What about the construction industry, in which
there are agencies that recruit people who are technically
self-employed? They are not employed by the end user or the agency.
They have many of the characteristics of employees—they have set
hours and their tools are provided—but the difference is that
they have lower workplace rights than employees working side by side
with them on the same construction site. That is why employment
agencies should be kept in the
Bill.
Mr.
McFadden:
The issue of self-employment
in construction is often raised with the Government. Such people may or
may not be supplied by employment agencies. There are a whole series of
Inland Revenue issues associated with the question the hon. Gentleman
raises, but I am thinking of people who are placed in what we would
normally regard as permanent jobs. The point I am making is that if the
Bill covers—it appears that it does given what my hon. Friend
the Member for Ellesmere Port and Neston said, although that is
unclear—the activities of head-hunters who place people in
permanent jobs, that would take us into a whole new field of
legislation, as that is certainly not covered by the directive. I am
not sure whether it is my hon. Friend’s intention to go beyond
the directive, but if it is not, he might need to look again at the
issue so that whatever differences we have, we can at least be clear
that we are talking about people who are placed in temporary posts,
rather than the activities of head-hunters. If he does not wish to
include head-hunters, perhaps he might outline that and suggest how he
will deal with the definitions to ensure that the Bill does not
unintentionally stray into that
area.
10.30
am
Mr.
Heppell:
I am becoming increasingly
confused. I think I understand the difference between an employing
business and the end-user and some employment agencies, but if an
employment agency is of the sort that the Minister describes and might
head-hunt and so on, how would the Bill affect it anyway if the
provision is kept in?
Mr.
McFadden:
The fear is that the inclusion of both
employment agencies and employment businesses in the definition would
affect such
agencies.
Mr.
Heppell:
What would be the effect on employment agencies?
If an agency does not have any employment issues, there is no problem.
It is not going to happen.
Mr.
McFadden:
The concern is that the
unintentional effect of the Bill could be that we imposed on
head-hunters an ongoing relationship, in terms of equal pay and
treatment, between those that they place and other permanent staff in
the organisation in which they were placed. That has never been the
intention of the European directive, which has always focused on
temporary workers. I do not wish to put words in the mouth of my hon.
Friend the Member for Ellesmere Port and Neston, but I do not believe
that it is his intention to do so here either. The provision as it is
drafted could stray into that area, and if that is not his intention,
my question to him is how would he deal with
that.
Mr.
Heppell:
It seems to me that if the
employment agency has no contractual relationship with the workers in
the first place—that is the sort of agency that the Minister is
talking about—the Bill would not apply. The purpose of including
employment agencies is to pick up those employment agencies that have
some sort of contractual relationship with the worker and to ensure
that employing businesses do not have a loophole whereby they can say,
“Oh, we’re an employment
agency.”
Mr.
McFadden:
I understand my hon. Friend’s point, but
elsewhere in the Bill there is talk of joint and several liability
between end-users and employment agencies for infringements of the
Bill. Although he is right to say that our normal understanding would
be that there is no ongoing relationship between the head-hunter and
the person that they place in a permanent post, I am not sure that the
Bill clearly excludes those head-hunters from its reach. Whatever other
differences there are between us, I hope that my hon. Friend agrees
that we should focus the discussion on people who are placed in
temporary posts, however they are defined.
It is surely not our intention
to start legislating for equal pay, perhaps unintentionally, in the
field of head-hunters and permanent placements. Whether the amendment
is the right way to deal with that, or whether my hon. Friend the
Member for Ellesmere Port and Neston wishes to table his own amendment
is a matter for him to consider. Both the draft European directive,
which serves as the backdrop to the Bill, and any discussions around it
have always focused on temporary agency workers. It has never been the
intention to legislate in a way that would affect the recruitment
industry as a whole when it places people in permanent posts.
Definitions are important, but
I am not sure that they are clear at the moment. At the least we should
ensure that the Bill focuses on temporary agency workers, which I
believe is its intent given what it says in its long title. Whether the
definitions do that is at least open to
question.
Mr.
Knight:
I agree with the hon. Member for
Ellesmere Port and Neston when he says that we need to get this right.
This is not a debating society; we are legislating. I share some of the
concerns that the Minister has expressed and the concerns expressed by
my hon. and astute Friend the Member for Shipley. It seems that the
provision that we are now being invited to support goes far wider than
perhaps the hon. Gentleman intended and would indeed include
head-hunters.
