One in 10 #ukemplaw statistics are rubbish. Or is it six in 10?

I’ve written here more than once before about the seemingly growing practice by law firms and others of using eye-catching statistics based on ‘quick and dirty’, dubious or even non-existent research to grab a few headlines for their organisation. All too many journalists – in both mainstream media and the specialist press – seem to lack a critical eye, and to simply regurgitate ostensibly ‘shocking’ statistics without question or analysis. And this week has been a bumper week, with no fewer than four questionable research ‘findings’ on different aspects of the labour market making headlines.

On Wednesday, the BBC, Guardian, Independent, Daily Mail and others reported that 58.8 per cent of UK university graduates are working in jobs that do not require a degree, according to research commissioned by the Chartered Institute of Personnel & Development (CIPD). This startling figure was the lead news story on BBC Radio 4’s flagship Today programme, though it appears no one at the BBC thought to query the spurious precision – are the good people at CIPD quite sure it’s not 58.7 per cent? – or to ask how many UK university graduates had actually been surveyed for the research, and when.

The 29-page CIPD report is wordy and no doubt worthy, and there’s no question as to its academic credentials. But you have to dig quite hard to discover that the 58.8 per cent figure is based on data from just one question in a 2010 European Social Survey, namely: “how many years of education someone would need to be hired for their current job”. To arrive at the 58.8 per cent figure, the CIPD researchers then assume “15–16 years of education as the minimum indicator for a graduate job”. That is, they were probably a graduate. But hey, let’s stick 58.8 per cent in the press release and see how it goes. Bingo!

Later the same day, the Daily Telegraph reported that, according to new research by Citizens Advice, 460,000 workers – one in 10 of the 4.6 million self-employed in the UK labour force – are cheated out of holiday pay, sick leave and pensions because “businesses have wrongly hired them as self-employed”. For its 22-page report, Citizens Advice surveyed a total of 491 of its clients, through two separate surveys (one online), and then determined from their answers that one in 10 “are on ‘bogus’ [self-employment] contracts, and should rightfully be appointed as company staff”. (Based on my 13 years at Citizens Advice, I’m surprised it’s only one in 10, but that’s another matter).

Then, on the basis that the “scale” of these 491 responses “provides a statistically-valid representation of the UK self-employment market (at a 95% confidence level, with a plus or minus 4% margin of error)”, despite the respondents to the online survey having self-selected, the Citizen Advice wonks extrapolate their ‘one in 10’ to the 4.6 million self-employed, do a few quick sums to show how much that is costing HM Treasury in lost National Insurance payments (£314m a year), and – Bob’s your uncle! – they have a headline in the Daily Telegraph and a piece on BBC TV’s supposedly cerebral Newsnight (at 20m15).

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Except that, as any fule kno, and as – somewhat bizarrely – the very next sentence in the report acknowledges, Citizens Advice clients are not representative of the national labour force. On average, they are lower paid, lower skilled, work fewer hours, and – crucially – are far more likely to be working for an unscrupulous or ‘rogue’ employer. Furthermore, as already noted above, the online survey collected data from self-selecting respondents (the ‘methodology’ section of the report doesn’t even break down the number of respondents for each of the two surveys). Fortunately, not all journalists are as unquestioning as those at the Telegraph or Newsnight, so (for example) there is no mention of Citizens Advice’s ‘bogus’ 460,000 figure in the FT’s coverage of the report.

Come today, and the Independent reports that “zero-hours contracts make up one in four offers to [the] jobless”, according to research by recruitment website Glassdoor UK. However, a quick glance at Glassdoor’s own press release reveals that the ‘research’ says no such thing. According to that press release, 23 per cent of the 1,001 “unemployed people” surveyed online by market researchers Opinion Matters for Glassdoor in May reported having been “offered a zero-hours contract”. Which begs the obvious question: when, and how many times, were they offered such a contract?

