Paternity Leave (Bereavement) Bill

Justin Madders Excerpts

3rd reading
Friday 26th April 2024 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to speak on Third Reading of this important Bill, which has cross-party support, as we have heard. I congratulate my hon. Friend the Member for Ogmore (Chris Elmore) on his success in steering the Bill to this point. I am aware of how much work he has done with the Government to get their support and to ensure that the legislation can go through the other place and gain Royal Assent. I also recognise that the hon. Member for Broxtowe (Darren Henry) has worked constructively on behalf of his constituent, Aaron, and with my hon. Friend, to ensure that the legislation will be in place. He spoke movingly about how the tragic circumstances of his constituent, who lost his wife, Bernadette, moved him to take action.

A number of Members have noted the importance of this work. The hon. Member for Hyndburn (Sara Britcliffe) spoke about the work that she has done in light of the very tragic circumstances of one of her constituents. She showed how Members can work constructively—with the NHS in her case—to makes changes so that no one else has to go through the experiences that we have heard about. The hon. Member for Stoke-on-Trent South (Jack Brereton) spoke with great sincerity about why this legislation is so important.

As we have heard, the Bill as amended will disapply the employment conditions to which an employee’s right to paternity leave is subject in the event of their partner dying. In effect, it will make paternity leave a day one right for the partner of a mother who has died, with no continuity of employment test. The right is also extended to the tragic circumstances in which both mother and child die, despite the fact that paternity leave is usually taken only for the purposes of caring for a child. As we know, partners of mothers who die in or just after childbirth are not currently entitled to paternity leave if they have not met the continuity of employment requirements. That means that some people find themselves in the unfortunate position of not being entitled by right to paternity leave. If their employer chooses not to show compassion by voluntarily providing leave, an individual could be left grieving for their partner, as well as undertaking the mammoth responsibility of being a single parent to their child, without workplace support. Like other Members, I find it very hard to imagine how anyone could face such a devastating situation with the added pressures of job insecurity on top.

It is right to acknowledge that most responsible and caring employers would react to such a devastating scenario with compassion and do the right thing by their employee, regardless of whether any law required them to do so. However, making it a legal requirement will mean that the vanishingly small number of employers who do not act in that way will now have to and the employee has one less thing to worry about.

My hon. Friend the Member for Ogmore said that he wants the Bill to help as few people as possible. That is an unusual statement to make in this place, but it is an important point. Thankfully, the legislation will apply to few people because death during or just after childbirth is very uncommon. The excellent work that our midwives and doctors perform means that the number of mothers who sadly pass away within 42 days of birth stands at roughly 12 for every 100,000 births. Of course, each death is a tragedy and a profound loss, but we should recognise that those tragic circumstances occur in only a small number of instances. The fact that it has taken Aaron’s situation for the matter to come before us means that it is important that we act to prevent people falling through cracks because of legislative oversight.

As we know, at present the only right to statutory bereavement leave is for parents who have lost children up to the age of 18. Leave is a day one right, but the entitlement to pay is conditional on their having been in employment and earning a certain amount over eight weeks. Shared parental leave provisions also may not always help people in facing the situation that this Bill was originally drafted to help. Not only is there a time restriction on access, but income requirements can differ for the mother and partner. The system is rather complicated, and we know that families have been discouraged from taking up shared parental leave; figures show that only 2.8% of partners decide to take it up. As we have heard, by virtue of the amendments agreed in Committee, by using paternity leave rather than parental leave as the vehicle for entitlement, hopefully more people will be protected. It would also mean that the surviving parents of adopted children or children born through surrogacy arrangements will be included, and we welcome those changes.

I commend my hon. Friend the Member for Ogmore for working constructively with the Department and the Minister to achieve the desired outcome. I also note with interest the new powers in clause 1(4), which provide for the ability to introduce regulations to enhance redundancy protection for bereaved employees when they return from extended paternity leave, and to allow bereaved parents to have keeping-in-touch days during their extended paternity leave. It would be useful when the Minister responds to hear whether it is his intention to use those powers to introduce regulations. In particular, as my assumption would be, will the regulations be analogous to current paternity leave provisions?

In conclusion, we are pleased to see the Bill reach this stage, and we now wish it safe passage through to the other place. Again, I commend my hon. Friend for his work on it, and I congratulate him on getting the Bill to this stage.

Football Index Collapse: Lessons Learned

Justin Madders Excerpts

Wednesday 24th April 2024 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mrs Murray. I thank my hon. Friend the Member for Blaydon (Liz Twist) for securing the debate and for the work she has done over a number of years to highlight this issue, as well as other existing or future problems that need to be tackled.

We know that Football Index has been described as

“the biggest scandal in British gambling history”,

with thousands of customers suffering cumulative losses of up to £134 million. It is a scandal and a failure. I am sorry to say that we are all getting rather too used to saying in this place that, once again, people have been let down. Whether it the sub-postmasters, the Women Against State Pension Inequality Campaign, the leasehold scandal, infected blood, the loan charge, mortgage prisoners, Equitable Life or the myriad other investment scandals that have seen people’s life savings stolen, too often in this place we end up saying that what happened was totally wrong and should not be allowed to happen again. But yet again that is where we find ourselves today.

It is little wonder that public faith in our elected representatives continues to erode when Parliament seems to be incapable of learning from past mistakes. Whether it is regulatory failures, loopholes or bad actors, this place seems unable to stop them. Consumer protection and other basic safeguards for our citizens seem to have gone missing in action. We are failing in our basic duties; light-touch regulation has clearly had its day. We know the terrible stories of those affected by Football Index—losses into seven figures, individuals driven to the brink of suicide, marriages collapsed, families torn apart and life savings vanished—and those impacts have been part of all the other scandals I mentioned. Too many people in this country have suffered grave injustices that we seem incapable of putting right.

Football Index has been described as a Ponzi scheme. As we have heard, its executives were warned soon after its launch—in fact, as early as 2016—that their so-called football stock market would prove unsustainable. All the warnings came some five years before its eventual collapse, leaving serious questions about how effective regulation was. According to newspaper reports, the Gambling Commission was warned in January 2020 that Football Index was

“an exceptionally dangerous pyramid scheme under the guise of a football stock market”.

We all know that that warning proved to be correct.

Perhaps it was the unusual nature of the product that meant it carried on without effective intervention. However, I have looked at Trustpilot reviews for many of the major online gambling companies, and there are a litany of tales about frozen accounts, withheld funds and appalling customer service. It seems that even the more straightforward gambling propositions are able to get away with far too much, so it should be little surprise when an unusual scheme, which was unsustainable by design, also escapes attention.

The FCA took its time to get involved, and was also indecisive, changing its view twice as to whether Football Index fell within its regulatory remit. On two separate occasions, in September 2019 and September 2020, when it did indicate that Football Index fell within its remit, the FCA did not follow up with adequate action, and the product continued to be unregulated.

Those who used Football index talked about it being advertised as an investment product, with only a very small note squirrelled away on its website saying that it was a betting scheme, which is what it really was. FCA regulation allows for redress for losses through the Financial Services Compensation Scheme, but because Football Index was considered gambling—although not overtly advertised as such—the failure to regulate it meant that the losses were allowed to continue to stack up.

The Gambling Commission has now updated its framework on how it assesses risks, so that the novelty of the product is fully considered. Licences will not normally be issued if the product’s name contains language associated with financial products. The FCA now has, I understand, an executive director to oversee its relationship with the Gambling Commission where products appear to cross boundaries. However, despite those actions, the reality is that nobody has been held to account.

Even those originally involved in the company have got away with it. The Insolvency Service, which I wrote to, decided there was insufficient evidence to justify directors disqualification proceedings. The people who created Football Index in the first place are allowed to carry on with impunity. That is wrong, because they knew it was unsustainable and they were warned about that from the very start, but they carried on anyway.

That leads us on to KiX, which my hon. Friend the Member for Blaydon mentioned. The KiX website says:

“Digital Athlete Tokens (DATs)…represent the on-pitch performance of individual footballers…and are deployed as smart contracts on the blockchain”.

It says that the owner of a digital athlete token becomes

“eligible for twice weekly winnings.”

I do not really know what that means, but it has a familiar ring to it—as we have heard, some of the people behind Football Index are part of KiX. That quote about digital athlete tokens means it is as clear as mud to me whether this should be regulated by the FCA or the Gambling Commission—perhaps it is neither. KiX is apparently a “decentralised autonomous organisation” and apparently has a

“decentralised, egalitarian and democratised blockchain ethos.”

If that word salad is not enough to put you off investing, I hope that someone, somewhere, who actually understands what that means is going to take responsibility for regulating this.

We have let people down, and these products need proper regulating and policing. We really do not want to end up here again in another few years, bemoaning our lack of action. I have had too many constituents ripped off by one investment scheme or another, and the lack of accountability, justice and—I am sorry to say—interest from those whose job it is to ensure that there is justice says to me that we are letting people down on a systemic basis. We have to do much better than we are at the moment.

Draft Code of Practice on Dismissal and Re-Engagement

Justin Madders Excerpts

Monday 15th April 2024 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Sir Graham.

I thank the Minister for his introduction of the code of practice. It has taken more than two years, but we are finally here debating the action promised by the Government on dismissal and re-engagement. When the Government committed to introducing this code, there was a moment of consensus across the political spectrum that the situation we saw with P&O Ferries, which summarily sacked almost 800 workers over Zoom, could not happen again. The Business Secretary at the time, the right hon. Member for Welwyn Hatfield (Grant Shapps), said that

“we will not allow this to happen again…where new laws are needed, we will create them…where legal loopholes are cynically exploited, we will close them, and...where employment rights are too weak, we will strengthen them.”—[Official Report, 30 March 2022; Vol. 711, c. 840.]

Well, I am sorry to say that those legal loopholes remain as open today as they did two years ago, and there is absolutely nothing to stop the outrage of P&O happening again. Why do I say that? It is there in black and white in paragraph 12.3 of the explanatory memorandum to the code of practice, which says that

“the Code does not impose any new legal obligations and operates within the current legal framework”.

That, in the final analysis, is why this code of practice is such a let-down—another promise broken, another capitulation to the bad bosses and another reason why it is time for change.

