Before we begin the debate, I advise hon. Members that we are expecting a Division in the House within the next 10 minutes, upon which this debate will be suspended for 15 minutes to enable hon. Members to vote. I call Stewart Malcolm McDonald.
I beg to move,
That this House has considered the use of unpaid work trials at the outset of employment.
Thank you very much, Mr Hollobone; it is always a pleasure to see you in the Chair. Hon. Members will know of my longstanding interest in this issue, having introduced a private Member’s Bill on it after the 2017 election: the Unpaid Trial Work Periods (Prohibition) Bill. Unfortunately, and I hate to start on a sour note, my Bill was talked out by the Minister’s predecessor, the hon. Member for Burton (Andrew Griffiths), when he was in post. I am an optimist, however, and I am optimistic that the new Minister will drive us in a different direction, see the gravity of the problem, and bring forward the necessary legislation to prevent that exploitation from continuing.
There are many people—not just in this House, but outside it as well—whom I should thank for their input during my preparations for that Bill and for this debate, and during my long campaigning on the issue, but I will single out one campaign for mention: Unite’s “Better Than Zero” campaign. It has been at the forefront of not only challenging the use of unpaid work trials, but putting forward a credible alternative to exploitative work practices, with a particular focus on the hospitality sector. I encourage all hon. Members to support that campaign, particularly its hospitality charter.
I will outline exactly what is going on and why it is a problem that needs fixing. Unpaid work trials—the period between applying for a job and being given the formal job offer—are at the heart of what I want the Government to fix. I want them to fix the fact that that part of employment law is entirely unregulated, although I am sure the Minister will dispute that when she gets to her feet. There is a deficiency in the National Minimum Wage Act 1998, for which, in fairness, I do not blame Labour. Nobody saw it as an issue then and has not for the last 20 years, but it is a deficiency that needs to be fixed.
During my research for this debate and the preparations for my private Member’s Bill, many hundreds of people got in touch to give me their personal experiences of what it is like to take part in an unpaid trial shift. I myself did it when I was younger, as, I am sure, did many other hon. Members. Unpaid trials range from perhaps a couple of hours in a coffee shop or a hotel, for example, right up to the extreme end, with the most extreme that I have come across being a 40-hour working week, where people tried out for a job that they would not be paid for and had no guarantee of securing permanently.
I congratulate my hon. Friend on all the work that he has done to bring this important issue to the public’s attention. More than half of people know someone who has experienced an unpaid work trial or have done one themselves. Does he agree that that shows the scale of the problem and the abuse of workers that is taking place?
Indeed. Although there are no Government or trade union statistics on that, it is a problem that everyone knows exists, because we have either done it ourselves or know somebody who has.
Not only do people work—as in the case that I mentioned—for up to 40 hours without pay when trying out for a job, but we have the vicious situation of people being offered work trials for jobs that do not even exist. That can take the form of a job being advertised so a business can get itself through a busy period such as Christmas, or the wedding season in the spring time if the employer is a hotel. It can also be used to cover staff sicknesses. People are being taken advantage of when they are asked to come in and try out for jobs that there is absolutely no chance of them getting, because all the employer wants to do is cover shortages in their own rota.
I congratulate the hon. Member on securing the debate. He talks about some of the more extreme examples. He may be shocked to hear the experience of a constituent of mine. She had a seven-day unpaid work trial, but was also told that if she was subsequently employed and left within the first year of employment, she would have to repay the company for the cost of her training and her Disclosure and Barring Service check.
Rather unusually, I am blown away and have no words. I have never before heard of that kind of thing happening, but it does not surprise me at all. Imagine how dispirited and depressed that kind of situation leaves an applicant feeling, particularly if they have applied for job after job and have got nowhere, often with no feedback from those from whom they hoped to secure employment.
The hon. Gentleman has clearly outlined some worrying issues. I do not think anybody present would support somebody not being paid for a one-week work trial if that is how it is badged. There are also legitimate concerns that, as part of the interview process, people may be asked to perform certain work tasks to see whether they are suitable for the role. How would he differentiate between the unethical practices that he outlines and genuine job interview and job selection processes?
My Bill deals with the very scenarios that the hon. Gentleman mentions. I want to make it clear that I am not against trying people out for a job. The Bill is quite clear on that, too. I am against the use of unpaid trials to exploit people. Later in my speech, I will mention a business that has changed its practices as a result of this debate approaching, which might address the hon. Gentleman’s concerns.
Some employers know that the practice is wrong but are indulging in it. I know that they know it is wrong, because they changed their practices when my Bill was introduced last year. I will give two examples. The first, believe it or not, is the BBC. I had been told that the BBC was taking advantage of young freelancers; abusing their time, talent and energy; involving them in the production of programmes; and doing so through the guise of an unpaid trial period. I wrote to the BBC about the matter and, as a result, it has stopped that practice. Why? It knows that it is exploitative.
