Ed Miliband vows to get tough on zero-hours contracts

Labour's crackdown, marked in address to TUC, comes as UK languishes near bottom of G20 pay league

Ed Miliband will put forward plans on Tuesday to outlaw the exploitative use of zero-hours contracts, as new figures show Britain has suffered the second biggest fall in wages of any G20 country since the coalition took office.

In an address to the TUC, Miliband will set out proposals to tackle the spread of zero-hours contracts, now believed to affect millions of workers and which have become the symbol of a post-recession economy built on job insecurity and exploitation.

Miliband's commitment stops short of an outright ban on the contracts but will be welcomed by unions demanding he shifts focus from union-Labour reforms to proposals to help working people. Research published by the Unite union this weekend suggested as many as 5.5 million people could be on zero-hours deals offering little or no guarantee of work and pay.

Labour officials said it was likely the proposals would include giving anyone working for a single employer for more than 12 weeks on a zero-hours contract the automatic right to a full-time contract based on the average time worked in the 12 weeks.

The scale of the living standards crisis, in part created by demands for greater labour market flexibility, is underlined in the new figures from the Commons.

A combination of high inflation and a clampdown on wages by UK employers has meant that workers in France, Germany and Canada have seen their pay packets relative to inflation recover since 2010 while the average British worker is £1,500 worse off. Only Italy has performed worse.

The gap between inflation and wage rises mean average wages adjusted for inflation in the UK fell 2.6% from 2010 to the end of 2012 compared with a rise of 0.5% in France, 2.7% in Germany and 3.4% in Canada.

Miliband, who is likely to face a difficult audience at the TUC conference in Bournemouth as relations are strained by the Labour leader's reform efforts, will say any economy that works for working people must have security as one of its foundation stones.

He will pledge to "ban practices which lead to people being ground down", adding that "an unequal recovery won't be a stable recovery. It won't be built to last".

In a competing speech on Monday, the chancellor, George Osborne, will claim the economy has turned the corner, suggesting the recovery under way is sustainable and proof that he was right to reject Labour calls to abandon spending cuts.

A bullish Osborne will say the best way of safeguarding living standards is growth but also promise the proceeds will be shared fairly.

Miliband will propose three specific measures to reduce the use of zero-hours contracts:

• Banning employers from insisting zero-hours workers be available even when there is no guarantee of any work.

• Ending zero-hours contracts that require workers to work exclusively for one business.

• Ending the misuse of the contracts where employees are, in practice, working regular hours over a sustained period.

Miliband has asked Norman Pickavance, former director of human resources at the supermarket chain Morrisons, to chair an independent consultation with business groups and others on how the measures might work.

In particular, he will investigate options to ensure that workers who are actually working regular hours week in week out cannot simply be left on zero-hours contracts without their consent. They include the assumption that workers will move on to a regular contract after a specific period of regular employment.

He will also be asked to work with business to investigate whether other measures should be considered and whether additional legislative steps should be taken.

Miliband will tell the TUC: "We must stop flexibility being used as the excuse for exploitation."

He will continue: "Of course, there are some kinds of these contracts which are useful. For doctors, or supply teachers at schools, or sometimes, young people working in bars. But you and I know that zero-hours contracts have been terribly misused. This kind of exploitation has to stop."

The business department is conducting a review into the scale of the zero-hours contract economy, but Miliband's plans are the most specific proposals to reform so far.

The figures on wages, which also showed that the G20 countries Mexico, Turkey, Russia and South Africa saw bigger rises in real wages, were produced by the OECD and analysed by House of Commons library staff for the Labour party.

The figures highlight the problem faced by Osborne and the Bank of England as they try to sustain a recovery that has accelerated since January, but many economists fear could soon run out of steam.

Critics of the government believe persistently high inflation will undermine the benefit of rising wages and force workers to continue digging into their savings or adding to their already large debts to maintain consumer spending. But Osborne will insist the recovery is sustainable because consumers are also unloading debt.

