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Workers (Predictable Terms and Conditions) Bill

Volume 727: debated on Friday 3 February 2023

Second Reading

I beg to move, That the Bill be now read a Second time.

I am pleased that we have time to debate this important issue in the Chamber. I know that many hon. Members in the Chamber will have a personal interest in this area and am grateful for their participation. Zero-hours contracts are an important part of the UK’s flexible labour market, both for employers when there is not a constant demand for staff and for individuals who need to balance work around other commitments such as childcare and study. However, the 2017 Taylor review of modern working practices found that workers on zero-hours contracts, as well as agency workers and temporary workers, struggle where flexibility is “one-sided” in an employer’s favour. Some employers misuse flexible working arrangements to create unpredictability and insecurity of income, and there is a reluctance among some workers to assert basic employment rights. That one-sided flexibility means that workers need to be available to their employer with absolutely no guarantee of work. Employers can also schedule or cancel shifts with little notice, leading to insecurity of hours and income for workers—or, in the case of temporary workers, dismissal altogether at short notice.

To address one-sided flexibility, the Taylor review recommended that the Government should create a new right to request a contract with guaranteed hours for zero-hours contract workers. The successful passage of my Bill would create a new right for eligible workers to request a more predictable working pattern.

I welcome my hon. Friend’s private Member’s Bill, because it is incredibly important to give people on zero-hours contracts the security of knowing that they will have protected hours. Does he agree that, as we are trying to encourage the over-50s back into the workplace, the Bill may go some way to giving them security over their hours and pay for the work that they do?

I thank my hon. Friend for her intervention. She is a brilliant champion for her constituents in the Cities of London and Westminster. Of course, the nature of the economy in central London means that, often, people will be in the retail, hospitality and the tourism industry with insecure work. I thank her for championing the Bill. The point that she makes regarding older people in employment is important. The Government are actively looking at that. I hope that they continue to press the issue to ensure that we can address labour shortages by widening the pool of potential people to take those vacancies.

The new right would give workers who would like more certainty the ability to request a more predictable work pattern that reflects the hours or times that they work. A qualifying worker would be able to make an application to change their existing work pattern if it lacked predictability in terms of the hours or times they worked, or if they have a fixed-term contract for less than 12 months. The Bill would ensure that workers and employers retain the benefits of zero-hours contracts and other forms of atypical work. Of course, workers who are content to work more varied hours will continue to be able to do so.

Many individuals who work unpredictable patterns often experience an imbalance of power with their employers, which leaves them afraid to ask for more fixed conditions out of fear of being dismissed or denied future shifts. The Bill would address that unfair imbalance of power, empowering and encouraging workers to talk to their employer about their contract, safe in the knowledge that starting the conversation would not result in any detriment whatsoever to the worker. Workers will be better able to secure employment that suits their individual circumstances, helping them to be more satisfied at work and less stressed around the lack of predictability of their hours and income.

It is good that we have cross-party support on this issue as well. It is one thing for an employee to have a right, but as we have seen, quite often employers who do not want to give their employees those rights and treat them well have ways of getting around that; they will find an excuse to dismiss the employee and take on somebody who might be prepared to be more flexible. How does the hon. Gentleman envisage that the safeguards and rights under this Bill will be genuinely enforced? I would suggest trade union membership as a pretty good start.

I thank the hon. Lady for her intervention and I will get to that section of my speech in a couple of minutes. She does great justice to the people in her constituency who work on zero-hours contracts by raising that important point. The Bill introduces a right to request a more predictable working pattern and the process employers have to follow is clearly outlined to ensure that there is some certainty when employees request that their contract is changed and that their employer deals with them seriously and appropriately.

The Bill helps to support the income security of workers at a time when many are feeling increased cost of living pressures. It will not only benefit workers; businesses will reap the rewards of having a more engaged and happier workforce. The rights introduced through my Bill will apply to all eligible workers, including agency workers, not only those employed on zero-hours contracts; it will apply to the wide range of workers who have unpredictable working conditions, including temporary workers, agency workers and workers with non-guaranteed hours.

