HC Deb 26 January 1996 vol 270 cc575-88

Order for Second Reading read.

11.8 am

Mr. Dafydd Wigley (Caernarfon)

I beg to move, That the Bill be now read a Second time.

I am glad of this unexpected opportunity to present a Bill on an important issue—the rights of one of the most neglected groups of workers in these islands, namely, home workers—and thank the National Group on Homeworking for its support in drawing up the Bill and campaigning for it.

I realise that the prospects of getting a "behind-the-Chair Bill", as they are called in this place, on to the statute book must be limited—indeed, as limited as time is today. I hope, however, that we can get the issue on to the agenda by virtue of this short debate, and I particularly hope that the Government will produce a Minister to listen to it—I am glad to see an instant Minister appear. I hope to secure indications from him that the Government are prepared to take the issues seriously and to make progress on them. I would also like the Bill to go into Committee, where we could explore the issues in greater depth. I thank hon. Members from every party in the House who signed early-day motion 335, calling for progress with the Bill.

Some people will ask why a Plaid Cymru Member of Parliament has introduced such a Bill. Hon. Members know that social issues have always been high on our agenda. At our conference this year, we were lobbied on the topic, and we promised to do everything we could to help those who are concerned with it.

In Wales, 69,000 people are identified as home workers and, according to the Office of Population Censuses and Surveys, in 1991 there were 6,210 home workers in Mid Glamorgan, of whom 2,180 were identified as manual workers and 1,020 as intermediate and junior non-manual—in other words, way over half the total number of home workers were clearly employees. In my county of Gwynedd, more than 9,000 people were identified as home workers in 1991; two thirds of those may well be self-employed, but a substantial group fall into the category of employees.

Social justice has always ranked high on the list of political priorities in Wales—across party lines. This issue is a cause for concern for people, not only in Wales but in all parts of these islands. When we get our own Parliament in Wales, this is the sort of legislation that we will most certainly want to put on the statute book. I hope that some progress will arise from today's debate.

Who are the home workers towards whose plight the Bill is addressed? It is estimated that about 1.25 million people in the United Kingdom are paid to work in their own homes. About half those may be classified as self-employed, but nearly 700,000 work under the control of an outside employer and are known as home workers or sometimes as out-workers. They are mainly, but not exclusively, women and they work from their own home for a combination of reasons—mainly because they desperately need the money on which to live and cannot go out to work because of family responsibilities, usually young children and sometimes disabled or elderly relatives. In the larger cities and conurbations, many home workers are from the ethnic minority communities.

Home workers do a range of work, including assembly work for manufacturing industry, sewing and knitting work for the clothing industry, routine clerical and processing work, which increasingly includes data processing, and telecottaging. Home workers even manufacture Christmas crackers, for which the pay rate is abominably low.

We need to differentiate between a home worker, who is dependent on an outside employer for the work, and a genuinely self-employed person, who controls for him or herself critical aspects of the working pattern. In differentiating, there are large grey areas of definition. I must impress on the Minister that those are the areas to which I shall return, and that is why I regard the Bill, or a Bill along these lines, as necessary.

One aspect of the problem with which the Bill deals is that of definition and the plight facing many thousands of people who, while they are clearly dependent workers and not self-employed in any normal meaning of the term, are not treated as employees because of the interpretation of the law—although, if the work they do were done in a factory or an office and not in their homes, it would most certainly lead to their being categorised as employees. As a result, they suffer from the problems, frustrations and difficulties that arise from working at home: low pay, unfair remuneration systems, the unreliability of the supply of work, unreasonable deadlines, inappropriate working conditions, bad lighting and bad seating, and the lack of health and safety advice.

There are the dangers to health, not only for the workers but for their families, the lack of employee rights, training for the job and adequate supervision, and the lack of national insurance cover, which partly arises from the low pay. Their legal status is uncertain—investigations have shown that, while a third of home workers are clearly self-employed and another third may clearly be defined as employees, a third are acknowledged as being in a grey area. Finally, many home workers feel isolated. They have no one to whom to turn for help and advice.

