Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Report stage
Wednesday 23rd July 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, we now move to consider the employment tribunal system. I shall speak first to Amendments 158A and 158B. The Government are extending the time limit for individuals to bring claims to an employment tribunal, but if that is the case, and if, as the Government have repeatedly said, they value early conciliation and the vital role that ACAS plays in resolving disputes before they reach litigation, then surely the same principle must apply to the conciliation period itself. Extending the early conciliation period from six weeks to three months would provide claimants and employers alike with more breathing space to resolve matters amicably, reducing the burden on the tribunal system and promoting quicker, less adversarial outcomes.

I will also speak to Amendments 180 and 186. I will not repeat the arguments that I and many noble Lords across this House have already made about the state of the employment tribunal system, but let us be clear: the situation is now dire. We have spoken to a range of people involved in the system and hear the same message: employment tribunals are in disarray, with claimants waiting for up to two years for their cases to be heard. We believe that justice delayed is justice denied.

The Government say they are investing in tribunals, pledging to hire more judges and providing additional funding, so I hope the Minister will be able to answer these questions. First, how many new judges have been appointed? Secondly, what is the scale of the funding and how will it be allocated? Thirdly, will the Government also commit to hiring more administrative staff to ease the backlog? If so, how many? Until we have clear, credible answers to these questions, we believe it is simply irresponsible to bring forward clauses in this Bill that will place even greater strain on a system that is already buckling under pressure. I just hope that the Minister will have answers to these and other questions.

I will also refer to Amendments 186 to 188. We believe that there is this difficulty with the existing system and we have already seen the Government push back implementation of parts of this legislation to 2027. I do not know whether this is because they have at last had a moment of clarity and realised just how damaging some of these measures could be in practice. We now have an amendment asking to delay further until 2029. Frankly, this is not just reasonable; we believe it is necessary. A four-year delay might be the bare minimum to avoid the disasters which would otherwise be presented by this legislation.

Let us not pretend this delay is some kind of political foot-dragging on the part of the Government. To seek to delay implementation until 2027 of what was said to be a vital Bill is an admission that this legislation is deeply flawed and that rushing it through risks wreaking havoc on businesses, workers and the tribunal system alike. What is more, with the Government and the unions now seeming less like allies and more like wary rivals, this delay might be something the Government are willing to accept. I beg to move.

[Lord Katz (Lab)]

I am pleased to have a contrast in terms of debate length. It is good to hear from the noble Lord, Lord Hunt of Wirral. I will speak to this quite large group of amendments and, for the sake of brevity, try to cover as much ground as I can in time.

On Amendments 180 and 186. We recognise the concerns of the noble Lord, Lord Hunt of Wirral, over the employment tribunal system. I reassure noble Lords that we have heard the concerns of your Lordships’ House, the other place, and broader stakeholders representing employers and employees, and we are already acting. This includes recruiting more judges and legal caseworkers, and providing significant additional funding to ACAS for 2025-26. ACAS’s annual report shows that, of the approximately 125,000 early conciliation notifications received by it, approximately only 33% proceeded to employment tribunal claims.

I can try to answer some of the direct questions from the noble Lord, Lord Hunt, on the increased resources for the system. On new judges, 50 new fee-paid part-time employment judges were appointed in 2024-25 and a further three recruitment exercises to increase capacity are being undertaken in 2025 and 2026. I will reflect on Hansard and, if there are other questions on this I have not covered, I will of course write to the noble Lord.

As was pointed out earlier in the debate, we are also considering other areas such as the role the expanded fair work agency could play, where this would reduce the need for costly and lengthy tribunal claims. We are happy to receive further constructive suggestions from noble Lords on their ideas for reform, but we are of the view that it would be disproportionate to make the vital improvements to workers’ rights contained in this Bill dependent on the kind of review the Opposition propose.

Amendments 158A and 158B were also tabled by the noble Lord, Lord Hunt of Wirral. The suggestion about increasing the time for early conciliation is indeed constructive. As we have said previously on a number of occasions, we are engaging with businesses and unions to consider the ways to address growing demand and improve the efficiency of the employment tribunal system. Part of this work involves looking at how we can improve the already good work that ACAS is doing to help parties reach mutually agreed outcomes without the need for stressful and expensive litigation.

The six-week early conciliation period takes place prior to a claim being brought to the employment tribunal and provides an opportunity for employers and employees to try to reach an agreement without having to go to a tribunal. Increasing the time for early conciliation could provide some benefits to parties, but we need more time to consider how this would interact with other reforms and identify potential unintended consequences. Changes to the period of early conciliation can be made using secondary legislation and therefore it is not necessary to use primary legislation for this purpose. Perhaps the compromise I might suggest is that we will be happy to reflect on the suggestion that has been made as part of our wider work, and I thank the noble Lords and other colleagues for their amendments.

I turn next to Amendment 185, which was tabled by the noble Lord, Lord Sharpe of Epsom. The Strikes (Minimum Service Levels) Act 2023 unduly restricts the right to strike and undermines good industrial relations. It has proven to be ineffective and has contributed, one might argue, to industrial unrest. It is worth pointing out again, as we have already heard this evening, that no employer has ever issued a work notice under the Act and not a single day of strike action has been prevented since it was introduced. Indeed, reflecting on Questions earlier today, I repeat that we lost a record number of days to strike action in 2022 and 2023—the highest number since 1989, if I recall correctly. That Act definitely did not prevent more industrial action taking place.

Rather, we believe negotiation and co-operation are better ways to ensure that essential services continue during strikes, while respecting workers’ rights. For these reasons, we are committed to removing this legislation as soon as possible. Our commitment to repeal the legislation has been trailed for over a year. We made the commitment to make work pay, it was reiterated in our manifesto, and we announced it again in August last year, so it will not come as a surprise to any employer. As I said, in any event, employers are not using the legislation anyway.