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The press release doesn’t say, and there is no link to any actual report that might explain the research methodology, so I contacted Glassdoor. They replied with a generic statement from Opinion Matters on how they ‘recruit’ such respondents: essentially, respondents are remunerated for being part of a panel that completes any number of surveys emailed to them by Opinion Matters. So we have no way of knowing whether, and if so how, the 1,001 respondents are representative of ‘unemployed people’, even if we can agree on a definition of ‘unemployed’ (e.g. unemployed and seeking work).

Glassdoor also sent me a spreadsheet containing the survey data. This shows that the question asked was simply: “Have you ever [sic] been offered a zero-hours contract”. So, the ‘finding’ that 77 per of the 1,001 respondents have never been offered a zero-hours contract – despite 299 (one in three) having been ‘unemployed’ for longer than three years, and 38 for more than a decade – tells us nothing at all about the proportion of job offers made to ‘the jobless’ in 2015 that are zero-hours contracts.

But it is the middle of the Silly Season. Which perhaps explains why leading law firm Slater & Gordon thought it a good idea to press release its new research with a claim that “almost six in 10 people have witnessed or suffered bullying in the workplace”. Again, there is no link to any actual ‘report’ that might explain the research methodology – despite the press release explicitly referring to “the report” – so I contacted Slater & Gordon to ask for a copy. They told me that the research report exits, but cannot be shared “externally at this stage as some of the details are commercially sensitive”, and referred me to the generic methodology of market researchers Censuswide, who conducted the survey of 2,000 of their 69,000 (remunerated) panel members for Slater & Gordon. And, subsequently, Censuswide told me:

We used an online quantitative methodology to achieve the overall 2,000 sample base of UK workers. In terms of this sample being robust enough to represent the UK workforce, based on the latest employment data from the ONS, there is a total of 31 million workers across the UK. With this in mind, a sample size of 2,000 is considered to be robust and representative (working to a low margin of error of 2.2% and a confidence level of 95%).

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In short, Citizens Advice, Opinion Matters and Censuswide all appear to have worked on the highly questionable assumption that sample size alone is sufficient to ensure that their survey findings are representative of – so can be extrapolated to – the whole labour force. Which perhaps goes some way to explaining why the pollsters got it so wrong in May. For we know that, even if Citizens Advice surveyed all 30,000 of the self-employed people it advises through its “local offices” each year – Citizens Advice Bureaux seem to be a thing of the past, thanks to a recent brand makeover – the findings could still not be extrapolated to the national labour force. And how do we know that there isn’t a correlation between becoming a remunerated Censuswide panel member and having been bullied at work in the past, or between being ‘unemployed’ and becoming a remunerated Opinion Matters panel member?

Which is not to say that there are such correlations. We don’t know one way or the other. But if researchers don’t publish and explain the methodology used for their ‘research’, they must expect at least some people to question their headline-grabbing findings. And, perhaps more importantly, to question what they have added to the debate on labour market issues and appropriate policy responses.

[Postscript: Yesterday evening, Hetan Shah, executive director of the Royal Statistical Society, got in touch via Twitter to draw my attention to this fabulous “new free online stats course for journalists” that the Society has launched “to reduce just this kind of thing”. Managers at Citizens Advice might want to get their policy researchers to complete the course, too.]

Labour losing race to the top on employment rights policy

So, the supposedly free-market Tories have had their Stalinist-sounding ‘long-term economic plan’, and now Labour has a ‘better economic plan’. Towards the end of the latter, a chapter entitled ‘Supporting firms to win the race to the top, not get dragged into a race to the bottom’, states:

Too often it is assumed that the only way for firms in sectors such as retail, hospitality and social care to compete is by cutting employee pay and conditions. But many firms in these sectors want to be able to compete through higher skill, higher wage business models, without being undercut and dragged into a race to the bottom.

The [Coalition] Government has actively encouraged a race to the bottom by weakening the UK’s enforcement regime and promoting a hire-and-fire culture: doubling the qualification period for unfair dismissal, introducing fees for employment tribunals, and setting up a controversial scheme whereby employees trade their employment rights in return for a share in the company.