When
I was studying law, to earn extra money, I undertook part-time work
with an employment agency that dealt exclusively with the entertainment
sector. It provided comedy acts as well as musicians and bands for
venues. Occasionally, bands asked it to supply temporary musicians when
a musician was ill. For example, the late Syd Lawrence had a
large—I think 35-piece—orchestra and, occasionally, if a
trombonist fell ill, an employment agency dealing with musicians would
be asked to send a musician to deputise. Invariably in my experience,
in that scenario, the dep-musician was paid less than the permanent
members of the
band.
It
seems that the Bill would go into the entertainment area in a way I am
sure that the hon. Member for Ellesmere Port and Neston did not intend.
If an employment agency dealing with musicians supplied a dep-musician
to a band on a lower salary, the Bill would enable that deputising
musician to sue the employment agency because the band leader did not
pay him same as a valued and perhaps long-term member of the orchestra.
For those reasons, the hon. Member for Solihull is right to seek to
remove from the Bill the inclusion and encompassing of employment
agencies.
Adam
Price:
If the Bill is passed, it will be
illegal for the end-user to pay the lower salary to the temporary
worker in any case. Therefore, would it not be right to ensure that
employment agencies were aware of that and that they did not enter into
any kind of relationship with an end-user that was seeking to do
something against employment
legislation?
Mr.
Knight:
That is all very well and it
probably would be reasonable if we were discussing staff who were
employed as cleaners given that cleaning a floor is the same job
whether someone has been there two or three years or two or three
weeks. But applying that same rule where we are dealing with artistic
ability and talent would be oppressive in the extreme. It would be
saying, for example, to a trumpeter of the ability of the late Harry
James or the late Eddie Calvert that they could be paid only the same
as the most mediocre trumpeter in an orchestra. That goes against the
whole history of show business. To win wider support for the Bill, the
hon. Member for Ellesmere Port and Neston has to get over the fact that
the clause is too wide. It goes too far.
Andrew
Miller:
I understand where the right
hon. Gentleman is coming from, particularly as we now see the genesis
of MP4. At the time he is talking about, a zero-hours contract
essentially provided for him to slot in to make up the numbers in a
band from time to time when someone was sick. Had he decided to take
the more radical line of some of his colleagues on MP4 and tried to
recruit people to the Musicians Union, or some such organisation, he
could legitimately have been sacked for doing so as he had a zero-hours
contract. That
problem goes back to 1983, which perhaps I will tell the Committee
about, if I catch your eye, Mr.
Hancock.
Mr.
Knight:
That is a totally different point. I am not saying
that temp musicians who work on a temporary basis should have no rights
at all, but there is a justifiable argument for paying some musicians
in a band or orchestra more than others, because of the talent that
they bring to that entertainment unit.
Jim
Dowd (Lewisham, West) (Lab): There is a contradiction
here. If we were talking about the general hierarchy of an orchestra,
we could understand that point. However, if I have understood the
circumstances outlined by the right hon. Gentleman, we are talking
about circumstances where, if someone was ill or indisposed, and
someone else was needed to take their place at short notice, that
person would be obtained from an agency. Surely, if that person was not
up to the skill or standard required, they would not be an adequate
replacement. The thrust of the Bill is that where people are of similar
skills and abilities, one should not be disadvantaged simply because
they acted in a temporary capacity, compared to those who are there
full time. It is not a question of comparative skill across the
piece.
Mr.
Knight:
That argument cannot apply when one looks at the
entertainment industry. There will always be situations where someone
is of exceptional talent and is paid, because of that talent, to remain
in a band or orchestra. During a period of illness, the orchestra
leader is willing to carry on engagements, perhaps with a slightly
reduced ability in his band, but all he needs is a replacement musician
who can play in tune and read music. He may still wish to maintain the
higher salary for the permanent member of the band who is ill. What is
wrong with that? Why should he or she not be allowed to do
that?
Philip
Davies:
I agree entirely with my right hon. Friend. Does
he agree that in relation to the amendment, even if one accepts the
arguments given by the promoter of the Bill, the issue is about whether
it is the end-user who should be held responsible for ensuring that
terms and conditions are met, or the employment agency that merely
signposted the person into the job? Even with the amendment, the
end-user would still be included in the clause; it would merely take
away any responsibility from the employment agency that does not
actually employ them.
