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Labour accuses coalition of encouraging growth of zero-hours contracts Labour accuses coalition of encouraging growth of zero-hours contracts
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Labour has accused coalition ministers of encouraging the spread of zero-hours jobs, after it emerged that jobseekers could lose their benefits for three months if they do not accept such contracts.Labour has accused coalition ministers of encouraging the spread of zero-hours jobs, after it emerged that jobseekers could lose their benefits for three months if they do not accept such contracts.
A letter from the Conservative minister Esther McVey revealed that, under the new universal credit system, benefit claimants for the first time will be at risk of sanctions if they do not apply for and accept certain zero-hours jobs.A letter from the Conservative minister Esther McVey revealed that, under the new universal credit system, benefit claimants for the first time will be at risk of sanctions if they do not apply for and accept certain zero-hours jobs.
The shadow work and pensions secretary, Rachel Reeves, called on the government to clarify its position, as ministers have previously said jobseekers will face no penalties if they do not take zero-hours roles. Rachel Reeves, the shadow work and pensions secretary, called on the government to clarify its position, as ministers had previously said jobseekers would face no penalties if they did not take zero-hours roles.
On Tuesday David Cameron backed the plan. Asked whether the prime minister thought it was right for jobseekers to face benefit sanctions if they turned down zero-hours contracts, his official spokesman said: "He does think that it is right, as part of the introduction of universal credit, that there should be a requirement on people to take work opportunities that are offered, such as the ones you refer to."
The spokesman told a regular Westminster media briefing: "Individual decisions about tailored work requirements for people who are in receipt of taxpayer-funded benefits are taken on a case-by-case basis by jobcentre staff. But as a point of principle, should we be expecting people to seek employment in return for benefits, and do we have a system, in the universal credit, that is designed to respond to changing earnings? He does think that's the right approach."
Reeves told the BBC: "People are able to take zero-hours contract jobs but that should be their choice. They shouldn't as a parent or somebody with caring responsibilities be forced into taking a job that you just can't do, that you can't match with the responsibilities that you've got as a mum or a dad or a carer.Reeves told the BBC: "People are able to take zero-hours contract jobs but that should be their choice. They shouldn't as a parent or somebody with caring responsibilities be forced into taking a job that you just can't do, that you can't match with the responsibilities that you've got as a mum or a dad or a carer.
"The government need to answer some questions pretty quickly about who exactly is at risk of losing their benefits for refusing to take a zero-hours contract job. The government need to do much more to tackle the exploitation of workers on these contacts, rather than encourage the growth of them.""The government need to answer some questions pretty quickly about who exactly is at risk of losing their benefits for refusing to take a zero-hours contract job. The government need to do much more to tackle the exploitation of workers on these contacts, rather than encourage the growth of them."
Last week the Office for National Statistics revealed that the number of people with zero-hours contracts – which do not guarantee minimum hours of work or pay but require workers to be on standby – had reached 1.4 million. Last week, the Office for National Statistics revealed that the number of people with zero-hours contracts – which do not guarantee minimum hours of work or pay but require workers to be on standby – had reached 1.4 million.
More than one in 10 employers are using such contracts, which are most likely to be offered to women, young people and people over 65. The figure rises to almost half of all employers in the tourism, catering and food sector. More than one in 10 employers are using such contracts, which are most likely to be offered to women, young people and over-65s. The figure rises to almost half of all employers in the tourism, catering and food sector.
Currently, people claiming jobseeker's allowance are not required to apply for zero-hours contract vacancies and do not face penalties for turning them down. McVey previously told Labour that claimants should not be mandated to apply for a job offering a zero-hours contract, and in October the business secretary, Vince Cable, said he wanted to make it "absolutely clear" that people would not lose their benefits if they declined a zero-hours contract. Currently, people claiming jobseeker's allowance are not required to apply for zero-hours contract vacancies and do not face penalties for turning them down. McVey previously told Labour that claimants should not be mandated to apply for a job offering a zero-hours contract, and in October, the business secretary, Vince Cable, said he wanted to make it "absolutely clear" that people would not lose their benefits if they declined a zero-hours contract.
The change in policy under universal credit, which is due to be rolled out across the country, was revealed in a letter from McVey, an employment minister, to the Labour MP Sheila Gilmore, who had raised the issue of sanctions with her.The change in policy under universal credit, which is due to be rolled out across the country, was revealed in a letter from McVey, an employment minister, to the Labour MP Sheila Gilmore, who had raised the issue of sanctions with her.
McVey confirmed that under the new system, jobcentre coaches would be able to "mandate to zero-hours contracts", although they would have discretion about considering whether a role was suitable.McVey confirmed that under the new system, jobcentre coaches would be able to "mandate to zero-hours contracts", although they would have discretion about considering whether a role was suitable.