Clearly, the Bill cannot solve all those problems, but it tries to deal with some. Home workers fall between the two stools of employee and self-employed. In consequence, they can face enormous deprivations. They suffer financially because of payment levels, which in some instances can be described only as scandalous. They suffer from an absence of legal rights, which they would have by virtue of employment law if they were properly recognised as employees. They suffer dangers, and would be protected under health and safety at work legislation if they were doing the same work in a factory. They miss out on entitlements that they would get under the national insurance system, if they earned enough to be above the lower threshold for contributions and were properly registered for national insurance purposes.

I must dwell on the financial plight of these people—not that the Bill can directly overcome that problem, but it can help indirectly. I shall give the House some examples. The National Group on Homeworking produced a valuable report in 1994, written by Ursula Huws, who is a leading worker in the area—her work is widely acknowledged, including, I believe, by the Government.

The report is entitled "Home Truths" and is based on a detailed survey. It shows that most home workers are paid on a piece-rate basis. The average weekly pay was found to be £46 two years ago and the average hourly rate was £1.28.Only 15 per cent. of home workers got more than £70 a week and 35 per cent. were earning less than £30.

The report gives graphic examples. A woman known as Nasreen was sewing skirts and blouses and getting 11p per garment, which generated £10 a week for 50 hours' work. A woman called Jenny was earning £12 to £15. In her most successful week she earned about £30 for 60 hours' work, including working in the evenings and at weekends. That is the background to the issues with which we want to deal through the Bill.

Secondly, on health and safety, clearly there are potential dangers even in fairly light work undertaken at home. There are dangers in cutting canvas, sewing leather, soldering circuit boards and having chemicals in the home—certainly if there are children around. In that context the "Home Truths" report states: Employers' duties to self-employed homeworkers are fairly limited. However, where the homeworkers have the status of employees, their employers have a responsibility for ensuring their health and safety (under the Health and Safety at Work Act, 1974) on the same basis as any other employees. However, the evidence of this survey is that few are exercising this responsibility. Home workers said that they had been given health and safety advice by the employer in only 4 per cent. of cases, and the employer had only provided safety equipment in the same, tiny, proportion of cases. The percentage of employers insuring home workers against accidents was even lower, at 3 per cent. of cases. That graphically demonstrates the problems faced by home workers and the degree to which, even where people are recognised as employees, employers are not fulfilling their responsibilities under the law.

In a factory, employees would be given firm guidance on how to do—and how not to do—jobs. There would be safety equipment, protective clothing and inspectors to keep an eye on how a job is done. The Health and Safety Executive would pay periodic visits. No such safeguards exist at home. Some may be impractical, but the safety of the workers still matters enormously, and the House should note that.

Thirdly, there is the lack of cover under the national insurance system. Many home workers do not currently pay national insurance contributions, and nor do employers on behalf of workers who are, or may be designated as, employees. Consequently, home workers miss out on national insurance dependent benefits. Non-contribution arises partly from the low earnings of home workers, who often earn less than the lower threshold of £58 per week.

If home worker status were clarified as fully equivalent to that of employees in factories or offices, that would at a stroke improve the home worker's financial lot. There could be an increase in wages of between 20 and 30 per cent. at the very least. That would bring around 200,000 people into the national insurance net. I put it to the Minister—I would be glad if he would respond—that if, by such a stroke, we brought 200,000 people into the national insurance net, that would generate at least £100 million for the Treasury. If the Government are turning their back on such resources, I want to know why.

Unfortunately, among home workers there is an element that is in the black economy. They may be earning more than £58 a week. Greater clarity in law will help many of them come openly into the system. Again, there is potential for substantial income for the Treasury.

I address the problem from the point of view of not only income for the Treasury but basic national insurance benefit rights for employees who most certainly need them.

The fourth problem is the main one dealt with by the Bill—the absence of legal employment rights for home workers compared with those for similar employees who do identical work in factories and offices. Two major enactments safeguard the rights of employees: the Employment Protection (Consolidation) Act 1978, as amended, and the Trade Union Reform and Employment Rights Act 1993. They provide, inter alia, rights for a written contract of employment, statements of itemised pay, appeal mechanisms against dismissal, redundancy entitlement and maternity provisions.