Workers must have worked for their employer for a set period of time before an application can be made. This period will be set out in regulations; I am sure the Minister will expand on that in his remarks, but it is expected to be 26 weeks. The worker only needs to have been employed with their employer at some point during the month before that period and to be working again for the employer when the application is made. Given that the Bill targets workers with unpredictable working patterns, they are not required to have worked for their employer continuously.

The same criteria will apply to agency workers applying to temporary work agencies. Agency workers who make applications directly to hirers will be required to have worked for their hirer for at least 12 weeks continuously during the 26-week period. This replicates the provision in the Agency Workers Regulations 2010 which states that after 12 weeks’ continuous service an agency worker will gain entitlement to the same set of employment rights as if they had been recruited directly. It ensures that workers cannot use the right to request a more predictable contract to circumvent the agency workers regulations and gain entitlement to additional employment rights before they have worked those 12 continuous weeks.

Once a worker has made their request, the employer will be required to notify them of their decision within one month. An employer will be able to turn down a request for more predictable conditions on specific statutory grounds, similar to those established for the existing right to request flexible working. That will help to ensure that businesses are not unfairly burdened by the new right, for example if the costs of providing a worker with a more predictable pattern would be too burdensome at the time.

Workers will have the option to complain to an employment tribunal if their employer does not handle the request in a reasonable manner, wrongly treats the request as withdrawn, dismisses or treats the worker poorly because of their request, or rejects the application on the basis of incorrect facts. We assume, however, that most declined requests will be handled informally and will not give rise to an employment tribunal claim.

I thank officials at the Department for Business, Energy and Industrial Strategy for their assistance with drafting the Bill and the arrangements for today. This area has broad cross-party support: indeed, it was included in the manifesto I stood on and the Liberal Democrats and Labour made similar commitments on zero-hours contracts in their manifestos. I hope that Members on both sides of the House share my desire to ensure that the Bill succeeds. As you will know, Mr Deputy Speaker, there is a certain fragility, to say the least, that accompanies the passage of private Members’ Bills through the House, and I would therefore like to navigate this process with the support of Members on a cross-party basis.

This Bill is a golden opportunity to bring about real change on the pressing issues of atypical contracts and one-sided flexibility, at a time when insecurity of pay and hours is particularly pressing. I hope that Members will be able to support it.

I am delighted to support the Bill, and I congratulate my hon. Friend the Member for Blackpool South (Scott Benton) on presenting it and on his speech. I am pleased that the Government are giving the Bill their backing. Of course, it was a Conservative-led Government who banned exclusivity clauses in 2015, which was an important step towards the system of worker protection that is needed in the new economy that is unfolding. I am pleased to see that we are supporting this new measure, which will end the system of one-sided flexibility that prevails and ensure that workers can request a predictable pattern of work. It is right that we are doing that.

The Bill sits in the context of a broader question about the model of work we want in 2023. One part of the answer to that question is that we want a model of work that is not fixed or ossified, as work perhaps was in the industrial age. We cannot respond to the gig economy by insisting on restrictions and inflexibilities that are inappropriate to this age. Ultimately, we will end up destroying jobs if we insist on too much structure and predictability, but neither can we chase the gig economy down the plughole of ever greater rights for employers at the expense of their staff. We cannot let employers dictate terms that include unacceptably low wages or unacceptable conditions.

One part of the answer, which is not within the scope of the Bill, is to ensure we have an immigration policy that ends the economic model of the last 20 years, in which we have imported foreign labour at the expense of British workers and at the expense of investment in our own people and in the innovation and technology that are needed if labour has its real value, which it does not if our rates of immigration are too high.

We also need to empower workers. My hon. Friend explained the problem very well. People are not robots that we can just switch on and off and leave dormant when we are not using them, waiting for us to switch them on again. We have to respect the human dignity of staff. As I said in an earlier debate, we need to recognise that people are not just workers; they have obligations and relationships outside work that we need to respect.

The question of what model of work we want is part of a broader question about what type of life we think people should have in this country. My simple answer is that we want people to have the conditions for a decent family and community life. An important measure to achieve that is ensuring we have a model of employment in which one adult can earn enough wages to support their family. We need jobs that support whole families, whether that is one full-time job or two, three or four part-time jobs. If someone has a partner, they need to be able to share the workload, to earn enough money to support the family, enabling them to have time for children or dependent adults and, importantly, to spend time supporting their community.