[Labour’s new industrial strategy] is about giving employers the tools they need to raise standards, and also protect them from being undercut, by raising the minimum wage, ending the abuse of zero-hours contracts, and making it illegal to use agency workers to undercut wages and conditions.

Bafflingly, there’s no further mention of – let alone any pledge to reverse – that doubling of the unfair dismissal qualifying period. Nor is there any mention of Labour’s previous pledge to reform the tribunal fees that have done so much damage to the ‘enforcement regime’. Given that employer lobby groups such as the CBI and FSB have openly called for the hefty fees to be substantially lowered, this is an astonishing omission from what is clearly intended to be a business-friendly document.

Indeed, once you cut through the rather repetitive references to ‘the race to the bottom’ and ‘raising our ambitions for the domestically-traded sectors’, there are precious few commitments to policy reform that might actually help achieve the plan’s lofty goals. Apart from reiterating both welcome plans to “encourage more employers to pay a living wage” and the disappointingly modest pledge to “increase the minimum wage to £8 an hour before 2020”, the 80-page document sets out just three broad policy pledges specific to “reducing the pressures employers face to get dragged into a race to the bottom”:

1. Banning the abuse of zero-hours contracts: giving workers on zero-hours contracts new legal rights to be protected from employers forcing them to be available at all hours, insisting they cannot work for anyone else, or cancelling shifts at short notice without compensation, and giving workers on zero-hours contracts who are actually working regular hours week-in week-out a right to a contract with fixed minimum hours. We will also introduce a new Acas Code of Practice [on zero-hours contracts].

This is all very well, but – as I’ve previously noted elsewhere and the document itself recognises just two paragraphs later, in relation to enforcement of the minimum wage – there is no point having rules if they are not enforced. And, presumably, the only way to enforce these proposed new rules would be for individual workers to pursue a tribunal claim against their abusive employer. Which very few workers would be likely to do, even without the fees of up to £1,200 on which the document is so surprisingly silent. So, new Labour ministers could huff and puff all they like, but their shiny new rules wouldn’t blow many rogue employers down.

2. Tackling undercutting by rogue employment agencies: taking action to crack down on rogue agencies that exploit workers illegally for profit – for example through a licensing system that ensures agencies are complying with basic standards or stopped from operating; extending the Gangmasters Licensing Authority approach to cover sectors where there is evidence of high levels of migrant labour and exploitative working practices; and closing the loophole in the Agency Workers Directive that allows agency workers to be used to undercut employees.

This is more encouraging, even if it is somewhat ill-defined. However, both the employer lobby groups and past Labour ministers have been strongly against extending the GLA’s licensing regime to other sectors – with good reason. And, since 2010, Coalition ministers have reduced the BIS employment agency standards inspectorate to a rump of just three staff. So it’s not at all clear who Ed Miliband, Rachel Reeves and Chuka Umunna think would do all the cracking down. In short, there’s a lot of work yet to be done on this policy pledge if it’s to become more than a vague sop to the TUC, which has stuck rigidly to its call to extend the GLA regime.

3. Ensuring proper enforcement of the rules: there is no point in having rules if they are not enforced. Under this Government, the number of inspections into whether the National Minimum Wage was being paid has more than halved and there have been just two prosecutions since 2010. There is widespread agreement that better enforcement would support employers that play by the rules. Labour will improve this by: increasing the fines for breaching the minimum wage to £50,000; extending the remit of the HMRC minimum wage unit to cover holiday pay; giving councils a role in enforcement; and trebling the fines for knowingly employing illegal migrants.

The last of this third set of policy actions is little more than dog whistle politics, but there’s a good case for capitalising on the local, front-line knowledge of councils in order to improve enforcement of the NMW. And extending the HMRC unit’s remit to cover holiday pay is something I suggested in 2011, as an obvious first step in incrementally fusing the HMRC unit and the GLA into a genuine fair employment agency; more recently, it was a recommendation of the June 2014 report on low pay by Alan Buckle.

