Employment Rights Bill

Lord Barber of Ainsdale Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 10th December 2025 Lords Chamber

[Lord Barber of Ainsdale (Lab)]

My Lords, the subjects covered by these amendments have been more than extensively debated already, so I do not need to rehearse all the arguments around each issue. Nor do I need, I hope, to remind the House that this whole Bill represents the fulfilment of a hugely important manifesto commitment and, by long-established convention, it must ultimately be recognised and accepted by this House.

As a former chair of ACAS, I will briefly focus on what is new since our previous debate on the Bill: the unprecedented agreement between the TUC and unions and the major employers’ organisations in this country. I say “unprecedented” because, although there have been agreements on some issues over the years between the TUC and the CBI—I think of the joint work that was excellently done developing the furlough scheme during the Covid crisis—I cannot recall such a grouping of the representative organisations of employers ever coming together to seek and to reach an understanding with the TUC. I do not need to list all those organisations on the employer side in this process; the noble Lord, Lord Fox, has done that for me already. This is a historic development and, to my mind, a very positive one. I warmly congratulate those on all sides who gave leadership, for the Government, the unions and the employers, to make this possible. All the parties needed to move from their original positions to make this possible.

As is clear, the centrepiece of this agreement is moving from a right to protection against unfair dismissal from day one of employment to after six months in the job. This proposal was championed by many noble Lords in our earlier debates, speaking up, as they have, for what they have seen as employers’ most important concern about the different provisions in the Bill. But, of course, this agreement is more ambitious than that, in also clearing the decks for the Bill to move swiftly to Royal Assent. As the joint statement by all the employers’ organisations makes clear:

“This change addresses the key problem that must be sorted in primary legislation”.


That statement acknowledges that other issues covered by the Bill, on which those organisations may have concerns, will be consulted on in due course after Royal Assent. This reflects a widely shared view that, rather than leaving continued uncertainty and dragging this debate out further, it is now better for all parties to get the Bill passed so that we can all move on to the next stage of bringing some key provisions into force, in line with the published timetable, and the planned consultations on other issues covered by the Bill.

My ACAS and TUC experience has taught me how difficult it can be to find intelligent compromise on issues that may have been hard fought. It has also taught me the vital importance of agreements being honoured when a deal is done. If the passing of this Bill is further delayed it would frustrate one of the key objectives of this agreement.

As the employers’ organisations said in their statement, this shows that dialogue works. I truly hope that the positive spirit that underpins the agreement continues to the next phase—I mean in the changes to be made across the workplaces of this country, not just the consultations on detailed aspects of the Bill. My ambition has always been for unions and employers to find constructive ways of working together in order to build successful organisations. In that spirit, I hope all noble Lords will now get on board and show—dare I say it—solidarity with the employers of our country in the compromise that they have reached. I hope noble Lords will not just support the changes in unfair dismissal arrangements but now pass the Bill through to Royal Assent without any further delay.

[Lord de Clifford (CB)]

My Lords, I will speak on Motions B and B1 and register that I speak on behalf of SMEs and as a small employer of 130 people. I thank the Government for listening to businesses and this Chamber with regard to the change to unfair dismissal. Six months is certainly enough time for businesses to assess employees.

I thank the Opposition, the Liberal Democrat Front Bench and my noble friend Lord Vaux of Harrowden for persisting in trying to change Clause 23. This change could have had the effect of allowing employers, especially SMEs and micro-businesses, to take a chance on a prospective employee who shows the skills and talents for a particular role when the employer, for whatever reason, may have doubts. This could be due to a lack of experience, the different ways in which some individuals need to work nowadays, or an employment gap. This change certainly would help that.

However, the Government’s introduction of the change to lift the compensation cap will potentially significantly dampen down employers’ enthusiasm to take this chance. This is especially true for micro-businesses. The regulatory burden and the risk of starting to take on employees is significant, and the removal of a cap will add to the real fear about starting to employ people. All those businesses hear is an unlimited cap, which is what the focus will be in their minds. They will not know about the average limit being just £7,000 or £8,000. The thought of an unlimited liability if you get the dismissal process wrong will either stop businesses taking on employees or mean that some employee issues are not tackled for fear of the possible amounts. This will have a negative impact on productivity and, possibly, the culture that people work in.

I have listened to the Minister and welcome the impact assessment and consideration, but I ask the Government to reconsider this change and put some limit on the compensation, so that small businesses can assess the liability and not have the fear, even if unfounded, of paying a large fine that could put those businesses or business owners at risk.