Amendments 187, 189, 190 and 191 were tabled by the noble Lord, Lord Leigh of Hurley—he is not in his place—and the noble Lord, Lord Sharpe of Epsom. We have always said that we would engage and consult comprehensively on implementation to ensure that strengthened rights, protections and entitlements work for all. We want employers, workers, trade unions and others to have the time and space to work through the details of each measure with us.

On Amendments 187 and 189, I remind noble Lords that our road map, which the noble Lord, Lord Hunt of Wirral, referred to, sets out our plans for consulting on key provisions in Part 1 and Part 4 this autumn and into early 2026. We will then publish our response to each consultation, in line with published guidance. This will include a summary of responses received and a breakdown of the type of respondent. This reflects what we have already done in published consultation responses.

Through all these consultations, we will continue to engage with SMEs to ensure that their vital perspectives are fed into policy development, and we will provide sufficient support to prepare for these reforms. We value the constructive feedback and insights that such businesses and organisations give, and we will continue to prioritise engagement moving forward.

On Amendment 190, I remind noble Lords that, since 2016, there have been 33 reports and strategies on the effectiveness of labour market enforcement. I also remind noble Lords that the single enforcement body, regardless of the name, was a policy pursued by both the Opposition and the Liberal Democrats. Indeed, I believe that the proposal, under different titles, was in all three manifestos at the general election. So, whereas previous Governments have dithered and delayed in taking action, we are taking action to tackle the fragmented and ineffective enforcement system by bringing it all under one roof in the fair work agency.

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[Lord Hunt of Wirral (Con)]

My Lords, this has been a very important debate about employment status. I thank my noble friend Lord Moynihan of Chelsea for his important and thoughtful contribution to the debate. I also thank the noble Lords, Lord Freyberg, Lord Londesborough and Lord Clement-Jones, for their extremely important contributions.

As my noble friend Lord Moynihan rightly pointed out, the Government in their make work pay document have committed to consulting on a simpler employment framework—one that distinguishes clearly between workers and the genuinely self-employed. However, the reality is that platform workers and the innovative businesses that rely on them remain in the dark. There is no detail, no timeline and no clarity as to when or indeed whether these major reforms to employment status will materialise.

In the meantime, uncertainty reigns, and that uncertainty is not without cost. It risks holding back investment, stifling expansion and deterring new entrants into the UK market. We now hear so often from the Government about making the UK the best place in the world to do business, but a failure to provide clarity on the future of employment status, particularly in the growing platform economy, sends the opposite signal. The Government would therefore do well to heed my noble friend’s intervention. If they are serious about supporting flexibility, entrepreneurship and modern ways of working, then they have got to provide both the sector and the self-employed with confidence and clarity on what exactly lies ahead.

[Lord Katz (Lab)]

My Lords, I wish I had also brought my white hanky to the debate, but sadly I do not have that cop-out. This been a short but focused and interesting debate. I will begin with Amendments 177 and 179, tabled by the noble Lord, Lord Freyberg. The Government are well aware of the importance of accurate occupational categorisation, especially for those in culturally important occupations, and the noble Lord and I have separately discussed this issue and the complexities around it.

More specifically, we understand that some stakeholders feel the four-digit standard occupational classification—SOC—system is not detailed enough for their needs. To address this, in 2023 the ONS published an extended six-digit system that includes more accurate categories for groups like those mentioned by the noble Lord in his amendments. In addition to this, the ONS is now beginning work on the next update to the SOC system, which will be published in 2030.

I am afraid that I do not have some of the details on disaggregation, the levels of qualifications and so on that the noble Lord, Lord Freyberg, asked about, but I will undertake to write to him with more details. However, I would be very happy to facilitate contact between the noble Lord and the ONS team that is responsible for this work. He has demonstrated great interest and no little expertise in this subject area, and I am sure that they would appreciate his views and detailed analysis on the system, how it could be improved and how it could better reflect the complex ecosystem of craftspeople and other creative workers.

I turn to Amendment 167, again tabled by the noble Lord, Lord Freyberg, and supported by the noble Lord, Lord Londesborough, as well as Amendments 183 and 184A, tabled by the noble Lords, Lord Clement-Jones and Lord Moynihan, respectively. I hope that the noble Lords are reassured from the debate on the previous group that the Government take the commitment to tackling pressing issues with the existing employment status framework very seriously—and from the comments of the noble Lord, Lord Clement-Jones, I think that is the case.

As the noble Lords, Lord Moynihan and Lord Clement-Jones, said, consultation in the fullest sense is imperative on this issue. It will allow us to receive and consider the widest range of views and engage fully with relevant stakeholders, including those mentioned by the noble Lord, Lord Moynihan, in his amendment. Consulting on employment status was a commitment in the plan to make work pay, and as my noble friend Lady Jones outlined to your Lordships’ House in the debate on the previous group, today we are confirming that we will publish a consultation on this by the end of the year. As the noble Lord, Lord Moynihan, said, we will risk undermining the value of this work if we introduce new definitions without prior consultation.

The noble Lord also mentioned requiring an impact assessment of any legislative proposals brought forward as a result of this consultation. I can reassure your Lordships’ House that, in keeping with our better regulation requirements, we will produce impact assessments alongside any such legislation.

I hope this assures noble Lords that the Government are committed to consulting on employment status and are doing so with the care, focus and full engagement that this important issue requires. On this basis, I ask the noble Lord, Lord Freyberg, to withdraw Amendment 167.

Jobs Market

Debate between Lord Katz and Lord Hunt of Wirral

Wednesday 23rd July 2025 Lords Chamber

[Lord Hunt of Wirral]

To ask His Majesty’s Government what assessment they have made of the jobs market, and of the implications for the wider economy.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, this Government’s No. 1 mission is to grow our economy. We want a thriving, inclusive labour market with more people in good jobs, high living standards and productivity growth in every part of the country. The employment level has risen by 600,000 since the election, and we mean to go on as we have started, delivering our planned reforms to provide people with the work, health and skill support they need to succeed.

[Lord Hunt of Wirral (Con)]

My Lords, we all regret the current upward trend in unemployment. As the evidence shows, when economic growth returns, only a flexible labour market will deliver that much-needed jobs dividend. What assessment have the Government made of the likely impact of the Employment Rights Bill on the flexible labour market we all need?

