Code of Practice on Dismissal and Re-Engagement

Lord Browne of Ladyton Excerpts

Monday 25th March 2024 Lords Chamber

I do not wish to take up any more of your Lordships’ time by repeating arguments I have made many times before, so I will end on this point. Fire and rehire is deeply unpopular, with 70% of the Government’s own voters wanting to see the back of it. But this new code, if anything, actually legitimises this abusive practice and shows bad bosses how to get away with it, legally. In my opinion, enough is enough; it is time for change. When will this Tory Government finally fight back and stand up for ordinary workers who are being exploited day in, day out? Thankfully, Labour will take steps to end fire and rehire within the first 100 days of coming to power. I sincerely hope that that is the case, because working people at the sharp end cannot put up with this any longer. The sooner we get rid of it, the better.

[Lord Browne of Ladyton (Lab)]

My Lords, I am confident that the Minister will have read the Second Reading debate of my noble friend Lord Woodley’s Employment and Trade Union Rights (Dismissal and Re-engagement) Bill. I too do not intend to repeat the speech I made then, but I make no apology for repeating the most important points, because they were designed to expose whether the code will be the deterrent that the Government think it will be. I am personally extremely sceptical about that, for two very clear reasons, which I will repeat by way of explanation.

First, while this debate is ostensibly concerned with this somewhat anaemic code of practice, it engages much larger questions of access to justice, the balance of power between employers and workers, and, fundamentally, whether the code does what it purports to do and will shield workers from manifest injustice. Given that the introduction of this code was announced in response to P&O Ferries instituting mass redundancies in March 2022, I think it is legitimate to look back at what the Government said then. The then BEIS Minister, Paul Scully, explained the Government’s new commitment to introduce a statutory code of conduct. He did so in highly emotive and, one might say, colourful language. He described the practice of firing and rehiring as “deceitful” and “disgraceful”, labelled the actions of P&O “appalling” and “unscrupulous”, and vowed that the Government would “stand up for workers” against the flagrant disregard shown by companies that use sudden mass dismissal as a negotiating tactic.

Having raised these expectations, it is no wonder that there is manifest disappointment with the glacial emergence, over two years, of a code of practice that will impinge upon employers only at the point a case reaches tribunal. Testing whether or not that will be a deterrent is what I want to draw the Minister’s attention to. I did this in my contribution to the Second Reading debate, drawing attention to the issues of delay and the coming imposition of fees for tribunals. The Minister who responded to that debate, the noble Lord, Lord Johnson of Lainston, was unable to pick up on those points in his winding up of the debate and offered to write—and, true to his word, he did write. I thank him for attempting to ease my anxieties but I confess that his letter was not wholly successful. Indeed, it was the opposite: it raised the temperature of my anxieties.

The letter began by admitting that there remains a backlog of 32,000 cases in the tribunal system, asserting that reducing outstanding caseload is the key to bringing down wait times, before revealing that:

“Employment Tribunal timeliness data has not been published for some time due to the Employment Tribunal changing their case management system in 2021”.


That was three years ago. We have an assertion that bringing down wait times is essential, followed by a confession that, owing to a change in the case management system three years ago, we are today unable to gauge whether or not wait times are falling.

The viability of this code of practice is entirely contingent on a tribunal system that is effective and can prove timely redress. The fact that we currently, by the Government’s own admission, have no access to the data that would tell us whether it delivers timely redress is absurd, if the Government are to rely upon that as being the ultimate deterrent against this behaviour by the people they described with those very colourful adjectives.

The letter also engaged the question of the Government’s consultation on reintroducing fees at this time, of all times, for those who wish to bring a case before an employment tribunal. I thank the Minister for outlining, in his letter, the details of the help with fees remission scheme, but I remind your Lordships’ House that I raised the case of R (UNISON) v the Lord Chancellor in my speech on Second Reading. It is not mentioned at all in the letter, and I can understand why, because the judgment in this case was unambiguous. It concluded that levying fees was unlawful. It cited the Leggatt report, which specifically identified the absence of fees as one of the three key elements that made tribunals successful, and concluded that fees, however modest, have the effect of preventing access to justice. That was the principal point that I raised in that aspect of my speech, and it was just ignored in the letter I got back from the Government.

I understand the fees coming under consideration are appreciably lower than they were previously, but they will certainly not encourage victims of fire and rehire to have recourse to the tribunal system and may well act as a further discouragement. This is yet another case of the Government telling us that they understand the existence of an injustice, assuring us that their heart is in the right place and they are seeking to right a wrong, but then again balking at doing the needful. We are all familiar with the cases of Tesco, Jacobs Douwe Egberts and Carnival and the other cases that seem to be appearing by the day, some of which the noble Lord, Lord Woodley, referred to, and the way in which employers and others weaponise the power advantage they have and exploit their workers. Rather than institute a non-legally binding code of practice that tells employers what they already know, I believe a more fitting course of action would be to enshrine good practice into law and offer clear redress to workers when they are victims of injustice.

[Lord Hendy (Lab)]

My Lords, I share the regrets expressed by my noble friends. I intend to address the second element in the regret amendment put down by my noble friend Lord Woodley, and that relates to the International Labour Organization, which your Lordships will recall is a tripartite body, consisting of Governments, employers and workers. The United Kingdom was a founding member in 1919; it was the first signatory of the fundamental convention on freedom of association—convention 87—in 1949; it is a member of the governing body; and it is represented on the Committee on Freedom of Association.

The relevance of that is that, on 8 November last year, the governing body approved the 404th report of the Committee on Freedom of Association, which reported on the P&O Ferries saga of St Patrick’s Day 2022. Your Lordships will recall that 786 seafarers were dismissed on that date and only 100 were subsequently reinstated. The other jobs were given to agency staff. The Committee on Freedom of Association, as approved by the governing body, made three substantive recommendations, none of which, so far as I can see, is reflected in the code of practice.

The first recommendation related to collective bargaining. The committee said that it

“urges the Government, with the social partners, to ensure mutual respect for the commitment undertaken in collective agreements, which is an important element of the right to bargain collectively and should be upheld in order to establish labour relations on stable and firm ground”.