The stark truth is that home workers are, in practice, widely denied those rights. The survey that I mentioned showed that only 34 per cent. have itemised pay slips; only 18 per cent. have any form of employment contract; only 6 per cent. have redundancy entitlements; and only 6 per cent. are allowed maternity leave.

The overwhelming majority of home workers do not have the rights that are provided by law for other employees; nor do they have the rights of collective representation that are recognised by trade union legislation. If ever a group needed such rights, it is home workers. The effectiveness of the law as it stands can be measured only by the way in which it works in practice. Clearly, the law is not working in practice.

If the Minister tries to argue that the law regards every home worker who has not opted to be considered self-employed as an employee, he will have to explain why employee rights are being denied in case after case to the overwhelming extent shown by several surveys.

The problem of definition of home workers and whether they are classified as employees was highlighted by the Employment Select Committee in 1981. In paragraph 9 of its first report in 1981–82 on home working, it commented: There is an unsatisfactory area of doubt over the employment status of many homeworkers: it seems to be unclear whether many such workers are self-employed or are employees of the firms for which they work. In paragraph 10, the Committee recommended: Homeworkers should be regarded as employees…Homeworkers should enjoy the same employment protection as other workers. Patently, 15 years later, Parliament has failed to provide such protection for those workers.

Interpretation of the law by the courts and the agencies of Government is a hopeless mess. I have been advised that case law is contradictory. The recent case of Mrs. Vasanti Patel of Leicester shows the difficulties. She was an out-worker working from her home for a clothing company. Her company regarded her as a self-employed person, as did the Inland Revenue, but an industrial tribunal classified her as an employee. After the case, the Inland Revenue commented that the problem arose because no definition of employment, and hence of employee, exists in law. It said that the definitions are blurred.

In a publication endorsed and presented by the Government a few months ago, "A Manager's Guide to Teleworking", the Government themselves recognised the problem. The document stated: Whether someone is an employee or self-employed depends upon the terms and conditions on which he or she is engaged and works. There is no statutory definition of employment or self-employment but the Courts have considered the question on a number of occasions and have identified a number of criteria as helping to determine someone's employment status. The conditions running through these judgments show that no one factor is conclusive. The Government's own publication recognises that a problem exists. Mrs. Patel won her case, but we cannot expect every home worker to go to court to obtain what should be basic employment rights.

I have so far addressed the plight of the group of home workers who historically have been badly done by. I want to broaden the debate and look to the future.

Telecottaging is already a growth industry and modern technology such as fibre-optic links, the Internet and interactive digital systems open up the prospect of much greater home working, albeit of a nature different from that of the traditional groups that I have already described. The opportunities provided by telecottaging can be a major blessing, especially for scattered rural areas such as that which I represent. If it is to be an area of growth, it is vital that the employment rights of people who work from home by way of telecottaging are protected.

The development of telecottaging is important environmentally. It will reduce the need for car travel by employees, decentralise economic activity and sustain small local communities. That all points to the need to welcome telecottaging and the concept of home working, as do considerations of care in the community. If we are to go down that road, it is vital that we sort out the glaring anomalies in law for people who work at home.

The Government want to increase flexibility in the labour market. They want to encourage home working, especially teleworking. How can they do so honestly if those involved find that they are to lose out on their employment rights? Teleworking is a growing sector, but it has already encountered those problems. A survey undertaken by the Department of Employment in 1993, again by Ursula Huws, showed that 57 per cent. of teleworkers are considered permanent employees; 8 per cent. are temporary employees; and 32 per cent. are self-employed.