Mr.
Knight:
That is a very good point. The amendment moved by
the hon. Member for Solihull is not perfect, but it is a step in the
right direction. That is why I indicated my support. My hon. Friend is
right. In the scenario that I have described, the Bill would mean that
the bandleader would be legally responsible, as would the entertainment
agency that supplied the temporary musician. Once his two or three-week
engagement was over, the temporary musician could then sue the
bandleader for discrimination under the Bill, and sue the agency that
provided the job. That is not right, and I would like to think that the
hon. Member for Ellesmere Port and Neston did not intend that scenario
to be covered by the Bill.
Mr.
Heppell:
For a moment I thought that
these circumstances were the exception that proves the rule, but the
music and entertainment industry is different
from most other things. However, one thing is
similar. The point is that if somebody was at lower level, the
bandleader might want to carry on with what would probably be a
different format—if there was no Eddie Calvert to do the solos,
it would be a different show. Under those circumstances, if he employed
someone else directly instead of going to a temporary agency and did so
on a lower salary, there would be no conflict. We need to consider if
there will be a difference if someone is employed directly or on a
temporary basis because they should be treated the same. If the
intention of the bandleader was to employ somebody directly on a lower
salary, the right hon. Gentleman could legitimately justify what he
says about someone below standard being paid less on a temporary
basis.
10.45
am
Mr.
Knight:
These interventions show that if
the Bill goes ahead in its present form, the whole subject will become
a lawyer’s paradise. If the Bill looks as if it will get on the
statute book, perhaps I should renew my practising certificate because
I can see dispute after dispute
arising.
Miss
Julie Kirkbride (Bromsgrove) (Con): My right hon. Friend
raises an important subject. Perhaps we should consider a less
glamorous, more straightforward form of employment than the one he
clearly knows a great deal about, such as teaching. Let us consider the
example of someone taking over from a teacher who had been at the
school for many years, and who was on the enhanced salary offered by
the Government to encourage good teachers to stay in the classroom.
Would it be reasonable to employ someone who might have just come out
of college to teach that class for that term, at the same enhanced pay
rate that the teacher who was destined to teach the class for that
academic year would have received?
Mr.
Knight:
I thank my hon. Friend for her intervention. The
example she gives is more difficult to deal with because it could be
argued that clause 1(2) addresses that issue, whereas the music
industry would be caught by the Bill, which would lead to a lot of
difficulties. Everything is capable of being resolved, and I would be
much happier if the hon. Member for Ellesmere Port and Neston said that
he would accept from me an amendment to exclude the entertainment
industry from the Bill in cases where the differentials relate to the
circumstances I have
described.
Andrew
Miller:
I understand the right hon. Gentleman’s
concern, but clause 1(2)(b) states that the provision applies only
if
“the treatment is not
justified on objective
grounds.”
He
is quite right: the example of the measured capacity of a teacher or a
nurse could easily be covered by that. Some of the examples that he
gave related to subjective judgments about artistic value;
nevertheless, the training, skill and earning capacity of the musician
are objective measures that could be used. How does he separate his
example of an arts teacher from an artiste in a
band?
Mr.
Knight:
This is a difficult area, and
that is why my hon. Friend the Member for Huntingdon got a bit excited
when I said I would be less unhappy with the Bill if it excluded
entertainment, to which he said sotto
voce, “Only entertainment?” The
entertainment industry will have real difficulties with the Bill
because musicians are paid not only in accordance with their merit, but
with the history of where the band, orchestra or group comes from. For
example, I know of cases where an act had minor national success in the
pop charts and then a member left. a new member was
recruited—sometimes through an agency—to take the place
of that person, but because the band was established before that new
member joined, they were put on a salary and received no percentage of
the profits from the sales of the record that was a hit before they
joined. It could therefore be argued that that person was treated
unfavourably, and that they have a right of action under the Bill and
could sue the employment agency for offering them a contract on terms
less favourable than those of any other band member, when their musical
ability may exceed that of other members of the band.
I hope that the hon. Gentleman
will reflect on the difficulties that the Bill would present for the
entertainment industry. I have used musicians as an example, but the
difficulties would apply to other areas such as circus acts and dance
troupes, which need to be exempt from these provisions. All that we
have before us is the modest amendment moved eloquently by the hon.