It has taken two years to get to this point. In those two years, P&O has still been benefiting from Government contracts, and all the while, fire and rehire continues to pollute the country’s industrial relations landscape. While the P&O Ferries case was not wholly a fire and rehire situation, I will return to it later, because it bore many hallmarks of the practice and exposed the gaps in our laws designed to protect workers, where employers with deep enough pockets could use fire and rehire to disregard our laws.

In the wake of the pandemic, there has been a jump in the number of employers using fire and rehire. Research by the Chartered Institute of Personnel and Development found that between 2021 and 2023, the proportion of firms using fire and rehire had almost doubled. Many well-regarded household names attempted to do so, including Tesco, Clarks and British Airways. What was once a seldom-used device has become a mainstream practice and part of a wider pattern of growing insecurity at work. In short, it has become a first choice rather than a last resort.

[Kevin Hollinrake]

The hon. Gentleman raises P&O, which I must point out is specifically not a case of fire and rehire. What is the Labour party proposing to stop another P&O situation happening in future?

[Justin Madders]

I thank the Minister for his intervention, but we have been down this road before where he keeps asking what Labour’s policies are. My answer is, “Call a general election and we’ll have a debate about these things.”

[Kevin Hollinrake]

So you don’t know the plan.

[Justin Madders]

The Minister knows perfectly well where our policies can be found. The new deal for working people has been well advertised and well covered in the press. As he knows, there is a lot of support for our proposals to end fire and rehire.

As a TUC investigation recently found out, around 38,000 employers were using fire and rehire as a tactic. In that context, we need to scrutinise the draft code of practice and consider whether it will end the commonplace use of those tactics. I am afraid that, despite having had two years to get this right, we are no closer to ending the scourge of fire and rehire. The code of practice is vague, it is weak and in its final analysis, it will not prevent another case as egregious as P&O. On that basis, the Government have failed to keep the promise they made two years ago.

Let us take the element that many people found most offensive about P&O: the fact that at the outset, its management were able to look at the sanctions that they were potentially liable for and decide whether they wanted to break the law. The cost of breaking the law was considered as just another business overhead to be factored in when making decisions and, as we saw, P&O decided that the sanctions were not a strong enough deterrent to prevent rule breaking.

It is welcome that the code of practice gives an indication to unscrupulous employers that they cannot get away scot-free with breaking the law. However, we have concerns that the 25% uplift on awards at tribunals for employers who have been found to have unreasonably failed to comply with the code will not be strong enough to deter bad employers.

First, we have concerns about the inclusion of an award cap in the code of practice. As I have mentioned, it was particularly concerning that P&O was able to look at the options and perform a cost-benefit analysis of whether to conform with the law. It knew the maximum penalty it would face in compensation for each employee, which it then priced into its decision. In effect, it was able to treat the law on compensation—a law that is in place to protect workers’ jobs and their dignity—as optional. What the code of practice means, in effect, is that breaking the law remains an option, though it is now slightly more expensive than it used to be.

Laws are only as strong as their enforcement, so we believe that sanctions should reflect the egregiousness of the transgression. If an employer decides to break the law, their sanction should not be capped but should instead be decided on the basis of the facts. That way, any employer tempted to brazenly flout their legal requirements would no longer be able to calculate the costs of doing so, because in the most serious cases that cost would not be knowable and they would have to take their chances in court. Smaller transgressions would be treated by a tribunal. As it stands, the most egregious cases still have a ceiling, which means that those who act with ill intent can still price in the cost of acting unlawfully.

The code of practice therefore retains the status quo, whereby an employer can look at the maximum fixed penalty associated with breaking the law and, in effect, choose whether they will abide by it. It is workers who suffer the consequences. Some bad employers might see consultation requirements as burdensome, but there is a reason why the law requires consultation.

The consultation process is a vital opportunity for the voices of workers and their representatives to be heard, and for alternative proposals to be put forward to save jobs and protect conditions. When consultation works best and is meaningful, it can benefit employers and employees. There are, thankfully, many good employers who understand that and work collaboratively with trade unions. We commend those employers, and we know that they already go above and beyond their legal requirements. However, this code of practice needs to be set in a robust framework for bad employers, who sadly are out there. Frankly, there is no evidence that the 25% uplift will act as a deterrent.

I would like to hear what the Minister has to say about that, because I do not know how he can confidently assert that a 25% uplift will actually prove to be a deterrent. In response to my written question about the use of compensatory uplifts by employment tribunals, he said:

“Data on the use of compensatory uplifts by Employment Tribunals is not collected.”

That means that the Government do not know how much the compensatory uplift is used in other areas of employment law where there is a similar code of practice. That gives rise to the question: on what basis has it been decided that this measure is effective in preventing employers from failing to follow the code of practice? Does the Minister have evidence of its effectiveness that he can share with us today?

It is also worth reminding Members that this deterrent will not come into force straightaway. As the Minister indicated, secondary legislation is required to amend section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992. He said that that will be introduced this summer. Will he confirm whether that means before the recess or at a later date over the summer? It would be useful to get a date for the introduction of that secondary legislation.

It must also be pointed out that under the current drafting of the code, the sanctions can be awarded only if an employee has been found to have been unfairly dismissed. We know how easy it is for an employer to dismiss a worker in the modern economy. Of course, generally speaking, those with less than two years of continuous service cannot be considered to be unfairly dismissed. Some may sign settlement agreements that offer them their statutory entitlement, but a hard-nosed employer may say, “Well, if you want to argue for an extra 25%, take your chances at a tribunal,” where the cost to the employee might be more than the potential sum to be gained.

On top of that, the code of practice protects only “employees”, meaning that some of the most insecure workers in the labour market will not benefit one jot. To add icing to the cake, or salt to the wound, the Government intend to reintroduce employment tribunal fees, which we know from experience have a significant impact on people’s ability to enforce their rights. Will the Minister provide an assessment of how many people will benefit from this code of practice, and how many employers he believes will not use fire and rehire as a result of it?

Paragraph 14 of the code refers to a 25% reduction in compensation where the employee—not the employer —unreasonably fails to comply. Is it the Government’s intention to give tribunals the power to reduce employees’ compensation in fire and rehire cases, and if so, what element of the P&O case led the Minister to conclude that that was necessary? As the TUC pointed out, the uplift does not cover redundancy situations. As we know, P&O was in part a redundancy situation, where surely the same sanctions should apply. Will the code apply where workers are replaced with agency staff?

Turning to the substance of the guidance, I have made the general point that, as is clear from the explanatory memorandum, the code creates no new legal obligations. That is sadly reflected in the number of times that the code says that an employer “should” rather than “must” do something. I will not list every example—I appreciate that people have other places to be—but there are some important instances where “should” comes in, such as paragraph 16, which says that the employer “should” consult in good faith. Paragraph 23 says that

“the employer should consider what information could be provided about…the proposed changes”.

Paragraph 28 says that the employer

“should genuinely consider the points that are put forward”,

and paragraph 31 says that

“a threat of dismissal should not be used as a negotiating tactic”.

On the last of those, why not say that the threat of fire and rehire “must” not be used as a negotiating tactic? I am pretty clear that that is what Ministers had in mind when they made those promises two years ago. Why is it a requirement only that an employer “should” consult in good faith? Surely we want every employer to consult in good faith; there should be a legal requirement for them to do so.

[Kevin Hollinrake]

There should be.

[Justin Madders]

Employers should do, yes—and that should be enforced in law.

There is a similar issue with the guidance offered in the code on the provision of information and how to conduct consultation with workers. Instead of clearly and unambiguously stating what information employers ought to provide, the code relies on the phrase “as reasonably possible” on numerous occasions. Instead of providing concrete guidance on the timeline of providing information, paragraph 21, for example, simply states:

“Information should be provided as early as reasonably possible.”

Similarly, paragraph 22 states that

“employers should share as much information regarding the proposals as reasonably possible”

in order for employees and their representatives to understand the plans and ask questions. Section D on consultation states that an employer should

“genuinely consider any reasonable alternative proposals”

and should

“consult for as long as reasonably possible in good faith, with a view to reaching an agreed outcome”.

Those statements are not really anything other than restatements of the existing legal principles on consultation, and the repeated references to “should” rather than “must” mean that in reality, the code does not strengthen protection for workers at all.

Insomuch as there is concrete guidance about the provision of information, I suggest that it is insufficient. Paragraph 23 lists the information that could be provided, such as the proposed changes, who will be affected, the business reasons for the changes, the timeframe, any other options considered, and next steps, but those are not the only pieces of information that unions or other representatives will require to propose truly viable alternatives to fire and rehire. It is unclear why the Government have chosen not to be more prescriptive with the types of documentation that could be provided. The TUC recommended that the list be expanded to include information similar to that set out in paragraph 11 of the ACAS code of practice on the disclosure of information to trade unions for collective bargaining purposes. That would mean that unions and other representatives could get sight of more information about a number of elements relating to staff, including productivity and efficiency data.

Perhaps most importantly, financial information would also be available—cost structures, profits, assets, liabilities and forecasts—which would help to formulate a credible alternative plan. In particular, financial information would help those representing the workforce to determine whether the financial position of the company was such that some sort of action was justified, as opposed to the situation that we often see in fire and rehire, where the company is making a healthy profit on the face of it but refers to vague and sometimes intangible reasons for the proposed changes. It may even refer to something as vague as

“the strategic direction of the business”,

which is mentioned in the first paragraph of the code of practice.

Choosing not to include that level of prescription in the code will limit the ability of unions and other representatives to suggest ways to avoid fire and rehire. Indeed, what we are presented with in the code of practice is perhaps the exact opposite of what ought to be best practice.

In particular, paragraph 27 of the code gives employers the opportunity to withhold information should they believe it to be commercially sensitive. The employer alone decides what to disclose, so they can hide behind that catch-all paragraph to keep whatever they want private. Yet the sharing of confidential and commercially sensitive information is commonplace in good industrial relations, and it can be the basis of a shared conversation to find a solution, particularly in cases of fire and rehire, when access to documents such as financial forecasts is critical to unions being able to assess the firm’s position and suggest viable alternatives. Instead of encouraging employers to withhold such information, as the code of practice does, it should suggest ways to facilitate the sharing of sensitive information. The code could easily have talked about circumstances in which it would be appropriate to disclose such information to the appropriate reps, perhaps on the condition of confidentiality, but it chooses not to.