Aldi has changed the way that it interviews and recruits people. It has taken away what might have been thought of as the interview element, whereby someone carried out a work task. Instead, it now has a shorter interview period that involves shadowing someone around the store to see exactly how the business works and, crucially, so that the applicant can determine whether the job is for them. That is a better way to recruit people.
My Bill would also have given some of the cards to the applicant who, it strikes me, holds very few in the entire process. My Bill would have made it clear that employers offering a trial shift had to be doing so for a job that actually existed; that when the trial period started and finished had to be stipulated in black and white; and that applicants knew that, however they got on during the trial, the employer would give them proper feedback as to whether they had got the job. My Bill was all about empowering applicants and making it clear to them that the law is on their side, rather than it being deficient and too often working against them.
When I introduced my Bill, the Government were of the view that the law was not deficient and dealt with these matters as it was. In fairness to the new Minister, she has brought forward guidelines on the use of unpaid work trials. That is welcome—I get that change often happens in small steps—but I am afraid that it is not enough. She is, I am sure, unsurprised to hear me say that. We know that millions of people up and down the UK are crying out for proper legislative change that will back them when they go for a job. At the minute, the law absolutely does not do that. That can be evidenced by the fact that there has never been a single fine—
Sitting suspended for a Division in the House.
Hon. Members will be glad to know I am bringing my remarks to a close, to allow the debate to begin properly.
It is my understanding that the Government believe the current law is sufficient, presumably with the addition of their recently published guidelines. However, the evidence suggests that it is not: there has not been one fine, prosecution or even public shaming of a company or employer that has used unpaid trial shifts, particularly in the most pernicious and exploitative fashion, in the history of the National Minimum Wage Act.
I am sure many Members will wish to share the experiences of their constituents; I would like to share just one. A mother whose son had gone through an unpaid work trial said:
“My son was asked to do a trial shift in our local restaurant. The manager who was on shift did not even speak to him when he was in! He was left in the bar with no direction and when he tried to help the others he was told to get back behind the bar! He wasn’t paid a penny for his time. The same restaurant had already done the same thing to a friend of mine’s son except it was for a kitchen porter and he did 4 hours, no pay and again at end of his shift he just left, waited over a week with no job offered.”
I cannot expect the Government to legislate against obnoxious behaviour, which surely that example represents, but they can legislate to prevent unpaid trail shifts being used in such an obnoxious fashion.
Some may say that I am being partisan, but I think I make an accurate observation: this Government are utterly out of ideas. I am offering them a free idea at a time when we are asked to believe that the Prime Minister wants to improve and enhance workers’ rights in one fashion or another. Assuming there is no general election between now and the upcoming Queen’s Speech in June, I plead with the Minister to do everything she can to ensure legislation is brought forward in one form or another, either in this Session or in the Queen’s Speech later this year, to ensure that we end the use of unpaid work trials.
When I was lucky enough to be picked in the ballot for private Members’ Bills, inevitably I was bombarded by outside interests saying what they would like a Bill to achieve. Obviously, any Member who finds themselves in that position wants to bring in a Bill that can genuinely make a difference to people’s lives. There are millions of people, particularly young people, up and down this country who have fallen victim to this practice day after day for many years. Even with the new guidelines, millions more will fall victim to it.
Knowing what we know, it would be an utter dereliction of duty for this Parliament and this Government not to act. I do not look to this Parliament to solve many problems—hon. Members understand my political view of it—but it can solve this problem. I ask the Government to get serious and start solving it.
Order. I am obliged to call the Front-Bench spokespersons no later than 5.23 pm. The guidelines give five minutes to the SNP, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister. Stewart Malcolm McDonald will be allowed a couple of minutes at the end to make concluding remarks. Five Back-Bench Members wish to contribute, so I will impose a four-minute limit on each speaker.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Glasgow South (Stewart Malcolm McDonald) on securing the debate and on the way he introduced the subject.
As we have heard, unpaid work trials are becoming a widespread practice. I, too, have heard about many cases, predominantly from young people desperate to get a foot on the employment ladder, who have been given false hope of employment and been cheated—yes, cheated—out of a day or more’s pay. They are used to provide free labour, to cover staff shortages or to reduce costs, with the final insult of not being hired for the job they applied for in the first place.
Sadly, it does not surprise me that Unite the Union—I declare for the record that I am a member—has heard from many of its members in the hospitality sector, who believe that these trials are in fact a crude ruse that will allow companies to get away with not paying people a fair day’s pay for a fair day’s work. It is clear that some companies are offering shifts with no intention of giving somebody a job, and others, who may actually give a job to someone, want to see how many shifts they can squeeze out of them first for no pay at all, or at a lower rate. It is nothing short of scandalous and should concern us all that Unite says that the use of unpaid trial shifts has increased exponentially in recent years.