Last May, the Department of Employment launched a book entitled "A Manager's Guide to Teleworking", by Ursula Huws, to which I referred. In a section on advice to managers on the contractual arrangements that should be drawn up, it stated: Drawing up contracts for teleworking can seem a daunting task. But in practice it presents problems only in a minority of cases. Nine out of 10 telework managers report no problems at all in this area. The ED Teleworking Survey showed that in half the organisations teleworkers have the status of employees, usually permanent employees. This means that they have normal contracts of employment to which extra clauses have been added to cover their situation as teleworkers. The Government's publication goes on to detail the extra clauses that must be added to a contract of employment to look after a teleworker's position. It says: Extra clauses in an employee's teleworker contract might cover: the hours when teleworkers are expected to be at their desk or in the employer's office; any extra responsibilities or duties relating to being home-based, (e. g. procedures for regular reporting or for a safe delivery of work); health and safety issues; details of which expenses can be claimed from the employer and/or any additional allowances payable to the teleworkers to cover heating, lighting and other costs; and insurance. That specific advice is given in a report presented by the Government to people intent on developing more home working by way of telecottaging. If that advice is relevant to employees working at home in that context, it is equally applicable to home workers in all other sectors of the economy where home working is undertaken.

It is worth reminding the House what the Minister said in a press release published when that document was presented. The press release, "Plug into teleworking—Ann Widdecombe tells UK businesses", says: To make a success of teleworking management arrangements must be adapted to new working arrangements. Teleworkers need to be clear about what is expected of them. Effective methods are needed for monitoring performance and giving workers feedback… One of the main messages of the guide is that teleworkers should be as highly valued and integrated members of the organisation as any others. They should not be left out of consultation and planning. They should have equal access to training and promotional opportunities. These points do mean that managers need to give extra thought and care to teleworking arrangements. Those are the words of the then Employment Minister, the current Minister of State, Home Office—the hon. Member for Maidstone (Miss Widdecombe) —and those provisions should apply equally to all home workers. That position should arise from their status in law. That press release shows that at least one Minister recognises the problem and the fact that steps need to be taken in some circumstances.

A change in the law along the lines proposed in the Bill is needed to resolve the problem. Clauses 1 and 2 provide that the two basic Acts that deal with employee rights—the Employment Protection (Consolidation) Act 1978 and the Trade Union Reform and Employment Rights Act 1993—should have the term "worker" inserted in place of the word "employee". Clause 3 adopts the definition of "worker" as that given in the Wages Act 1986, sections 8(1) and 8(2), which essentially say that a worker is an individual who works under a contract whereby the individual undertakes to do or perform any work or services for another party to the contract whose status is not that of a client or customer". I am advised professionally that that is an appropriate definition because it already exists in law and that. by adopting it, we would close the loopholes in current legislation.

If the Government insist that, because of rulings such as the one on the Patel case, the law is adequate, there is a crying need for employers, the Inland Revenue, the national insurance authorities, the Department of Social Security and the health and safety at work people to be told that fact. There is a crying need also for mechanisms to be set up to enable home workers to secure their rights without recourse to courts or industrial tribunals in every instance.

Four steps now need to be taken. First, a formal Government circular should be sent to all employers of home workers, informing them that home workers have the same rights as the employer's other employees. Secondly, a body similar to the Commission for Racial Equality and the Equal Opportunities Commission should be set up to assist home workers to obtain their rights. Thirdly, local authorities should designate someone to advise home workers. I am glad to say that the new Caernarfonshire and Meirionnyddshire authority which comes into force on 1 April plans to do exactly that.

Fourthly, if employers contend that a home worker is self-employed and not an employee, the burden of proof should fall on the employer. Until and unless it is so proved, the home worker should be treated as an employee, with all the rights under the law that that entails. Those four steps are the minimum to which the Government should respond if they are not prepared to take on this Bill. However, it would be much easier if we gave a Second Reading to the Bill and went on to examine the details in Committee.

The law must be changed to accomplish that and, if the Government contend otherwise, they must explain why overwhelmingly in practice the law stands in contempt. Laws that are systematically ignored are bad laws and need to be amended. The Bill provides a mechanism and, if its detailed wording is inadequate, the Government can table amendments or new clauses in Committee.

This issue is on the political agenda here and in Europe. A draft European Commission recommendation on home working defines the term "home working" and calls on member states to review, revise and develop laws, regulations and policies to provide home workers with: contracts of employment; statements on pay and deductions; maternity and social security safeguards; health and safety provisions; a method of resolving disputes; and a number of other safeguards. It also highlights the need for local advice centres for home workers, and for collecting and collating reliable statistics on home working, which are clearly desperately needed, according to all the publications on which one can lay one's hands in the Library.