In many of the instances of fire and rehire mentioned by my noble friend Lord Woodley, there have been established collective agreements and established collective bargaining. That was the case with P&O Ferries, where collective agreements stretching back nearly 100 years were flouted.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank all noble Lords who have participated in this debate. I hope to clarify some key points that were mentioned. I will first turn to the regret amendment tabled by the noble Lord, Lord Woodley. I know that the noble Lord is a champion of protecting and enhancing worker’ rights, but the Government do not believe that his suggested amendment to the code would be appropriate.

The amendment suggests adding measures from his Private Member’s Bill on dismissal and re-engagement and from a report from the International Labour Organization. The measures contained in the noble Lord’s Bill would, in effect, ban dismissal and re-engagement. That is because the Bill would remove the ground of “some other substantial reason” for an employer to justify a dismissal in a dismissal and re-engagement scenario. Almost all cases of dismissal and re-engagement rely on this ground as potentially a fair reason. Therefore, this would, in effect, ban the use of dismissal and re-engagement.

As I said earlier, it would not be appropriate to impose an outright ban on dismissal and re-engagement. There are some situations in which dismissal and re-engagement have a valid role. Companies that are, for example, going through difficult economic times or a change in their business model may need the flexibility to use this option to save as many jobs as possible.

In regard to the International Labour Organization’s Committee on Freedom of Association’s definitive report 404, as raised by the noble Lord, Lord Hendy, I would like to clarify that the UK is committed to all ILO conventions that we have ratified, including Convention 87 on the freedom of association and protection of the right to organise, and Convention 98 on the right to organise and collective bargaining. We are carefully considering the Committee on Freedom of Association’s recommendations and will provide information to the ILO in due course.

Turning to the point made by the noble Lord, Lord Woodley, about P&O Ferries, echoed by the noble Lords, Lord Fox and Lord Leong, as we said at the time, the treatment of staff by P&O Ferries was disgraceful and was called out as such from this Dispatch Box. It fell short of the high standards we expect in this country, and which most businesses uphold. The company deliberately chose to ignore statutory consultation requirements. P&O Ferries broke the law by dismissing its workers with no warning, having made prior arrangements to bring in agency staff to replace them. What P&O Ferries did was “fire”, and not “fire and rehire”. The company dismissed staff with no notice or consultation. I understand that it was not seeking to renegotiate its employees’ terms and conditions, so the code would not have applied.

The noble Lord said that some of those employees were fired and rehired. I thank him for bringing that to my attention. I am not familiar with the detail of their personal circumstances, but speaking generally, if an employer seeks to renegotiate terms and expects that it may dismiss an employee and rehire them or another employee to effect the changes, then it would be bound by the code. The Government have taken action in response to what P&O Ferries did. This includes legislating through the Seafarers’ Wages Act 2023 and the ongoing Insolvency Service civil investigation.

A number of noble Lords raised the deterrent effect of the code and, as I said, the code of practice is a proportionate response, balancing protections for employees with business flexibility. An employment tribunal could increase an employee’s compensation by up to 25% where an employer unreasonably fails to comply with the code. The Government will bring forward legislation so that the 25% compensation uplift also applies to the protective award, where employers have not complied with the collective consultation obligations and have unreasonably failed to comply with the code. The noble Lord, Lord Woodley, asked for an update on this legislative change that will increase the deterrent effect of the code. Subject to parliamentary time, the Government intend to bring this forward this summer.

The noble Lord, Lord Leong, asked when the code would apply to an employee. The code will apply from the first day of an employee’s employment, though it will be subject to qualifying periods in individual claims.

Having heard the debate, I think there is perhaps just a philosophical difference on how we proceed in these matters. This Government believe that our workforce and labour laws are in an advanced and sophisticated state. We have record employment in this country: 33 million out of a population of 66 million working. We have just increased the national minimum wage at twice the rate of inflation over the last 25 years, and only 5% of our workforce is on the national minimum wage. Now that they have reached that level, they can be considered to have been taken out of low pay if that is defined as two-thirds of median hourly wages. They are now at that level, and therefore, within our labour force, our laws are working flexibly.

In my role as Minister for Exports, I travel the length and breadth of the country, and I meet companies of all shapes and sizes. The one observation I will make to this House is that post Covid, there has been a reassessment of the value of labour in this country. The labour force is now one of the most valuable parts of any company’s make-up and capability. There are labour shortages, and good labour is scarce. I would argue, perhaps, that there has never been a better time to be an employee, because of the ability to receive higher wages for good skills that are at a premium, and companies want to have those employees within their businesses. In this situation, and thinking as an employer, I can imagine that it would be only in exceptional circumstances, where we were trying to keep our employees together and keep our company on the road, that we would have such a discussion. It would be absolutely as a last resort.

To take the point raised by the noble Lord, Lord Browne, about there being no teeth and waiting times in the tribunal system, I acknowledge that there are perhaps backlogs in that system, but this is a process that no employer wishes to get caught up in, considering the amount of time and cost it would take when we want to have our employees happy and working and producing effectively for the benefit of all the stakeholders within the company. Just as a matter of philosophy, we would say that this is an exceptional situation. The TUC says that it estimates that only 3% of employers have ever gone down the road of fire and hire. As we said in the code quite clearly, it is not toIn conclusion, I would argue that the Government are taking robust and appropriate action in this area. A statutory code of practice is a proportionate response to dealing with controversial fire-and-rehire practices. The code will address this practice, 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. Subject to parliamentary approval, the code will be in force later this summer. The House should be left in no doubt that the Government will always continue to stand behind workers and stamp out unscrupulous practices when they occur.

[Lord Browne of Ladyton (Lab)]

Does the Minister have a response to my question about the coincidence of the Government consulting on imposing fees on those who seek to apply to an employment tribunal in the face of the case of UNISON v Lord Chancellor, where fees were held to be unlawful because they impeded access to justice? This issue was not addressed in the letter that the noble Lord, Lord Johnson of Lainston, sent to me. It was in my speech at Second Reading. Do the Government have a position on that? Is it just a coincidence that this is happening at the same time as employment tribunals are being given the ability to impose an extra 25% of financial penalties on employers who fire and rehire as part of the code of practice?

