Move to establish charter for Zero Hours contracts

Liverpool City Council is set to establish a Charter Mark for local businesses to champion good practice in the use of agency staff.

It is one of a series of recommendations in a report to the Employment, Enterprise and Skills Select Committee, and follows a Scrutiny Panel which has looked at the issue of Zero Hours contracts in the private sector.

It looked particularly at what are known as mobile worker employment contracts, which are used by agencies to place staff in various workplaces.

It took evidence from a number of organisations including a recruitment agency, a firm which uses agency staff, the Department for Work and Pensions (DWP) and work programme provider A4E.

If found that more than half – 52 percent – of the 6,500 job vacancies in the city at the moment are agency jobs, and there is significant growth forecast by the Recruitment Industry Trends Survey.

The Scrutiny Panel also discovered that:

• A local firm which gave evidence is using large numbers of agency staff instead of permanent staff

• People working for a local recruitment agency do not receive overtime even if they work weekends and Bank Holidays; sometimes do not know if they are working until the day they are called in and are not members of a trade union

• A guarantee to have a 25 mile limit on travelling to workplaces can often be much further in reality as it is calculated as the crow flies rather than the distance by road or rail – and staff have to pay their own travel costs

• A loophole known as the ‘Swedish Derogation’ is being used to employ people on terms and conditions which aren’t the same as permanent staff

Councillor Barry Kushner, Chair of the Employment, Enterprise and Skills Select Committee, said: “What the Scrutiny Panel has heard is alarming evidence in the private sector of the increasing use of agency staff to replace core workers on inferior terms and conditions.

“It is making it extremely difficult for people to plan their lives, as they do not know from week to week or even day to day what hours they will be working, or how far they will have to travel.

“There is a real concern here that the welfare state is having to carry the burden of low waged and poor working practices because despite having more people in work they are increasingly relying on in-work benefits.

“More and more people are being employed on these type of contracts and we need action now to make sure that agency workers are treated fairly and are not taken advantage of.

“There is a case for good quality zero hours contracts where it suits the employer and the employee, and the city council itself uses standardised hours contracts for certain sessional jobs such as youth workers, sessional tutors and events staff. But in contrast to some private sector contracts, we ensure they have the same terms, conditions, rights and protection as every other member of staff – including access to the pension scheme and redundancy entitlements, and we do not use them to replace permanent staff.”

The Scrutiny Panel is also recommending that the Government:

• Puts controls and measures in place to ensure that zero hours contracts are only used when there is a real business need and not to circumvent broader employment rights

• Closes the Swedish Derogation loophole that exempts firms from paying the same rate of pay to agency workers that they do to permanent staff

• Allow short term benefits claims to be made by people affected by the uncertainty of zero hour contracts and consider whether the cost should be passed on to the businesses involved

• Make sure that the terms and conditions of jobs advertised on the Universal Jobs Match website are quality checked so claimants aren’t maneuvered into zero hours and low hours contracts.

• Consider regulation of Work Programme Providers being allowed to use recruitment agencies they own as the end employer for their clients, to make sure there is no abuse of public funds

It is also recommending that trade unions should actively recruit agency workers as members.

Councillor Nick Small, Cabinet Member for Employment & Skills, said: “I welcome and support this report and the work that has been done around this issue.

“The City Council is fully committed to doing its part to ban exploitative zero hours contracts which rip people off which is why we have worked with our trade unions to ensure the Council has got the highest standard of flexible working practices.

“It’s why we’ll be shortly launching our Employment Charter to encourage Liverpool businesses to follow our lead.”

The report will be considered at a special meeting of the Employment, Enterprise and Skills Select Committee on 9 October and can be read here