The draft European document also emphasises the need for employer organisations and trade unions to develop measures to implement the Commission's recommendations. I should have thought that it would appeal to the Government that the parties involved should sort out the problems. I urge the Government to approach the negotiations with the European Union in a positive frame of mind.

An International Labour Organisation conference on home working will be held in Geneva on 4 June this year, when the comprehensive home working recommendations will be considered. The proposed text, of which I have seen a copy, includes provisions for: first, a competent authority at national or regional level to keep a register of home workers; secondly, employers when they first give out work to a home worker, to notify the authority and keep a register of home workers employed; and, thirdly, employers to keep a record of the work assigned, the rate of remuneration, the time allocated, the allowable home worker costs reimbursed, the deductions from pay, the gross and net remuneration and the date of payment.

The Government must recognise that those basic provisions are necessary for home workers if they are to be fairly treated under the law, because home workers miss out on them at present. The ILO document could provide an excellent basis for securing fair treatment, and a source of reliable information.

In summary, the Bill will not increase the amount of employment protection legislation on the statute book; nor will it increase or extend employment protection. The Bill is about social justice and making it easier for workers to claim the rights to which they are legally entitled and which are set out as the statutory minimum in current law. The Bill will put no further duties on employers. It will not extend rights to genuinely self-employed workers, but it will give protection to those workers who are wrongly classified as self-employed by their employers or are unsure of their legal status.

The problems and confusion created by the current wording of employment legislation make challenging employment status through the industrial tribunal system complicated, requiring great legal expertise. The current provision of accessible, free specialist advice to home workers is patchy. If the rights of home workers were more accessible, standard advice agencies would be able to handle their inquiries easily and effectively.

Parliament intended that workers should have statutory minimum rights at work. The present loophole means that employers can make a mockery of the basic rules that were laid down by the House of Commons. It is not just a home working problem. Increasing numbers of workers have been classified as self-employed by employers who seek to avoid their statutory obligations. That is particularly true in such sectors as construction and publishing. As the Bill could produce more money for the Treasury, it would be beneficial to the Government, as well as result in new benefits to employees.

I urge the Government to take the Bill seriously. I have outlined issues that often lie the below the surface. Home workers do not have strong organisations to speak on their behalf. Many are vulnerable people who are uncertain of their legal status as employees or their right to work in their own homes. They need help. It may well be that the Government and their predecessors considered the existing legislation to be adequate. The figures that I have quoted demonstrate that it is not. As the current law is not working, I appeal to the Government to say that they are prepared to change it to ensure that home workers in all parts of Britain can obtain the rights that they require and deserve.

11.42 am
Mr. Stephen Byers (Wallsend)

I congratulate the hon Member for Caernarfon (Mr. Wigley) on the topic that he has selected as the subject of his measure. The plight of home workers is all too often ignored, and we should welcome the opportunity that the Bill provides to discuss it today.

More than 1 million people in Britain work from home. The majority are women and many are black or Asian. They are often isolated, and they have no collective voice to speak on their behalf. They are extremely vulnerable and they look to the House to defend and protect their interests. They are perhaps one of the least protected sections of the work force.

The hon. Gentleman mentioned that home working is a growing sector. As the profile of the labour market changes, it is important that employment law is amended to reflect those changes. The traditional view of the home worker is someone working from a Victorian terrace, perhaps somewhere in the east midlands. That has changed dramatically. Many new home workers live in rural areas and often work in rather professional employment. Nevertheless, their needs remain clear.

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor)

I agree with the hon. Gentleman on the point that he is making. Does he accept that, since 1981, the proportion of home workers in manufacturing jobs has decreased from 21 per cent. to 12 per cent. and that the real increases in home working have been in the better paid managerial, professional and secretarial occupations?

Mr. Byers

Yes. I accept that point absolutely. However, we should not ignore the employment needs of those individuals. Although there has been a change in the nature of home working, and many of the individuals concerned are in managerial and professional employment, they still need the protection of employment legislation; that issue is at the heart of our debate.

Although the nature of home working has changed, individuals working in that sector continue to be exploited. A recent survey by the National Group on Homeworking shows that many people work exceptionally long hours for as little as 30p a hour. The average home worker works 36 hours a week for £46.