The sad reality is that we are having this debate today because both the law and culture in this country place little emphasis on workplace protection and do not support or respect it. We give far too little attention in this place to the reality of the world of work. Far too many people experience insecurity, uncertainty and exploitation, and until this place resolves to do something about that, the kind of injustices we have heard about today will continue.
The blunt truth is that unpaid work trials are a scam. They are a means for employers to increase their profits at the expense of the workers, and are part of a wider problem across society whereby workers, especially young people, are seen as a disposable commodity. In an ideal world, all employers would act like the majority of decent and responsible employers out there, who pay their trial workers, and we would not need legislation to tell them to pay people fairly for the work they do. We do not live in an ideal world, and some people need to be told what is unacceptable. We should all stand four-square behind the principle that if you work, you should be paid for it.
I welcome the publication of the new guidance from the Department, but the proof will be in the pudding. The guidance says that it will ultimately be up to enforcement officers, courts and tribunals to decide whether there has been a breach of minimum wage regulations, but how realistic will that approach be? How many people will resort to litigation, waiting many months with an uncertain outcome, possibly facing experienced lawyers, just for a day’s pay? How much enforcement will actually take place? The International Labour Organisation has a benchmark of one labour market inspector for every 10,000 workers, but in the UK we have only one for every 20,000 workers.
Would it be easier to put a legal presumption in place? If you are working for a minimum wage it should apply, whether it is a trial shift or not. It is open to employers to have a robust interview process and seek references, and thanks to the weak employment laws in this country, they can sack workers with impunity anyway, if it does not work out in the early stages. If there is any need for trial shifts at all, there is certainly no justification for them without pay.
I am angry at this systematic, cynical and avaricious exploitation, but I am also sad that many young people think that unpaid work trials are just the way things are. Do they not deserve more respect than that and more protection? Can the Minister set out what more she can do to increase awareness among young people? In 20 years of the minimum wage, there have been only 14 prosecutions. Unless rights are enforced, they will never be truly worthwhile. The Government need to step up to the plate.
I congratulate the hon. Member for Glasgow South (Stewart Malcolm McDonald) on bringing this forward. It is a pertinent issue and one that I firmly believe in.
I am also a firm believer in hard work—that is a fact. I was raised that way and raised my boys in the same way. If people want a new car, they must work hard and save hard, and keep the old banger as long as they can. If they want their own house, they must work hard and save for longer. That has always been the motto in our family. I understand that it is harder now for young people to get into the housing market, no matter how much work they carry out, but that is a debate for a different day.
The debate today is clear. As I said to the hon. Member for North Ayrshire and Arran (Patricia Gibson) before the debate started, I can well remember my dad hiring people, watching them for the day and then saying at the end of the day, “Here is your pay; I don't think you are actually cut out for this job.” By and large, the person understood and accepted that. I can never imagine him getting someone to work for the day and then saying that they did not pass the test. That is for a very simple reason: it is simply not fair to expect someone to work for a day and not pay them—not ever. That is the way it is. If that were true in my dad's time, it is certainly every bit as true today. The principles of decency and rightness dictate that we treat people how we would like to be treated—with dignity and respect. That is what the hon. Member for Glasgow South referred to in his introductory speech—dignity, respect and fairness.
I fully understand those who wish to trial employees. Do they have the customer skills? Can they think on their feet and use logic? Can they handle the work? People can or cannot—a trial will ascertain that. I am all for trial periods or probation, but I believe they must be of a short duration and for a specific purpose, and most of all they must be paid. That is why I welcome the Government’s commitment to entrenching the right to be paid for work. I am glad that it allows people to come for an interview that includes work experience time. The six tests that the Government outline and how they expect the law to be interpreted are very clear. I want to quote them here, to have them on record.
“Whether a ‘work trial’ is genuinely for recruitment purposes,”
and that is the crux of the matter,
“(if it is not, it will generally be considered to be work and the individual will be eligible to be paid the national minimum wage or the national living wage); whether the trial…exceeds the time that the employer would reasonably need to test the individual’s ability to carry out the job offered (in the Government’s view an individual conducting work in a trial lasting longer than one day is likely to be entitled to the national minimum wage);…the extent to which the individual is observed while carrying out the tasks; the nature of the tasks carried out by the individual and how closely these relate to the job offered (where the tasks are different from those which the job would involve…but rather to get the tasks carried out); whether the tasks carried out have a value to the employer beyond testing the individual…(this will normally indicate that they do not have such a value and that the individual is not ‘working’); whether trial periods are important (aside from recruiting) to the way the employer runs its business.”