Another glaring omission is the lack of clear and concrete guidance as to how to conduct an effective consultation process. There are comments that remind employers to conduct a meaningful negotiation and process, but no guidance on how to actually go about it. In its consultation response last year, the TUC suggested that the relevant section should include practical guidance about how to go about conducting an effective process. It recommended that there should be guidance on the exchange of written information, including responses to demonstrate that employers have actively considered alternative proposals. Those are the standards that we want to see in a good and effective consultation process. Of course, most employers want to do their best, so why shy away from providing that level of detail?

Instead of paying lip service to the idea of conducting a meaningful consultation, more practical guidance could drive up standards and ultimately improve the outcome of the consultation process. That is far beyond what is included in the code of practice. In fact, paragraph 25 states that the provision of information in writing is not even an obligation, but just “good practice”. Are the Government really saying that the information in consultation exercises does not have to be provided in writing? That sums up the failings evident in the section of the code of practice that deals with information and consultation. It is vague, it is weak and it does not encourage employers to make the most of the opportunities to avoid imposing changes on their workforce.

I want to say a few words about the advice in the code of practice that fire and rehire should be used only as a last resort. The code of practice is clear that it does not mean a last resort in the sense that there is no alternative to the action other than insolvency or redundancies, for example; rather, the suggestion is that it can be used as a last resort if negotiations are not successful. In practice, that means that employers can, as they do now, use the most spurious of reasons for proposing fire and rehire, but as long as they can show that they have attempted some consultation, they can still do it.

That brings me to the question of what an employer will be expected to produce to show that it considers its decision to fire and rehire as a last-resort measure when consulting unions and, indeed, when the matter is taken to a tribunal. Will that include anything to do with the disclosure of financial records, business forecasts or accountancy advice? In the absence of such information, how will unions be able to differentiate between employers considering dismissal and re-engagement as a genuine last resort and those that use it as a scare tactic? These fundamental points should have been addressed in the code of practice.

The original code of practice contained a whole paragraph that stated that, before making the decision to dismiss workers,

“the employer should take some time to reassess its analysis and consider carefully again”.

It listed conditions such as whether it was “truly necessary” to impose the new terms, whether any

“alternative options…could achieve those same objectives”,

and whether the changes would impact those with protected characteristics. In other words, it set out a much more thorough process than we have ended up with in the final version of the code of practice.

The removal of those requirements can be seen only as a capitulation to the interests of bad employers who disliked the idea of having to re-examine their business case to make sure that the imposition of changes was absolutely necessary. The consultation response notes:

“Some respondents indicated that re-examination would be overly burdensome for employers, suggesting a lighter-touch approach with employers reviewing only specific proposals, rather than their entire business strategy.”

I do not think that language sends out the message that fire and rehire is a last resort. It would be helpful if the Minister took the opportunity to explain why the decision was taken to water down the requirements in the original draft code of practice.

It seems clear to me that the changes reflect more of an intent to reduce concerns about the code being burdensome on business than an intent to protect workers from having new terms and conditions imposed on them. I suggest that those are not the actions of a Government intent on curbing the use of fire and rehire. We were clear that the original draft would fail to do so, but now that the draft has been further watered down it seems even more ill-equipped to deal with the scourge of fire and rehire.

Finally, the Minister will be aware that the P&O case led to a report and recommendations by the International Labour Organisation’s committee on freedom of association. That report came out at the end of last year. Can the Minister update us on what actions the Government have taken in response, and whether they intend to implement all the ILO’s recommendations?

What we have before us is a code of practice that fails to deal with the fundamental reason for its creation, which is to stop another case as egregious as that of P&O. It has taken two years to get to this point, yet we are no closer to the protections that workers in this country deserve. The code of practice represents a missed opportunity to right the very real wrongs that we have seen up and down this country for far too long.

--- Later in debate ---

[Gavin Newlands]

Of course I would suggest criminal sanctions to end such practices. The Minister is right to say that P&O did not use fire and rehire in the strictest sense, but there were elements relating to fire and rehire. In a sense, it was fire and replace. Those staff members were replaced by cheaper foreign workers. That is the truth: the jobs were not redundant. If I were to bring forward another law, I would ensure fire and replace were also made illegal in circumstances such as those at P&O. As it happens, fire and replace is not new; it was actually proposed back in 2002 by one Tony Blair during the firefighters’ pay dispute.

We have a real problem around employment rights in the UK. The balance has been tipped over the last four and a half decades far too far towards employers and away from ordinary women and men who need the protection of the law against what is thankfully the minority of unscrupulous employers. Forty-five years of continual assault on workers’ rights has left millions essentially at the mercy of bad bosses, or subject to the gig economy and classed as “contractors” by multinational corporations desperate to avoid taking any responsibility for them and their or anyone else’s welfare.

Those lost decades need to be reversed. Sooner or later, the UK parties have to realise that workers’ rights are a fundamental part of building a stronger economy. It is no coincidence that virtually every country in Europe has stronger workers’ rights and better protections for their workers, and also enjoys higher living standards and a more robust, more diverse economy and social infrastructure.

Unfortunately, I do not hold out much hope for an improvement after the next general election. I know that there are many, many good people in the Labour party—including in this room—but the Leader of the Opposition has shown little interest in workers’ rights. I am still waiting for a response to my letter asking for his support of my Bill to ban fire and rehire, and the slew of shadow Ministers proclaiming their admiration for Margaret Thatcher do not inspire much confidence that they will roll back her and her descendants’ attacks on workers’ rights.

[Justin Madders]

Will the hon. Gentleman give way?

[Gavin Newlands]

Of course. I thought the hon. Gentleman might want to intervene.

[The Chair]

Order. Before the hon. Gentleman takes the intervention, let me say that we are here to debate the draft code, rather than what may or may not happen after the general election or what happened 45 years ago.

[Justin Madders]

I understand what you say, Sir Graham, but I cannot let those comments go without a response. I just want to point out to the hon. Gentleman that the leader of the Labour party has promised that legislation on employment law will be introduced within 100 days of a Labour Government taking power. If his party is so keen on employment law, why did less than half of his colleagues vote for the private Member’s Bill to devolve employment law to Scotland?

[Gavin Newlands]

I thank the shadow Minister for that intervention, which did not surprise me. Nor did your point, Sir Graham—God forbid a lot of the politics enters the fray. It is a bit rich for the Labour party to talk about devolving employment rights when, as members of the Smith Commission, it was the Labour party that vetoed the devolution of employment law to Scotland. It would be devolved to Scotland if it were not for the Labour party, so it is unbelievable that that would be cast up in this way.

I say this in all sincerity: I genuinely hope that I am wrong about the lack of enthusiasm from Labour and the Leader of the Opposition for radical change of the status quo if they come to power. But I do know that I am right about the lack of ambition shown by the current Government and this code. Support is far too strong a word, as perhaps the Committee can gather from my remarks, but we will not oppose the code on the basis that it is slightly better than nothing. It would be nice to come to one of these Committees one day and be pleasantly surprised by the Government’s ambition, rather than despairing over their lack of it.

I was going to conclude with questions for the Minister, but the shadow Minister, the hon. Member for Ellesmere Port and Neston, asked all my questions and more. For the benefit of Committee members I will not repeat them, but I look forward to the Minister’s response.

--- Later in debate ---

[Kevin Hollinrake]

What that business leader did was disgraceful. We impose criminal sanctions on employers very cautiously because we want people to invest in our economy. That is hugely important. We make changes in employment law at our peril. It needs to be balanced between the needs of employers and employees.

[Justin Madders]

Will the Minister give way?

[Kevin Hollinrake]

Perhaps the shadow Minister will answer this question as part of his intervention. In The Telegraph, Archie Norman, one of the foremost business people in this country, who has done tremendous work in making sure that people have good employment opportunities, described Labour’s potential package in the area of employment law and the changes the party intends to make. He said that the changes would reduce flexibility, make it more costly to hire people, deter people from entering the workplace and deter investment. Perhaps the shadow Minister will address Archie Norman’s criticisms when he intervenes.

[Justin Madders]

I could, but I fear that Sir Graham might say I am out of order. It comes as no surprise that a former Conservative MP would want to prevent the extension and strengthening of workers’ rights. The Minister said that there is no room for criminal law, but is it not the case that his Government referred the matter of P&O Ferries to the Insolvency Service for potential criminal proceedings?

[Kevin Hollinrake]

Yes, corporate criminal proceedings, not individual criminal proceedings. I think that what the hon. Member for Paisley and Renfrewshire North refers to is individual criminal sanctions, which would be disproportionate. If the hon. Member for Ellesmere Port and Neston thinks that a Conservative politician is only on the side of the employer, I do not think he has met Archie Norman. Perhaps he might benefit from a meeting with him. He is a very considerate employer who understands the need to treat employees right as well as make sure the framework is right for business in this country.

The hon. Member for Ellesmere Port and Neston asked why the 25% uplift would prove a sufficient deterrent. Clearly, it is a deterrent, because it is more than an employer would have to pay if they go through the simple process of consulting their workforce. I might describe it as bleeding obvious. The actual impact remains to be seen, but we certainly think it is a significant deterrent. The hon. Gentleman asked whether it will be implemented before, within or after the summer recess; we are intending to do so before the summer recess.

The hon. Member for Ellesmere Port and Neston also asked about these provisions applying only to employees with two years’ service. He is right to say that generally, unfair dismissal rights are around only after the first two years, unless there is something like discrimination, for example. I know the Opposition are seeking to change this in their proposals, which we think is disproportionate and wrong. In a collective situation, however, there are circumstances where people who have been in the workplace for less than two years are covered.

On the point about “should” and “must”, we are dealing here with provisions that will be heard before a court. A court can make the judgment, of course, on whether somebody has done the right thing. I think “should” is the right kind of phrase to use in that situation, because a judgment is made and the tribunal can award up to 25% on top of the normal financial requirements if an employer unreasonably fails to comply with the code. That joins the circle, in terms of making sure that this code is effective when people go before a tribunal.

The hon. Gentleman asked about the ILO. We are carefully considering the committee on freedom of association’s recommendations, and will provide information to the ILO in due course.

The hon. Gentleman also asked about some of the changes and said that they have been watered down, but that is not the case at all. We did make changes following consultation, and did some reordering to make it more straightforward, which was based on feedback we received. We also made changes suggested by trade unions, including saying that employers have to speak to ACAS before raising fire and rehire, and adding the award to claims that can attract 25% uplift for non-compliance.