In addition, we should reflect on the conditions in which those people carry out their work at home. Approximately eight out of 10 home workers have children. About 70 per cent. of them work in the same room as their children play. One in five care for a dependent relative while working at home. Many home workers struggle to provide a living for themselves, their children and their dependants, often in difficult circumstances. They are often vulnerable and open to exploitation, and it is becoming increasingly clear that the legal difficulties surrounding the definition of an employee, as opposed to someone in self-employment, are not helpful to people in those circumstances.

One would have hoped that the Government would recognise the vulnerability of many home workers and be prepared to take some positive steps to assist them. Unfortunately, in the last couple of months the Government have taken steps that will create difficulties for many home workers.

The Minister will be aware that on 28 November 1995 the Government repealed section 133 of the Factories Act 1961 as part of their attack on red tape, as they see it. That section required employers to notify the names and addresses of their home workers to the relevant local authority. The purpose was to allow authorities to ensure the observance of health and safety measures and to offer welfare advice. It was a key part of local authority strategy to tackle poverty among home worker families. The Government, in their infinite wisdom and as part of their bonfire of regulations, decided to remove section 133. That has created difficulties, because that modest measure was of benefit to many local authorities in helping home workers in their areas.

The Minister may say that the Health and Safety Executive was not a greater promoter of retaining section 133 of the 1961 Act. I was disappointed that the executive was not prepared to oppose the Government's repeal of that measure, but many sectors of society and organisations regret that the Government felt it necessary to repeal section 133.

At the heart of the Bill is the legal definition of "employee". The distinction between employees and the self-employed has, for a variety of reasons, become blurred. The Patel case is particularly significant.That individual was regarded by many organisations and bodies as self-employed, but the industrial tribunal held her to be an employee. Government clarification is needed.

Mr. Wigley:

Given the forthcoming ILO conference and European Union discussion document, and in the event of the Government failing to tackle this important problem, can the hon. Gentleman indicate whether an incoming Labour Government would tackle it as a matter of urgency?

Mr. Byers:

That is always an interesting question. Later, I will outline Labour's approach.

Mr. John M. Taylor:

Does it have anything to do with stakeholders?

Mr. Byers:

Much of Labour's policy reflects our commitment to the stakeholder economy—and that covers home workers as well as other employees.

The Patel case has important practical and legal consequences. Perhaps the Minister will reflect on that decision and say today how the Government view the blurring, legally, between employees and the self-employed. Given the changing labour market, it is in the employer's interests for people to be self-employed—although in practice they are employees. In journalism, teaching and the construction industry, people are increasingly encouraged—some might say forced—to seek self-employed status because of the benefits for the employer. It removes statutory obligations and offers substantial savings in terms of the employer's national insurance and tax payments. Employers should not be able to use a legal loophole to escape those liabilities—they are stakeholders too, and they have a responsibility and duty to the public purse.

Home workers are especially vulnerable. They are isolated and have no collective voice. The Government should not stand to one side and allow them to be exploited. Home workers need the protection of the House and the Government. Labour's approach to employment law is to provide minimum standards for all in the world of work, whether work is done in the factory, office or home. That principle, and our commitment to it, will affect our approach to home working as to other aspects of employment legislation.

11.54 am
The Minister for Competition and Consumer Affairs (Mr. John M. Taylor):

I am grateful to the hon. Member for Caernarfon (Mr. Wigley) for his clear explanation of the concerns that led him to introduce the Bill. I have been most interested in what he had to say. May I also thank the hon. Member for Wallsend (Mr. Byers) for his balanced contribution? I am sorry in retrospect that I diverted him into the subject of stakeholding, but perhaps he feels at home with the concept even if the rest of us do not understand it.

The hon. Member for Caernarfon spoke on behalf of a group of people whom he considers to be especially vulnerable. Today is not the first time that he has spoken in this place for the underdog. The hon. Gentleman is highly regarded in the House and I, having been the Welsh Whip for almost four years, also hold him in high regard. I recognise that this is a matter on which he feels strongly, and I have listened carefully this morning. While I cannot make any promises, I hope that I may have some success in persuading the hon. Gentleman that the legislation already extends significant protection to home workers.