Member for Solihull, and as that is all that is on offer, I will
support
it.
Mr.
Frank Doran (Aberdeen, North) (Lab): There are a lot of
red herrings flying around. I was interested in the approach taken by
the right hon. Member for East Yorkshire, who is himself a musician of
some standing—a rock giant to some of us. He knows the industry
much better than I do, but I am old enough to remember Eddie James and
Eddie Calvert. They were never looking around for work and never used
anything other than their agents to get them prime appointments, not
fill-in appointments in a band. There may be problems with other
aspects of the music
industry.
I
want to talk about my experience in this field, which is mainly as an
employer. Like the right hon. Member for East Yorkshire, I am a former
solicitor. I no longer have a practising certificate, but he is
absolutely right that there could be lucrative work here. Often in my
practice, I had to use agencies. I always used registered employment
agencies, because I knew that there was at least some scrutiny of the
way in which such businesses operated. I always looked for businesses
that I thought were reputable, because I thought that that would give
me the best chance of getting the sort of person whom I
wanted.
Usually, I
needed people such as secretaries for short fill-in jobs. I do not
think that many solicitors were available from the employment agencies
that I used, but I know that agencies now exist in specialised areas
such as engineering, accountancy and law. All sorts of professions and
skills are now available in the market. The contract was between me and
the agency—I had no say in what the individual was paid. Very
few of them stayed long enough for me to find out what they were paid.
As I understand it, that remains the case.
I would not
have been interested in what is described in the Bill as “an
employment business” because I wanted something that had
scrutiny and a registered regulation process attached to it. The Bill
tries to deal with the sorts of agencies that come under less scrutiny,
and such businesses might come into that category.
However, that does not exclude employment agencies, the requirements on
which seem to have loosened over the past 20 or 30 years. The scrutiny
that used to be available when I was a practising solicitor in the
’70s and ’80s seemed to be quite a serious and onerous
requirement. I am not sure whether that is the case
now.
The
Minister was right to raise the point about head-hunters. My only
experience of working with a head-hunter came recently when working in
this place. I was on the interviewing panel for a very senior Official
of the House. Head-hunters were appointed, and as I recall, the House
was responsible for the advertising. The head-hunters’ job was
to scrutinise the people who applied, to put tentacles out to find
other people and to encourage people to apply. The result of that
process was selection by interview by a panel of people appointed by
the House, including Officers of the House; myself, representing
Members; and an independent person representing outside industry. The
contract with the head-hunting agency was simply to do the trawl and
the filter. The relationship with the person employed is between the
House and the individual, with a normal employment contract featuring
statutory terms and conditions and so on. I do not see why head-hunters
come into this process at all. The vast majority are employed to find
employees, not to act as an agency in the sense that I understand it.
That is quite a different situation.
Philip
Davies:
Head-hunters potentially come into the process
because of the definition of “employment agency” in the
Bill. An employment agency is a business that provides
services
“for
the purpose of finding workers employment with
employers”.
That is what
head-hunters do, and that is the definition of employment agencies in
the
Bill.
Mr.
Doran:
My recent experience, which I
admit is not profound or wide, is that the head-hunter is involved in
the search for the employee, but the employer makes the final choice.
That is the difference. In my view, head-hunters do not come within the
definition of employment agencies in the Bill. It is open to argument
because some head-hunters may operate
differently.
“finding workers
employment with
employers”.
That
clarifies the position, in that head-hunters find the individual, not
the employment.
Mr.
Doran:
I agree entirely with my hon. Friend. Such matters
are open to debate and argument, which is why we are here.
I believe
strongly that employment agencies should be included. If they are
excluded, there would be a route for disreputable business to get
underneath the terms of the Bill and to avoid the provisions that we
trying to implement. That would be unfortunate and it would completely
undermine the process. I am sure that we will have plenty of
opportunity to discuss later the serious problems facing those at the
lower end of the employment spectrum who do not get the rate
for the job, who operate under appalling terms and conditions,
and—going against one of the Government’s main employment
objectives: to improve the skills of the work force—who tend not
to be trained. We have a substantial cohort of vulnerable workers. If
removing
the legislation’s application to employment agencies drove a
coach and horses through that protection, I would be extremely
concerned.