There should be no other misunderstanding with employers or perspective employers. If someone is asked to work a day, they should be paid for that day. I recently read an article on the calling of John Wesley, the founder of the Methodist church. A massive part of his outreach was about better working conditions for mine and coal workers. While impressed with what he achieved a long time ago, it is sad that we are still having to say to people that it is not okay to expect something for nothing, from someone who wants nothing more than a job to pay the bills.
I am all for internships and apprenticeships, and I am also all for ensuring job suitability. If someone cannot do a job then they may lose that job. What I am not for is people being taken advantage of, and unfortunately that is what is happening. It must stop. Minister, we are seeking clarification of the law and assurance. We support the workers in their every attempt to ensure that those who work are paid, no matter how long or short that work is.
It is a pleasure to see you in the Chair and to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald), not just on securing this debate but on the legislation he introduced under the private Member’s Bill process. It is an area of deep regret that that legislation has not been pursued. It highlights the absolute folly of the private Member’s Bill system in this place, but that is a debate for another day.
I rise to make similar points to those already made. We need action on this today. I think, “Okay, fine, great, guidelines,” but the reality is that we need this enshrined in law. In the time I have been in this House, I have already seen a number of areas of employment legislation and employment practice that do not do justice to our constituents, quite frankly. Some of it is about unpaid work trials, which I reckon will be even more of a thing after Brexit. The hospitality sector largely relies on EU nationals. When the drawbridge is brought up as a result of the Immigration Bill, the chances are that the hospitality sector is going to rely more on people in the local population working in those jobs. I would be very concerned if hotels and restaurants decided that they were going to deploy unpaid work trials.
My hon. Friend makes a powerful point; that is something the Minister should consider. When we say that this place just does not deliver for workers’ rights, we look at the absolute lack of any action on zero-hours contracts. We look at, for example, the age discrimination in the national living wage, which is not applicable to those under 25. Those are areas where the Government have been told time and time again that Parliament wants action, but they sit back and say, “Oh well, we’ll do guidelines, or we’ll do consultations.” I certainly welcome consultations, but at this stage we need to see legislation.
The hon. Member for Ellesmere Port and Neston (Justin Madders) has made the point that, even though the National Minimum Wage Act 1998 is on the statute books, only 14 employers have been found in breach of the legislation since it came into force. I do not think that is helpful at all.
The point I would make, which people would expect to come from a Scottish Nationalist Member of Parliament, is that if Westminster is not willing to take action on better employment conditions, then surely it should look at devolving that legislation to the Scottish Parliament, where we have a track record of taking action. Take, for example, the business pledge, whereby companies make commitments to say that they are investing in youth, do not have zero-hours contracts and do not discriminate based on someone’s age. There is clearly action in Scotland that can and will be taken to provide better employment conditions for people.
I regret that a number of parties in this Parliament blocked the devolution of employment legislation. If hon. Members are going to stand up in this Chamber today and say that they want better employment rights for people, that is fine—I would like to see better employment rights for people across the UK—but I do not want to come to another debate and make this point again and be stonewalled by the Government. If the Government are not willing to do it, then the Scottish Government will.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Glasgow South (Stewart Malcolm McDonald) on securing this debate and on his persistent and tenacious work in championing this long-standing issue. It is important, because in many ways his background is reflected in the priorities he brings to this House. I was thinking about the backgrounds of many MPs, and perhaps that is something we need to consider. Is this matter on their radar at all? Do they have even a basic understanding of how this sector operates? Have they ever had exposure to it? Have they ever understood how these exploitative employment practices work?
Like the hon. Gentleman, I share that background of having worked in similar environments. I reflect on my first job when I was at school: I went to work in a pizzeria in Glasgow called La Vita, which hon. Members might have heard of. There is one in George Square, one in Byres Road and one in Bishopbriggs Cross. I was hired on a zero-hours contract, but I also had to do an unpaid trial shift when I started there with my friend Ryan. I remember we were competing against each other for the same job, but they ended up taking us both on.
Often, we would go in during the week and work for maybe an hour, and then be sent home with a free pizza when we were expecting to work five or six hours. It was okay for me, because I was still living at home at the time, so it was pocket money, but I shudder to think about the people I worked alongside, who relied on that as income to live on and often to take care of children. While I was somewhat insulated from the full effects of that exploitative practice, I none the less realised that it was unfair and discriminatory. We also had our tips taken from us—a practice that was subsequently made illegal. That just shows that, even though we are operating at the margins, things that happened then to me and others are actually illegal now.
We are still dealing with the effects of casualised employment, zero-hours contracts and unpaid trial shifts, which remain to be tackled. I wonder why that is not a priority for this Government and why it is not a priority for more Members of this House, who might otherwise have been here. I think it is simply that they are not aware of it.
The hon. Gentleman is correct to say that it does not seem to be a priority for this Government—unless, of course, the Minister is able to enlighten us and tell us what her Government might do. Does he agree, given that we all understand it is not a priority for this Government, that that is a powerful argument for devolving this power to the Scottish Government?