[Lord Offord of Garvel (Con)]

As the noble Lord knows, one can read Hansard as well as one can, but not being in the Chamber to hear his eloquent argument of the case makes me slightly deficient in this response. I am disappointed that my noble friend was unable to write more comprehensively on the matter. Perhaps I can follow up with a second letter in that regard.

Employment and Trade Union Rights (Dismissal and Re-engagement) Bill [HL]

Lord Browne of Ladyton Excerpts

2nd reading
Friday 1st March 2024 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, it is a genuine pleasure to follow my noble friend Lord Sikka. It is not the first time his admirable forensic skills have made the House much better informed. He is, in my view, the antithesis to the widely held view that accountants are boring; he is certainly not.

I also commend my noble friend Lord Woodley and the ecosystem that supported him, not just for drafting this legislation but for the powerful, comprehensive and convincing speech he introduced the debate with. Mostly, I thank him for securing a Second Reading that helpfully coincides with the publication and laying of the Government’s feeble draft code of practice. It is remarkably easy, as all the speeches today have shown, to support this legislation. It is even easier to criticise and disaggregate the useless code the Government have come up with. I intend to spend a bit of my time trying to do that.

I have read almost every word that has been recorded in Hansard about the practice of firing and rehiring, and there seems to be a broad consensus on the unfairness of this practice. The debate is not a diagnostic one; we all know that this is a problem. It is rather a debate about solutions. While I recognise that recently the Government have fulfilled their commitment to publish and lay a draft statutory code of practice, I simply do not believe that it will have a material impact on removing the thumb on the scales that currently tilts the balance of power strongly in favour of unscrupulous employers. There is a catalogue of companies, and now, unfortunately, local councils, which have used this dreadful practice. There is no point in going through them; we all know that.

Given that the introduction of this code was first announced in response to P&O Ferries instituting mass redundancies in March 2022, I understand those who feel a little sceptical when the Government claim they wish to provide urgent redress. What can explain the slowness with which they have moved in this matter? The then BEIS Minister, Paul Scully, explained the Government’s commitment to introduce a statutory code of conduct in emotive and highly colourful language. He described the practice of firing and rehiring as “deceitful”, and “disgraceful”, labelled the actions of P&O “appalling” and “unscrupulous”, and vowed that the Government would “stand up for workers” against the “flagrant disregard” shown by companies that use sudden mass dismissal as a negotiating tactic. What has been the response to this clarion call—the Government’s own clarion call? We have seen the glacial emergence of a code of conduct over two years that will impinge on employers only at the point if a case were to reach a tribunal.

Given that, it may be worth examining the degree to which the tribunal system is currently calibrated to provide swift and effective redress for victims of this practice at all. Although backlogs have eased from pandemic levels, the average waiting time for claims to arrive at final hearing has increased, with some cases taking between 12 and 18 months from the date of issuing a claim. Furthermore, the Government have just begun a consultation on reintroducing fees for those who wish to bring a case before an employment tribunal. The last time this was tried, the Supreme Court ruled that unlawful in UNISON v Lord Chancellor 2017, and the judgment in that case was unambiguous. It cited the Leggatt report, which had identified the absence of fees as one of the three key elements that had made tribunals successful, and it concluded that levying fees was unlawful because

“it has the effect of preventing access to justice”.

The fees currently being considered by the Government are appreciably lower and accompanied by a fee remission scheme. They will certainly not encourage victims of fire rehire to have recourse to the tribunal system, and they will likely act as a further discouragement.

My final point on the tribunal system concerns the Government’s reasoning for introducing fees. The open consultation they have started explains that it is unfair for the taxpayer to bear the burden for the tribunal system while those who have recourse to it can access it without charge. Are they serious? There are some areas of policy in which this reasoning holds true, but this is not a question of repaying an investment or a discretionary activity; it is about access to justice for the vulnerable, which is a fundamental tenet of a civilised society.

Rather than reposing its faith in the forthcoming code of conduct, the Bill enshrines good practice into law and provides clearer lines of redress where appropriate standards are not met. Ultimately, the Bill is about justice and accountability. It protects workers from having their pay and conditions degraded under duress and ensures that, where companies or public sector employers, such as councils, choose to do this, they will do so only at the price of breaking the law.

Guidelines in the form of a non-binding code of conduct are simply inadequate. I do not believe that managers who threaten to fire several hundred employees unless they accept a pay cut do this without knowing that they are doing something wrong. They simply choose to do it anyway. The Bill prevents that, enshrining good practice into law. As my noble friend Lord Woodley told your Lordships’ House, the Bill would mandate appropriately deep consultation with unions. It would allow employees automatically to claim unfair dismissal in the absence of the best practice, and it would allow unions to do what they are designed to do and take rapid action where a reaction is needed to a fire and rehire threat.

Clause 2 speaks directly to the debate about equity between employers and their staff. First, it states that any change to an employment contract would be void if it was obtained under threat of dismissal. Secondly, it removes one of the arguments currently in the Employment Rights Act 1996 that an employer can make, in the case of fire and rehire, to show that such a dismissal was fair—namely, that there is “some other substantial reason”. Instead, the employer would be obliged to prove bad conduct, lack of competence, a threatened breach of the law or that the employee’s job had become obsolete. This specificity will ensure that fire and rehire will no longer be possible as a negotiating tactic.

Crucially, as my noble friend stressed and re-stressed, the Bill does not ban fire and rehire outright. There are cases where it is the only means of protecting jobs by preventing a company from collapsing altogether. The Bill is an attempt not to strangle enterprise but to ensure that those whose hard work has made an enterprise possible are protected from having their pay and conditions changed by managerial fear.

I began my remarks by saying that politicians of all stripes have acknowledged that the use of fire and rehire as a negotiation tactic is wrong. Granting that, the question that follows is about what solution we believe will be most effective: is it the passing of provisions that will explicitly prevent this practice, or placing our trust in adherence to a code of conduct that is not legally binding? My answer to that question is reflected in the support I offer the Bill and the support I will offer any similar measure that will come before your Lordships’ House.

