Fair Pay Announcements from Business Secretary

Fair Pay Announcements from Business SecretaryBusiness Secretary Vince Cable announces measures to boost fair pay for British workers…

After a number of stories recently regarding workers’ pay, Vince Cable has announced a package of measures that he hopes will make the workplace fairer.

Two of the main concerns were zero hours contracts and the National Minimum Wage.

Zero Hours Contracts

Back in July the TUC voiced its concerns over the rise of so-called "zero hours contracts", followed closely by a revision from the ONS after they admitted that they had underestimated the number of workers on zero hours contracts.

The CIPD also investigated the phenomena and estimated that even the revised ONS figures were still off target and that as many as a million workers in the country could be on such contracts.

Vince Cable by this time had already announced that his department work "looking into" the issue and on Monday Mr Cable remarked:

"I have been examining closely the issue of zero-hour contracts over the last few months. We’ve been speaking to businesses, trade unions and other groups both about their downsides and their benefits."

Mirroring the upward revisions of the numbers Dr Cable admitted that there had been underestimations and that the fear that some workers were being exploited were justified:

"It is clear that they are much more widely used than we had previously thought. It is also clear that there are abuses in the system, especially around the issue of exclusivity which some employers are demanding from workers on these contracts."

The issue of exclusivity that Dr Cable mentioned was in regard to some businesses issuing zero hours working contracts to employees and demanding that, despite the promise of no work at all, that these workers not seek work anywhere else. Vince Cable added:

"Today I am announcing that we will proceed to issue a consultation, which will explore how to tackle any abuses, particularly around exclusivity. I am determined to make sure people are paid and treated fairly, in a way that also helps keep people employed in these delicate economic times."

Other issues of concern the Department of Business has found over ZHCs include the lack of a clear or legal definition of these contracts, the uncertainty associated with workers not knowing how much they will work or be paid and that some workers are being penalised for not accepting the hours they were offered at very short notice.

A public consultation will be launched, the date to be confirmed later this year.

National Minimum Wage

Dr Cable has asked the Low Pay Commission (LPC) to consider whether the National Minimum Wage can rise at a rate faster than it currently does over the medium term.

The thinking behind this temporary boost is that low pay keeps up with any acceleration in economic improvements.

The LPC advises the Government on the National Minimum Wage and puts forward its own recommendations that the state usually accepts.

Dr Cable has asked the LPC to look into what market conditions would need to exist to allow pay to increase but without negatively affecting jobs.

Speaking about the National Minimum Wage, Dr Cable said:

"The National Minimum Wage is a vital safety net in protecting the low paid. However, as signs of an economic recovery start to emerge, we need to do more to make sure that the benefits of growth are shared fairly across the board."

"The Low Pay Commission every year carries out a huge amount of valuable, detailed work looking at labour conditions across the economy. Today, in addition to their ongoing annual remit, I am asking them to extend this expertise to help the government and business understand how we can deal with the issue of low wages in the economy. In particular I have asked them to look at what economic conditions would be needed to allow the National Minimum Wage to rise by more than current conditions allow."

The Low Pay Commission will report their findings and recommendations in the new year.

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