But Labour are kidding themselves – and the voting public – if they think that increasing the maximum penalty for breaching the NMW to £50,000 will have more than a marginal impact. For the penalty is set at 100 per cent of the total arrears owed, and in all but a handful of cases that sum is relatively small, and certainly well below £50,000. For example, among the 162 NMW-flouting firms named and shamed by BIS to date, including the tranche of 70 named today, the total arrears owed – and so the penalty imposed – was less than £10,000 in 154 cases, and exceeded the current maximum of £20,000 in just four cases. And, as they each involved a number of workers, those four cases would have been more than adequately covered by the Government’s proposed new maximum penalty of £20,000 per underpaid worker, set out in the Small Business, Enterprise & Employment Bill and almost certain to become law before Parliament is dissolved on 30 March.

Of course, Labour could increase the penalties by increasing the penalty rate from 100 per cent of the arrears owed to, say, 200 per cent. But that’s quite different to what Labour are saying they would do, and might be quite hard to justify when, in the vast majority of cases, the total sum owed in underpayments is relatively small, and the employer is a (very) small business. Among the 162 firms named and shamed by BIS, the average underpayment per worker was just £306.11, and no fewer than 35 of the 162 firms are hairdressers or beauty salons. We’re (mostly) not talking big corporates here.

All in all, Labour’s ‘better economic plan’ is depressingly short on credible, fully-formed (and costed) policy ideas for halting the race to the bottom in pay and working conditions. The good news is that I’m available to help sort that out, and my daily rate is a lot less than Jack Straw’s.

Waiting for your call, Chuka.

 

 

 

 

 

 

The holes at the heart of Ed Miliband’s #ukemplaw speech

Yesterday, Labour leader Ed Miliband responded to recent media and internal criticism of his leadership by giving his #ukemplaw speech. This didn’t go quite so far as resolving the question of whether voluntary overtime should be included in holiday pay, but it did include a robust denunciation of inequality and the casualisation of so much of the UK’s labour force. There were repeated mentions of zero-hours contracts, low pay, and insecure work, and more than one shout-out for the Living Wage.

All fine and dandy, even if there wasn’t any new policy as such, and had the event concluded at the end of Miliband’s speech I would most likely have left Senate House feeling somewhat encouraged. But the speech was followed by a Q&A, and my positive mindset was inadvertently shattered when a Labour activist in the audience – picking up on her leader’s condemnation of zero-hours contracts and citing her own bitter experience – gamely urged Miliband to legislate for an outright ban.

Starting his response with a swipe at the Coalition’s plan to simply ban exclusivity clauses, which he (rightly) noted will do nothing to tackle the exploitative use of zero-hours contracts, Miliband went on to re-iterate Labour’s own plan to pass legislation giving zero-hours workers who are in fact working “regular hours” a legal right to demand a regular contract. “It is essential we do this”, said Miliband, “as the problem is affecting so many people.”

And then Miliband was off to the next question, without explaining how or why the “bad businesses” that cause so much misery to “so many people” will change their exploitative practices just because politicians in Westminster have passed yet more new employment law. Will tens of thousands of vulnerable, zero-hours workers suddenly discover the courage (and resources) to risk almost certain dismissal (or just a reduction in their hours to, well, zero) by issuing a tribunal claim against their exploitative employer for refusing to give them a regular contract?

No, they won’t. Which is why, if Miliband and his party are serious about tackling the ever greater casualisation of the labour market, and the associated zero-hours contracts, chronic low pay and insecure work, they have to start thinking about doing more than simply pass more laws creating more rights. For, as the October 2014 report of Labour’s own National Policy Forum acknowledges, “Employment rights have to be enforceable to mean anything.”

And what plans does Labour have to make employment rights – existing and new – more enforceable?

Well, somewhat belatedly, the party has started making the right sort of noises on tribunal fees, which have slashed the number of cases by 65% and left the average private sector employer facing a claim just once every 83 years. However, it’s pledge to replace the fees regime with one in which “affordability will not be a barrier to workplace justice” remains more a clumsy slogan than a credible policy solution to the not insignificant problem that outright abolition now comes with a price tag of some £40m in lost fee income (£4m) and increased operational costs (£35m).