Post Office Horizon: Compensation and Legislation

Lord Browne of Ladyton Excerpts

Tuesday 27th February 2024 Lords Chamber

[Lord Johnson of Lainston (Con)]

I am grateful to my noble friend and pay tribute to his work. The Post Office will not play a role in deciding the correctness of the overturned convictions in the Bill; that will be a matter for the Government. The statement about the Post Office paying compensation is well heard. I am grateful for that and I hope I have made the point that the Government continue to look into it. Having said that, the Post Office has paid a very large quantum of compensation payments—several thousand, I think. It would be extraordinary if the team there were not completely aware of the need to ensure that they get this right, I hope including significant cultural change. There has been a wholesale change of individuals on the board of directors since 2021 and 2022. Currently, the important thing is to get the compensation payments paid and, in parallel, review how the process is working.

[Lord Browne of Ladyton (Lab)]

My Lords, because of the moral imperative, when I was Secretary of State for Defence, in 2006 I amended the Armed Forces Act with two clauses to pardon 309 of the 346 shot at dawn for cowardice. The evidence suggested that most of them were suffering from PTSD and the records for the rest were poor. I was told that this would be a slippery slope and that I would undermine military justice by so doing, and historians told me that I was changing history. Military justice has survived and is just as robust as before, and on the “Today” programme I said to a historian that I was not remaking history but making it. Ministers are making history now, absolutely rightly, because of the moral imperative.

The Post Office’s lawyers, who were responsible for a number of these convictions, have tried to influence Ministers. I have not seen the letter, but I understand from the way in which it has been reported that they said

“it is highly likely that the vast majority of people who have not yet appealed were, in fact, guilty”

because there were

“clear confessions and/or other corroborating evidence of guilt”.

From what I have seen of the way in which these interrogations were conducted, it is no wonder that some of these people confessed. They had this evidence from the Horizon system rammed down their throats and were told what the consequences would be if they did not confess. It seems to me that these confessions are pretty poor and I cannot think of any other evidence that could corroborate the false information that this system was producing. I do not see the argument here.

The Government should look very carefully at these cases before exoneration or quashing the convictions. As I understand it, the Minister said that they will ask people whose convictions are quashed to sign a statement that may later cause them to be prosecuted for fraud. We should not leave anyone with that hanging over them. We should check all these cases and see exactly what Peters & Peters is talking about, because I cannot think of anything that was not poisoned by Horizon.

Finally, my noble friend raised this crazy presumption that computers always produce the truth. When will we do something about this in the laws of evidence in this country?

[Lord Johnson of Lainston (Con)]

I thank the noble Lord for those points. I was reminded of his making of history in an unprecedented and wholly unique way only a few years ago. I think he will agree that that was the right thing to do then and that this is the right thing to do now. It does not set a precedent; these are truly specific circumstances. I agree with him about the principle around the confessions. The excellent and important TV series powerfully demonstrated the relevance of this point; in a number of cases, people seem to have been given ultimatums to accept an admission of guilt for a lower level of penalty. It is right that this legislation, when it becomes an Act, will exonerate all those who fulfil these criteria.

I push back on the principle that each of the cases should be reviewed in the detail that the noble Lord suggested, because the whole point is that we want to move with a sense of pace. It has been widely reported—and, I am sure, discussed among everyone who has been following the case—that it is certainly possible that some people who have committed a crime will be exonerated. It is the Government’s view—I call on the legal experts in this House in saying this—that the clear uncertainty on which the evidence was based would impact the retrials. I would have assumed that, if there was a retrial for each case, the baselessness of the evidence being used would mean that, even if those people were guilty of committing a crime, they would probably be exonerated in many instances. It is not simply around the technical element of the necessity; it is the fact that we want to move fast, and we want to exonerate these people who are aging—in many instances, sadly, some have already passed away. It is the right thing to do, and it sends a very clear message that this country and our two legislative Chambers want to redress a significant wrong.

Post Office Governance and Horizon Compensation Schemes

Lord Browne of Ladyton Excerpts

Wednesday 21st February 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

On the first point, I do not have the exact intricacies of which bank account the money sits in. I am happy to write about that, but it seems to me that if the Treasury and the Government have said we have a potential liability of £1 billion, we are good for the £1 billion. I will find out where it is sitting, if that is the question, but to me that is perhaps a lesser matter.

On the Staunton case, I am not prepared to do HR in the Chamber. That would not be fair or right. We should not talk about detailed conduct allegations in a Chamber such as this. The chairman was dismissed by the shareholder, the Secretary of State. In any company I have ever operated in, the shareholder is entitled to remove a chairman. The chairman’s job is to represent the shareholder, so if the shareholder is not happy with the chairman, it is absolutely valid that the shareholder can dismiss the chair. That is what happened in this case, and there is now a process that is better done in private. Let us not do HR in the Chamber.

[Lord Browne of Ladyton (Lab)]

My Lords, I recognise that the outcome of this competition of accounts between Henry Staunton and the Secretary of State could have significant consequences for them both, certainly for the Secretary of State if she is proved, at the end of the day, not to have been truthful to Parliament. She has another problem to do with what Canadian High Commissioner Ralph Goodale has said to the Business and Trade Select Committee, so she is in some difficulty.

I am in the space that I think the noble Lord, Lord Arbuthnot, is in. I do not think that this unedifying spectacle—this sideshow of mud-slinging—is the Minister’s priority. The priorities need to be full and proper compensation to the people who have lost out; the restoration of their good name in all the ways that will be necessary, which will involve exoneration; and, in the longer term when the inquiry is over, proper accountability for the people responsible for this. In the immediate term there is a simple way of resolving this competition of accounts: to put into the public domain all the information that it is proper to and to let the people out there see it and make up their own minds. They will in any event.

My real concern is that there is almost certainly an ongoing miscarriage of justice occurring in our justice system, as has been exposed, properly, by this Horizon scandal. It is the ludicrous presumption that if information comes from a computer, it is deemed to be reliable evidence. If that is to be challenged, it is up to the person who is claiming that it is not right—not the person who owns the computer—to show that the computer is not producing the right evidence. When on earth will we get this presumption changed around the right way? There must be daily cases in our courts that are not up to the level of the Horizon scandal, in spades and at every single level, creating other miscarriages of justice whose mess we may have to clean up in future at enormous expense to the public.