Lorely
Burt:
All Members of the House have enormous sympathy with
exploited, vulnerable workers. The hon. Gentleman talked about
unscrupulous employment agencies trying to get underneath the Bill.
Does existing employment legislation not cover the activities of
unscrupulous employment agencies? Does he not agree that the problem is
not with the law but with its enforcement, and that the unscrupulous
agencies to which he referred are breaking the existing law, which we
need to enforce?
Mr.
Doran:
The hon. Lady makes a good point, but a huge amount
of money is invested by the Government to enforce, for example, the
minimum wage provisions. A lot of the exploitation that we are talking
about takes place under the radar. We need tougher measures to ensure
that existing regulations and legal requirements are met. The Bill is
part of that process, which is one reason why I support
it.
11
am
Mr.
McFadden:
I want to ask my hon. Friend to go back to what
he was saying about head-hunters. Does he accept that the Bill should
not cover head-hunters? That is a different issue from what we normally
talk about in the field of agency workers. Does he accept that if,
inadvertently, the Bill covered them, it would have to be
changed?
Mr.
Doran:
If head-hunters along the lines that I described in
my earlier comments were covered, I would be concerned. It seems to me
that they are not operating as employment agencies, but as agents to
find employees of a particular brand and definition. We can look at the
issue as the Bill
progresses.
Jim
Dowd:
Is it not the case with the
head-hunters that the commercial and contractual relationship is
between the potential employer and the head-hunting company? There is
no commercial relationship between the head-hunting company and the
individual identified for potential employment by the
employer.
Mr.
Doran:
That is exactly right. I thank my hon. Friend for
that. To repeat what I said earlier, I oppose the hon. Lady’s
amendment.
Philip
Davies:
It is a pleasure to serve under
your chairmanship, Mr. Hancock. I would like to start by
congratulating the hon. Member for Ellesmere Port and Neston for
getting his Bill to this stage, which is an achievement in itself,
particularly when opposed by all the main parties’ Front-Bench
Members. There will be plenty of time to discuss our fundamental
disagreements over the Bill as a whole, but this debate is to do with
the modest amendment moved by the hon. Member for Solihull, with which
I agree wholeheartedly. There are some fundamental disagreements about
the principles, and some of the comments we heard today were an example
of 1970s socialism of which Arthur Scargill would have been
proud.
I
would like to focus on the point about removing employment agencies
from the clause. We seem to have got ourselves into a bit of a muddle
over definitions and what would and would not apply under the Bill.
Although I oppose the Bill in its entirety, even those who support
the Bill and its intentions ought to reflect further on the
organisations they would be including. Following on from the speech of
my right hon. Friend the Member for East Yorkshire, which I thought
highlighted some of the issues particularly well, the hon. Member for
Aberdeen, North said that, in his experience,
musicians—certainly the top ones—did not have to go to
employment agencies to find work. They found work through their agents.
What struck me as a result of that remark was whether agents themselves
would be included in the definition of employment
agencies.
It is
important that we look at the definition of employment agencies, as
specified by the Bill. It states
that
“‘employment
agency’ means the business (whether or not carried out with a
view to profit and whether or not carried out in conjunction with any
other business) providing services...for the purpose of finding
workers employment with employers or of supplying employers with
workers for employment by
them”.
That is what
agents do when representing particular clients. They are finding
employment for workers with employment. Clearly, in the Bill’s
definition, the agents themselves would be included. However, the hon.
Member for Aberdeen, North was saying that that was nonsense, because
people found work through agents, as if they would not be applicable.
None the less, it strikes me that employment agencies would apply under
the clause, if we do not remove them from the
clause.
The definition
is helpful, because it makes it clear that it
is
“for the purpose of
finding workers employment with employers or of supplying employers
with workers for employment by
them”.
That
is perfectly clear. The employment agencies have nothing to do with the
employment of the people concerned, but are merely finding those people
jobs. At that point their relationship with them ends. That is
perfectly clear in the definition. What would strike me as bizarre is a
situation in which an employment agency, having done its
job—having found a worker a job with an employer, or an employer
a worker—would be left with an endless liability into the
future, lest at some point the end-user, the employer, decided not to
honour the terms and conditions for those entitled to them. Why on
earth should the employment agency have an ongoing liability when its
part of the deal has been done satisfactorily on behalf of both the
employee and the employer? The agency might do its bit perfectly well,
yet the Bill would leave it in limbo.