[Justin Madders]

In the Government response to the consultation, there are some lovely pie charts showing the responses.

[Kevin Hollinrake]

Thank you.

[Justin Madders]

I am glad the Minister has been looking at the artwork. A large proportion of responses —sometimes as high as 40%—to the question, “Do you agree?” are categorised as “unspecified”. Is the Minister able to explain what that covers?

[Kevin Hollinrake]

Not off the top of my head, but I am happy to confirm it via separate means.

The hon. Gentleman also said that the code should be more detailed in specifying exactly how a consultation might take place. We think that would be the wrong approach, and that the employer is the right person to determine that, in terms of how he or she consults members of their team. We did not want to get a very lengthy code that would naturally result in being too specific about exactly how that consultation should take place. I think I have covered all the points raised by the hon. Gentleman; he can intervene on me if I have missed anything.

[Justin Madders]

I have just one small point. The code of practice referred to compensation being reduced by 25% for employees not compliant with the code. Is the Minister able to confirm whether it is the intention for that to apply in this case?

[Kevin Hollinrake]

I do not quite understand the hon. Gentleman’s question. Perhaps we can have a discussion about that afterwards.

To conclude, we are taking robust and appropriate action in this area. We believe that a statutory code of practice is a proportionate response to dealing with controversial fire and rehire practices. The code will address the practice of fire and rehire, aiming to ensure it is only ever used as a last resort, and that employees are properly consulted and treated fairly. It clarifies and gives legal force to accepted standards about how employers should behave when seeking to change employees’ terms and conditions. Employment tribunals will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the code where it applies. Subject to approval by this House, the code will be in force later this summer, prior to recess, and I hope Members will support it.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Code of Practice on Dismissal and Re-Engagement.

Draft National Minimum Wage (Amendment) (No. 2) Regulations 2024

Justin Madders Excerpts

Monday 18th March 2024 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mr Hosie. I thank the Minister for outlining the changes these regulations make to implement the new rates of minimum wage, as recommended by the Low Pay Commission, to which I also pay tribute for its sterling work. I will refer to some of the findings from its annual report during my contribution.

I also—he should really steel himself, because I do not do this often—congratulate the Minister on delivering the promise to match the minimum hourly rate to two-thirds of median wages. I think that has been eight years in the offing, but we have got there. In achieving this figure, the Low Pay Commission recommended a rise that represents the largest increase in cash terms since the introduction of the minimum wage. That is clearly welcome news for those working in minimum wage jobs, as is the extension of the entitlement to all those over the age of 21. It represents a 9.8% increase for those older than 21, with the hourly rate of the main rate—the so-called national living wage—now at £11.44 an hour. That equates to an annual increase of just over £1,800 for someone working a 35-hour week, and clearly we in the Opposition welcome that.

While I understand the Government are keen to celebrate this year’s levels, I would caution them not to be too overconfident, because anyone who has taken the time to study the Low Pay Commission’s report will see that much more needs to be done before work in this country pays in the way that it should. There are clear warning signs in the report about the persistence of insecure work and in-work poverty.

No one here will need reminding that the rates of inflation we have had to endure in recent years have thrown workers—and, indeed, everyone in this country—into a cost of living crisis. Inflation rates peaked at 11.1% in October 2022 and have been hovering around 4% and 5% even now. Between April 2021 and April 2022, household bills doubled, and the price of essential goods and services increased at a magnitude not experienced since the 1970s and 1980s. The Low Pay Commission report notes that energy, food and transport costs were at the “highest rates recorded” since the CPI series began, way back in 1989. Even in September last year, when inflation was beginning to come down, energy prices were still increasing by 5% and food inflation was 12.2%.

Last year I raised concerns that, in the face of such high levels of inflation, the minimum wage uplifts were not large enough to prevent a real-terms cut to the rate. That has been confirmed by the Low Pay Commission report, which states that the past two years’ increases in the minimum wage have in fact represented a cut in real terms due to inflation. I am pleased that the commission is confident that today’s increases will restore the value of the minimum wage in real terms, but I am also aware that the increases do not undo the previous two years, when pay did not keep up with the cost of living and hardship has endured as a result.

[Kevin Hollinrake]

As I said, the national living wage has outstripped inflation twofold during the period since its implementation. At one point in time, the Opposition talked about a national living wage of £15 an hour. Is that still the hon. Gentleman’s policy? Is that his personal policy or the Opposition’s policy?

[Justin Madders]

That very interesting question is some way outside the remit of the regulations. Of course, if the Minister wants to talk about what our policies will be, he should advise the Prime Minister to call a general election—but perhaps we are not quite there.

My question for the Minister is about the inflationary spikes of the last couple of years. What mechanisms are being looked at to ensure that the minimum wage increases at a rate that reflects those in real time? The evidence gathered by the Low Pay Commission on how workers have been affected is truly sobering. In Belfast, the commission found that supermarkets had introduced payday pantries, which provide food for workers in the run-up to payday. A care worker in Manchester told the commission,

“Most of my colleagues are using food banks.”,

and stated that that was not a new, post-pandemic problem. Such examples chime with responses in trade union surveys. In autumn 2022, Unison found that 17% of respondents had skipped meals and that 20% had asked for a loan from family or friends. In May 2023, USDAW found that 46% of its members surveyed were worried about food bills, 15% had turned to food banks and 42% had missed meals in the last year to pay for bills. If anything, the situation has been getting worse. The Joseph Rowntree Foundation’s yearly poverty report states that the proportion of households in poverty with at least one working adult increased from 61% in 2021 to 64% in 2022. The poverty rate across the country as a whole is now more than one in five, and poverty has not fallen for 20 years.

It is worth saying a few words about why, despite the Minister’s comments, minimum wage increase have not eradicated in-work poverty, which is what we would like to see. Of course, I commend the Government for reaching their 2016 pledge to increase the minimum wage to 60% of median wages by 2020 and to two thirds of median wages by this year. Indeed, the impact has been that the number of employees on low hourly pay has fallen consistently; the fall since 2015 is estimated to have been about 20%.

However, the graph on page 62 of the Low Pay Commission report reveals that on two issues we still have an awful long way to go. It is hard not to be struck by the large disparity between men and women in terms of low pay—a point I shall return to—and the persistence of low weekly pay as opposed to low hourly pay. That instructive graph shows that increasing the minimum wage floor is only one of the tools needed to tackle problems in the labour market, and that it has largely left unaffected the issue of low pay for those on weekly earnings. There is clearly an issue about the number of hours people are working.

The Low Pay Commission annual report highlights the wide gap between men and women. Consistently since 2011, roughly 15% of men in employee jobs have been on low weekly pay, despite the increases in the minimum wage. The percentage of women on low weekly pay is double that of men, at roughly one in three. That has fallen gently since 2011, when the rate was around 41%, but that large disparity is still there. Will the Minister say whether there are any plans to deal with that gender pay gap and the question of hours worked?

To adequately address the problems in our labour market, we have to consider not only the number of hours but the quality and insecurity of work. Citizens UK has estimated that there are 6.1 million workers currently trapped in insecure forms of work, 3.4 million of whom are on low pay. That amounts to 19% and 11% of the total workforce respectively on low pay. Low pay is not an inherent condition for those in insecure work, however; those on low pay are around five times more likely to be in insecure jobs.

It is noted in the Low Pay Commission’s report that those insecurely employed struggle to get adequate hours, still receive late shift notices and are on zero-hours contracts. Respondents noted that workers in sectors such as hospitality had to take on multiple jobs to obtain full-time hours, which brings the challenge of having to juggle their availability in order to be accessible for both.

In its fieldwork, the Low Pay Commission found that workers continue to struggle to get contracts that reflect their actual hours worked. It was also noted that employers are still allocating shifts with as little as a day’s or just a few days’ notice, with some workers interviewed even stating that they had had shifts cancelled on the day they were meant to be in work. That is clearly a problem that is not going away. I ask the Minister this: how is someone supposed to plan for the future when they do not know how many hours they will work from week to week or month to month? What can a worker do if they are told they are surplus to requirements on a particular day when they might have already paid out for childcare or transport costs? Such practices erode the gains that we have made on the minimum wage.

As I say, I will not be entirely negative—the Minister would not expect me to be so. Positive steps have been made this year. We particularly welcome the removal of the 21 to 22-year-old age category. That measure was found to have broad support among those contacted by the Low Pay Commission. But as I mentioned last year, we are sad to see the Government continuing to support age discriminatory bands for those over the age of 18. Why should someone’s age determine their pay? A young adult is unable to go to their landlord and demand lower rent or to tell the cashier at the supermarket that they should have a discount because they are under the age of 21. Their bills are no cheaper than anyone else’s, yet for some reason we expect young people to make ends meet on lower pay.

That is accentuated by the fact that the rates have grown more slowly for younger workers. The gap between the main rate and the 18 to 20-year-old rate has grown massively since the Conservative party came to power in 2010. The Low Pay Commission report shows how the 18 to 20-year-old rate hovered around 85% of the value of the adult rate throughout Labour’s time in office. It then fell to below 80% between 2011 and 2013 and has continued to fall since 2015.

The minimum wage rate now for those aged 18 to 20 is just over 70% of the adult rate—around 15% lower than it was under the Labour party, rubbing salt into an already unjust situation. I appreciate that the Minister has referred to an above-rate increase for 18 to 20-year-olds this year, but is that part of a concerted plan and strategy to bring back the differential that existed under the Labour Government?

Eligibility is only half the battle. Unfortunately, entitlement to a minimum wage does not translate directly into securing that rate of pay. Enforcement is key and the right to be paid a minimum wage remains an important part of the enforcement universe. Questions, therefore, ought to be asked about the effectiveness of enforcement, as too many workers still report being underpaid.

Data from the annual survey of hours and earnings shows that, despite the total number of people reporting being paid less than the minimum wage having fallen since 2019, last year 365,000 workers were still being underpaid by their employer. As a share of the minimum wage coverage, that has increased since 2019, at a rate of 23.4%. That means that of those who earn on or around the minimum wage, around a quarter of them are not actually receiving it. That is certainly something that we need to see more action on.