Separately, a response to a freedom of information request to the Department for Work and Pensions (DWP) says: "We expect claimants to do all they reasonably can to look for and move into paid work. If a claimant turns down a particular vacancy (including zero-hours contract jobs) a sanction may be applied, but we will look into the circumstances of the case and consider whether they had a good reason."Separately, a response to a freedom of information request to the Department for Work and Pensions (DWP) says: "We expect claimants to do all they reasonably can to look for and move into paid work. If a claimant turns down a particular vacancy (including zero-hours contract jobs) a sanction may be applied, but we will look into the circumstances of the case and consider whether they had a good reason."
Higher-level sanctions – imposed if a jobseeker refuses to take a position without good reason or leaves a position voluntarily – will lead to a loss of benefits for 13 weeks on the first occasion, 26 weeks on the second occasion and 156 weeks on the third occasion.Higher-level sanctions – imposed if a jobseeker refuses to take a position without good reason or leaves a position voluntarily – will lead to a loss of benefits for 13 weeks on the first occasion, 26 weeks on the second occasion and 156 weeks on the third occasion.
Asked about the issue by the Guardian, the DWP said jobseekers would not be required to take a zero-hours contract that tied them exclusively to a single employer. The government is already consulting on whether to ban this type of contract altogether.
The change has been made possible because universal credit will automatically adjust the level of benefits someone receives depending on the number of hours they work. This means claimants should not face periods without the correct benefits when their earnings fluctuate or they change job.
However, critics raised concerns that the new policy would force people into uncertain employment and restrict the ability of claimants to seek better work while still placing a burden on many to increase their hours.
Labour's Gilmore said she was concerned about the situation because jobcentre decision-makers already did not appear to be exercising enough discretion before applying sanctions under the old regime.Labour's Gilmore said she was concerned about the situation because jobcentre decision-makers already did not appear to be exercising enough discretion before applying sanctions under the old regime.
"While I don't object to the principle of either universal credit or zero-hours contracts, I am concerned about this policy change," she said. "I also fear that if people are required to take jobs with zero-hours contracts, they could be prevented from taking training courses or applying for other jobs that might lead to more stable and sustainable employment in the long term.""While I don't object to the principle of either universal credit or zero-hours contracts, I am concerned about this policy change," she said. "I also fear that if people are required to take jobs with zero-hours contracts, they could be prevented from taking training courses or applying for other jobs that might lead to more stable and sustainable employment in the long term."
Andy Sawford, a shadow minister who has pushed for reforms of the contracts with his zero-hours bill in parliament, also expressed concern about the change. He said universal credit would require many people on low hours to try to increase their work, and those below a "conditionality earnings threshold" – normally 35 hours at the minimum wage – may be asked to "carry out relevant actions" to raise their earnings or again face sanctions.
"How can you commit to training, undertake a proper job search or agree to participate in interviews when you are on a zero-hours contract and may be required to work at any time?" Sawford said. "Requiring people to take zero-hour jobs is a big change from the past. It will create further insecurity for many of the lowest-paid people."
Labour has promised to crack down on abuses of zero-hours contracts, with Ed Miliband saying their use has reached "epidemic" proportions in some industries. He wants to see workers with irregular shifts and pay getting a contract with fixed hours if they have worked regularly for the same employer for a year.Labour has promised to crack down on abuses of zero-hours contracts, with Ed Miliband saying their use has reached "epidemic" proportions in some industries. He wants to see workers with irregular shifts and pay getting a contract with fixed hours if they have worked regularly for the same employer for a year.
The TUC has expressed worry that the contracts are "no longer confined to the fringe of the job market".
A DWP spokesman said: "As now, if there's a good reason someone can't just take a particular job they won't be sanctioned. But it is right that people do everything they can to find work and that we support them to build up their working hours and earnings. The average zero-hours contract provides 25 hours of work a week – and can lead to long-term opportunities.A DWP spokesman said: "As now, if there's a good reason someone can't just take a particular job they won't be sanctioned. But it is right that people do everything they can to find work and that we support them to build up their working hours and earnings. The average zero-hours contract provides 25 hours of work a week – and can lead to long-term opportunities.
"Universal credit payments will adjust automatically depending on the hours a person works to ensure that people whose hours may change are financially supported and do not face the hassle and bureaucracy of switching their benefit claims.""Universal credit payments will adjust automatically depending on the hours a person works to ensure that people whose hours may change are financially supported and do not face the hassle and bureaucracy of switching their benefit claims."
Gillian Guy, chief executive of the charity Citizens Advice, strongly criticised the change in policy. "Zero-hours can mean zero prospects and zero income," she said. "Forcing people to accept a role which offers little or no guarantee of an income could leave jobseekers facing the daunting choice between a tough financial sanction and the Russian roulette of a zero-hours contract. The 60% rise in people coming to Citizens Advice for help with jobseeker's allowance sanctions shows that this system is causing anxiety whilst doing little to help people get work.
"Getting people into stable employment is the surest way of reducing the cost of out-of-work support. Financial support needs to be paired with help to develop skills and increase the likelihood of finding work in the long-term. A role with few hours of work and no guaranteed income could mean hard-pressed families find their gains from work outweighed by childcare and transport costs."