[Lord Katz (Lab)]

My Lords, I have enjoyed debating with the noble Lord, Lord Hunt of Wirral, over too many days to recall, the merits of the Government’s Employment Rights Bill. To be clear, the plan to make work pay is a once-in-a-generation transformation of our labour market to make it fairer and more inclusive, and to deliver the day one rights the country needs. It will introduce ground-breaking reforms such as bereavement leave for those who suffer miscarriages, ensure fair pay for the social care sector, and ban the use of NDAs in cases of sexual discrimination and worse. Let us be clear: we are also repealing the previous Government’s failed trade union legislation, which delivered for this economy record levels of days lost to strikes in 2022 and 2023—a record they cannot be proud of. We are fixing their mess by introducing the Employment Rights Bill.

Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Report stage
Monday 21st July 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I rise briefly to support my noble friend Lord Parkinson of Whitley Bay’s amendment, supported as it has been by very effective speeches from the noble Lords, Lord Faulkner of Worcester, Lord Berkeley and Lord Palmer of Childs Hill, the noble Earl, Lord Clancarty, and the noble and learned Baroness, Lady Butler-Sloss.

It is a sensible measure that recognises the value of voluntary work on heritage railways and tramways, especially for young people. The current statutory framework treats such activity as though it were employment in a heavy industrial setting, when in reality it is community-based, educational and often intergenerational. These are voluntary efforts undertaken not for profit but for preservation, learning and public enjoyment. To continue to classify this as if it were unsafe or exploitive is to misunderstand both the activity and its value. This amendment corrects that without undermining the original protections of the 1920 Act. My noble friends deserve support, and I hope the Government are about to respond positively.

[Lord Katz (Lab)]

My Lords, it was going so well, then it hit the buffers. I am trying to make that not the last of the rail-related jokes—noble Lords will note the groans from behind me. I thank noble Lords for a stimulating debate—as we had in Committee—and, as several speakers have pointed out, it was a debate on a subject that inspires support from across the House, which is fairly unique in this piece of legislation. It is good to see and is obviously because so many in your Lordships’ House—like those in the rest of the country—enjoy and revel in our industrial heritage, as seen through heritage railways.

I thank the noble Lord, Lord Parkinson of Whitley Bay, for bringing the amendment back for further discussion. I think it was the noble Lord himself who outed me as a bit of a rail nerd in Committee, so noble Lords will know that heritage railways is an issue I am familiar with and fully support. It is an issue close to many hearts here in your Lordships’ house and it is great to see the interest we saw in the impassioned debate—it says here, and I agree—repeated here on Report.

In addition to the noble Lord, Lord Parkinson of Whitley Bay, I thank my noble friends Lord Faulkner of Worcester and Lord Berkeley, the noble Lord, Lord Palmer of Childs Hill, and the noble Earl, Lord Clancarty. I particularly thank the noble and learned Baroness, Lady Butler-Sloss, for making a little detour from her usual route to call by our station here tonight.

The UK heritage rail sector encompasses more than 170 operational railways, running trains over nearly 600 miles of track and operating between some 460 stations. It creates jobs and greatly supports local economies. I pay tribute to all those who run and maintain those railways; they not only preserve our heritage but contribute greatly to their local tourist economies. I mention this because it is notwithstanding the issues identified by this amendment.

The heritage railways are incredibly successful; they go from strength to strength, notwithstanding the issue the amendment raises about the Heritage Railway Association’s concerns. The benefits to all volunteers cannot be overestimated. However, as many speakers have said, it is particularly good for young people, and I wholeheartedly support efforts to encourage young people to take advantage of the volunteering opportunities that heritage railways offer, with their emphasis on teamwork, communication and helping to bring science and engineering topics to life.

It is vital that any work or volunteering is carried out safely and should be appropriate to the age and experience of the volunteer. It is also important to recognise that additional measures, such as effective supervision, need to be in place for young people, particularly those aged 14 to 16. Health and safety law requires heritage railway operators to protect a young person’s health and safety, taking account of their age, lack of experience and levels of maturity. Of course, not all work is suitable for young people; dangerous or high-risk work activities should not be carried out. Health and safety risk assessments help heritage railway operators to determine what work activity should be carried out and how to make sure it is done safely. After all, we want to preserve and revive heritage railways, not heritage employment practices. While the Health and Safety Executive and the Office of Rail and Road provide general guidance, it is for the Heritage Railway Association to support its operators with detailed guidance about suitable activities for young people.

Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Report stage
Wednesday 16th July 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I agree with the noble Lord, Lord Goddard of Stockport, that, as we warned when we discussed it in Committee, Clause 26 was, as originally drafted, quite simply unworkable.

As we reminded noble Lords throughout Committee, the clause was far too broad. It would have captured entirely routine contractual changes, such as simple variation in work location, and treated them as fire and rehire cases. That approach was not only impractical but potentially damaging to employers and employees alike. We therefore welcome the Government’s decision to bring forward amendment that define the concept of a restricted variation. This brings much-needed clarity to the legislation. Although I would not go so far as to say that the clause now flies, it is at least comprehensible.

The Minister quoted Unite. May I quote Unite back at him? It has just issued a statement saying that it condemns the Government’s amendments, which in its own way suggests that progress is being made. The Minister would be well placed to consider the rather detailed brief that Unite has delivered, condemning the way in which the Government are now reworking Clause 26. It suggests that progress is being made and all our warnings are coming to fruition. One now has to wonder, I suppose, whether the realisation dawned when someone in Whitehall spotted that the original drafting could have torpedoed the Government’s own plans to relocate 50% of senior civil servants out of London.

Of course, these amendments, while helpful, have added layers of complexity. Look at what Clause 26 now represents: it is a recipe for going to Peers such as the noble Lord, Lord Hendy, and asking, “What does this mean?” There is so much here that is very difficult to understand; these amendments have added layers of complexity. The fire and rehire provisions are probably slightly more workable now—I say this slightly optimistically—but, my goodness, they are intricate. No wonder the Government are preparing to consult on the matter in the autumn; that consultation will be crucial.