From what we have seen from the Low Pay Commission’s report, workers in certain sectors are impacted more than others. I spoke last year in the same debate about the impact in the social care sector and raised the findings that Unison had shared with me about the exploitation of domiciliary care workers. I mentioned then that 73% of those workers were being underpaid. They were not being paid for the travelling time. I also stated that record keeping by employers was found to be way below the standards expected and that the complexities of those pay calculations made it incredibly difficult for employees to establish whether they had in fact been underpaid.

It was therefore pleasing to see that the Low Pay Commission had dedicated some space in its annual report this year to discussing those issues. It noted that the amount of arrears that His Majesty’s Revenue and Customs recovered for non-payment of the minimum wage

“pales into insignificance when compared to the average amount of arrears that Unison secures”

for social care workers—well done to the trade union Unison, but should it not be HMRC’s job to recover arrears and ensure the minimum wage is paid properly in the first place? Is it the case that HMRC is unable to properly decipher the records, or is it going lightly on social care employers?

[The Chair]

Order. I know that the Low Pay Commission report and recommendations are in the paperwork we have been given, in the impact assessment, but enforcement and so on are slightly wide of the scope of this very narrow SI, which is simply about a change to rates. I am sure the shadow Minister will reflect that in his soon-to-be brief closing comments.

--- Later in debate ---

[Justin Madders]

I understand what you say, Mr Hosie, but this is the only occasion we get to debate the Low Pay Commission report and, as you correctly point out, it is instructive in setting the minimum wage. I will, of course, be guided by your comments.

I will just say a little more about the naming and shaming scheme. I am pleased to see that we have managed to get two rounds of it in the last year. However, one problem is that we are talking about historical breaches—one of them in the last round was from 2012. There are evidently problems with the naming and shaming system. Employers that do not pay the minimum wage must feel that they will face the obloquy of the naming and shaming scheme quickly—much more quickly than they do now. When will the Minister be able to update us on how the enforcement and naming and shaming schemes will be operating faster?

I will skip over the questions on procurement that I raised last year, Mr Hosie, but I want to raise a couple of final points mentioned in the Low Pay Commission report. One was about the number of commissioners. There has been a gap in that number, and the commissioners expressed some frustration that they were not at their full complement. I think there is still a vacancy on the commission. Can the Minister update us on when that is likely to be filled?

Finally, the commission noted that the labour force survey was becoming less reliable. What plans does the Minister have to ensure that in future, when the Low Pay Commission is setting its rates, it can do so on the basis of a robust dataset? I recognise that he has made comments about the remit being issued for 2024 shortly, but it is probably lacking a little bit of detail. Does he have anything to share with us about the Government’s plans and ambitions for raising the minimum wage in the next decade?

--- Later in debate ---

[Justin Madders]

On the Minister’s point about how the minimum wage has increased over the past eight years, why is it still the case that so many people are in in-work poverty? How many people have actually made that request for predictable hours under the legislation?

[Kevin Hollinrake]

There has been a significant decrease in the number of people in absolute poverty—millions of people since 2010 and 400,000 fewer children in absolute poverty, which we all welcome. As I said before, in pushing the national living wage as high as we have done, we are putting burdens on businesses. We want to ensure that we strike a balance, and that is our concern with this. We always take into account the concerns of employers as well as workers.

[Kevin Hollinrake]

My right hon. Friend is right to say that part of the rationale behind the national living wage is to ensure that wages that employers pay are not being subsidised. The total cost of the welfare system is around £303 billion, some of which is a result of the issue he raised. To me, that is wrong and that is one of the reasons why we would like to see the national living wage increased. Nevertheless, we do not want to see that at the detriment of jobs in our economy.

There is still a balance to be struck on making sure people have the opportunity for predictable hours. That is covered in the legislation we have introduced. I understand that the policy of the hon. Member for Ellesmere Port and Neston is that anybody who has been in work for 12 weeks and is on a contract can request those hours in terms of as a permanent position. I think that is the policy that the Opposition are going to introduce. It will be interesting to see what impact that will have on employers, particularly employers of seasonal workers.

There is a balance to be struck between business and workers. I point out that there are 4.2 million more jobs in our economy than there were in 2010. That is a huge success story. There are 1.2 million fewer people unemployed and looking for work. That is a huge achievement. Some of the policies that Labour always tend to bring forward end up costing jobs. Every single time we have had a Labour Government, unemployment is higher at the end of their term than it was at the start.

[Justin Madders]

Is the Minister aware that an election is about to be called, because he has spent the last couple of minutes talking about Labour policies rather than the statutory instrument? If he is so convinced that our policies are bad, why won’t he let the public decide?

[Kevin Hollinrake]

I am purely responding to the points that the hon. Gentleman raised, to try to make him understand there is a balance to be struck in the economy between jobs and pay. That is the balance we are trying to strike.

The hon. Gentleman and the SNP spokesman, the hon. Member for Glasgow South West, made points about enforcement, which we take very seriously. We have doubled the compliance budget between 2015-16 and today to £27.8 million. We have ordered employers to reimburse £100 million to 1 million workers. We take this very seriously.

The naming and shaming scheme was suspended during covid. I understood why, but I was very keen to reintroduce it. It is the principal deterrent. I reassure the hon. Member for Ellesmere Port and Neston and other members of the Committee that, whenever we are about to do a naming round, we write to all the employers and tell them that they are going to be named. We get a lot of push-back, and we push right back again. There is no excuse for not paying the minimum wage. We have named a total of 3,200 businesses since 2013, including more than 500 just last month.

The hon. Gentleman raised the point about the vacancy in the Low Pay Commission. We are actively seeking candidates for that; if anybody is out there listening, I am very happy for them to come forward. I am very confident that new chair Baroness Stroud will do a fantastic job.

The SNP spokesman said that he wants a higher living wage, which I completely understand. He is very willing to nail his colours to the mast, unlike the Opposition, about where he thinks that should be, but I gently push back to him as well on the balance we need to strike here. The hospitality sector in Scotland is struggling as well as ours, and others are too. We must make sure we get that balance right. I have to say that in Scotland the failure rate in hospitality is even worse, being 30% higher than it is in England. That is partly down to the fact that Scotland has not passed on the rates money for those hospitality businesses, as has been done in England. The average pub in Scotland is £15,000 a year worse off because of that policy.

Oral Answers to Questions

Justin Madders Excerpts

Thursday 7th March 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

My hon. Friend the Member for Bury South (Christian Wakeford) is right that too many employers still think they can opt out of paying the minimum wage. Earlier this week, the Low Pay Commission published its 2023 report, which said that non-compliance “appears persistent” in the social care sector. I have heard a range of evidence citing problems with record keeping, exploitation of migrant workers, and workers routinely not being paid for travel time.

It is clear that the social care sector has a real issue with the minimum wage but, when browsing through the latest naming and shaming list published by the Department a couple of week ago, I found only 17 employers classed as being within the social care sector, which is less than 0.1% of the total number of employers in the sector. What will the Minister do to ensure that everyone working in the social care sector gets at least the minimum wage?

[Kevin Hollinrake]

The hon. Gentleman is right to raise this issue, on which we do much. For example, we make sure that people can anonymously report the underpayment of the national living wage through either His Majesty’s Revenue and Customs or ACAS. It is really important that we do that. We have labour market enforcement undertakings and orders, and we provide the tools for serious cases. As of April 2022, 40 employers were on labour market enforcement undertakings and 18 employers have been prosecuted. The message should be loud and clear to employers that if they do not comply with the law, we will take action.

Shared Parental Leave and Pay (Bereavement) Bill: Instruction

Justin Madders Excerpts

Instruction
Tuesday 5th March 2024 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I will just say a few words about the motion; I am sure the Minister would be disappointed if I did not.

I pay tribute to my hon. Friend the Member for Ogmore (Chris Elmore) for his work on this issue. I am pleased to see the hon. Member for Broxtowe (Darren Henry) here too, because they have both been working on this issue with the Minister, and it is very pleasing that we have got to this stage. I commend my hon. Friend on his success in achieving Government support. This important Bill will help those in the awful and unimaginable situation of losing a partner when a child is expected. The Minister is right to try to equalise the provisions across all circumstances. We look forward to the Bill hopefully being amended in Committee to take on board the intentions set out today. We welcome the motion, and we wish it all the best.

[Darren Henry (Broxtowe) (Con)]

When Aaron came to my constituency surgery with his three-week-old son, Tim, in his arms—his wife sadly died in childbirth—he had been working for a company for less than six months so he was not entitled to shared parental leave. Does the shadow Minister agree that this will affect the very small number of people a year in that situation? It will not be a significant burden on businesses and the Government, but for the people it affects it will be hugely impactful.

[Justin Madders]

The hon. Gentleman is absolutely right. We have discussed that with the Minister in other debates. The Bill will thankfully affect a very small number of people, but the hon. Gentleman is absolutely right that for them it will be an incredibly important advance. On that note, I wish the Bill the best of success in its passage through Parliament.

Draft Carer's Leave Regulations 2024 Draft Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024

Justin Madders Excerpts

Wednesday 21st February 2024 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mr Hollobone. I thank the Minister for his introduction. We will not be opposing the regulations today, although that is not to say that I do not have a few questions and comments—I know the Minister would have been disappointed if I did not have anything to say. Let me start by paying tribute to the hon. Member for North East Fife and my hon. Friend the Member for Barnsley Central (Dan Jarvis) for their work on the private Members’ Bills that led to these regulations.

As the Minister highlighted, the draft carer’s leave regulations will provide employees from day one—we in the Opposition certainly like day-one rights—the right to a maximum of one week’s leave per year to care for a loved one, without any requirement to provide evidence. As we know, the entitlement can be taken in chunks as small as half a day or as one week’s continuous leave, and it cannot be refused by an employer, nor can an employee be detrimentally treated as a result of taking such leave, in common with many other protections in employment law.

Campaigners have pushed for many years for the right to statutory care leave, but until now there has been no such right. We know that there is a whole range of reasons why carers might need to take time out; the regulations will hopefully allow them to provide assistance with a doctor’s appointment or recovery after surgery, for example. The regulations are undoubtedly a step forward, and they should make a difference to those with caring responsibilities who are in paid work.