Miliband will say: "Living standards have now fallen for longer than at any time since 1870. You know what that means. People not knowing how to make ends meet at the end of each month.

"After over three years of this government, with our economy still smaller than it was before the financial crisis, the rewards in our economy are going only to the few at the top. And that's not just unfair. It's bad for our country."

The speech comes as a time when Unions are demanding concrete signs of Miliband's responsible capitalism agenda. But his aides argue it is not a sop to sceptical unions since insecurity at work affects most people. In addition, most people on zero-hours are not in unions.

Article Source : http://www.guardian.co.uk

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Agency workers paid up to £135 a week less for same job, says TUC

Agency workers are being paid up to £135 a week less than permanent staff for doing the same job, despite EU rules saying they are entitled to equal pay, claims the TUC.

The union body is to launch a formal complaint on Monday against the government for failing to enforce European rules that are meant to guarantee equal treatment for temporary staff.

UK regulations implementing the EU's temporary agency workers directive entitle workers drafted in through agencies to the same pay and conditions as their permanent colleagues after 12 weeks. But the TUC says a widely used loophole means up to one in six agency workers are missing out.

The TUC general secretary, Frances O'Grady, said: "The recent agency worker regulations are being undermined by a growing number of employers who are putting staff on contracts that deny them equal pay. Most people would be appalled if the person working next to them was paid more for doing the same job, and yet agency workers on these contracts can still be treated unfairly."

The TUC has become increasingly frustrated about the growing use of the loophole known as the Swedish derogation, which allows agency workers placed with companies to be paid less than direct employees, provided the agency agrees to continue paying them for at least four weeks at times when it is unable to find them work.

On Monday, it will to lodge a formal complaint against the government with the European commission in Brussels, saying the UK is failing to protect temporary workers properly in the way it has implemented the directive.

Billy Hayes, the general secretary of the Communication Workers Union, said: "Some of the lowest-paid workers in the UK are being cheated out of their rights to equal pay by cynical employers intent on keeping their wages low."

He added these "payment between assignment" contracts can often be even worse for workers than the much-criticised zero-hours contracts, which offer no guarantee of regular work.

"The whole point of the 2011 agency regulations was to bring the principle of equal treatment, including equal pay, into UK law. But the introduction of new contracts means many agency workers are signing away their rights to equal pay – which for most people is the most important element of the regulations. The irony here is that if you're on a zero-hours contract you're actually better off because you qualify for equal pay after 12 weeks," he said.

The business secretary, Vince Cable, ordered an investigation into zero-hours contracts earlier this year, and the Labour leader, Ed Miliband, has met business leaders to discuss the issue.

Zero-hours contracts have become increasingly controversial, with some firms, including retailer Sports Direct, employing up to 90% of their workforce in this way, with no sick pay or holiday pay.

But growing use of the Swedish derogation since the agency workers regulations were introduced in 2011 suggests some employers have been looking for other ways to try to cut the cost of hiring staff.

TUC research has found that call centres, food production companies and logistics firms are making widespread use of the loophole, and the Recruitment and Employment Confederation estimates that one in six agency workers are on such a contract.

The derogation was only introduced because Sweden already offered better protection for its workers than the directive provides. Countries implementing the agency workers directive promised to prevent employers abusing the opt-out.

O'Grady said: "Swedish derogation contracts are just one more example of a new and growing type of employment that offers no job security, poor career progression and often low pay."

The TUC has argued that while unemployment is falling, the headline statistics disguise the many thousands of workers who are "underemployed" – working fewer hours than they would like – or trapped in poorly-paid jobs.

Robert Halfon, the Conservative MP for Harlow, recently raised concerns about the Swedish derogation, suggesting supermarket group Tesco had been able to use it to hire agency workers on low pay.

Article Source : http://www.guardian.co.uk

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