Mr.
Heppell:
In those circumstances, though—if the
employment agency had done its job to the satisfaction of the employer
and the employee—presumably the employee would not take action
against the agency. They would take action against the end-user who
broke the contract with
them.
Philip
Davies:
I am grateful for that helpful intervention,
because that is my point entirely. I do not accept the premise of the
Bill, but even if one does, the root of the solution to any particular
problem clearly lies with the end-user. Even with the amendment tabled
by the hon. Member for Solihull, clause 1 would still provide for
people to take the end-user to task.
The
point is whether the employment agency should be included all. Given
that the end-user is included and that redemption can be sought through
that end-user, it serves absolutely no purpose to list employment
agencies in the Bill. It will serve only to create uncertainty for
agencies. As the hon. Member for Nottingham, East said himself, it will
not make any difference for the
employee.
Mr.
Knight:
Has the hon. Member for Nottingham, East not
missed the point? If an aggrieved worker went to the hon. Member for
Aberdeen, North—let us say that he resumed his law practice in
Scotland, having lost his seat—the advice that he would get is,
“Your rights, sir, are not only to sue the employer but to sue
the agency. We think the employer may be short of funds or in financial
trouble, so we advise you to go to the agency first.” That is
what the Bill provides
for.
Philip
Davies:
My right hon. Friend is entirely
right. He has highlighted astutely the can of worms that we may be
opening. In fact, it may go further than that. The solicitor might say,
“Well, you might not want to upset your employer, because
that’s who you’re employed by. Rather than pursuing your
employer, who you don’t want to get on the wrong side of, why
not go for the employment agency instead? You’ve got no dealings
with them whatsoever. You’ve got nothing to lose at all by
having a go at them.” According to the Bill, the agency will be
just as liable as the end-user. The clause makes no difference between
them. The employment agency may end up being the one left in the firing
line, even though we on the Committee all seem to agree that the
employment agency would not be responsible at all for the situation in
which such employees found
themselves.
In
terms of the bureaucracy involved in recruiting people from employment
agencies, we might end up in a difficult situation. At the moment, an
employment agency can find somebody a job under terms and conditions
acceptable to both the employee and the employer. Under the clause, if
it transpires that some people in the firm are paid differently, the
employment agency, even if it had no prior knowledge of that, might
find itself liable for a problem that it could not have anticipated and
for which it was not responsible, even though the employee and employer
were both happy with the terms and conditions of recruitment at the
time.
If it
transpires further down the line that some people are being paid
differently, employment agencies might be held responsible for that
too. That could mean that in order for any employment agency to find
work for an employee, it would have to ask the employer to hand over
all files on the pay, terms and conditions of all the people who
currently work in the firm, to ensure that nobody it places in that
firm is being disadvantaged in any way. I used to work for Asda, which
employs between 120,000 and 130,000 people. It often took on temporary
workers at Christmas and Easter, when there is a bit of a rush on in
the stores. If employment agencies had to go through the rigmarole of
checking up on the pay, terms and conditions of all Asda’s
employees just to ensure that nobody would be disadvantaged by
comparison with anybody else who worked there, who on earth would want
to start up an employment
agency?
Ms
Butler:
Is that not in some respects the point of the
Bill, in the sense that the employment agency and
we, under the Equal Pay Act 1970, should be looking at transparency with
regard to the pay and conditions of employees to ensure that they are
paid a reasonable wage for their job? Is that not part of the premise
of the
Bill?
Philip
Davies:
I understand the hon. Lady’s point, but
that is where the difference lies. She is saying that people should be
paid a fair wage for their job, but that is not what we are discussing:
we are discussing whether people should be paid an equal rate for their
job. As my right hon. Friend the Member for East Yorkshire made clear,
there are many good reasons why people should not be paid equally for
their jobs. Many employers want, for example, to reward people’s
loyalty over long periods of time with higher pay, better terms and
conditions and longer holidays. That seems to be a perfectly reasonable
way to reward people who have been loyal to a firm for a long period.
The hon. Lady seems to be mixing up paying and treating someone fairly
with treating them equally, but there is a huge difference between the
two. Ensuring that people are not treated in a manner that is not equal
would put a massive burden upon employment agencies to find out huge
swathes of information before they could confidently place someone with
an employer, even though the employee was happy with their terms and
conditions at the
time.