As we heard, the number of people potentially affected by the regulations is not insignificant. There are millions of people who are both in work and responsible for caring. Carers UK found that before the pandemic almost 5 million people were juggling work and caring, and that increased to 7 million during the pandemic. The Chartered Institute of Personnel and Development estimates that the figure is closer to 3.7 million people, while the impact assessment published alongside the regulations states that the total number of carers—not just those who are in work—stands at 4.2 million. There are, therefore, several different estimates of the number of people who will be impacted by the regulations, and I will return to that briefly later on, but whatever figure we choose, it represents a substantial proportion of the total population, let alone of the number of people actually in work. Given that, at the latest count, there were about 33 million people in work, around 11% to 15% of the overall workforce may benefit from the regulations.

There is a large amount of evidence that good employers already have informal care leave practices in place, but of course many employees do not have that option and, unfortunately, often take caring leave in the form of annual leave or sick leave. That was uncovered during the Government’s 2020 consultation, which found that two thirds of carers had had to use annual leave to provide care for their dependants. In essence, until that point the issue was hidden: carers would use annual leave or find another way, by hook or by crook, to take the time out that they needed. We should make it very clear that annual leave is meant for rest and recuperation, not caring responsibilities.

A 2018 report by the Work and Pensions Committee summed up that unfortunate practice as “detrimental” to carers’

“own physical and mental well-being,”

and said that, in the long run, it would increase

“the risk of sickness, exhaustion and ‘burnout’.”

Those warnings appear to be accepted in the summary of the “do nothing” approach in the impact assessment published alongside the regulations, although I cannot help but point out to the Minister the irony of the Government’s being alive to the importance of a worker having the option and the ability to take annual leave in the context of caring, just a couple of months since the introduction of reforms to rolled-up holiday pay, which will have the opposite effect.

All hon. Members here will appreciate how taxing such caring efforts will be for workers, and many will, of course, have personal experience of such difficulties. Research published by the CIPD in 2021 found that almost one third of working carers provide at least 30 hours of caring per week, meaning that they are effectively undertaking another full-time job on top of their full-time caring responsibilities. Of those working full time, 28% provided at least 30 hours of care. Understandably, for many that can take a huge physical as well as psychological toll, not to mention the need to balance such personal challenges with the development of a career.

For many the situation can seem insurmountable, and people often reduce their working hours or give up work entirely. I hope the regulations stop that happening as much as it has been to date, but according to research 9% of the population have had to do that: the impact assessment notes that 5% have left the workplace altogether and a further 4% have had to cut their hours. Carers UK claims that this translates to 600 workers leaving the workplace per day. If that is correct, it is a staggering figure and clearly something that we should all want to do something about. It is clear that informal care needs can impact on one’s career, leaving many working people in a state of economic inactivity in order to provide care. When so much potential and experience is lost to the labour market, we need to address that; I hope the regulations will help in that respect.

It is important to note that the burdens do not fall on all sections of society equally. The impact assessment notes that the impact of caring while in work hits those aged 45 to 54 hardest—I declare an interest at this point as I am in that age group; I know it is hard to believe, but I am under 54—with more than a quarter of people reporting that it had taken a toll on their work. There is also a gender aspect to this, with women more likely than men to be responsible for caring. The family resources survey found that 9% of women, as opposed to 6% of men, are in this position. If we put the facts together, it is no surprise that women aged between 45 and 64 years old are most likely to be carers. As we know, with such added responsibilities they are more likely to be leaving the workforce, which exacerbates the existing gender pay gap.

All this shows that not only are many making a massive personal sacrifice, but there are societal consequences as well. The inequalities in terms of who is responsible should trouble us all, but there are also profound financial impacts. The impact assessment notes that the potential cost incurred to the Exchequer alone is around £2.9 billion per year. Analysis suggests that better carer’s leave policies could save businesses a cumulative £4.8 billion per year in unplanned absences, and a further £3.4 billion in improved employee retention. Clearly, those figures may need to be tested by experience, but it is clear that some businesses have caught on to the benefits of providing carer’s leave and introduced voluntary policies. Sadly, though, that applies only to a small proportion of businesses overall—Carers UK report that it is around 12% of existing employers.

It is an understatement to say that a very strong case for carer’s leave has been made for a number of years, but we do have concerns about some of the aspects of the regulations. Most significantly, the calls made during the passage of the Carer’s Leave Act for the Government to consider making such leave paid have fallen on deaf ears. It was not just the Opposition who called for paid leave; the Government’s own response to the consultation on the matter, which was published in September 2021, stated:

“There were strong calls from charities and individuals for this leave entitlement to be paid.”

Despite those strong calls, the space allocated to considering them in the consultation extended to just 162 words, in which the Government said they were “sympathetic” to the calls but judged that the impact on businesses would not be “proportionate”. There is no analysis to support that position, and no further evidence. I know that finances are tight, but we already know about the potential positive financial impact, so I would have expected some form of analysis in the impact assessment—which took a year to come out—of the costs and benefits of making the entitlement paid. The Government should at least have considered that as an option.

Why have the Government decided that it would be disproportionate to make the entitlement paid without offering any supporting evidence? Has the Minister looked at costings at any point? Indeed, has there been any consideration of that point at all? Given the evidence that there is an economic benefit, it is important that there is an explicit acknowledgment in the impact assessment that keeping the leave entitlement as unpaid will discourage some carers from taking up leave. The impact assessment says that

“as this is an unpaid leave entitlement some carers will be disincentivised to take the full entitlement of leave, as they do not want to lose more of their income. Existing survey evidence shows that one of the key reasons for not taking leave is because of affordability.”

Will the Minister explain why the Government have chosen a policy which, according to their own analysis, appears to limit the take-up?

[Kevin Hollinrake]

The hon. Gentleman is implying that we should make the entitlement paid, which is a perfectly reasonable position. As he makes that assertion and that policy decision that the Labour party will presumably adopt, does he understand how much that decision will cost and where the money will come from?

[Justin Madders]

As the Minister knows, we will publish our proposals with costings when we get to the general election. However, as the Government have been considering the regulations, I want to know whether they have undertaken such an exercise. It appears they have not, and I think, given that there is apparently some financial benefit, that it is perfectly reasonable to ask why that question has not been addressed at all. I further point out that the impact assessment states that

“some employees may prefer to use their annual leave for caring responsibilities, as this is an unpaid entitlement and annual leave is paid at full-pay.”

That undermines the purpose that the regulations are trying to achieve, so I hope the Minister can address that in a little more detail when he responds.

As I mentioned earlier, there is a question about how many people will actually benefit. I quoted figures from Carers UK and the CIPD, which place the number of people in work who are carers at more than 5 million or at 3.7 million, respectively. The Government’s estimate of those who will benefit is substantially lower, at 1.9 million, according to page 13 of the impact assessment. That number is also alluded to in the explanatory memorandum, which states that the number of in-work carers is roughly half the total number of informal carers, which is 4.2 million. It would be useful to hear from the Minister why we have such discrepancies on the figures; after all, there are several million people between the Government’s and the CIPD’s estimates. One possibility is that many carers do not qualify for the assessment because they are not employees. I do not know whether that has been part of the issue.

I have some concerns about the mechanics of the entitlement and will ask the Minister to address those when he responds. The particular issue is the ability of an employer to postpone the leave for a period of up to one month. The regulations state that an employer is entitled to delay the take-up of leave if

“their business will be unduly disrupted if the employee took carer’s leave during the period identified in the notice”.

That appears rather open-ended. What constitutes a business being unduly disrupted? Will the Minister help us with that? Will there be guidance issued on that point, alongside the regulations, to clarify the circumstances in which it can be invoked?

It is also worth noting that if an employee provides less than one week’s notice, the leave could be postponed before the earliest day or part day requested in the employee’s notice. That means that there are asymmetrical notice requirements. Where an employee must provide adequate notice to proceed with their entitlement, the employer can seemingly postpone at a moment’s notice. We can all see why that that might not necessarily align with people’s caring responsibilities. Most of the time, the leave will be dependent on the care needs of the recipient, and it might not be possible to rearrange cover in such a fashion, so will the Minister accept that a balance must be struck between the needs of the carer and of the employer?

I suggest that the way the draft regulations are framed means that the employer could, if so minded, refuse a request for whatever reason they chose, as long as they use the wording of regulation 8(b). On the face of it, under the draft regulations, there is no mechanism to challenge an employer’s decision. On reasons to postpone carer’s leave rather than refuse it—it is supposed to be operational in a month—what explanations does the Minister expect a business to produce? What measures can the Government take to ensure that consent is not withheld unreasonably?

Before I move on to the second set of regulations, I will say that it is a little disappointing that we have had to wait such a long time for regulation. It is now not far off seven years since the Government promised to

“give workers a new statutory entitlement to carer’s leave, as enjoyed in other countries”,

in the 2017 Conservative general election manifesto. That was repeated in the 2019 manifesto, which stated that they would introduce the

“entitlement to leave for unpaid carers, the majority of whom are women, to one week.”

A promise to introduce the provisions as part of the now mythical employment Bill was made in the 2019 Queen’s Speech. A consultation was launched in March 2020, followed by a Government response a year later, but then we heard nothing more.

As we know, throughout the passage of the Carer’s Leave Bill there was no opposition to its principles and no amendments were made. I think it was universally accepted that it was a positive step forward, which poses the question of why we have had to wait seven years for this to be delivered. Why did we have to rely on a private Member’s Bill for it to come into law? Hundreds of thousands of workers could have benefited from the protections in the legislation had it been issued earlier. It is positive that we have finally got there, but it is reasonable to ask the Minister why it has taken us so long.

I now turn to the second set of regulations, the draft Maternity Leave, Adoption Leave, and Shared Parental Leave (Amendment) Regulations. As the Minister stated, they are about the protections against being made redundant that are afforded to workers who take maternity, adoption or shared parental leave. The rights stem from the MAPL regulations of 1999 and similar provisions in the Paternity and Adoption Leave Regulations 2002 and the Shared Parental Leave Regulations 2014.

All the existing regulations state that if a worker’s job is being made redundant during their maternity, adoption or shared parental leave period, they are entitled to be offered alternative employment that is not substantially worse than their previous job. As the Minister said, the new regulations will expand the time during which those protections apply up to 18 months after the birth of the child. That will mean that a mother taking the full 12-month entitlement to maternity leave or a parent taking the full 12-month adoption leave will be protected for at least six months after their return to the workplace. For a parent taking shared parental leave, protections apply only if they take off at least six consecutive weeks of parental leave.

