Government’s zero-hours contract plans faces heavy criticism

The government’s Employment Rights Bill has caused some concerns regarding the plans surrounding zero-hours contracts.

The criticism comes from the chance that certain elements could create a boom in ‘false self-employment’ numbers.

This is according to the Recruitment and Employment Confederation (REC) – its response to a House of Commons Business and Trade Committee Make Work Pay programme inquiry meeting held last week.  

Neil Carberry told the Committee meeting at the Palace of Westminster: “Agency workers do not exist in a monopsony – they have choice. They sign up to multiple agencies and each agency has the ability to place them in many places. They feed back to us the value of being able to say, ‘I don’t like it there’, ‘I don’t want to go there’ or ‘put me somewhere else’.

“When we think about extending powers on Zero Hours Contracts to agency workers, we are talking about one million people who went to work as temps this morning. The articulation from government as to why agency might be covered by these powers is that ‘we want to avoid direct employers using agency as a loophole’.

“I don’t think one million agency temps should be taken for granted like that. I think we need to accept that agency workers are protected by their own Act, two sets of regulations, an independent regulator – which needs some more resource – and defined statements in Key Information Documents (KIDs).”

Neil added, “Agency worker is largely two-sided flexibility and that is why we want to ensure agency workers have choice.

“We need to deal with agency differently; two suggestions from us: strengthening some element of Agency Workers regulations; and do more on hours in the KIDs. It feels like there is a real risk of, in an attempt to avoid evasion by direct employers, bringing one million temps into this regime [will be] driving some of the behaviour we have seen reported in the past months where some direct employers are using platform sites to engage people who are patently workers as self-employed. The real enemy is false self-employment, that is our primary concern about the reality of the Bill.”

The REC also highlighted concerns about umbrella company compliance being unaddressed by the Bill and the need to focus on better enforcement of existing law as a priority.

Neil explained, “The Bill has nothing to say about the primary thing that my members think the government should regulate which is the use of umbrella companies, and that is a major lacuna.

“Umbrella companies are largely acting as employer of a percentage of temps. Once they exist in a sector, they are quite difficult for agencies who payroll their own temps to compete with. There are good standards around those who audit umbrella companies, like the FCSA, but there are examples of pretty poor payroll practice in the sector. We would like to see the kind of regulation that the Employment Agencies Act [and] the Conduct Regulations bring to employment businesses (agencies) brought to umbrella companies as well.”

To find out more about contracting please contact Sophie on 01206 591 000 or email sophie.lewis@contractoumbrella.com.