As a Labour Member of Parliament, my analysis is primarily driven by class. I have just as much interest in securing the employment rights of someone who lives in Liverpool as of someone in Glasgow. That is where I operate. I am saying that I want us to have unity of purpose for worker’s rights across the UK, and that is why I believe in the trade union movement and the labour movement. We can have respect for ideological difference on this, but that is my analysis, and it is as simple as that.
I want to increase trade union density, because there has historically been a significant casualisation and a low trade union density in the hospitality sector in this country. That is why the “Better Than Zero” campaign has been particularly effective in mobilising workers and making them aware of their power. I also commend the GMB for the excellent, ground-breaking agreement it achieved with Hermes, the courier firm, just yesterday, which secured holiday pay, guaranteed rates and collective negotiation under the GMB, with full recognition for those workers. That is a lesson for the rest of the gig economy and the hospitality sector that we can really achieve improvements, and a demonstration of a trade union working innovatively. What could we do for workers’ rights across the UK with the real force of law and legislation behind them? I feel that would be a real game-changer for our economy; it would improve average wages and improve the resilience of our economy, and that is the way we ought to proceed.
I have experienced exploitative employment practices, as have other Members of this House. It is time that this House woke up to the reality facing millions of young people and casualised workers across the UK.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I, too, start by congratulating the hon. Member for Glasgow South (Stewart Malcolm McDonald) on both securing this debate and the work he undertook on the Unpaid Trial Work Periods (Prohibition) Bill. When I first arrived at this House after the 2017 general election, I wore my Parcelforce shirt to remind me where I had come from and why I was elected by the people of Coatbridge, Chryston and Bellshill, whom I asked to send a working man to Parliament. They sent me here to fight for justice for workers, and that is why I call on the Government to end not just this scandal of unpaid trial shifts, but all employment practices that fail to treat people with dignity and respect.
I was truly disappointed that the Government chose to talk the Bill out, despite the support from hon. Members of all parties, the trade union movement and the public. The Government have allowed this scandalous situation, in which employers can ask someone to undertake an unpaid trial shift, to continue because of their actions. It is not isolated to one sector of the economy or one type of employer; it is a widespread practice in our economy, ranging from the hospitality sector to the creative industries. The practice is used not only by small, family-run businesses, but by multinational corporations that think it is normal. I am sure we can all agree that it is a practice which must come to an end.
I pay tribute to organisations, such as the Scottish Trades Union Congress and the National Union of Students, that are working tirelessly to highlight the injustices faced by those who are made to work unpaid trial shifts. I particularly commend the “Better Than Zero” campaign for the tremendous work it has done and continues to do to highlight some of the worst employment practices in Scotland and to educate, organise and mobilise young workers to fight for their rights. I have joined with the campaign on many occasions, and it was a pleasure to take action together.
It is time for us in this House to take real action on this question. There should be legal clarity for both workers and employers on what constitutes a trial shift. There should be a requirement for employers to outline the length, the criteria and the outcome of any trial shifts undertaken, and it should be made clear in the National Minimum Wage Act that a failure to pay individuals for working on a trial shift is illegal. It is time that the Government sent out that message.
Of course, unpaid trial shifts are just a symptom of the type of economy that the Government have created. It is an economy where many workers are not paid the living wage—I want to see that living wage, or even the national minimum wage, increased to £10 per hour. It is an economy where many workers find themselves with job insecurity, with the use of zero-hours contracts, but we are told that the unemployment rate has never been lower. It has never been lower because of zero-hours contracts; that is how that figure is justified. This is an economy where basic health and safety requirements such as breaks are viewed as optional or outright ignored by employers. It is an economy where workers find it increasingly difficult to organise and mobilise to defend their rights, terms and conditions, all because of this Government’s sustained attacks on the trade union movement. I say to any workers working in low-paid jobs, “Join a trade union today. You can make a difference.”
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my constituency neighbour, my hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald), on securing the debate. I emphasise my support for his private Member’s Bill.
I am one of the Scottish National party signatories to that Bill, alongside my hon. Friends the Members for North Ayrshire and Arran (Patricia Gibson), for Glasgow East (David Linden), for Glasgow Central (Alison Thewliss), for Glasgow North (Patrick Grady) and for Glasgow North West (Carol Monaghan). I also pay tribute to the hon. Members for East Lothian (Martin Whitfield) and for Edinburgh South (Ian Murray) for their support. Indeed, the Bill is supported by Members from every single political party represented in the House. You look surprised, Mr Hollobone, but there are Conservative Members who support my hon. Friend’s Bill.
Thank you, Chair. All I will say is that I will play you at poker for money any time. We will move on.
