House of Commons Scottish Affairs Committee - Report on Zero Hours Contracts

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Head Office Circular No HO/083/14                                   16 April 2014


TO:  ALL BRANCHES, REGIONAL COUNCILS,
REGIONAL OFFICES, COUNCIL OF EXECUTIVES & HO OFFICERS.

Dear Members,

House of Commons Scottish Affairs Committee - Report on Zero Hours Contracts

The impact on rail safety and employment rights of zero hours contracts in the rail industry and offshore has been severely criticised by the House of Commons Scottish Affairs Committee in a hard hitting report released on 14th April. Chairman Ian Davidson MP who is an active member of the RMT Parliamentary Group said that the “overwhelming majority of zero hours contracts are abusive and exploitative and should be abolished”. He called on both the UK and Scottish Governments to use “every lever at their disposal to effect this change in culture” against exploitative contracts. Recommending that both Governments should have procurement policies that guarantee minimum standards for workers and which reduce the use of insecure employment practices such as zero hour contracts, the Committee “call on both Governments to set out what steps they will take to achieve this”

In our evidence to the Committee RMT left MPs in no doubt as to the threat to workers’ safety, pay rates and employment rights posed by zero hours, especially in  industries like rail. RMT told MPs that: “Zero hours only help the employer to cut costs – they offer no real benefits to workers, especially in safety critical industries in the transport sector.”

Rail
The Committee in a number of hard hitting recommendations said:  “We welcome Network Rail’s acknowledgement of the risks of using zero hours contracts in safety-critical roles. Zero hours contracts have been shown to be incompatible with running a safe railway and Network Rail must demonstrably reduce their dependence on them, both in its role as a direct employer and indirectly through its use of contractors.”

The fact that in May 2013 the Office for Rail Regulation Safety Director, Ian Prosser stated in a letter responding to RMT concerns over zero hours that these hyper-exploitative contracts ‘...are not conducive to the development of a safe railway’, strengthened our arguments to the Select Committee  that a five year budget negates the need for short term flexibility.

The Committee’s subsequent recommendation makes clear: “We believe that the stability of work and funding offered by a five-year control period means that Network Rail does not have a business need for the flexibility that zero hours contracts provide. Its only justification in using them must therefore be to reduce costs. This is not sufficient reason to put the safety of workers in jeopardy and to deny them the opportunity to be an employee and receive the employment rights that go with that status. Network Rail should take more work in-house and make greater use of fixed-term and part-time contracts”.

Offshore
In further evidence to the Committee RMT described how in February 2014 the offshore industry “came very, very close to a major, major incident West of Shetland in the last month”. The incident had the potential to capsize a linkputting 150 people at risk.

In a major victory for the RMT, the Committee found “Zero hours workers have a right to work in a safe environment and must be able to raise concerns without fear of losing their job. Despite a number of reports detailing the risks of zero hours contracts in safety-critical industries, the Government’s consultation on zero hours proposes nothing to protect workers who speak out. In response to this Report, the Government must set out the steps it will take to ensure that individuals who question the conditions in which they are expected to work and the quality of service they are able to provide, are protected from the actions of unscrupulous employers”

Other notable conclusions from the Committee stated “Denying workers rights that are legally due to them…….. is unacceptable. Employers must make clear from the outset an individual’s employment status. In addition, all workers should be legally entitled to a written contract setting out the terms and conditions of their employment. The Government must come forward with a robust means of protecting workers in insecure employment that enables them to claim the rights to which they are entitled without suffering detriment. Such a system must be enforceable and employers who abuse it appropriately penalised”.

Whilst welcoming the Government’s concern about a lack of transparency around zero hour contract’s the Committee failed to see how the Governments unenforceable Code of Practice, which aims to curb abuse by unscrupulous employers, can be ‘employer-led’ and still be effective. “Such proposals should only be implemented as a stepping stone to, or following, legislative change aimed at reducing the use of zero hours contracts and protecting those who are on them” they said.
 
The Committee recommended that the Government legislate to ban the inclusion of exclusivity clauses in all employment contracts that do not guarantee work.

In a final hard hitting conclusion the report states “The problems with zero hour’s contracts, as well as other forms of casual labour, are clear, yet it does not have to be this way. Many organisations are able to manage without using zero hour’s contracts: local authorities have moved away from using them directly and most major supermarkets are able to respond to fluctuations in their sectors without them. The use of zero hour’s contracts is out of all proportion to what is required and is creating a two-tier workforce. Employers should make much greater use of permanent, part-time, fixed-term or variable hour’s contracts which guarantee minimum hours and provide workers with a degree of certainty. Zero hours contracts must only be used where the employer can objectively justify their use”
The report can be accessed via the attached link:-


http://www.publications.parliament.uk/pa/cm201314/cmselect/cmscotaf/654/654.pdf


Yours sincerely,

Mick Cash
Acting General Secretary