However, as already noted, understandable fear of victimisation or summary dismissal means that, high fees, low fees or no fees, many abused workers will not even contemplate taking their employer on with a tribunal claim. And that means rogue employers can profit from exploitation with near impunity. It was for this reason that, in 1999, the then Labour government established the mechanism by which the national minimum wage is enforced, both in response to complaints and pro-actively, by a team of HMR inspectors. And similar reasoning lay behind the creation of the Gangmasters Licensing Authority (GLA) in 2005.

The National Policy Forum report includes a pledge to extend the narrow remit of the GLA to other sectors such as “construction, hospitality and social care” – but the CBI, REC and other employer bodies will never swallow such an extension of licensing (and see below). And the report states that “alongside increased fines and a new role for local authorities in enforcement [of the minimum wage], HMRC’s remit on enforcement should be expanded to include related non-payment of holiday pay” – these being recommendations from the May 2014 report for the Party on low pay and the future of the minimum wage by businessman Alan Buckle. But the fines have already been substantially increased, and it is hard to see many cash-strapped (and in many cases near bankrupt) local authorities taking an active role in such (limited scope) enforcement.

So, if Miliband’s #ukemplaw speech is to mean anything, he and shadow ministers need to take a leaf out of Vince Cable’s book. Last month, at his party’s conference in Glasgow, Cable quietly announced that the Liberal Democrat manifesto for May 2015 will promise a new Workers’ Rights Agency that would “revamp efforts to enforce employment law and tackle the exploitation of workers” by combining the remits and work of “the minimum wage enforcement section of HMRC, the working time directive section at the Health & Safety Executive, the BIS Employment Agency Standards Inspectorate, and the GLA.” According to Cable, this “joined-up enforcement approach” would “ensure the minority of unscrupulous employers who break the law do not get away with undercutting other employers who play by the rules.”

And, if it makes Miliband and colleagues feel better about lifting ideas from Cable, this wasn’t actually Cable’s idea – he simply lifted it from me. Over more than a decade at Citizens Advice, I repeatedly advocated a consolidation of the State enforcement bodies into a Fair Employment Agency, so as to shine a light into the murkiest corners of the labour market, provide better value to taxpayers, and secure a fairer competitive environment for business. And I’ve continued to do so in recent years. I really am that boring.

However, not long after I got home from Senate House, a tweet by shadow work & pensions secretary Rachel Reeves alerted me to another, equally depressing hole in Miliband’s purported determination to tackle the scourge of insecure and badly paid work. Reeves was tweeting a link to an interview she and shadow business secretary Chuka Umunna have given to the Financial Times, from which it is clear that, faced with protests from the CBI and others, Reeves and Umunna are now rowing back on Miliband’s eve of conference pledge to raise the minimum wage rate to at least £8.00 per hour from October 2019. And, later in the evening, on BBC Newsnight, Umunna confirmed that Labour would only “try to get the minimum wage to £8.00 per hour by 2020”.

So, while Miliband’s #ukemplaw speech has been rightly praised for its greatly improved oratory and highly commendable “focus on inequality and insecurity,” the content seems as sadly hole-ridden as ever.

Have your say on the Small Business, Enterprise & Employment Bill

After a slow start – nothing much happened until early 2011 – the Tory-led Coalition has kept us employment policy wonks pretty busy over the last four years. We’ve had one significant piece of primary legislation – the Employment & Regulatory Reform Act 2013 – and several pieces of secondary legislation providing for extensive reform of both employment law and the employment tribunal system. We’ve had an overhaul of the employment tribunal rules of procedure, some tinkering (yet to come fully into force) with the law relating to parental leave, and a major consultation on how to tackle the proliferation and abuse of zero-hours contracts. And, last but not least, we’ve had the introduction of hefty, upfront fees for tribunal claimants that have demolished access to justice on workplace rights.