The Bill promoted by my hon. Friend the Member for Glasgow South is supported by the Scottish Trades Union Congress and the Trades Union Congress. As my hon. Friend outlined, he has been assisted by both “Better Than Zero” and Unite the Union’s hospitality section, and I thank Bryan Simpson, a constituent of my hon. Friend’s, for sending us an excellent briefing for the debate. It highlights several issues that hon. Members have addressed, including Mooboo, which I will come on to, and Aldi, which has had to change its practices.
The briefing also includes the testimony of individuals who have been through unpaid work trials. Rachel from Bearsden said:
“I did two unpaid trials of 5-6 hours each for a local restaurant who then strung me along for weeks with the promise of shifts before ending contact.”
Nicole from Renfrew said:
“I went to one of these and it is actually slave labour. They use you to get the shop ready for opening time and get annoyed if you make any mistakes (even though you haven’t been trained to do the job). They just abandon you and come back moaning that you’ve not finished the million tasks to do. They then emailed me the next day saying I was unsuccessful and that they can’t provide feedback because of the volume of applicants.”
Those are just some of the cases studies that Unite supplied.
We know that not only are such cases fairly common, but particular employers use a string of people like that, giving only short shifts or a day or two of employment. Those employers use people simply to plug a gap in their staffing and never look to employ someone.
That is exactly what happens. It is a way for unscrupulous employers to cut their wage bill by essentially introducing unpaid labour. My hon. Friend the Member for Glasgow South mentioned that some people have worked a 40-hour week in an unpaid work trial. They are then not given the job and another person is taken on to do an unpaid work trial for the same length of time.
The research and case studies provided to us by Unite are also supported by the Association of Independent Professionals and the Self-Employed—IPSE—which has looked at the treatment of freelancers. Unpaid work trials are an issue not only in the hospitality sector, but in the creative sector and others. According to IPSE, this has led to an average loss of £5,000 per year for its members, with 20% of its members saying that that is standard practice within the sector.
There is huge public support for my hon. Friend’s private Member’s Bill. While in the Commons Chamber, several Members of Parliament from Scotland saw an advert on Twitter from Mooboo bubble tea, highlighting its unpaid work trial. We questioned Mooboo about that practice, and we found ourselves blocked on Twitter for having the temerity to question the company and its working practices. That led to a petition that surpassed 13,000 signatures. My hon. Friend the Member for Glasgow South also wrote to Her Majesty’s Revenue and Customs concerning the practices of Mooboo stores.
Has the Minister been in contact with her friends in the Department for Work and Pensions? We know that individuals who refuse or leave a zero-hours contract job can face universal credit sanctions. If someone refuses the offer of an unpaid work trial, will they be subject to a universal credit sanction?
The fact is that the organisation leading the way on employment law is the European Union. The European Parliament is looking at radical alternatives to employment law, leading the way for workers in the gig economy, in stark contrast to the Government’s good work plan, which nibbles around the edges. As my hon. Friends have said, if Members of the Westminster Parliament will not tackle unfairness in the workplace, that job should be handed to the Scottish Parliament, and we will do it for them.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Glasgow South (Stewart Malcolm McDonald) for securing this important debate and for his excellent opening speech. Like him, I highlight the fantastic campaigns by trade unions, particularly the “Better Than Zero” campaign.
As several Members have set out, unpaid work trials have become a widespread practice in the hospitality, entertainment and retail sectors, but it is important that we place that development in the wider context of the so-called gig economy, as my hon. Friend the Member for Glasgow North East (Mr Sweeney) did. Characterised by increasingly exploitative working practices and conditions and insecure work, the gig economy affects millions who are struggling to make ends meet, making it harder for someone to say no to unreasonable and exploitative conditions set by employers.
That is the reality for so many, but it is being ignored, and even—dare I say it—encouraged by a Tory Government that represent only the wealthiest few. Everything about the current crisis of work is a consequence of an environment that is designed to reduce the burden on the employer at the expense of millions of workers.
In addition, more than £3 billion is lost in wages every year through unpaid work, with the continuing practice of unpaid work trials a key contributing factor. After a long campaign by the TUC and trade unions, and after attempts by Members—notably the hon. Member for Glasgow South—to introduce legislation have been repeatedly ignored, the Government attempted last December to set out when unpaid trial periods are acceptable. It was about time. As we have heard, a growing number of workers, particularly younger workers and those with learning disabilities, have been asked to work for free in recent years. Research by Unite has shown that, over the past three years, there has been a six-fold increase in complaints about unpaid shifts.
It is not only the trade unions and those who represent workers who say that the current system is not working. The Federation of Small Businesses has expressed concerns that unpaid trial shifts are shading into exploitation. Far too many employers have made people who are seeking work do a full-day trial shift, and in some cases employers have even demanded a full week of free work. That is not limited to small businesses; it includes large companies, as highlighted by my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders) and for Coatbridge, Chryston and Bellshill (Hugh Gaffney), and the hon. Member for Strangford (Jim Shannon).