This introduction of a right to request a predictable pattern of work is good, and I applaud it. I like the fact that we are imposing a duty on employers in terms of what they should do when a request for a predictable pattern of work is made. I prefer duties to rights—the language is better, and the implication is better. We need to beware the wrong enforcement of duties that we create, but in principle, duties are better than rights because they imply relationships and obligations. The alternative—a world in which society is regulated only by individual rights—is one of eternal competition, a constant contest between individuals each claiming their due and eternal legal battles over who has broken which contract and which law.

We need a better culture than that, in which we recognise that we live under our obligations, not our entitlements, and our responsibilities matter more than our rights. That starts with people who have power in society—people with the power to hire and fire. We are insisting today on the fulfilment of employers’ duty to enable their staff to create the conditions for a decent family and community life. That is a good use of the power of the state, and I am delighted to support the Bill.

I congratulate the hon. Member for Blackpool South (Scott Benton) on bringing forward this very important Bill. I apologise: I may have mistakenly referred to him as the hon. Member for Blackpool North earlier; I know that can cause serious issues on occasion.

I will endeavour to keep my remarks brief as I am sure that Members across the House will wish to wrap up this debate and move the Bill on to the next stage of the legislative process as soon as possible. This appears to be a welcome piece of legislation, as measures to give workers the right to request more predictable terms and conditions of work are long overdue. Indeed, over the past decade we have seen an explosion in the use of unpredictable and exploitative zero-hours contracts that fail to guarantee for working people a set number of hours of work on set work schedules.

In 2010, just over 150,000 workers were employed on a zero-hours contract, but that number has risen dramatically, with more than 1 million now employed on such contracts, according to the latest release from the Office for National Statistics. As the hon. Member for Blackpool South highlighted, it does not reflect a rise in the number of people wanting flexible work, as such contracts offer flexibility only for employers, not for working people. It is a rise in the number of people who are being exploited in a dire employment market by bad bosses.

Under these contracts, working people feel pressured into accepting shifts, knowing that if they turn them down, they may not get any hours at all in future. Many are given hours at short notice: a TUC poll found that four in five were offered shifts with less than 24 hours’ notice, leaving them scrambling for childcare cover or transport to work, often at great cost. They are left entirely at the whim of the employer and, as a result, zero-hours contract workers find it next to impossible to plan their finances on time, thereby holding them back and holding back our economy. Is it really any wonder why our productivity is so poor compared with other countries when working people are exploited in this way? Women and those from an ethnic minority background are more likely to be exploited by zero-hours contracts, entrenching the discrimination they already face in the workplace.

I was, then, pleased that in their December 2018 good work plan the Government accepted that this is an issue that faces our economy in the 21st century and that action is needed to protect people’s rights in the modern world of work. However, as for many other pieces of legislation to address the injustices faced by working people, we have been waiting for far too long to see a Bill like this on the Floor of the House. Matthew Taylor published his review of modern working practices in July 2017 and it took another year and a half for the Government to publish their good work plan in December 2018. Although they accepted the recommendation to create a right to request a contract that guarantees hours for those on zero-hours contracts, it is not until now—more than four years later—that we are seeing legislation to give effect to it.

Why did the Government not include this legislation in the employment Bill that they have repeatedly promised from the Dispatch Box but appear now to have dropped? Such a Bill offered a clear opportunity to introduce the statutory right to request more predictable terms and conditions, as well as the opportunity to strengthen protections for pregnant women and new parents, to introduce a statutory right to carer’s leave and to protect people from harassment in the workplace—today alone we have considered Bills on all those things.

I want to be absolutely clear that the next Labour Government will, within the first 100 days of our taking office, move to put on the statute book our new deal for working people, which will ban zero-hours contracts and contracts without a minimum number of guaranteed hours. It will ensure that everyone working regular hours for 12 weeks or more will gain a right to a regular contract that will reflect the hours normally worked. It will ensure that all workers get reasonable notice of any change in shifts or working time, with wages for any shift cancelled without appropriate notice being paid to workers in full.