One difficulty is the definition of the group of people about whom the hon. Gentleman is concerned. The technological changes that we have seen in recent years have meant that more of those people who work from home do so through choice. Furthermore, many are highly skilled, well paid and well trained. The term "home worker" can cover computer experts, local solicitors and accountants.

The spring 1995 "Labour Force Survey" revealed that nearly three quarters of those who work from home are in managerial, professional, technical, clerical and secretarial occupations. Only a small proportion are unskilled manual workers falling into the traditional view of the home worker who fills envelopes or sews eyes on to soft dolls. There is nothing wrong with those occupations—they need doing and are done. In any event, many home workers, whether they sew or write programmes for computers, are employees who are already covered by the full protection of employment legislation.

As the hon. Member for Caernarfon will be aware, case law has established that just because people work in their own homes, rather than on the employer's premises, that does not necessarily mean that they are not employees like those who work in a factory. Like employees who work in a factory, home workers who are employees can complain of unfair dismissal if the employer stops giving them work. They can claim a redundancy payment if they are no longer needed, and they can also take maternity leave. While they are working, their employer should deduct tax and national insurance contributions as for any other employee. Those who are not employees can nevertheless benefit from protection against discrimination and unlawful deductions from their pay, and from health and safety provisions.

I recognise that it may not be easy to tell whether an individual is employed or self-employed. That is common ground between the hon. Member for Caernarfon, the hon. Member for Wallsend and myself. The individual home worker himself—or herself—may not always be sure. However, hon. Members may be interested to know that research has recently been carried out on behalf of the Department for Education and Employment, which will soon be published. It shows that only one third of unskilled home workers consider themselves to be self-employed and that they generally look after their own income tax arrangements. The research shows that those who consider themselves to be employees leave it to their employers to look after those matters.

Mr. Wigley:

I am grateful to the Minister for his detailed response. He has based his argument on the fact that a large proportion of the vulnerable people to whom I have referred are employees in law. If that is the case, why is it that 66 per cent. of them—according to the survey I have quoted—do not receive an itemised pay slip; 82 per cent. of them do not have a contract of employment; and more than 90 per cent. do not receive the other benefits which employees should expect to have? If they are employees in law, the law is not delivering the rights that they should have as employees.

Mr. Taylor:

I know the answer to that question, and I shall give it to the hon. Gentleman, although I know that it will not satisfy him completely. Employees such as those he mentioned are entitled to written particulars of their employment—what is commonly called a contract of employment—and to an itemised pay statement. There is no question about those entitlements. It is absolutely right that they are entitled to a statement of contractual employment terms and to an itemised pay statement.

The redress for an employee who does not receive them is to take the matter to an industrial tribunal—on that, I think that the hon. Gentleman and I would part company. I think that he is of the opinion that such tribunals are complex and legalistic. My opinion is that they are innately and culturally informal, and that people may be helped by taking their complaints or inquiries to tribunals. We might reach out and agree with each other on the desirability of doing everything possible to ensure that tribunals are simple and user-friendly and that they are not legalistic. That tribunals should be as informal and friendly and helpful as possible remains very much in my thoughts.

Mr. Wigley:

The Minister will accept that many of those who work at home are among the most vulnerable. They do not have backing from any organisation, and find it difficult to pursue cases to industrial tribunals. Given that fact, and the fact that he is predicating his case on the basis that the overwhelming majority of those people are employees, will he consider, as a practical and serious proposition, drawing up guidelines for employers which make it clear that those home workers are employees, and that, without doubt, employers have a responsibility to provide such things as contracts of employment and itemised pay slips? If there is any doubt about whether a person is an employee or self-employed, the guidelines should make it clear that the onus of proof is on the employer.

Mr. Taylor

The hon. Gentleman knows that I will remain available to discuss the issues with him in the Chamber or elsewhere. I will go this far: I will ask my officials to consider carefully whether there is any way that the guidance material that is produced by my Department could be more helpful, not least in explaining who is likely to he considered as an employed or a self-employed person. I should like to be constructive, because the hon. Gentleman was entirely constructive in his arguments.