[Lord Offord of Garvel (Con)]

I absolutely agree that the Staunton issue is a distraction that none of us needs; it is certainly not in the interests of the postmasters and postmistresses, who want to see compensation paid and convictions overturned. As I said, the Ministry of Justice is working expeditiously to sort the overturning of convictions. As I have also said before in this Chamber, there will be serious ramifications regarding a number of matters that will come from the inquiry when it is finally published. I imagine that the matter about which the noble Lord has deep knowledge, the presumption that the computer is always right, will be one such. I imagine that will be taken forward following the inquiry.

Post Office Ltd

Lord Browne of Ladyton Excerpts

Tuesday 30th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Baroness for her question. We have to clarify that what we are doing here is separating their compensation, so that it is done as immediately and expeditiously as possible. Then we will do fact-finding through the inquiry and accountability will follow. The Prime Minister and Secretary of State have said that there will be no deadline put in place, partly because this is a complex process that requires the postmasters to co-operate and come forward. Of the 2,417 postmasters in the HSS scheme, 100% have received offers, of which 80% have been accepted. We are making great progress.

[Lord Browne of Ladyton (Lab)]

My Lords, on the issue of how long the arm between the Government and the Post Office was, in 2020, following a High Court decision against the Post Office, experts on electronic evidence were invited by the Government to suggest changes to the legal presumption that computers are reliable. That lies at the heart of this case. To whom did those experts report, was the Post Office consulted about whether the recommendations should come into force and why have the recommendations never even surfaced, let alone been put into force?

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his question. I know that he is well versed in these matters. As we have discussed in the House before, there will be many ramifications from this case when the facts come out, one of which, as the noble Lord highlighted, is this presumption that the computer is always right, which clearly was not the case. I would have to refer to MoJ colleagues to find out exactly what happened in that case. The judgment was given in the Appeal Court in 2019 and the inquiry was set up in 2020. In 2021, when the convictions were overturned, the inquiry became a statutory inquiry. Under a statutory inquiry, we will get to the bottom of those questions.

Alan Bates and Others v Post Office Limited

Lord Browne of Ladyton Excerpts

Wednesday 24th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank the noble Lord for his question. The Horizon system has been upgraded—and upgraded again since 2017—and we now have a reasonable audit that it is now working satisfactorily. It will now be further replaced by a cloud system that will run alongside the current system, so I think there is now a feeling that there is efficacy in that system. What the noble Lord refers to is why there was an unshakeable belief in the computer system that went on for so long. We need to understand exactly how that happened, what the role of Fujitsu was in that, whether this was corporate malfeasance or the role of one or two individual bad actors, et cetera. We need to get to the bottom of that, and that is what the Williams inquiry will do.

[Lord Browne of Ladyton (Lab)]

My Lords, the reference my noble friend Lord Sikka made to the comparative inaction in respect to the directors of Carillion is but one of a number of scandals of which the Post Office Horizon scandal is the latest. It is another example of how poorly equipped the UK is to deal with corporate abuses.

Let us look across the Atlantic to New York. At the instance of Manhattan’s District Attorney, 17 of the Trump Organization’s many corporations were convicted of criminal offences, including tax fraud. Its chief financial officer pleaded guilty, was fined the maximum in compensation, and went to jail for five months. Now, the Attorney General of New York is asking a court to ban Trump and his three eldest children from ever running a corporate business in New York again, and to fine them $250 million. Can the Minister point me to any similar type of prosecution in this country, or tell me how that could ever happen here? I believe it could not.

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that question. The Financial Reporting Council is the UK body that deals with accounting failures. It had a considerable review following the failure of Carillion and British Home Stores—the Sir John Kingman review in 2018. A number of Carillion’s previous directors have been disqualified and other cases are still under way. The FRC is now much more effective as an audit regulator—it has had a change of personnel, and the relationship between the FRC and the audit companies has been removed at further arm’s length. There is still a long way to go, but the FRC is now in a position to take more stringent action.

Post Office (Horizon System) Compensation Bill

Lord Browne of Ladyton Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 16th January 2024 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, it is a privilege and an honour to follow the noble Lord, Lord Arbuthnot, particularly on the Second Reading of a Bill which, whether he likes it or not, is already referred to as the Arbuthnot Bill, and if I have anything to do with it, will continue to be.

On 7 September last year, the noble and gallant Lord, Lord Houghton of Richmond, began his contribution to an Armed Forces debate with the following sentence:

“I suppose that one of the many benefits of being a Member of this House is that you get a free copy of the New Statesman every week”.—[Official Report, 7/9/23; col. 570.]


I never thought that I would use this phrase, but I opened my New Statesman this week to discover that the editorial, headed “A very British scandal”, is about the very subject that has led to the necessity of this legislation. With your Lordships’ permission, I will read the peroration—for a very good purpose:

“The malaise that the Post Office scandal has exposed in British life is that of unaccountable power. Its executives obfuscated and denied errors despite being confronted by innumerable injustices. Institutions such as the Post Office and the Royal Mail—diminished by its botched privatisation—should exemplify the common good. All too often they become self-serving bureaucracies, with customers and workers bamboozled should they complain. Yet this affair is also a reminder of the best of public life: crusading journalists and MPs (such as staff at Computer Weekly and the Conservative peer James Arbuthnot); gifted screenwriters and actors; and, most of all, tenacious campaigners such as Mr Bates who will not cease until justice is done”.


My noble friend Lord Arbuthnot is an example of the best of public life.

The Post Office Horizon scandal exemplified many of the trends that have led to anger and political apathy among the public. Political indifference and delay, exacerbated by a defensive posture among the legal profession and others, have resulted in ruinous, life-altering outcomes for thousands of innocent people. To add insult to considerable injury, Fujitsu—the company responsible for this debacle—has won 150 government contracts since the details of the Post Office scandal began to emerge. Since December 2019, when the Appeal Court ruled that the Horizon system contained bugs and errors that resulted in miscarriages of justice, the Government have awarded contracts worth more than £4 billion either solely to Fujitsu or as part of joint public sector contracts. For those affected, there could be no greater evidence of a thumb on the scales of justice than this asymmetry of consequences. Postmasters have faced financial hardship and ongoing legal limbo, while those responsible have received implicit government endorsement in the shape of new lucrative contracts.