The TUC makes it clear that testing skills and abilities should be part of a structured recruitment process. Having worked in industry for 20 years before I came to Parliament, I support structured recruitment processes, which are far better than the old boys’ networks they often replace. However, there is absolutely no justification for employers demanding a period of free work as the price of entry into a job. In my view, and in the view of the TUC and other campaigners on this issue, employers who require candidates to do any productive work should be made to pay them at least the minimum wage—which, by the way, will be at least £10 an hour under a Labour Government. Why does the Minister think that productive work should go unpaid? Why will she not commit to a £10-per-hour minimum wage?
I realise that this is probably an unpopular point to mention in this place, because the practice is rife, but does the hon. Lady agree that we need to have a conversation about the use of unpaid internships in this building? Often, people will work for an MP for several weeks and there is a possibility that they might get taken on afterwards. It is not quite an unpaid work trial, but there is still a culture, in this building and in other Parliaments across the UK, of unpaid internships.
That is an excellent point, and I would welcome a debate on unpaid internships in this building. I myself offer living-wage paid internships. It also happens in other areas, such as the media, where the BBC and others offer unpaid internships. It is a barrier to entry into certain professions and a form of exploitation.
It is clearly bad employment practice to ask for real work and not pay for it. It also means that employers avoid paying taxes and making a relevant contribution. That leaves the taxpayer and the entire country out of pocket. Will the Minister commit to ending such tax avoidance by preventing unpaid trial shifts?
As the hon. Member for Glasgow East (David Linden) emphasised, without strong enforcement the new guidance is not worth the paper it is written on, but the organisations tasked with enforcement have faced huge cuts since 2010. The employment agency standards inspectorate has lost half its budget. That is why a Labour Government will invest in enforcement through a new Minister of Labour. How will the Minister prevent companies from simply choosing to ignore what are, after all, just guidelines?
Employers who require candidates to do any productive work should be made to pay them the national minimum wage. Will the Minister commit to these basic requirements when it comes to trial periods, and if not, why not? Workers deserve more. Ending exploitative unpaid trial shifts is just one aspect of redressing the balance in favour of workers, and that is why we will set up a new Ministry of Labour. If the Minister cannot match that, she should at least commit to ending unpaid trial shifts.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Glasgow South (Stewart Malcolm McDonald) on securing this important debate. I am proud to serve as the Minister responsible for the national living wage and workers’ rights, and I am pleased to be responding to the debate. I fully agree with the hon. Gentleman that it is wrong to exploit workers through unpaid work trials at the outset of their employment. Workers have the right to be paid the minimum wage when they are deemed to be working, and this must be upheld.
The Government are committed to building an economy that works for everyone through the national minimum wage and the national living wage. We will continue to ensure that the lowest paid in our society are rewarded fairly for their contribution to the economy. All businesses, irrespective of their size or sector, are responsible for paying the correct minimum wage to their staff. The vast majority of responsible employers ensure that they get it right.
The hon. Gentleman and other hon. Members raised examples of constituents and others who had been disadvantaged. Having heard the details, I can say that it is highly likely that those practices were illegal. An individual’s entitlement to the minimum wage depends on whether they are deemed to be a worker. If they are a worker, their employment must pay at least the relevant national minimum or national living wage. Our legislation is clear on that.
Many individuals participating in work trials would be considered to be workers. Therefore, they are already protected under existing legislation and are eligible to be paid the minimum wage from the start of their employment. An employer may wish to test an individual’s skills using a range of kitchen knives in a restaurant kitchen. That would probably have little or no value in terms of work for the employer, so would not require payment at the relevant minimum wage rate.
Clearly, the circumstances of each particular case would need to be considered to confirm entitlement to the minimum wage. However, the case of the 40-hour unpaid trial is, in the view of my Department, likely to be excessive and, therefore, against the law. Similarly, new recruits who are required by their employers to spend time at the outset of their employment undertaking training are entitled to the minimum wage for that time.
The hon. Member for Glasgow South raised the issue of exploitative unpaid work trials in his private Member’s bill of March last year. The Government recognised that concerns had been expressed in the House and in the media. Therefore, we issued new guidance on unpaid work trials on 3 December last year, to provide further clarity for employers and workers. The guidance aims to ensure that workers, especially young people in the hospitality and retail sectors, are not exploited through unfair and excessive unpaid work trials. The guidance sets out a number of relevant factors that should be taken into account, such as the duration of the trial and whether the employee is deriving economic value from the activity.
