EXCLUSIVE: Proposed guaranteed hours will be a disaster for workers
By Neil Carberry, chief executive of the Recruitment and Employment Confederation
One of the more unedifying aspects of political debate in the UK over the last couple of decades is the use of US talking points in the fundamentally different environment we have here in the UK. You see it all the time – and it even extends to how we talk about workers’ rights.
It is easy to knee-jerk to business views on workers’ rights as if there is some US-style anti-rights agenda amongst businesses. But firms have been partners on the Low Pay Commission for decades, and in Acas managing employee relations for decades more. They quelled the post-Brexit rush to set our jobs protections ablaze, stopped the excesses of Cameron’s Beecroft review and, just last December, helped get this Government’s Bill over the line with a sensible deal on unfair dismissal.
If you judge us by our works, therefore, it’s difficult to say businesses here are the anti-union, anti-rights campaigners that many in the Labour movement fear.
So when businesses here press the alarm button, it is worth listening to. As one business leader said to Jonny Reynolds last year at an event about the Employment Rights Bill, “You think we don’t like this because we want to keep workers down, or you can realise that we are raising concerns about this because we know what we are talking about.”
That’s the heart of it. Without belittling the importance of tackling poor practice and non-compliance, which the new Fair Work Agency will address, most workers in this country like their employers, and most employers are doing their best to give people great jobs. Taking their views on what works seriously is the business of good government.
Which brings us to the Guaranteed Hours powers in the Employment Rights Act. As currently proposed, they are a disaster for workers. As currently drafted, they may give absolutely every worker a right to demand to be employed for a set week after a very short time – and not even by their current employer, but by their employers’ client!
The original conception of these rights was very different. It came from the Low Pay Commission. Those proposals – agreed by businesses and unions – are not what the Act now introduces. Getting back to them is vital to protecting workers both in terms of predictable contracts and job opportunities.
That’s why a coalition of four trade associations – the REC, UK Hospitality, the British Retail Consortium and the Food and Drink Federation – wrote to Peter Kyle with our proposals for change. As employers of millions, we can see the damage current plans will do.
The goal of the LPC was to give workers an absolute right to a fixed hours contract where a seven-year Supreme Court case (that no worker would ever take) would. If you work a steady week for months on end, you clearly shouldn’t be on a zero hours contract.
As in Ireland, the LPC suggested temporary workers should be treated differently. They also suggested that the reference period should be designed with business.
That isn’t what the current plans do.
Instead, proposed rules do much more for those already in steady work. But they make things much worse for workers in the temporary and gig economy. The very people this change is meant to defend.
It creates incentives for employers to avoid creating marginal jobs – if you are tied in to employing after a short period someone when there is no work, there is a huge risk to businesses.
And this comes at a time that many businesses are struggling, after rises in energy costs and National Insurance as well as low growth.
But there is worse than this. If firms do create flexible work at all, all the incentives the current approach creates are to make that work more casual, not less. Businesses and unions alike have raised the concerning trend of false self-employment in jobs like retail and driving.
One union General Secretary once said to me that they found the attack on zero-hours contracts ironic, given that he had spent much of his career working to get casual workers onto them, as they offer protections that casual work does not. At present, the Government is about to level down rights for the workers they aim to protect.
So what can we do? Let me be clear – business are not saying the powers should be ditched, but four key changes are needed:
A longer reference period to ensure the absolute right lands where it is aimed. An absolute minimum of six months, but preferably a year.
Protect temporary opportunities. Access to the right should be delivered by agencies, not their clients. As in Ireland, these workers need a subtly different approach.
Set the low hours threshold at a targeted level rather than sweeping up workers who don’t need low hours protections.
Engage in immediate, meaningful discussion with business groups and unions about the suggested changes to the government’s proposals.
We all agree that no-one should spend years involuntarily working on a zero hours contract when they really have a steady working week. But these proposals miss the mark in hugely problematic ways for workers. This can be fixed – but Government needs to start working with the thousands of great British businesses who just want to make a success of our economy and our working lives.