However, with the Tories and Liberal Democrats having arranged for the nation to enjoy a full five years of coalition government, irrespective of what the nation might want, ministers have decided there’s still time for a tad more employment law reform.

Well, I say ‘reform’, but the handful of clauses on employment law in Part 11 of the Small Business, Enterprise & Employment Bill – which starts its committee stage in the Commons on 14 October – are more tidying-up than fundamental change. And at least three of them are likely to make little if any practical difference, however sensible and welcome they might seem at first glance.

Given the scope and arguably more fundamental nature of the rest of the 142-clause Bill, it seems unlikely that these employment provisions will receive more than limited scrutiny by MPs and peers. But the Committee of MPs that starts work next week is keen to receive external input, and if you have the time and the inclination you can submit your views and comments up until 6 November.

I urge you to do so. And, for what it’s worth, the following is what I have submitted to the Committee, covering clauses 136, 138, and 139.

Clause 136: Financial penalties for non-payment of an ET award

Clause 136 provides for the imposition of a financial penalty of up to £5,000 on an employer who fails to pay a tribunal award (or Acas-conciliated settlement), the aim being to discourage such non-payment.

During my time at Citizens Advice (2000 – 2013), I researched and wrote three reports on the widespread non-payment of tribunal awards: Empty justice (2004); Hollow victories (2005); and Justice denied (2008). So I warmly welcome the financial penalty mechanism provided for in clause 136, not least because it is pretty much the same mechanism that I proposed to ministers in 2012, during the passage of the then Enterprise & Regulatory Reform Bill. Ministers were not (sufficiently) impressed by the idea then, but pressure from the opposition front bench did lead to BIS minister Jo Swinson commissioning further research on the issue (replicating the research commissioned by the Ministry of Justice, in direct response to Justice denied, in 2009). And the damning findings of that BIS-commissioned research have evidently led to a ministerial change of heart.

Some have been quick to note that clause 136 would not solve the problem of non-payment of awards and Acas settlements. Indeed it would not, but then no single measure would, as the problem is extremely complex. There are other steps that BIS and the Ministry of Justice could and should take, such as ‘naming & shaming’ those employers who fail to pay up. But, by creating a meaningful financial disincentive to non-payment of an award, clause 136 could be expected to at least reduce the rate of non-compliance.

Except that, the kind of relatively low-value claim for e.g. unpaid wages, holiday pay and/or notice pay that has in the past often culminated in a hollow victory for the claimant when the employer fails to pay up, is also the very kind that has been eviscerated by the hefty, upfront tribunal fees introduced by the Ministry of Justice in July 2013.

Not surprisingly, vulnerable workers subjected to wage theft by a rogue employer have proven to be reluctant to throw up to £390 of good money after bad. So the number of claims for unpaid wages etc. has tumbled, from an average of 4,587 per month in the nine months immediately before the introduction of fees, to an average of just 1,073 in the nine months up to June 2014.

In short, thanks to the tribunal fees introduced in July 2013, the longstanding problem that clause 136 seeks to (partly) address is no longer quite the problem that it was. So, while BIS might now seek credit for trying to close the stable door, most of the horses have been galloping around the fields since July 2013, and will continue to do so until such time as the tribunal fees regime is substantially reformed.

Clause 138: Maximum financial penalty for breach of the NMW

Clause 138 provides for an increase in the maximum financial penalty that can be imposed by HMRC for breach of the national minimum wage, from £20,000 per employer (technically, £20,000 per Notice of Underpayment), to £20,000 per underpaid worker.

On the face of it, clause 138 is welcome. Fifteen years after its introduction, there can be no excuse for not paying the NMW. But the practical impact of clause 138 would be negligible, for two reasons.

Firstly, as the average underpayment (and penalty imposed) per worker was just £205 in 2013-14, the number of employers who pay even the current maximum penalty of £20,000 is small: just 52 (eight per cent) of all 652 employers penalised in 2013-14. So the number liable to receive a penalty anywhere near the proposed maximum of £20,000 per underpaid worker would be even smaller.