I quote another major figure: Mike Clancy, the general secretary of Prospect. He has warned that

“the government must be careful it doesn’t inadvertently create a veto against all contractual change”.

Surely that is the risk. Among the restricted variations now listed are reductions in entitlement to pay, changes to performance-based pay measures, alterations to pensions, variations in working hours or shift times, and reductions in leave entitlements. These are precisely the sort of changes that businesses, particularly smaller ones, often need to make—not recklessly, but to adapt, restructure or just survive during periods of financial strain. So we urge the Government to conduct this consultation with care. The views of employers must be front and centre. The impact on small and medium-sized businesses must be fully understood. Yes, constraints matter, but so do incentives. If we are serious about improving employment practice, we must not just punish the worst but support the best.

As amended, this clause is better, but we look forward to hearing from the Minister how he will respond to the many criticisms that have been made.

[Lord Katz (Lab)]

My Lords, I thought for a minute that concord might break out across the House—it did at least partially, but not quite. However, as the short debate we have had today and the debates we had in Committee have shown—the noble Lord, Lord Goddard of Stockport, identified this—there is wide agreement across your Lordships’ House that the unconscionable tactics we saw P&O Ferries use should never be allowed again. We have also heard clear arguments that employers will need to make reasonable operational changes and that this should be permitted.

I begin with Amendments 74 and 88 in the name of the noble Lord, Lord Sharpe of Epsom, which seek to make it clear that, where an employer makes redundancies because they have had to change location, this should not be an automatic unfair dismissal. We agree. If there is no longer a job for the employee at a work location because that location has had to close down, this is unfortunate but is still a redundancy situation. That is why new Section 104I will apply only when the principal reason for the dismissal falls within that section. Where an employee’s place of work is closed, the principal reason for their dismissal is likely to be redundancy. We will set out further detail on this matter in our planned code of practice.

Further, the changes that the Government are making through their amendments will mean that a change to the location at which an employee works is a non-restricted variation. This means that, even in cases where there is no redundancy situation, a dismissal for failing to agree to a new work location will not be automatically unfair. An employer must still follow a fair process when making such dismissals.

Amendment 73 in the name of the noble Lord, Lord Sharpe, seeks to limit the protections in the Bill to cases in which fire and rehire was used to reduce pay and benefits. Government Amendments 69 to 72, 77, 79, 82, 86, 91 and 92 will focus the clause’s protections on variations to certain terms—specifically pay, leave, total hours worked and specified shift patterns. Those terms were identified because variations to them would have a significant impact on employees and should not be imposed under the threat of fire and rehire. This is, we believe, in line with the intention of the noble Lord’s amendment.

In his speech, the noble Lord, Lord Sharpe, raised the comments from Unite and Prospect. I think I am right in saying that they were askance. They show that there is a variety of views within the trade union movement as well as across industry. We understand that Unite would like stricter conditions on fire and rehire. We feel that, having consulted a wide range of trade unions—including, of course, the TUC—and a number of business organisations, as well as businesses themselves and representative business organisations, including the CBI and the BRC, we have struck the right balance in the way we have constructed the clause.

Amendment 75 in the name of the noble Lord, Lord Goddard of Stockport, proposes to limit the clause to contract variations that are not one of a list of protected terms and are otherwise minor and non-detrimental. The Government’s amendments, which limit the clause’s automatic unfair dismissal protections to a list of restricted variations, achieve the noble Lord’s intended outcome; he very graciously acknowledged this. They also have the benefit of being specific. For example, the Government’s amendments will not require an employment tribunal to come to a decision about whether a variation should be considered minor on the facts of each case. They also give employers flexibility to make reasonable location changes, which employers have told us is an important operational consideration and which would not be possible under the noble Lord’s amendment.

I therefore beg to move the amendments in the name of my noble friend Lady Jones of Whitchurch and ask the noble Lord, Lord Sharpe of Epsom, not to move Amendment 73.

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[Lord Hunt of Wirral (Con)]

My Lords, I thank all noble Lords for their thoughtful contributions to this important debate. We are very grateful to the noble Baroness, Lady Grey-Thompson, for having raised what is a profoundly important issue, one that deserves very careful consideration by your Lordships’ House.

As my noble friend Lord Wigley reminded us, serious childhood illness places unimaginable strain on families, and it is not just a case of emotional turmoil. There are so many practical challenges as well, including hospital visits, overnight stays, unexpected emergencies and a need for sustained and focused care that no working parent can possibly schedule around.

I am pleased to say that many good employers already recognise this: in the most extreme circumstances, they show compassion and flexibility, ensuring that parents are not forced to choose between caring for a seriously ill child and retaining their job. At the heart of this is not only compassion but continuity. A child battling serious illness often requires a parent at their side, not occasionally but consistently. Without job protection and some form of financial support, the very people whom we would expect to be there—parents—may find themselves unable to be so.

Of course, any new entitlement must be, as the noble Lord, Lord Hogan-Howe, reminded us, designed carefully, with due attention to cost, clarity and implementation. Whereas on these Benches we do not take a fixed position on the amendment itself, I welcome the fact that it prompts us to engage seriously with a difficult but crucial area of employment and social policy.

I thank all those who have contributed to this important debate, and I hope that the Government will take from it not only a recognition of the challenge but a willingness to explore how it might be best addressed in law.

[Lord Katz (Lab)]

My Lords, this has been a powerful debate on Amendment 97, which seeks to introduce financial support and leave for the parents of seriously ill children, and I thank all noble Lords who participated in it. I pay particular tribute to the noble Lord, Lord Wigley, for sharing his painful and very personal story. It is clear that, even after a fair number of not just years but decades, the indelible mark of the pain that he and his partner and the rest of his family went through is still with him. On behalf of the whole House, I thank him for sharing that story.