The Government have clarified their view that work trials that are reasonable, not excessive and clearly part of a legitimate recruitment exercise do not require payment at the relevant minimum wage rate. For example, an employer may wish to test an individual’s skill in a restaurant kitchen through a short trial before hiring that person. That would probably have little or no economic value for the employer, so would not entitle the applicant, but it may well lead to a job offer for the individual. However, unpaid trials are not permitted if they are part of a genuine recruitment process, if they are excessive in length or if they are simply for the financial benefit of the employer.
As I have already said, we have an enforcement system for the national minimum wage, which, with the guidance, is focusing on targeting the employers that we need to target. We need to recognise—I was going to come to this point later—that in 2017-18, Her Majesty’s Revenue and Customs investigated and took action against more than 1,000 employers, raising £15.6 million, and affecting over 200,000 workers. That shows that the enforcement work is taking place. HMRC will investigate every worker complaint.
I am glad that HMRC investigates, but how many of the cases that the Minister has mentioned, in which money has been clawed back by workers who have been deprived of money to which they were entitled, took place in a period that would be considered a work trial, as opposed to when the worker had formally signed a contract and started a new job?
As part of HMRC’s involvement and enforcement of the national minimum wage, it investigates a number of breaches, including unpaid trials. I can tell the hon. Gentleman that HMRC is currently actively investigating companies in which there is a suggestion of unpaid work trials. Obviously, those investigations are currently ongoing, on the back of the legislation and the guidance that we offered.
I will make some progress. I encourage any worker who has concerns about unpaid work trials to call ACAS for free confidential advice, or to contact HMRC via its online complaints form. ACAS advisors will explain the general position in terms of entitlement to the national minimum wage and advise an individual based on the circumstances of their case. If the caller then feels that they may have been entitled to the minimum wage, the ACAS advisor will explain their options for taking the matter forward, which include contacting HMRC about formal national minimum wage enforcement.
I will carry on, because I want to give the hon. Member for Glasgow South time to wind up at the end.
HMRC investigators consider work trials on a case-by-case basis. They explore the precise detail of the arrangements, including what the worker is being asked to do and for how long. Where they come to the view that the arrangements constitute work under national minimum wage regulations, they will require the employer to repay any arrears and will impose a fine. HMRC has taken enforcement action where workers were expected to complete an unpaid work trial.
The Government are actively taking steps to tackle non-compliance with the national minimum wage, and to respond robustly to employers who fail to pay their workers correctly. We have doubled our investment in enforcement since 2015-16 and we now spend more than £26 million every year to ensure that employers meet their legal responsibilities. Employers who are found to be underpaying their staff must repay arrears and pay a fine of up to 200% of the underpayment, and may be eligible to be publicly named by the Department.
The hon. Member for Glasgow East (David Linden) mentioned that there had been only 14 prosecutions. As I have already outlined, the figure is actually more than 1,000 businesses in one year. The stat is not 14 but 1,000 in one year.
From the feedback I get from business, and from some of the work that I know is going on, I would say absolutely yes. We are enforcing and doubling investment, and we are making sure that HMRC investigates the case of every worker who complains. As the Minister with responsibility for the national minimum wage, that is exactly what I would like to carry on seeing.
I want to answer some of the questions that have been put to me during the debate. I also want to reassure hon. Members that workers’ rights are a big priority for the Government and particularly for me. In the advent of the Taylor review and the good work plan, we have seen a step change in a generation in terms of workers’ rights. We have announced that we will ban tipping, which will come further down the line, and we have laid legislation to firm up workers’ rights.
I thank the hon. Member for Glasgow South for securing the debate. It is essential that workers are paid the minimum wage. The Government have listened to concerns relating to work trials and issued new guidance, which, combined with robust enforcement, will help to ensure that workers are not exploited through unpaid work trials.
The more things change, the more things stay the same. We have a new Minister, but that was by and large the same speech we heard when my Bill was talked out last year. I want to address one issue that the Minister mentioned. I have no quarrel with the workers at HMRC—my partner is an employee, so I would know if I had a quarrel with workers there.
I am afraid that all the things the Minister outlined that people can do if they feel they are being exploited go partly to the heart of the problem. Why is the onus always on the person being exploited to run around and try to get somebody to take action, when the Government could do that in statute?
I am always grateful to hear the hon. Member for Strangford (Jim Shannon). As a DUP Member, he has greater access to the ears of the Government than I have, so as we approach the next Queen’s Speech, I plead with him to take the issue forward.
The hon. Member for Glasgow North East (Mr Sweeney) questioned whether Ministers had any idea or experience of what we were talking about. Yes, they do; the Minister’s predecessor was guilty of offering unpaid work in his office.
It has been a good debate and there is clearly much that we agree on. There is even much that the Minister and I agree on, but I plead with her to do something meaningful and introduce legislation. Let us stop putting the onus on the person being exploited and, for once, give job applicants some of the cards to hold.
Question put and agreed to.
That this House has considered the use of unpaid work trials at the outset of employment.