We will, of course, support this Bill. I look forward to seeing it progress to Committee very soon, so that we waste no more time to enhance much-needed rights for working people.

I thank my hon. Friend the Member for Blackpool South (Scott Benton) for proposing this important Bill, and I thank all hon. Members who have spoken on this subject. I am pleased to say that the Government support the Bill and are committed to ensuring that the UK is the best place in the world to start and scale a business—a phrase hon. Members will hear a lot more, after the Business Secretary’s recent speech from Davos about scale-up Britain, which is music to my ears. To do that, we need a strong and flexible labour market that supports participation and economic growth.

I would like to take a little time to talk about the Bill before addressing some points raised by hon. Members on both sides of the House. It is good to see cross-party support, for the third time today. Unlike the shadow Minister, we believe that zero-hours contracts are an important part of the UK’s flexible labour market, both for employers that do not have a constant demand for staff and for individuals who need to balance work around other commitments such as childcare and study. Around 1 million individuals are on zero-hours contracts—around 3% of the UK workforce.

The Government are keen to ensure that everybody can enjoy the benefits of flexible working. We are determined to tackle unfair working practices, such as the issue of one-sided flexibility where workers have to be available to their employer, with no guarantee of work. Employers may schedule or cancel shifts with little notice, leading to insecurity of work and income. I declare my interest, because my daughters are in a similar situation—one is of school age and works at the local pub, and that has happened to her. To be fair, a zero-hours contract works for her to provide flexibility from her side, too.

We recognise that receiving unpredictable and varying levels of income each month can make it difficult for some workers to meet the cost of rent, mortgage and household bills, especially during a cost of living crisis. My hon. Friend’s Bill will allow workers to request more predictable working arrangements, addressing the issue of one-sided flexibility, while ensuring that workers are able to continue working on a zero-hours contract or another form of non-guaranteed hours or temporary contract, if that is the type of arrangement that works best for them.

Does the Minister agree that it is important that employers feel that there is loyalty to their companies and loyalty to the work that the employee is doing? It should very much be a win-win.

I agree entirely. That is what modern employers are looking for. One of the biggest pressures that employers are facing is recruiting and retaining people. This is another measure where people can demonstrate that the workplace is fairer and more flexible, which should attract more people back into it.

The Bill will allow individuals and businesses to strike the right balance between flexibility and job security. Workers will be empowered and encouraged to start conversations with their employers about their work patterns, with the confidence that starting such a conversation will not result in detriment. We expect that employers will benefit from the new right, too—the point that the hon. Member for Bath made—through improved worker satisfaction and productivity. By allowing employers to retain skilled staff as workers, those workers will not have to look for a new role in order to secure a working pattern that meets their needs.

Facilitating higher productivity, both through this measure and the other five private Members’ Bills that we are supporting, will help to drive higher employment, wages and economic growth. As my hon. Friend the Member for Blackpool South has explained, the right will function in a similar way to the existing right to request flexible working. An employer will be able to refuse a request for more predictable working patterns on specific statutory grounds similar to those established for flexible working. We know how important it is to balance new workers’ rights with the impact on businesses, and those grounds will ensure that employers do not experience disproportionate burdens.

The Government consulted in 2018 on the right to request a more predictable contract, and the vast majority of respondents agreed with the creation of a right to request a more predictable working pattern.

I congratulate the Minister on his usual excellent summation of the legislation. On that final point, does he agree that giving employers certainty and giving employees the ability to have flexible working is a win-win and a good thing for both sides?

I entirely agree. That is why we have carefully struck a balance so that there will not be too much of a burden on employers. That would be detrimental to employees, too, because employers would be less likely to take people on. The right to consider it is clear, and the process is clear, but if it cannot work for the business, the process of saying, “I’m sorry, we can’t do that” is simple and set out in regulations.

The Government consulted in 2018 on the right to request a more predictable contract, and in response to that consultation we committed to introducing a right to request a more stable working pattern for all workers, including those on zero-hours contracts. Those workers will be able to make a request if their existing work pattern lacks predictability in terms of the length of their contract or the days or hours that they are required to work. The 2019 Conservative manifesto contained a commitment to introduce for workers

“a right to request a more predictable contract”.