Secondly, HMRC already can in effect impose a penalty of up to £20,000 per underpaid worker, by the simple expedient of issuing more than the normal one Notice of Underpayment to the employer. This practice was adopted in March 2014, when the penalty percentage was increased from 50 per cent to 100 per cent of the total underpayment, and the maximum penalty was increased from £5,000 to £20,000. (I am not aware of any published figure for the number of employers issued with more than one Notice of Underpayment since March 2014, but the Minister may be able to provide that figure to the Committee).

In short, all that clause 138 would do is align the statutory power to set the maximum penalty with the practice adopted by HMRC in March 2014 (in order to meet the Prime Minister’s announcement in November 2013 that penalties would be both increased and imposed on a ‘per worker’ basis). According to the associated BIS Regulatory Impact Assessment, this would save HMRC some £250,000 per year in administrative costs associated with serving a small number of employers with more than one Notice of Underpayment.

However, that would be the sum total of the impact of clause 138. And, as it is not clear from the Regulatory Impact Assessment how HMRC (or BIS) arrived at the total costs figure of £250,000, even that figure might well be an over-estimate.

Clause 139: Banning exclusivity clauses in zero-hours contracts

According to a BIS facts sheet on the Bill, clause 139 would “make exclusivity clauses in zero-hours contracts invalid and unenforceable,” the aim being to address the abusive use of zero-hours contracts.

Such exclusivity clauses – which prevent an individual on a zero-hours contract from working for a second employer, even when no work is on offer from the first – are easily labeled as unfair. But even if clause 139 achieved its aim of making such clauses “invalid and unenforceable” – a rather large ‘if’ – it would still have little if any impact on the abusive use of zero-hours contracts, for the simple reason that such exclusivity clauses are far from essential to that abuse.

In practice, all that an abusive employer has to do is let it be known that taking work with another employer will result in no further work being offered. Employment law specialist Mark Tarran has put it this way:

Zero-hours contracts before [clause 139]: “If you work anywhere else you will be in breach of contract and I won’t give you any more work.”

Zero-hours contracts after [clause 139]: “If you work anywhere else you will not be in breach of contract but I still won’t give you any more work.”

It is worth noting that, according to BIS, only 125,000 – about one in ten – of the estimated 1.2 million zero-hours workers have an exclusivity clause in their contract. And why would employers not have bothered to insert such a clause into nine out of ten zero-hours contracts? They didn’t, because they don’t need to. Take away the exclusivity clause, and the worker is still on a zero-hours contract, with no guarantee of work from one week to the next. And that is what makes them vulnerable to abuse.

To my mind, zero-hours contracts are best viewed as one (very nasty) symptom of a killer disease: the abuse of vulnerable workers by exploitative employers. That disease has become more prevalent and more virulent in recent years. But treating a symptom will not cure the disease, even if it makes the doctor feel more comfortable.

[Postscript: my submission has now been published by the Bill Committee]

Labour’s contract killing

Earlier this week, I was offered a contact. Which, sadly, doesn’t happen as often as my bank manager or my family would like. And, in any case, there wasn’t any money involved. At least, not for me.

On the plus side, the contract was offered to me by none other than the leader of the Labour Party, Ed Miliband. Yes! Me and Ed, bound together by a contract signed in brotherly blood. Well, me, Ed and a few thousand other people. Maybe tens of thousands. Quite a lot of brotherly and sisterly blood, then. Ed might need a transfusion.

As contracts go, it’s quite short – just ten brief clauses, each one a policy pledge by Ed. And, being a workplace rights nerd, I was pleasantly surprised to find that no fewer than three of the pledges relate to workplace rights. However, the wording of those three clauses left me with both a sinking feeling in my stomach, and a strong desire to bash my head against the nearest wall. Let’s take each of the workplace rights pledges in turn.