This is bad enough, but recent evidence has suggested that the Post Office has also treated the limited compensation it grudgingly offered to sub-postmasters as tax deductible. Dan Neidle, the head of Tax Policy Associates, has outlined why these claims are illegitimate, stating that you cannot

“claim a tax deduction for things which are unlawful, illegal or outside the trade”,

such as wrongly prosecuting 4,000 postmasters. We must also ask why, given that the £934 million they claim as deductible relates to historic periods, it is only this year that the Post Office has made a designedly oblique reference to this practice in the small print of page 101 of its accounts. I am pleased that HMRC last week confirmed that this matter—one of five where Tax Policy Associates believes that the Post Office has materially underpaid its tax—is under active investigation.

Mr Neidle is also campaigning openly for better compensation in the present scheme, for the element of damage that reflects destruction of reputation and stress. As I heard him explain only the other day, in the context of employment tribunal awards that component of the calculus of the total sum of compensation attracts awards of between £1,000 and £11,000 for the lowest levels of damage to reputation and emotional damage. For the more severe, awards are between £11,000 and £34,000. For the worst examples—I venture to suggest that the vast majority, if not all, the wronged postmasters must have suffered reputational damage and stress of the worst kind—employment tribunals are awarding between £34,000 and £56,000, whereas most postmasters are getting no more than £5,000 from the current compensation scheme.

Alongside today’s Bill, I am also pleased that a brief Act of Parliament providing for exoneration of all those affected is now being considered, which is something I first suggested in your Lordships’ House in June 2020. Given that three and a half years have elapsed between that date and this, such a glacial pace in providing redress may be another useful exemplification of a problem that saps confidence in the political process among the public.

At the heart of this miscarriage of justice is the fundamental unreliability of the Horizon software, upon which the original prosecutions depended. It is equally clear that, without the group litigation brought by the 555 sub-postmasters, the flaws and glitches in the software would not have been uncovered. Here, I return to a question which I raised in your Lordships’ House last Wednesday: where does, and where should, the burden of proof lie in respect of computer-derived evidence? The Police and Criminal Evidence Act 1984 placed that burden upon those who rely on such evidence. But, in response to lobbying from the Post Office, among others, we saw that change, because of a Law Commission recommendation. There is now a presumption in favour of the reliability of such evidence unless a defendant can prove why it may be compromised. How can we possibly expect an individual unversed in the complexities of computer programming or algorithmic, sequential decision-making to provide such proof? This is a further asymmetry that needs urgent action. I would be grateful if the Minister could give an undertaking, maybe not today, that this will form part of the follow-up to the Williams review.

Finally, I turn to the broader issue that my noble friend Lady Chakrabarti alluded to, and which is an obsession of mine: artificial intelligence and its integration into our public services. If the Horizon system—far more rudimentary than any AI-infused technology—can precipitate such confusion, misery and frustration, there is a risk that a far more complex system could produce more apparently coherent, though equally unjust, outcomes. In such a case, the pursuit of justice in the case of error would be more tortuous than that endured by the sub-postmasters we are discussing today. Noble Lords may recall a scandal that hit the Netherlands in 2019, whereby a self-learning algorithm falsely labelled thousands of people in receipt of child benefit as perpetrators of fraud. What was the result of that? Poverty, a wave of suicides among those affected, and children taken into foster care. Perhaps most worryingly, the algorithm disproportionately—and, to reiterate, falsely—targeted those from ethnic minorities.

I realise this is well outside the Minister’s purview, but, as we learn lessons from the Horizon scandal, what plans do the Government have to review the integration of AI into the work of the DWP in this country? Perhaps more importantly—I have asked this question and it has not yet been answered—what is the statutory basis for the use of AI in public services at all? Surely the use of AI in this way risks violating the Blackstone principle, of which the noble Lord, Lord Arbuthnot, reminded your Lordships last week. I will not repeat it, because my noble friend has already dealt with this. In this respect, I return to the Dutch case to which I referred. The victims had no way of knowing why their cases had been identified as potentially fraudulent, and officials claimed they had no way of accessing the algorithmic inputs and could therefore not describe why they were under suspicion. This echoes the Kafkaesque nightmare of the sub-postmasters—accused by faulty technology, denied access to the very information that could exonerate them and forced, in the meantime, to endure penury and stigmatisation.

I will support this Bill, as my party will, as it passes your Lordships’ House with, I trust, the utmost rapidity. I keenly anticipate further measures, not merely to provide full restitution to those affected by the Horizon scandal but to strengthen scrutiny and ministerial oversight over arm’s-length agencies. Nothing adequately can compensate the sub-postmasters and sub-postmistresses who have lost years of their lives to this injustice, but I believe that ensuring such a tragedy cannot happen again may at least console them with the thought that their suffering has not been entirely in vain.

--- Later in debate ---

[Lord Offord of Garvel (Con)]

I thank the noble Lord for that searching question. Of course, this covers about three or four different Governments and more than half a dozen Ministers; that is just a fact. The reality is that the shareholder of the Post Office is the taxpayer. The share is owned by the Secretary of State for the Department for Business and Trade. Under the current structure, that is effectively subcontracted to an independent board. If that independent board had acted on an independent basis, this would not have happened. In fact, if Ministers had slightly more inquiring minds, this would not have happened.

I look at myself in my role as a Minister. I look at the advice that I am given and at the decisions I have to make. There is a lot coming through on a daily basis. I ask myself this question: if I had been in this role and prior to Horizon there had been an average of, say, 10 convictions per year in a bad year—maybe five on average—and that went up to 80, even though I was very busy, doing a lot of things, and even though I said I had an independent board looking at this for me, would not that raise some inquiry? This fundamentally is the shocking scale—we are all embarrassed about this—of the abuse here. The accountability piece of this will absolutely come through the Wyn Williams inquiry. That will then move us to the next stage of the lessons that we learn from it.