I begin by thanking the noble Baroness, Lady Grey-Thompson, for bringing this extremely important issue to the attention of your Lordships’ House. I pay tribute, as, I am sure, does every noble Lord who has spoken in this debate, to the excellent work done by Ceri and Frances Menai-Davis and their charity, It’s Never You, which provides vital support to the parents of seriously ill children. Ceri and Frances set up this charity in memory of their late son, Hugh, who died tragically in 2021 after battling a rare form of cancer. It’s Never You has worked with the noble Baroness, Lady Grey-Thompson, to draft this amendment, and I know that Ceri and Frances have campaigned hard on this proposal to honour the memory of their son Hugh and to provide support to parents who face the same tragic circumstances that they did.

It is of course vital that parents be able to spend time at the bedside of their sick child without the fear of loss of employment or financial difficulties adding to a situation that can already be mentally overwhelming, isolating or physically draining, as the noble Baroness, Lady Grey-Thompson, set out so well. One can only imagine the trauma of being in such a terrible situation. I say that one can imagine, but perhaps one can never really fully understand unless one is in that situation.

I know that this challenge has been raised previously in your Lordships’ House and in the other place, and I want to emphasise that the Government are keen to continue to look at the issue with the noble Baroness, Lady Grey-Thompson, and It’s Never You. As the noble Baroness said, I have personally met Ceri and Frances several times already, and I have been struck by their selfless determination and resolve to provide for other parents what they did not have. We intend to continue this engagement. I want to ensure that parents of sick children are not ignored or left behind.

However, we do not believe that incorporating this amendment into the Bill would achieve this end, despite the very best of intentions with which it has been prepared. I will highlight three reasons for this.

First, we are concerned about the approach of amending the Neonatal Care (Leave and Pay) Act, which was taken through your Lordships’ House by the noble Baroness, Lady Wyld, as she set out a moment ago. Although the amendment rightly seeks to provide much-needed care to older children, it risks unintentionally undermining some fundamental principles of neonatal leave and pay, which were designed with the specific situation of newborns requiring medical care in mind. Much of the eligibility criteria for the leave and pay entitlements in the existing Act, for example, are connected to birth-related forms of leave, such as maternity and paternity, that simply would not apply to parents of other children. Similarly, the specific definition of “neonatal care” in the current Act has been carefully constructed through extensive consultation. Again, this amendment would require that to be overhauled, risking creating a gap in existing support.

Secondly, more detailed analysis is required to fully understand the total cost implications of this proposal. We need to understand how many parents may be eligible for support across England, Wales and Scotland, as well as the estimated take-up, familiarisation and business costs. Initially, external estimates suggest that the cost of this amendment could be in the low millions—the noble Lords, Lord Palmer and Lord Hogan-Howe, referred to that specifically—based on data from England only. However, those figures are likely to represent only a small proportion of all parents who may be eligible for support. The actual cost could be significantly higher, depending on how serious illness and other eligibility criteria are defined. Therefore, the overall financial impact will depend on the final definitions and scope used to determine eligibility.

Thirdly, it is also right that the Government consider other suggestions of support that have been put forward by parents who are put in this incredibly challenging and difficult situation, such as the right to a career break to enable parents to take an extended period of time out of work to provide care for a seriously ill child, as has been highlighted by Conservative MP Mark Francois in the other place and his constituent Christina Harris. It is right that the Government explore all proposals before proceeding to legislate in order to ensure good law—indeed, a workable law—and the very best outcome for parents, which I think we all, across the House, agree is needed.

The Government appreciate that there is a significant challenge to be addressed here, but more work needs to be done to understand the best approach and costs of tackling it. For instance, the noble Baroness, Lady Bennett of Manor Castle, raised GoFundMe and the way successful fundraising campaigns interact with the benefits system. That is undoubtedly an area that needs to be understood.

As the noble Lords, Lord Hogan-Howe and Lord Hunt of Wirral, said, we need to understand the costs, and to have clarity and full consideration. More work needs to be done to understand the best approach and the costs of tackling this issue and addressing it properly. However, I want to be very clear that we are listening, and I have been moved—as we all have—to hear of the distress caused by the incredibly challenging situation of serious childhood illness and the financial strain that comes with caring for a sick child.

The noble Lord, Lord Gascoigne, asked for a way forward, and I hope noble Lords will take what I am about to say in the spirit intended. I make a commitment to the noble Baroness, Lady Grey-Thompson, and to Ceri, Frances and It’s Never You, that we will consult on support for parents of seriously ill children, including the proposal for Hugh’s law, to gain views from all interested parties on the specifics of the support. We are doing this at pace—the consultation will run next year in 2026. We wish to continue working with It’s Never You, the noble Baroness and all noble Lords who are interested—having heard the debate this evening and the strength of opinion across the House—on this extremely important matter, as we further explore this proposal.

It is appropriate that we consult publicly and provide space to hear a range of views to ensure that we arrive at the most appropriate policy outcome. We want to do something that is right. We want to make sure we have a solution that sticks, is workable, and provides the support that so many parents need—indeed, that Ceri and Frances needed but did not have. It is important that we do not rush into it but have a considered approach. I therefore ask, while we undertake this consultation, that the noble Baroness withdraws Amendment 97.

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[Lord Hunt of Wirral (Con)]

I thank my noble friend for introducing this important debate. As he has pointed out, the challenge is to strike the right balance. We must protect individuals from being exploited or drawn into extended unpaid roles that are in effect jobs by another name, but we also must avoid placing undue burdens on organisations whose motives are benign and whose placements offer genuine social and developmental value. I welcome the debate that the amendment has prompted, and I hope that as the Bill progresses, the Government will engage closely with stakeholders to ensure that any future regulations achieve the twin goals of fairness for individuals and viability for those offering valuable early opportunities.

[Lord Katz (Lab)]

I thank noble Lords for this short but interesting debate around Amendment 103 moved by the noble Lord, Lord Holmes of Richmond, which seeks to prohibit work experience for a period exceeding four weeks. With regret, as he said, the noble Lord was unable to join us in the Chamber in Committee when we debated this amendment, which was moved on his behalf very ably by the noble Viscount, Lord Colville of Culross, who I do not believe is in his place at the moment.