Miss
Kirkbride:
I very much agree with my hon. Friend’s
argument, and it invites a question about how people could establish
the information that would protect them from any legal suit. They would
have no right to know that
information.
Philip
Davies:
Indeed, my hon. Friend makes a good point.
Obviously, much of that information might be covered by data protection
in the first place or might be commercially sensitive. For example, an
agency might provide workers for different firms within the same
sector, but a business should not really be expected to give out its
terms and conditions to an agency that might be able to pass that
information on to a competitor. We would open up a huge can of worms
simply by including employment agencies in the scope of the clause. The
hon. Member for Solihull was astute in spotting that potential flaw,
and that is why she is moving her amendment to make them
exempt.
We have many
fundamental disagreements about the principle of the Bill and its
practicalities, but even if one accepts the premise that people should
be given those rights, given the definition of employment agencies in
the Bill, I do not see how on earth any employment agency could end up
with a lasting liability for any unfair treatment when it is clearly
not their responsibility. Furthermore, that group would clearly include
head-hunters, as the Minister made clear, because their sole purpose is
to find workers for employers. That is clearly an unfair burden to put
on them.
The hon.
Member for Ellesmere Port and Neston pointed out that subsection (2)(b)
states that subsection (1) only applies if
“the treatment is not justified on
objective
grounds.”
As
my right hon. Friend the Member for East Yorkshire made clear, that
could be a lawyer’s gold mine, because there will be differences
of opinion on what constitutes objective grounds. The hon. Member for
Ellesmere Port and Neston, who I know to be a perfectly reasonable
man, might come up with a definition of objective grounds that is
perfectly reasonable. All of the members of the Committee might well
come up with their own definitions of objective grounds that are
particularly reasonable, but we are supposed to be setting legislation
that is clear cut and will give employers and employment agencies some
kind of certainty that what they are doing is fair. Simply having a
rather vague line that seems to have been thrown in at the last minute
to try to overcome any potential pitfalls by saying that the treatment
is not justified on objective grounds seems to offer no certainty for
employers or employment agencies to go about their legitimate daily
business.
If the clause is not amended in
the way that the hon. Member for Solihull proposes, the provisions
would be worse for employment agencies, who would have long-lasting
liabilities that they would not be able to control. It would be worse
for the employees, because I cannot imagine many people wanting to take
on such a potential liability, and therefore there would be far fewer
employment agencies to find people work with employers. I cannot
imagine many people wanting to take on such a potential
liability.
11.15
am
Mr.
Knight:
Although my hon. Friend and I have ongoing
objections to the Bill for other reasons, does he agree that it would
be far less objectionable if it excluded employment agencies acting in
the narrowest sense—in other words, those acting as mere
facilitators, with no ongoing contractual relations with the worker?
Philip
Davies:
My right hon. Friend is right in
the sense that the clause would certainly be a lot less objectionable,
which would make the Bill less objectionable. However, the Bill would
still be objectionable, albeit slightly less so. I go some way towards
accepting his point, but I would not want to mislead anybody into
thinking that accepting this rather modest amendment would suddenly
make the Bill all hunky-dory; the Bill would still be fatally flawed,
although slightly less so.
My right hon.
Friend does, however, make a valid point. As everyone has said, the
clause should not include head-hunters and those who simply pass others
on for a job and then have no further relationship with them. Everybody
has accepted that point. That is why I thought that the hon. Member for
Ellesmere Port and Neston made a useful distinction between employment
businesses and employment agencies. Even if we accept the amendment,
employment businesses would still be covered by the clause. Those who
still have an ongoing relationship with such businesses would therefore
still be covered, as would the end employer. The amendment would simply
remove from the equation those who do no more than find somebody a job
that they are happy about with an appropriate employer and who then
have no further dealings with that person. The amendment in the name of
the hon. Member for Solihull is modest, but it would improve the clause
considerably. I support it on that
basis.
Adam
Price:
It is a pleasure to serve under
your chairmanship, Mr. Hancock. It looks as if we might have
a very long summer ahead of us, although I fear that the hon. Member
for Shipley will never be satisfied—we shall see. As a member of
the only party represented on the Committee whose official policy is to
support the Bill, I think that I have a duty to say something at this
stage.