We absolutely support the Government on increasing protections and, as the Minister said, a range of evidence that has been available for a long time indicates that new mothers have been pushed out of jobs and discriminated against. The Minister referred to the Equality and Human Rights Commission’s 2015 estimate of about 54,000 new mothers being forced out of their jobs, equating to about 11% of the women responding, who had

“been dismissed, made compulsorily redundant where others in their workplace were not, or treated so poorly they felt they had to leave their jobs”.

In 2020, a Pregnant Then Screwed a survey of almost 20,00 women also found a figure of about 11% of women on maternity leave who had been made redundant or expected to be made redundant. The Government recognised that position and made positive noises following a 2017 Women and Equalities Committee report, but did not launch a consultation on the issue until 2019. Again, a commitment to act was made in the 2019 Queen’s Speech, but here we are in 2024 before we finally have some regulations.

It must be stated that the second set of regulations will address only one element of the challenges that women and other parents face: that of being made redundant while pregnant. On page 7 of the impact assessment, it is estimated that the measure will likely cover about 7,500 people. Clearly, that is a not insignificant number of workers, and it is a welcome step that additional parents will have the protections, but that is only a small proportion of those who start a family each year, and it is certainly a drop in the ocean compared with the 11% figure in the surveys to which I have referred.

There is concern, then, that the regulations will not take us all the way to where we want to be in protecting women and new parents from discrimination during and after pregnancy. I think we can all agree that the surveys and the evidence show us that there is currently an unacceptable level of discrimination, but it is important to remember that that has all been happening under the current rules on maternity, adoptive and shared parental leave, so it is reasonable to ask this question. What do the Government think will happen, when the extension of the period comes into force, to actually ensure that all discrimination in the workplace is eliminated? We know that tens of thousands of women are already being forced out of their jobs, through reasons not associated with redundancy, during pregnancy or within six months of their return to work. I fear that the measure will not go far enough, so does the Minister have any thoughts or suggestions about what else could be done to reduce the very high numbers?

The regulations on which the statutory instrument builds are reliant on awareness by the employer of the rules and on the ability of the worker to enforce their rights. The impact assessment noted that 70% of employers reported a high level of awareness of female employees’ rights, but it also noted that deeply concerning biases were held by an unacceptably large proportion of employers. Reportedly, 70% of employers held the belief that women should declare a pregnancy during the recruitment stage, and 25% thought it was acceptable to ask a woman about their plans to have children when hiring. Those statistics are concerning and should be setting off alarm bells about the latent discrimination that still exists. I started work nearly 30 years ago and even then those sorts of questions were simply unacceptable, so the fact that the impact assessment reveals that that kind of prejudice is still alive is worrying to say the least.

The concern is reflected in the part of the impact assessment that raises concerns that the effectiveness of the regulations could be blunted through an employer’s adherence to them. I will draw to the Committee’s attention two passages in the impact assessment. The first is the comment on the wider landscape, where it says:

“The legislation in this area is complex and thus businesses may struggle to understand their obligations. As a result, employees may find it difficult to exercise their rights.”

The other, which is a surprisingly candid comment about how the current system is not robust enough to adequately protect workers, says:

“Employers are currently not incentivised to provide sufficient employment protection for pregnant and new parents, and are likely to prioritise their costs and bottom line.”

It would be useful to hear the Minister’s reflections on those comments, because they allude to a wider problem. Will he reassure us that there will be adequate support for businesses to understand the new protections and that they will be accompanied by a robust enforcement mechanism to ensure that the protections actually benefit the people they are intended to benefit?

In closing, I remind Members again that the Select Committee report with actions in relation to where we are with the regulations today was published in 2016. We know that a week is a long time in politics, so eight years must seem like an eternity, particularly to those 54,000 women who we can estimate have been forced out of work each year during that period. The total is more than 400,000 women during that time. As I said, I will conclude on those points. We support the regulations, but there are some questions that I hope the Minister will address when he closes the debate.

Oral Answers to Questions

Justin Madders Excerpts

Thursday 25th January 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Postal workers are the bedrock of our communities, but they are being forced to work at unsustainable levels—something that, sadly, has not been recognised in Ofcom’s report on the future of universal service obligations. The input of postal workers is critical to a successful Royal Mail, so please can we have confirmation that their views will be considered in any future decisions?

[Kevin Hollinrake]

That would make perfect sense. We read the Ofcom report into the review of universal service obligations with interest. Our clear position is that we will retain a six-day service for our citizens and businesses, but those views will be taken into account.

Draft National Minimum Wage (Amendment) (No. 2) Regulations 2023

Justin Madders Excerpts

Tuesday 9th January 2024 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Ms Harris. Prynhawn da, and a happy new year to the rest of the Committee. I will say from the outset that we fully support the introduction of this instrument. We are glad to see that the Government have finally come through on the commitment made, I think, about two years ago in one of these Committee Rooms, during a debate with one of the Minister’s predecessors on a similar instrument.

As the Minister has already said in his helpful introduction, the regulations remove paragraph 3 from regulation 57 of the National Minimum Wage Regulations 2015. The paragraph contains provisions that exempt employers from having to pay the minimum wage to a worker who is

“not a member of that family, but is treated as such”.

As we know, such an exemption was introduced in 1999 to facilitate au pair placements, which allowed young people to spend some time in the UK learning about the culture and strengthening their language skills. Families would host an au pair and provide accommodation; in return, there would be some light housework, childcare, and typically education with the family about the au pair’s own culture. Given that the arrangement was primarily about a cultural exchange, it was deemed—I believe after quite a lot of evidence given to the Low Pay Commission—not appropriate for it to be covered by the national minimum wage. Obviously, those arrangements were entirely dependent on the parties entering them in good faith. I will go on to why there has been some difficulty with that.

As the Minister said, the Low Pay Commission has investigated the issue. Its annual report in 2021 found that the traditional model of au pairs did not really exist anymore. It said that as early as since 2008 there had been a dilution of the traditional tenets of the au pair model—many tended to work quite long hours; they were certainly doing more than just light housework and childcare. What really proved to be the death knell for the traditional au pair model were the post-Brexit immigration laws, which prevent au pairs, except those from a limited list of countries, from working in the UK. The Low Pay Commission concluded in its report that there is

“no viable route for au pairs to legally enter the UK”

and stated that even if EU countries were added to the youth mobility schemes, it is unlikely that the sector could compete with some of the other traditional areas for work such as hospitality and agricultural work.

It is pretty clear from the evidence that the exemption for domestic workers had outlasted its original purpose. Although it was clearly drafted with au pairs in mind, paragraph 3 is broader than that and fails to properly define the role of an au pair. That has allowed unscrupulous employers to use it as a loophole to exploit domestic workers and fail to pay them the wages they rightfully deserve, meaning they could force the claim that a domestic worker was treated as a member of the family and therefore must be exempt from the minimum wage. That is difficult for a worker to contest, given that their work is undertaken in a private setting. I will go on to speak in more detail about the difficulties that that brings, as well as the question of enforcement, which the Minister touched on.

This is all about exploitation, and such concerns are clearly outlined in the Low Pay Commission’s 2021 annual report. The chief recommendation made, and the reason we are here today, was that the exemption should be removed or at least amended to ensure that there would be no exemption for au pairs. The Government accepted that two years ago. At the time, the magic phrase “when parliamentary time allows” was used; as the Minister knows, that does not always mean that we end up with something. The Employment Bill is a good example of that. However, it is worth asking whether there is a reason why it has taken two years from making that promise to bring the regulations before us today, especially considering that there is political consensus on the matter and it is legally fairly straightforward.

I return briefly to the Low Pay Commission’s investigation, which produced an important number of findings about how the exemption is used—or, more accurately, abused. The most important factor touched on already is the demographic of the worker who is typically exploited. The Low Pay Commission found that the main affected group is made up of migrant domestic workers arriving in the UK on overseas domestic work visas, which allow them to stay for up to six months in a domestic setting. Since 2015, an employer of an overseas domestic work visa applicant must sign a statement that the work will not fall under the family worker exemption and therefore the worker will be paid the minimum wage. Unfortunately, that statement has not found its way into the minimum wage regulations and so employers were still relying on the exemption at tribunal.

The Low Pay Commission found numerous cases at tribunal where the exemption, having previously not made any appearance, was suddenly relied on by the employer to get rid of any sanction—even though a statement would have presumably been signed at some point, as part of the visa application, confirming that the exemption did not apply. We can all see that that is a pretty cynical manipulation of the law. I want to emphasise, however, that to even get to tribunal stage takes a great deal of confidence from the employee, as well has having the know-how and legal knowledge to identify a breach of the law.

The Low Pay Commission report noted that it is typical for contracts in this setting not to make any reference to the exemption, or for the employer not to inform the employee of the exemption up front. Another important characteristic of such a group of workers is that typically most were women doing the job to send money back home. It is noted that that means they are often highly vulnerable,

“hidden in private homes without access to their own networks and with language barriers.”

That is one of the reasons why the appeal tribunal rulings were successful, saying that the exemption should be disapplied. There is now an established precedent for the removal of the exemption as a matter of case law. However, the Anti-Trafficking and Labour Exploitation Unit, which advocated for the worker whose case was successfully defended in the appeal court, still believed there was a need for further clarification. That is why we are here today.

We know what courage it takes to challenge an employer who is in the wrong in ordinary circumstances. It is a big step to take an employer to an employment tribunal, but to do so when the employer provides the roof over one’s head, and when the employer may be the only person one knows in the country, takes extraordinary bravery. I am therefore concerned that, although the regulations are a positive step forward, closing the loophole will not altogether remove the exploitation. There is still a risk, and it is clear to anyone who has read the Low Pay Commission’s findings that there will be continuing challenges in this area.

We all recognise that anyone employed in domestic work is inherently vulnerable. Their work is not just their job and their income; it is also their accommodation. The vulnerability is exacerbated by the fact that most people coming in on the visas were here for six months, so they often had only one employment option and would find it very difficult to find work in another household. Given that, and given the fact that, under the conditions of the visa, they are not allowed to take work other than as a domestic worker in a private household, the Low Pay Commission quite clearly stated that they might feel trapped in their employment and fearful of the consequences of raising concerns.