Ban exploitative zero-hours contracts

Well, I’ve already written elsewhere about Labour’s fumbling towards a credible position on the exploitative use of zero-hours contracts, so I’m not going to add much here. Suffice to say, Ed and his team are going to have to wake up to the fact that, whilst it’s very easy to make speeches criticising the exploitative use of zero-hours contracts, in practice (and in law) it is not so easy to distinguish between the exploitative and the fair use of such contracts. The very same paper zero-hours contract could be used entirely differently by two separate employers – one in a way that benefits both the employer and the employee, and one in a way that benefits only the employer and simply exploits (and quite possibly brings severe hardship to) the employee. That’s a conundrum that won’t be solved by sloganeering.

Make work pay by strengthening the Minimum Wage

Well, yes, but what does ‘strengthening’ the NMW actually mean? In the hope that someone in Labour might provide an answer, earlier this week I put the question out on Twitter. And Antonia Bance – a former Labour parliamentary candidate – promptly responded by suggesting that it means “raising & enforcing [the NMW]”.  Well, yes, but raise it by how much, and better enforce it how? To which Antonia’s response was: “I don’t think we ‘ll know the answers to questions of detail unless Labour get into government”, and “broad promises that show direction of travel & values are thought more effective than detailed pledges”.

So it would seem. But to my mind, the votes of the more than one million workers paid at or just above the NMW rate are much more likely to be captured by a specific promise of a new, higher rate than they are by a ‘broad promise showing direction of travel’. George Osborne is on record as saying he believes Britain can ‘afford’ a rate of £7.00 per hour, without any significant negative labour market consequences, and if George Osborne thinks that then it’s surely not too much to expect a Labour government elected in May 2015 to go at least that far. Furthermore, from £7.00 per hour it’s really not that far to the Living Wage rate (outside London) of £7.65 per hour. So why not make an explicit commitment to an immediate hike in the NMW rate to £7.00 or even £7.50, and to achieving parity with the Living Wage by 2020?

Yes, that would imply making the Low Pay Commission redundant. But perhaps the Commission’s budget would be better spent enforcing the NMW, rather than just talking about it and (mostly) recommending below inflation increases. Government ministers routinely make decisions with far greater economic implications than what the NMW rate should be, and the long-term future of the NMW rate could be secured by writing into legislation an annual uprating at least as great as inflation. It’s really not rocket science.

Tackle the abuse of migrant labour to undercut wages, by banning recruitment agencies that only hire foreign workers

This is the one that really made me want to bang my head against a brick wall. For, leaving aside (for Jonathan Portes and others) the question of whether migrant labour does actually  ‘undercut wages’, the proposed ban is so patently nuts that this clause of Ed’s contract looks like nothing more than a shameful case of dog-whistle politics. Because, if hiring only foreign workers were to become illegal, what proportion of indigenous workers would a recruitment agency have to hire to be legal? One per cent? Ten per cent? Fifty per cent? Fifty-one per cent?

And, were any such arbitrary figure to be (foolishly) enshrined in law, who would police it? Under the Coalition, the BIS Employment Agency Standards Inspectorate has been reduced to a rump of just two inspector-level staff. Would Ed’s contract deliver any more human and other resources for enforcement of new (and the existing) rules?

Again, earlier this week I put these questions out on Twitter, in the hope that someone in Labour might be willing to provide some answers. When they didn’t, I put my questions direct to John McTernan, the fearsome Labour thinker and strategist with the self-appointed task of keeping Tony Blair’s halo shiny and bright. And, whilst first noting that he is “not my brother or sister’s keeper”, John was frank enough to say: “I think there are worse things than foreign workers. Like non-enforcement of [the] NMW”. Hear hear to that.

So, I will keep on posing these (and other) questions, in the hope that someone in Ed Miliband’s team might stop and think these silly contract promises through before they find their way into the manifesto for May 2015. Because, to my mind, that would be a serious mistake that might just blow up in some shadow minister’s face at some point during what is clearly going to be a tough and dirty election campaign. Or maybe Antonia is right when she says the party manifestos “will be meaningless this time because of possible coalition”.

Now that really is a depressing thought.