I am therefore delighted that the Bill introduced by my hon. Friend the Member for Blackpool South reflects our previous commitments on this important issue.

The Bill will also build on the progress that the Government have already made in bringing forward measures allowing additional flexibility for workers on zero-hours contracts and those in low pay. As my hon. Friend the Member for Devizes (Danny Kruger) pointed out, in 2015 this Government banned exclusivity clauses in zero-hours contracts, helping workers on zero-hours contracts to secure additional employment and boost their incomes. As of December 2022, that ban has been extended to workers who have a guaranteed weekly income equivalent to or below the lower earnings limit of £123 per week. On top of that, on 1 April 2023 the Government will increase the national living wage for workers aged 23 and over by 9.7%, to £10.42. That keeps the Government on track to achieve our manifesto commitment for the national living wage to equal two thirds of median earnings by 2022 if economic conditions allow.

This is the sixth private Member’s Bill on employment rights that the Government are backing. As a package, those Bills will increase workforce participation, protect vulnerable workers and level the playing field, ensuring that unscrupulous businesses do not have a competitive advantage. The Bills build on the strengths of our flexible and dynamic labour market and give businesses the confidence to create jobs and invest in their workforce, allowing them to generate long-term prosperity and economic growth.

I will address some of the specific points made by colleagues. This is the Bill of my hon. Friend the Member for Blackpool South, and I am pleased to be able to explain the Government’s policy position on any points that he has raised. My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who is no longer in her place, made a point about the over-50s. It is important that we try to attract more over-50s who have left the workforce back into the workplace. We know that about 575,000 people of working age have left the workforce since the start of the pandemic. I joined a cross-ministerial group, put together with business groups, to look at how we can attract those people back into the workforce. That body of work is ongoing, and we are very keen to find solutions, which will be partly about making the workplace fairer and more flexible, as this legislation will do.

As my hon. Friend the Member for Blackpool South pointed out, the legislation will lead to a happier and more engaged workforce. He also mentioned the 26-week qualification period, which aligns with other, similar measures in employment law. As he points out, this results from a manifesto commitment, which is why we are delighted to be able to support his Bill today.

My hon. Friend the Member for Devizes made similar points and also talked about the balance to be struck between employer and employee and the other work we are doing and have done to improve workers’ rights, including that ban on exclusivity clauses. The shadow Minister, the hon. Member for Bradford East (Imran Hussain), said that the Opposition were considering banning zero-hours contracts and other measures if they ever got into government—I very much hope that day will not come. By implementing things like that, there could be some serious damage to the economy, were that situation to come to pass. Nevertheless, we will let the electorate decide on that.

To conclude, this Bill will introduce an important new right that will help to address the issue of one-sided flexibility and support those with unpredictable working arrangements to gain security of hours and income. It has been encouraging to see support across the House for this Bill, as is evident from today’s good-natured debate. The Government look forward to continuing to work closely with my hon. Friend the Member for Blackpool South to support the passage of these measures, and I commend the Bill to the House.

With the leave of the House, I thank Members for their contributions today. In particular, my hon. Friend the Member for Devizes (Danny Kruger) as ever made a thoughtful contribution, and I agree wholeheartedly with his comments about the need to utilise the experience, skills and potential of British workers, rather than automatically reaching for this lever of unskilled immigration and workers from overseas. I thank the hon. Member for Bradford East (Imran Hussain) for signalling the support of the official Opposition for my Bill. There is also the brilliant support from the Government, particularly the Minister and his private team, who have been incredibly helpful over the past few weeks and alleviated some of my stress with their technical guidance on some of the finer points of the Bill. That has been greatly appreciated.

I know that my fellow Thatcherite, my hon. Friend the Member for Christchurch (Sir Christopher Chope), is keen to introduce his Bill, so I will keep my remarks short. Suffice it to say, I hope that Members on both sides of the House can agree that this important piece of legislation will give workers struggling with unpredictability in their working lives a way of addressing that, by empowering them to discuss their working conditions with their employer to see whether they can gain more predictability in their hours and income. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).