Next is the theme of legal process, brought up by the noble Lord, Lord Cormack, as well as the noble Lords, Lord Forsyth and Lord Weir, and also in relation to the Scottish angle. The noble Lord, Lord Cormack, says that the lawyers have some disquiet about the idea of Parliament overruling courts, but we have had the counterbalancing argument from William Blackstone. I think the House agrees that that overrides that particular issue.

In Scotland and Northern Ireland we have different jurisdictions. There were 77 prosecutions in Scotland and 24 in Northern Ireland. To speak from a Scottish point of view, those prosecutions were brought not by the Post Office but by the Crown Office. That is a separate legal jurisdiction in Scotland. Yes, we are one United Kingdom, but in the UK we respect the legal jurisdictions of the devolved nations. The Lord Advocate has reported today to Holyrood, the devolved Parliament in Edinburgh, saying that she is not currently in favour of a blanket rescinding of convictions because, she says, not every case involving Horizon will be a miscarriage of justice. She wishes to go through the appeal court—the Scottish Criminal Cases Review Commission. From a legal point of view, she is saying that these convictions were made by a court and therefore should be undone by a court.

We are at an early stage of that dialogue. There are letters and communication going between the MoJ in London and the Lord Advocate and the Crown Office in Scotland, and there is communication between the First Minister and the Prime Minister on this. That just highlights that there are some legal complexities here. The reserved matter remains reserved. Compensation will be the same for all jurisdictions, but there are some issues to be resolved regarding the actual legal process—certainly north of the border.

[Lord Browne of Ladyton (Lab)]

How on earth does a court challenge the evidence that the information coming from this computer is to be treated correctly because of the presumption? How on earth does the court overcome that? Only we can overcome that. We need to change the law. Unless we do so, we will always have this problem. The fact of the matter is that everywhere on this island the courts are not fit to deal with these cases. There were miscarriages of justice everywhere. The courts were not fit to test the evidence.

[Lord Offord of Garvel (Con)]

That is exactly the position that has been taken here by the Lord Chancellor for England and Wales, and that is now the conversation that has to be had in Scotland and Northern Ireland. We are dealing with a legal complexity that was confronted earlier this week by the Lord Chancellor, who now needs to run through the process with the Lord Advocate.

We come to the accountability issue. There have been comments from the noble Lords, Lord Sikka and Lord Palmer, about the role of the auditors. Again, you will get technical answers back that this is a separate statutory body that does not account to the National Audit Office because it has its own auditors, but then we find that that the auditor, EY, has signed off on the accounts. This is what we need to get to the bottom of. There needs to be a full inquiry to bring this to light. We will get the answers to these questions. Out of this, as I said, there will be a cascade of inquiry taking us into the fundamental territory of how the Government operate alongside quangos, arm’s-length bodies and so on. We have not heard the last of this. Its repercussions will come down through Whitehall.

Lessons will be learned, but right now our responsibility is to get the blanket exoneration that the noble Baroness, Lady Chakrabati, was asking for, and which my noble friend Lord Arbuthnot is now satisfied will be given, and getting the compensation—whatever that means; let us say financial restitution—to the claimants as quickly as possible.

This is a sorry saga and, as my noble friend Lord Forsyth said, we are all deeply embarrassed by it. It has taken so long; it has been going on for 20 years. How people did not ask more basic questions is something that we all need to reflect on. All of us Ministers are looking at that. From my own personal point of view, I am certainly looking at things quite differently through the lens of, “Where’s my sniff test on what I’m hearing, as opposed to just what I’m told by officials?”

I commend the noble Lord, Lord Weir, on his personal reflections on this and his story about his father being a postmaster. Is that not the essence of what we got from the series, and from our personal experience in the towns and villages where we live, that these folks are the salt of the earth? How could they as a group suddenly become criminal? How could we go from half a dozen convictions a year to 80? It just does not make any sense. So I thank the noble Lord for that contribution. That is what is turbocharging our response to this matter.

I say in conclusion to noble Lords that, as far as my department is concerned—and my colleague Mr Hollinrake is working very hard to ensure this—those who are affected by this awful scandal will receive the full and fair compensation that they are owed, and we will do that as quickly as possible. Postmasters have suffered for too long. That said, with their having waited so long for justice, the Bill ensures that the Government will not need to force victims into unduly rushed decisions on the complex and emotive issues of compensation.

I repeat my thanks to all noble Lords for their contributions today. I know the House takes a strong interest in this scandal and wider Post Office matters. I hear what the noble Baroness, Lady Brinton, said about where this takes us on previous scandals, and I am sure there is more to be said about that. This Bill is just one part of the extensive action that the Government are taking to defend the interests of postmasters, and I commend it to the House.

Horizon: Compensation and Convictions

Lord Browne of Ladyton Excerpts

Wednesday 10th January 2024 Lords Chamber

[Lord Offord of Garvel (Con)]

I thank my noble friend for that question. We must recognise the common interest of people impacted by the Horizon scandal and those affected by, for example, the infected blood scandal and Hillsborough and other tragedies. It is important to recognise that each of those circumstances was different and unique and unprecedented; each case is a personal tragedy.

In the infected blood case, the Government have already made interim support payments of £100,000 to individuals and bereaved partners, and the cost of that will be £400 million in terms of interim compensation. That compares with a likely figure of £1 billion for the Horizon postal scandal. I cannot speak with any great authority on the wider picture, but it must surely be the case that, as the Government look at this case, there will need to be a wider conversation and look at the broader picture on all these issues.

[Lord Browne of Ladyton (Lab)]

My Lords, I accept that with this particular scandal the priorities should be the exoneration and compensation of those who have been so badly damaged by it, the exposure of the reality of the corruption that led to the scandal in the first place and accountability for those who have been acting so corruptly. However, at the heart of this, the biggest miscarriage of justice in terms of scale that this country has ever seen, there is another issue that needs immediate attention: a faulty legal presumption that requires immediate re-evaluation. In England and Wales, there is, as a matter of law, a presumption that computers are working properly, unless there is evidence to the contrary, and therefore that what they produce is reliable. If it were not for the group litigation, the fundamental unreliability of the software in the POL Horizon system would never have been revealed. That is because challenging that computers are not working properly is far outwith the resources of most people in this country and, unless they work together in this way, they have no chance of doing this in our courts. It is time now to re-evaluate this and replace this presumption with a requirement that those who rely on computer evidence should justify to the court that it is reliable and not the other way around. We could do that relatively quickly and easily, and the onus would then lie on the people who are relying on that evidence to show that it is reliable and that the computer is working properly. In the Horizon case, without perjury, nobody would have been able to do that.