The combination of that fundamental vulnerability with the fact that many such workers will simply not possess the language skills, knowledge or network to enforce their legal rights is quite worrying. It is a combination that the Low Pay Commission found to have negative consequences. It found that most workers reported being underpaid, often well below the minimum wage; working additional hours for which they did not get additional pay; or simply being treated as being on call throughout the entire day. There were even instances of more serious abuse, including physical abuse and being prevented from leaving the house. Case studies have shown the levels of exploitation that some workers face. I will read a short extract from one, which is about a woman the report calls Imelda:

“She didn’t know any of the rules in the UK and so was initially happy with payment of £400 per month. She worked from 6am to 12 midnight, doing the cooking, laundry and cleaning. She was not allowed to speak to another Filipino or to leave the house. Her contract says she should be paid £1400 per month, but this was not enforced; she was told to sign the contract even though she didn’t understand it. She was afraid to leave the house and become undocumented.”

That encapsulates the real problems that can be faced: the lack of understanding of the law; the exploitation of the language barrier; the long, gruelling hours; the control that the employer exerts over the worker’s life; and the threat of becoming undocumented.

There is no doubt that removing the exemption will help by both disincentivising employers from underpaying their staff and making it easier for domestic workers to be compensated. The change will work only if those workers are aware of their rights and have the wherewithal and confidence to report. The evidence I have quoted from migrant domestic workers strongly suggests that that is not a given; in fact, it is quite a significant challenge. Clearly, the individual in the case I quoted, Imelda, did not know her rights or her ability to raise a flag; she did not have the confidence to leave the house, let alone talk to an outside body. It stands to reason that, alongside the introduction of the regulations, there should at the very least be an information campaign to ensure that migrant domestic workers are aware of the laws and how to report any breaches that they might face. Rights without any proper enforcement are no help to people at all.

My challenge to the Minister is this: how can we expect this instrument to work if migrant domestic workers are unaware of the law or where to report? The instrument is all about enforcement, which can happen only if the individual is empowered or if the body that regulates the sector brings claims on behalf of workers. It is concerning that the explanatory memorandum says nothing, really, about how to monitor the success or otherwise of the regulations. The Minister talked about the HMRC investigations unit, but the Low Pay Commission had concerns about the capacity to do very detailed investigations into domestic working situations, which of course mean people being able to get through the door in the first place.

At the very least, we should be keeping track of the numbers of individuals reporting underpayments in such situations. We could ask the Low Pay Commission to review the effectiveness of the instrument in a few years’ time; the magnitude of the problem demands at least that. I wonder whether the Minister can give us some detail in his response about what steps will be taken to monitor the effectiveness of this instrument and the ongoing abuses in the system.

Let me conclude by confirming that we support this instrument. We believe it will have some effect in closing the loophole that has been allowed to continue for too long. Employers should not be exploiting their workforce, and we should not be allowing them to use legal technicalities to do so. But the measures alone will not deal with all the issues that the Low Pay Commission has identified. The Government need to consider how they will monitor this sector and ensure that migrant domestic workers are aware of their rights and able to freely enforce them.

The missing piece here is enforcement. We know that at present enforcement is not possible unless people have their rights and have the know-how and confidence to exercise them. The Low Pay Commission found that many domestic workers do not have those. To make this instrument a success, that definitely needs to be addressed.

--- Later in debate ---

[Kevin Hollinrake]

I thank hon. Members for their valuable contributions to the debate. I think all contributions focused on enforcement, quite understandably. As I said earlier, legislation without implementation is rather a waste of time, so let me say exactly what we are doing. As the shadow Minister and the SNP spokesperson said, it is quite a daunting thing to challenge one’s employer, especially in this kind of environment. As I said in my remarks to my right hon. Friend the Member for North West Cambridgeshire, these complaints can be made to Acas online or on the phone, or anonymously to HMRC, so they do not necessarily risk that relationship—although in some circumstances it would be pretty clear who had tipped off the agencies.

In terms of information campaigns, I agree, and that is what we are planning to do. We will work with Acas, which will update its guidance. The Government website will also be updated with guidance. However, that is not necessarily the place where everybody is going to look—we are also working with the au pair and domestic worker agencies, for example, to make sure that they are fully aware of responsibilities in this area. We are also working closely with charities that support vulnerable workers in this kind of space.

[Justin Madders]

I have a suggestion that might help the Minister. Is it worth talking to the Home Office about information that goes through when visas are processed?

[Kevin Hollinrake]

That is a challenge I am very happy to take on, and advice I am very happy to take up. We work very closely with our colleagues in the Home Office. As the hon. Gentleman may have noticed, some officials are here so I am sure that is what we will do.

The hon. Gentleman also rightly mentioned capacity. He will be aware that over the last seven years we have doubled capacity on enforcement in HMRC—it is now £27.8 million. That comes in two areas: a promotion campaign, which is upstream work with employers to make sure that they are aware of their responsibilities, and enforcement, which includes very significant levels of potential fines. We have found that the most effective deterrent is the naming and shaming work we do on employers that are breaching the national minimum wage regulations. That is something we are very keen to do, and are doing, more often. Furthermore, employers are required to keep records for six years, which feeds into the point made by my right hon. Friend the Member for North West Cambridgeshire. If there is an anonymous tip-off and HMRC investigate, it is much easier for them to make sure that the rules have been followed.

The legislation will ensure that all work is treated fairly and end the misuse of the exemption to exploit workers, particularly migrant women. I would like to conclude by once again extending my thanks to the Low Pay Commission. Thanks to its independent and expert advice on this national minimum wage exemption, we can ensure that the right balance is struck between the needs of workers, affordability for business, and the wider impact on the economy. I put on the record my thanks to Bryan Sanderson, who has been the chair of the Low Pay Commission for some time. We worked very closely with him. He is now moving on to pastures new, but he has done a brilliant job leading that commission. I thank the commission for its recommendations on the 2024 rates, which will give a record cash increase to the national living wage and end hourly low pay for those aged 21 and over. I commend the regulations to the House.

Question put and agreed to.

Statutory Parental Bereavement Leave and Pay

Justin Madders Excerpts

Wednesday 6th December 2023 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the chair, Mr Sharma, and it has been a pleasure to listen to this debate, because it has shown the best of Parliament. People have brought their personal awful experiences to the fore to try to bring about change for the better for everyone. I certainly congratulate the hon. Member for Broxtowe (Darren Henry), first on securing the debate, but also on his tireless and passionate campaigning in this area. We heard how his conversations with his constituent Aaron about the tragic loss of his wife set him on this path. As the hon. Member for Stafford (Theo Clarke) said, it does not seem right that he was not entitled to any leave in those awful circumstances. That succinctly puts into words where most Members are on this issue. I pay tribute to the hon. Member for Stafford for her leadership and courage in this area, and to the hon. Member for North Ayrshire and Arran (Patricia Gibson), who has been a tireless campaigner on the issue, bringing her own experiences to the fore.

I return to the tragic story of the constituent of the hon. Member for Broxtowe. We extend our deepest sympathies to Aaron and his family. What the hon. Member said today and in his previous interventions has brought the issue to the fore. While he has not been successful in the private Member’s Bill ballot, we have had positive indications that my hon. Friend the Member for Ogmore (Chris Elmore) will bring forward a similar Bill. I encourage the Minister to meet my hon. Friend in due course—I am sure he will—to ensure that we can get the Bill over the line.

As has been acknowledged, the circumstances in which Aaron found himself are thankfully very uncommon. The number of mothers who sadly passed away within 42 days of giving birth between 2019 and 2021 was 261, but that is 261 is too many. It goes without saying that each and every death is a tragedy, and I put on record our sincere condolences to all families who have faced those extremely difficult circumstances and that unimaginable heartbreak.

It is apposite to take this opportunity to look at the UK’s comparative maternal mortality rate. Recently published research found that the UK had a maternal mortality rate many times higher than some of its European counterparts, and it performed second-worst in a study of eight European countries. Those figures are clearly concerning, but I appreciate that that is not for the Minister to address; it is more a matter for his counterpart in the Department of Health and Social Care. In many respects, national comparisons do not get across just how difficult it is for people like Aaron who face this devastating situation. However, the fact that they can fall through the cracks in the way that we heard today shows that there are deeper problems with the protections afforded to workers in this country. In that example, the gaps are evident.

As we have heard, at present the only right to statutory bereavement leave is for parents who have lost children up to the age of 18; in those circumstances, they are entitled to two weeks of leave. Leave is a day one right, but the entitlement to pay is conditional on having been in employment for at least 26 weeks and having earned at least £123 over eight weeks. Paternity leave and paternity pay have similar requirements, and sometimes a person can have been in a job for 26 weeks before they are entitled to any support at all. Shared parental leave and pay provisions do not really help people in Aaron’s situation. Not only is there a time restriction on access to them, but income requirements can differ for a mother and a partner. Frankly, the system is very complicated, and I am afraid that the evidence is that that has discouraged families from taking up shared parental leave. It was introduced with the aim of enabling more equal parenting, but the latest figures show that only 2.8% of partners decide to take it up, so we need to do better on it.

That is why we want paternity pay, paternity leave, maternity leave and shared parental leave to become day one rights. Then those facing the tragic circumstances that Aaron faced would not risk falling through the legislative cracks, on top of facing personal tragedy and an extremely difficult situation.

Many good employers already choose to go beyond their statutory requirements, but it is clear that many do not. That is why the law needs to step in. This debate has highlighted an injustice, and it seems to me that everyone is of the same view—that this needs to be put right. It is clearly unacceptable that individuals facing some of the most tragic and difficult circumstances are allowed to fall through the cracks in this way. It would be helpful to hear from the Minister on what the Government propose to do about that. Can he inform the House of any research undertaken into the issue?

It would be interesting to know, if a figure is available, exactly how many parents in Aaron’s situation would be supported by the legislation we are talking about. That would clearly help with an assessment of the costs involved. I know the Minister has discussed the matter previously with the hon. Member for Broxtowe, but I wonder whether he has had an opportunity to consider draft legislation. I appreciate that we are not always able to get a definitive answer from Ministers on private Members’ Bills, but will the Government support the proposal of my hon. Friend the Member for Ogmore? That would clearly be a welcome step forward. We have heard a compelling argument for reform today, so it is about time we got on and delivered it.