The hon. Member for Solihull
said that this was a probing amendment, and it has raised some
interesting issues.
Lorely
Burt:
This is not a probing amendment. Unless the hon.
Member for Ellesmere Port and Neston amends or withdraws the relevant
provision, I shall press the amendment to a
vote.
Adam
Price:
I am suitably admonished. I was trying to tempt the
hon. Lady in my direction, but it did not work.
Nevertheless,
the amendment has raised some interesting issues, and some of us may
not be as far from each other as we appear to be. I cannot speak on
behalf of the hon. Member for Ellesmere Port and Neston, but those of
us who support the Bill did not intend, for example, recruitment
consultancies working for investment banks in the City of London to be
caught in the net of the Bill. Although the workers they deal with
might now be vulnerable, given the way the economy is, they are not
vulnerable in the sense meant in the Bill.
The fear
expressed by several hon. Members—we are not lapsing into a
conspiracy theory—is that if the Bill were passed, some
employment businesses could reinvent themselves as employment agencies
or mask their employment business-related activities so that we ended
up with exactly the same circumstances. For example, there is the
construction industry scheme under which groups of workers are
recruited by employment agencies. They are technically self-employed,
and that allows the end-user to avoid giving them the same set of
rights and conditions that they would enjoy as direct
employees.
Adam
Price:
Casualisation provides huge advantages to
employers, and no doubt the hon. Member for Shipley is about to say,
“No bad thing
either”.
Philip
Davies:
The hon. Gentleman’s fear
that employment businesses will become employment agencies is
misplaced. This is not self-definition. It is not the businesses that
define what they are. The definition is in the Bill. The nature of the
service that businesses provide is covered in the Bill, and so the term
“employment agency” can be removed without any fear that
people will define themselves in a different
way.
Adam
Price:
Yes, but what I fear is a much
broader restructuring of the labour market, whereby people who may be
currently employed through employment agencies may be encouraged to
become self-employed on short-term contracts. Contracts would be
constructed to allow that to happen, as in the construction industry.
Some 20 per cent. of workers in the construction industry are
self-employed and recruited through employment
agencies. They do not work for employment businesses or the end-user.
They are vulnerable workers. In the terms of the Bill, they are
temporary agency workers. The Bill would allow us to protect those
workers, because it includes employment agencies under its
rubric.
The
right hon. Member for East Yorkshire raised some fair points in
relation to specific sectors. Concerns have also been raised in other
sectors where there are high net value employees—for example,
engineering and IT consultants. They are concerned that their
circumstances could be disadvantaged by the Bill because they have
secured advantages from flexible labour markets and casualisation. They
are highly skilled—many of them have a unique set of skills and
are in high demand—and it suits them to have flexible short-term
contracts. The situation is perhaps similar in parts of the creative
industries. One could argue that the lower the skill level and the
seniority level—even within the creative industries—there
is exploitation, in particular of younger workers at the
bottom.
We
need to be mindful that in some sectors and in some circumstances there
perhaps needs to be specific exemptions. We are not talking about
vulnerable workers but about workers with unique sets of skills. The
hon. Member for Ellesmere Port and Neston alluded to that. In economics
we refer to economic rent; even individuals have a unique value in the
marketplace. For example, it is almost impossible to compare
professional footballers like for like. The only way to do that is
through the marketplace, where a price is set for them. In certain
sectors, right at the top of key industries, we are talking about a
wholly different set of circumstances to those of vulnerable workers
who are exploited by disreputable employment agencies and employment
businesses. At this stage, it is better to have an expansive
definition, and if there are sectors and particular circumstances in
which it is clear that exemptions should be made, that can be done at a
later
stage.
Miss
Kirkbride:
The hon. Gentleman points up a difficult aspect
of the Bill, which is that there are many groups in very different
circumstances. There are people at the top of the pile, as well as
people who are undoubtedly exploited. Conservative Members accept that
there is a case in some areas. However, I can think of other groups,
perhaps women who have children, who could be seen as vulnerable
because—
It being
twenty-five minutes past Eleven o’clock, The
Chairman
adjourned
the
Committee without Question put
, pursuant to the
Standing
Order.
Adjourned
till Wednesday 14 May at half-past Nine
o’clock.
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