Employment Rights Bill

Lord Hendy Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I promise to be very brief. I support all the amendments in this group.

The arguments are building for the establishment of an independent freelance commissioner, mainly because the number of freelancers is growing and will continue to do so in the face of increasingly adverse conditions for both employers and employees. The current 2 million freelancers could easily grow to 3 million within the next 10 years, as employers continue to shed staff from payroll because they are weighed down by increased NICs, national minimum wages in excess of inflation, and some of the onerous new rules and regulations coming along in this very Bill.

I have argued that we could broaden out the need for an independent commissioner for the self-employed—who total about 4.5 million in this country, and the number is growing—but I will leave that issue to the next group, as it is addressed by my noble friend Lord Freyberg’s Amendment 167.

In conclusion, freelancers offer a great diversity of skill sets and flexibility in an economy that is suffering from stagnation and rigidity. They deserve greater recognition, and I implore the Government to take the proposal for a commissioner seriously. I absolutely agree with the noble Lord, Lord Clement-Jones, that we do not want a toothless, woolly token champion; we need an advocate with teeth—let us hope that that is what we will see.

[Lord Hendy (Lab)]

My Lords, no one hearing the speeches of the noble Lords who have spoken could be other than sympathetic to the objects of the amendments in this group.

However, although it may seem churlish, I have a point on the definition of freelancers in Amendment 161. It is not a technical point; it is about the fact that another categorisation of workers would be added to the already complex pattern of the status of workers. I know that the Government intend to conduct a comprehensive review of the status of workers later, and the issue of freelancers will no doubt be addressed in that.

One issue affecting freelancers, as defined in the amendment, is the use of substitution clauses in workers’ contracts. Two points arise here; my noble friend Lord Berkeley will say a few words about one, and I will deal with the other. The issue is that the insertion of substitution clauses by employers can be used to deny self-employed workers, such as freelancers, all employment rights. The particular value to some employers of this device was established in the Deliveroo case in the Supreme Court in 2023, in which I had the honour, or perhaps the misfortune, of representing the union representing the workers.

The issue is that self-employed workers are by definition not employees, and so they do not have the rights of employees. But they could be what lawyers call limb (b) workers, with limited employment rights. In order to fall into that definition, such workers must undertake

“to do or perform personally any work or services”.

The delivery companies have realised that this condition could be defeated by the inclusion of a right to substitute on the part of the worker. Clearly, a legal provision that such a clause should not be a factor in the determination of personal service is needed, but doubtless that will be a matter for consideration in the Government’s review.

[Lord Berkeley (Lab)]

My Lords, I will just add a few words to my noble friend’s contribution. This little item that we are discussing came out of a debate we had in Committee when we established that there was a link between the small boats with what we might call illegal immigrants coming across the channel and the delivery vehicles, mostly bicycles with trailers and mostly in London, but in other places as well. There was strong evidence that the riders do not have permission to work in this country and have probably not passed any of the tests necessary for what they are doing. We all know what the problem is with these bicycles and trailers going around London: they seem to forget that there are things such as traffic lights and rules about keeping to the left.

Ministers were sympathetic, and we had a very useful meeting with the Ministers, for which I thank them. The real problem is that once one of these drivers has a job at one of the companies my noble friend mentioned, they can contact their brothers, sisters and cousins on the continent and say, “Why don’t you come across too? You can share the job”, which sounds fine. They spend the money and come across the channel, hopefully still safe and alive.

Once two of them are trying to do the same job as if one person, it gets very difficult. There is no easy solution to this, apart from—we had a very useful meeting with the Minister on this—adding the word “substitution” to many of the issues that noble Lords in the creative sector spoke about so well earlier. They are often substituting for their brothers and cousins but are still working without the necessary insurance, certification or anything else. I hope that when my noble friend the Minister comes to respond, she will look favourably on the idea of having a wider interpretation of the type of work we are talking about. Apart from people not paying their tax and everything else, hopefully there are not going be too many road accidents, but at the moment it is a little dubious.

I am grateful to other noble Lords who have listened to something that is 100 miles away from creative, but it is just as important. I look forward to the Minister’s response.