The Government have always been clear that a fair day’s work deserves a fair day’s pay. You need only look at the Government’s track record on the national minimum wage and the provisions in this Bill to see how the Government are delivering on this commitment. I will reiterate what I have said on this issue previously because it is worth emphasising: the existing legislation is clear that aside from a very small number of exemptions, workers who are entitled to the national minimum wage should be paid accordingly. No ifs, no buts. These are the rules that our enforcement body enforces, and these are the rules that we expect businesses to abide by. Of course, the vast majority do, but those that do not undercut the responsible businesses unfairly, and we should all be agreed that this is not behaviour that we should tolerate. This means that an employer cannot call a worker an intern to avoid paying them. I want to repeat this very important point, not only for your Lordships’ House but for those who are listening to this debate outside: an employer cannot call a worker an intern to avoid paying them.

If workers who are entitled to the national minimum wage are not being paid what they are due, there are protections in place so that they can receive what they are owed. The Government and His Majesty’s Revenue & Customs have raised and continue to raise awareness on workers’ rights, so that no one is left out of pocket. I have previously stated that the Government will be consulting on this issue soon. In fact, and in response to the noble Lord, Lord Holmes, I am pleased to be able to tell your Lordships’ House that this consultation will indeed begin tomorrow with a call for evidence. I do not believe that I am overstating the case when I say that all of us in this House care about this issue, in particular, ensuring that our young people have access to opportunities, regardless of their background, whether they can afford to work for free or where they are based in the country. The noble Lord, Lord Holmes, spoke powerfully on that basic right and I think that we are all in agreement with the principle.

This amendment, while well-intentioned, risks creating loopholes, where existing workers who are entitled to the national minimum wage from day one could find themselves working for free for up to four weeks. I am sure that we would all agree that this is not right and not what any of us wants to see. Adopting this amendment could well lead to an influx of four-week roles appearing, with only those who can afford to work for free accessing them. We do not want to lock away valuable opportunities and create unintended consequences by rushing through this amendment. These issues are complex, which is why I reiterate that it is important that the Government consult on this issue first. To make clear, we are standing by our words in Committee. When we said that we would be starting the consultation “soon”, in this case, that means tomorrow. As I stated in our debate in Committee, the issues that the noble Lord, Lord Holmes, wishes to address can be dealt with most effectively outside of this Bill. I therefore ask him to withdraw Amendment 103.

Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Committee stage
Tuesday 24th June 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I rise to speak to this amendment and, frankly, to express a degree of disbelief that such a proposal should have been made. With due respect to the noble Baroness, I do not believe that this amendment is a serious contribution to the debate on fair pay or responsible corporate governance. It is a piece of performative and ideological showmanship—a throwback to a worldview that sees profit as a vice, wealth as inherently suspect and enterprise as something to be managed, limited or downright punished. The idea that government should impose a legal maximum pay ratio—a flat arbitrary ceiling of 10:1 between the highest-paid and lowest-paid employees in every organisation—is not just unworkable but, I believe, economically illiterate.

First, this proposal would be a gift to bureaucracy and a curse to business. Every company, from high street shops to high-growth tech firms, would have to monitor and police every single form of pay—salary, shares, bonuses, pensions and benefits in kind—just to ensure that they do not cross an artificial line. Do we really want our job creators to spend their time calculating compliance spreadsheets instead of investing, innovating and employing? Secondly, it would actively disincentivise growth and ambition. High-performing individuals—those who drive investment, lead exports and create jobs—would simply leave and take their talent elsewhere.

The noble Baroness mentioned Amazon. I join the Government in welcoming the further investment that Amazon is making. As a matter of record, Amazon employs circa 75,000 people in the UK. No one is on zero hours, and the minimum annual starting salary is between £28,000 and £30,000 a year. It provides flexible working opportunities from day one, including term-time contracts, which allow parents, grandparents or carers guaranteed leave during school holidays. It offers paid parental and bereavement leave. Amazon also offers guaranteed hours from day one, and employees have the choice of full-time or part-time contracts. It is important to put the record straight. Since 2010, Amazon has invested more than £64,000 million in the UK, and £12,000 million in the last 12 months, and supports a network of around 100,000 UK-based small and medium-sized businesses. I welcome the opportunity that the noble Baroness has given me to put the record straight.

To go back to the noble Baroness’s amendment, it would mean that employers would be forced to avoid hiring lower-paid staff altogether, just to protect the ratio. What would be the result? There would be fewer jobs, less opportunity and more outsourcing—the very opposite of what a fair and inclusive economy should look like, hitting the least well-off, the most vulnerable and those at the margins of the labour market.

My third point is that this is not fairness; it is levelling down. It is virtually saying, “Don’t succeed too much, don’t reward excellence, don’t grow too big or too fast or be too profitable”. That is not fairness—it is anti-growth, anti-aspiration and anti-business. I must tell the noble Baroness that this amendment looks like it would be more appropriate in a Maoist economic manifesto, delivered to his revolutionary cadres, rather than a serious proposal for modern employment legislation. What this amendment reveals is not a serious attempt to solve a policy problem but a mindset that is suspicious of success, dismissive of wealth creation and entirely detached from economic reality. Against that background, I look forward to hearing the Minister’s response, which I hope will agree with mine, that this is an amendment that should not be accepted.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, let accord break out across the Table. I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 320. I do not share the disbelief of the noble Lord, Lord Hunt of Wirral, in hearing it, but only because I probably have more than the passing acquaintance with bits of the Green Party manifesto that he perhaps does—and that is the only reason for it.

It is right that companies should be sensitive to wider workforce pay when setting pay for those in the boardroom and other senior leadership positions. Company law and wider regulation already address that point. First, the Companies Act requires that UK listed companies must disclose and explain each year the ratio of their CEO’s pay to that of the company’s lower-paid and average-paid employees. Secondly, under the UK Corporate Governance Code, listed companies are asked to review workforce remuneration when setting directors’ pay and engage with employees to explain how executive pay aligns with wider company pay policy. Taken together, these measures provide important transparency and accountability in how UK listed companies deal with pay and incentives across the whole employee base.

Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Committee stage
Wednesday 18th June 2025 Lords Chamber

[Lord Katz (Lab)]

We have had a fair amount of scrutiny of the wider proposal, rather than the Bill’s specific fair work agency proposals. As I said, over the past nine years since 2016, there have been 33 different strategies and reports, including—but certainly not limited to—the Taylor report. This is not an area that has not been considered and scrutinised to some degree. I also say to the noble Baroness that the Single Enforcement Body—as it was called by the previous Administration—was the policy of successive Conservative- led and Conservative Administrations. I am not going to intrude on the great policy disagreements on that side of the House. We feel it important to establish the fair work agency and to ensure that we have strong enforcement of labour market regulations. I therefore ask the noble Lord to withdraw Amendment 271ZZA.

[Lord Hunt of Wirral (Con)]

My Lords, this has been a very significant debate, because I believe it is the first time I have heard from the Government Front Bench an acceptance that the Opposition will eventually take over government again. He and I may disagree on when this will happen—of course we disagree: I just happen to believe that it is going to happen at the next general election. That is why these amendments are so important.

I also want to say how much we miss the noble Lord, Lord Fox. I was very disturbed indeed to hear about his unfortunate accident, but I am very pleased to hear that he may shortly be with us. I hope that, by speeding up the process to Report in July, he will still be able to be with us, because he has always brought a note of common sense—despite coming from the Liberal Democrat Benches. Now I am upsetting everyone. All I want to say to the noble Lord, Lord Goddard of Stockport, is that he has been a marvellous substitute, if one can say that. His pragmatic approach to the Bill has been enormously valuable, but we do miss the noble Lord, Lord Fox.

I thank my noble friend Lady Lawlor, who is quite right: we are moving into unknown territory. Although the Minister might remind us that the Conservative Government were committed to looking at stepping in this direction, we are still moving into unknown territory and, as my noble friend Lord Jackson of Peterborough pointed out, the CIPD cost estimates are really worrying. I do not think the Minister properly addressed his key question on the whole issue of accountability.

However, here we are. I am surprised that the Government have rejected Amendment 271ZZA. It is a reasonable and pragmatic amendment that simply recognises the basic democratic principle that a new Administration should have the ability to review and, if necessary, revise a labour market enforcement strategy to reflect new economic realities and public priorities. Despite the amendment to which he referred—which is at the margin—the Government have always insisted that a labour market enforcement strategy must run its full term without reset, regardless of elections or changes in government. But why should a new Government be bound by a strategic direction set by their predecessor? That is not consistent with the democratic mandate bestowed on any incoming Government. Surely it is neither logical nor democratic to compel a newly elected Government to implement a strategy they did not design, especially in a labour market that is dynamic and constantly evolving.

Economic landscapes can shift dramatically within short periods, whether due to international events, technological change or domestic challenges. Flexibility to adjust enforcement priorities accordingly is essential. It is not only a question of governance, but of ensuring that enforcement remains effective and responsive to current labour market conditions. The Government have already recognised the importance of periodic review and the resetting of the labour market enforcement strategy every three years, as set out in Clause 91. If I am not mistaken, that periodicity is built into the framework precisely to ensure that the strategy remains relevant and responsive.

The main feature of this debate has been the cogent arguments put forward by the noble Lord, Lord Goddard of Stockport. His insights, and those of my noble friend Lady Coffey, highlight the pressing need for a substantive independent review of the proposed fair work agency. While the promise of increased efficiency in enforcement is welcome, we must remember that there are intentions and then there are results. We must understand how such efficiency will be achieved and at what cost, what other alternatives were considered, and why they were rejected.

To date, the Government have not committed to publishing any specific details about the establishment of the fair work agency—details that are crucial for proper scrutiny. We lack clarity on the expected costs of this new body, the standards by which compliance will be measured and the criteria that will guide enforcement decisions. Without that transparency, it is difficult to assess whether the creation of this body will represent genuine progress or simply add another layer of bureaucracy, which, as the noble Lord, Lord Goddard of Stockport, stressed, will impinge on smaller businesses in particular.

There remains much to discuss and questions to be answered about the fair work agency. Unfortunately, I find myself unconvinced by the Government’s arguments against the amendments proposed by myself and the noble Lord, Lord Goddard of Stockport. Our proposals are not about obstruction but about ensuring proper oversight, accountability and flexibility in this important area of labour market governance. I am sure that we, and the Liberal Democrats, will return to these issues on Report, but for now, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Katz (Lab)]

I do not want to disappoint the noble Lord, but I am afraid he is stuck with me again. I thank the noble Baroness, Lady Coffey, for tabling amendments on legal assistance and the noble Baroness, Lady Noakes, for notifying us of her opposition to Clause 114 standing part of the Bill.

I will start with Amendment 272BA. To be fair, the noble Baroness, Lady Coffey, and others indicated that this has overlapped with not only previous discussions today but discussions of groups on previous days in Committee. As my noble friend Lady Jones said on Monday, the drafting of Clause 114

“was carefully thought through and is deliberately broad and inclusive”.—[Official Report, 16/6/25; col. 1883.]

It is only fair that it covers not just employees but employers and trade unions. To answer a specific question from the noble Baroness, Lady Coffey, about what other assistance could be provided, this could include help in understanding procedural requirements, preparing documents or accessing expert input. It is designed to be flexible and responsive to individual needs. Given this, we cannot support Amendment 272BA.

Amendment 272D would restrict the amount of support that could be offered to any individual through this power. It is not a reasonable measure. I understand that it is a probing amendment, as the noble Baroness, Lady Coffey, said, but the small amount proposed in the amendment would leave the power meaningless. As we have discussed, this would be, although it is not intended as such, tantamount to a wrecking proposal, because it is such a small amount. Obviously, as we have discussed, this is a manifesto commitment. The fair work agency should be able to decide how much support it can offer, without being constrained to random financial limits for no good reason.