[Lord Offord of Garvel (Con)]

The noble Lord highlights perhaps one of the most cynical aspects of this terrible case: each of the sub-postmasters was told that they were alone and that this was happening only to them. We have all seen the programme and we all know the people in our communities who do these vital jobs. They work alone in small shops in small towns and villages and do not necessarily have the support that they need. That was perhaps one of the most invidious parts of the drama series and, at the end of the day, perhaps the help given by one or two constituency MPs was to believe these folks and get them together, which resulted in the group of 555 coming together. It is very relevant to say, “Why does the little guy have to keep convincing the big guy? What is going on?” Again, I know that the Lord Chancellor and the Ministry of Justice are now very focused on this issue and that they will come out of this with some serious questions that need to be answered. That will be part of the follow-up to the Williams inquiry. Let us find out exactly what happened. Out of this, I think that some serious questions will be asked about future processes and that this House will come back to this issue more in the coming years.

Employment Relations (Flexible Working) Bill

Lord Browne of Ladyton Excerpts

2nd reading
Friday 19th May 2023 Lords Chamber

[Lord Browne of Ladyton (Lab)]

My Lords, it is a particular pleasure to follow the noble Lord, Lord Holmes of Richmond. Once again, I am impressed by his ability to translate his lived experience into persuasive rhetoric in your Lordships’ House. It is a distinct privilege that we regularly have the opportunity to hear from him on areas in which, sad to say, there are fewer people than there ought to be in your Lordships’ House who can speak with that lived experience.

It is also a particular pleasure to speak in support of this Bill, and I commend and congratulate my noble friend Lady Taylor on proposing it and introducing it with her characteristically informed and persuasive eloquence. While I am at it, we should recognise her Bolton colleague, my honourable friend Yasmin Qureshi, for her hard work proposing and sponsoring the Bill through the other place. From my reading of the debate at the various stages of the Bill in the other place, she was 100% persuasive. The Bill attracted support from all parts of that House and has been delivered to us in good condition.

As others have said, and as was said repeatedly in the Bill’s various stages in the other place, the Bill is not an attempt to change workplace culture but to give legislative force to changes that have occurred organically. In 2016, less than 10% of jobs were considered flexible. Since then, we have seen a 566% increase, with 58% of UK businesses now offering flexible working in some form. The Bill embeds this cultural shift into law. As we await the long-promised but yet to be seen government employment legislation in Bill form, perhaps we should thank Labour Bolton for giving us this opportunity to modernise at least this part of the labour law in the meantime.

Clause 1 is extremely welcome. It transfers greater agency to the employee and ensures that flexible working is seen as a right, rather than a favour that can be airily granted or refused at the whim of the employer. Despite the efforts of some to caricature flexible working as a charter for middle-class idleness, with stories of senior managers working from their Pelotons, it is something which is most important for those who are seeking to balance employment with very real challenges and responsibilities in their personal lives. It is particularly important for those who are neurodivergent, for those who have responsibilities as carers or as parents of young children and, as we have heard, for those who are disabled.

Before plunging into an analysis of any piece of legislation, I believe it is worth asking the most fundamental questions: is it necessary, does it engage a real as opposed to an imagined problem, and will its provisions do so effectively? I believe the answer to all three is yes. As your Lordships’ House will know, since 2014, all employees have had the legal right to request flexible working, but only 30% of those requests were accepted in the last year for which figures are available, while flexitime was still unavailable for almost 60% of UK employees. Given the need to tempt those who have opted in significant numbers for early retirement back into the workforce, embedding the right to flexible working will be critical.

In thinking about where the inequities in the current system lie, as well as strengthening the right to request flexible working for parents, carers and those suffering with a disability, there is also a need to address the problem of low pay. In the 2023 Flex for Life report, the researchers outline the current state of flexible working in Scotland. They found that while 51% of Scottish workers who earn less than £20,000 work flexibly, that figure is 80% for those who earn more than £50,000. One can adduce apparently obvious reasons for this—that lower-paid workers are more likely to work in sectors where flexibility is more difficult, such as hospitality and manufacturing—but the research shows this imbalance to be more deeply entrenched. This disparity is, in fact, true across all sectors. To quote the report directly:

“Frontline or not, the higher earners always have significantly more flexibility than lower earners”.


That is something we should think about in further debates on this subject and as we monitor the effect of this Bill once it receives Royal Assent, which I am sure it will.

I shall be supporting the Bill as it progresses through your Lordships’ House. It recognises and gives legislative shape to a cultural shift that has taken place over the last few years, and it seeks to empower employees and give them greater agency. For these creditable and credible reasons, I look forward to it reaching the statute book.

Whistleblowing Framework

Lord Browne of Ladyton Excerpts

Tuesday 16th May 2023 Lords Chamber

[The Earl of Minto (Con)]

No, I do not think so.

[Lord Browne of Ladyton (Lab)]

My Lords, I thank the Minister for his letter yesterday to those of us who spoke in the debate on the amendment from the noble Baroness, Lady Kramer, on this very issue on day 6 of the Economic Crime and Corporate Transparency Bill Grand Committee. It deals particularly with data reporting. That is very helpful, although it shows that the regulators implement this patchily, inconsistently and, arguably, uselessly. So is it too late for the terms of reference of the review to be revised specifically to include an office of the whistleblower but, more particularly, to look at whether we could financially reward whistleblowers for information? That has generated a dramatically better climate for whistleblowing in the United States of America. Could we also look at our experience from the pandemic? Given the poor recovery rate for the public funds misspent on PPE, surely this is worth trying.

[The Earl of Minto (Con)]

The noble Lord has asked a lot of questions. The regulators and the level of consistency in reporting are absolutely part of the brief. The review is not currently structured to look at the question of a department of the whistleblower but, as I said in my Answer, I believe that that may well be a recommendation that comes out of it. I am afraid I cannot remember what the other question was.