I accept entirely that there are people for whom obtaining legal guidance or determination can be difficult or hard to find, and a process with which they feel culturally ill at ease. As president of the citizens advice bureau in Shirley in my constituency, I recommend the wholly admirable—and often unsung—services that it provides. I am sure that, like mine, the hon. Gentleman's constituents will find that the advice that is available from their local CAB is better than they could ever have imagined. The culture, which is friendly and informal, is one that we seek to encourage for those who, by definition, are troubled and who come to the bureau burdened with a problem.

I shall develop my remarks further. I do not wish to trespass upon eternity, but there are more things to say. Those who are not employees can nevertheless benefit from protection against discrimination, protection against unlawful deductions from their pay, and from health and safety provisions. I recognise that it may not be easy to tell whether an individual is employed or self-employed. That is a recurring theme, and the individual himself or herself may not always be sure.

In the final analysis, it will be for the industrial tribunal to decide whether the home worker is an employee and can complain of unfair dismissal or enforce other rights under the Employment Protection (Consolidation) Act 1978. In making its decision, the tribunal will consider all the circumstances surrounding the employment relationship to see whether there is any reciprocity of obligation between the two parties, which is the necessary condition of a contract of employment.

The Government's position has always been that it would not be right to require employers to carry the full burden of the legislation without the minimum degree of mutual obligation which must be present in any contract of employment. To add to regulation in that way would considerably constrain employers' freedom to run their businesses in the manner they think best. It would add to employers' costs, reduce work opportunities and inhibit the strong economy which we aim to encourage.

I hope that my remarks have in some way convinced the hon. Gentleman. While I have not found it possible to sign up to his proposed legislation, I have listened with great attention to what he has said and I shall continue to bear it in mind. I am grateful to him for giving us the opportunity to consider those important issues.

12.7 pm

Mr. Wigley

I shall not detain the House unduly. I am grateful to the Minister for his response and I have noted the points that he has made. I am grateful also for his undertaking that he is prepared to look at the possibility of drawing employers' attention to their responsibilities under existing legislation. Those responsibilities may not be entirely clear to employers not for some malicious reason, but because there is a grey area that must be addressed. I shall be very glad if the Government can make progress along those lines.

I noticed a slight contradiction in what the Minister said—particularly in his closing remarks when he suggested that my legislation might impose additional burdens and costs on employers. However, earlier in his speech he based his argument on the fact that employee rights exist already. Therefore, those burdens—if that is what they are—and costs should be on employers' shoulders already. I invite the Minister to ponder that point.

We are trying to ensure that all employees are recognised as such and have the reasonable protection of law when they are working in their own homes. In some circumstances, the provisions that apply in the factory or at the office cannot apply at home. However, there should patently be protection in other areas, and that protection does not exist at present.

I am glad that the Minister is prepared to look into the matter—particularly in light of the Patel case, which may provide a basis for insisting that people who are not receiving fair treatment should be treated fairly. I accept that the Patel case moves things forward in that direction. I also accept that the measures that will be introduced at a European Union level and in the International Labour Organisation in coming months may add dimensions to the considerations that the House should take on board in legislation, if legislation is necessary in that field. We may have to return to the matter in a year or so.

I urge the Government to act on the positive implications of the Minister's speech. I shall take advantage of any opportunity to discuss the issues further with him outside the Chamber on a formal or semi-formal basis. I hope that, as a result of Government action along the lines that he suggested, it will he possible for home workers who have missed out on their entitlements in the past to secure them in the future without having to resort to industrial tribunals.

If they need to go to such tribunals, I hope that they will note the Minister's assurance that assistance is available from, for example, citizens advice bureaux, and that local authorities will inform them of their rights. It would be better, however, if employers delivered those rights, because—as the Government say—that is the position in law. Employers should note what has been said here today, and recognise that responsibilities go with the employment of home workers.

I hope that this short debate, and the Bill, will at least promote that argument. If, in the fulness of time, we find that substantial progress is not being made, we shall want to table further legislation. I thank the Minister for his response.

Question put and negatived.