Amendment 272E would create an additional process before the power can be used. Part 5 of the Bill already calls for the fair work agency to publish an annual strategy, as we discussed on an earlier group. Requiring yet another administrative document in this way would be burdensome and unnecessary, and I think we share across the Committee a desire to reduce bloated bureaucracy—a phrase that has already been used this afternoon.

Turning to Amendment 272F, the powers under Clause 114 will operate in tandem with those in Clause 113, but workers will not always want to be separately represented in proceedings brought by the fair work agency. They can be represented, but they do not have to be. Therefore, we cannot support this amendment.

Amendment 272G would mean that the fair work agency would duplicate ACAS’s existing responsibilities regarding dispute resolution. This power is not intended to be a replacement or a duplication of existing support. We cannot support this amendment, as it would complicate the enforcement landscape when we are trying with this Bill to simplify it.

Amendment 272H would limit the scope of this power. It would create situations where legal assistance would have to cease, even if proceedings continued, leading to unfairness. It could lead to people being unable to continue their cases, which could cover other matters such as discrimination, because support could no longer be offered. The fair work agency should be able to decide what is appropriate and fair in each case.

Amendment 272I would put an unnecessary burden on the Secretary of State to have insurance in place before being able to provide advice on a settlement agreement. To be fair to the noble Baroness, Lady Coffey, she sort of indicated uncertainty around this. To be clear, this amendment wholly contradicts established government practice. I refer her to paragraph 4.4 of Managing Public Money, which sets out that the Government should generally not take out commercial insurance and it is not good value for money.

To summarise on Clause 114, the legal system can be intimidating, particularly for vulnerable workers or those from marginalised backgrounds. To repeat what my noble friend Lady Jones said in the previous group, many vulnerable workers are reluctant or unable to bring their cases to tribunal to enforce their employment rights, and this has serious consequences. Rogue employers exploit this, breaking employment law, and get away with it. For instance, Citizens Advice suggests that high-paid workers are more likely to file a case with an employment tribunal than lower-paid individuals, despite the latter being more likely to have their rights infringed. As I said, this lets rogue employers off the hook, and that is unfair for the vast majority of businesses, which we all know do the right thing by their staff and want to. It is unfair for the vulnerable workers involved—to state the obvious—who are being denied their rights, and it is unfair for the rest of the workforce, who are denied work opportunities due to illegal practices undercutting them.

As was said in the last group, that is why, in the plan to make work pay—again, a manifesto commitment—we set out that the fair work agency will have powers to bring civil proceedings to uphold employment rights. The Bill will give the fair work agency the power to bring civil proceedings in the employment tribunal to uphold rights. This is a critical power, particularly for situations where a worker feels unable to bring proceedings themselves. But there are occasions where a person is able to bring proceedings in the tribunal or another court but needs assistance, or where the case has wider ramifications and the person concerned could benefit from the fair work agency’s expertise.

[Lord Hunt of Wirral (Con)]

My Lords, can the Minister remind us to what extent there has been consultation with the Secretary of State for Justice? Has the Lord Chancellor been involved in putting together this scheme, which is going to sit alongside legal aid, for which she is responsible? It would be really helpful if the Minister could make sure that the Government is joined-up in putting forward what is, in a way, as my noble friends have pointed out, quite a blank cheque, which has not properly been costed. Can he put us right on all this, please?

[Lord Katz (Lab)]

I am more than happy to. The noble Lord, Lord Hunt, anticipates the comments that I was just about to come to—but we can address the point now. The noble Lord, Lord Jackson of Peterborough, focused on this as well. This is not expanding legal aid. The power is intended to give the fair work agency a discretion to provide support in employment-related cases. It is not an alternative to legal aid and it will be used in specific cases. The Government will set out how and when the fair work agency will exercise its power in due course and will discuss this with a range of stakeholders. I reassure the noble Lord, Lord Hunt, we have regular conversations with the Ministry of Justice, including on the Bill’s implementation.

I return to what I was saying about the importance of ensuring that the power of legal advice is appropriately bounded. It cannot be used to fund dispute resolution facilities delivered through other routes. Importantly, the clause protects the integrity of the courts and tribunals by confirming that nothing in the clause overrides existing restrictions on representation imposed by legislation or judicial practice. This clause complements the fair work agency’s wider role in promoting access to justice and fair treatment in the workplace. It provides a vital lever for supporting individuals who might otherwise face legal barriers alone or for ensuring compliance with relevant law, and it delivers our manifesto commitment on which Members in the other House were elected.

The noble Baroness, Lady Noakes, asked about the costs. These will be set out in due course and will be discussed with a range of stakeholders, particularly employers, trade unions and employees.

United Kingdom Jobs Market

Debate between Lord Katz and Lord Hunt of Wirral

Wednesday 11th June 2025 Lords Chamber

[Lord Hunt of Wirral]

To ask His Majesty’s Government what assessment they have made of the jobs market in the United Kingdom.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, a near-record number of people are in employment. This has been driven by a fall in economic inactivity, which is now at its lowest rate since 2023. For people in work, real earnings have continued to grow. We want to continue this trajectory and achieve our long-term ambition of an 80% employment rate by reforming employment, health and skills support, as set out in the Get Britain Working White Paper.

[Lord Hunt of Wirral (Con)]

My Lords, 274,000 jobs have already vanished on this Government’s watch and the OBR has already warned that the Employment Rights Bill will have an additional negative impact on levels of employment. Why are the Government so stubbornly pursuing and continuing with this legislation—which can only be called the unemployment Bill—when their own forecaster is saying that the Bill will destroy jobs?

[Lord Katz (Lab)]

I thank the noble Lord for his question. I have enjoyed debating issues around the Government’s flagship Employment Rights Bill with him during some fairly lengthy Committee sessions. Given the debate we had last night, I am somewhat surprised that he returned to this field. We discussed just yesterday evening how one of the main aspects of the Employment Rights Bill is delivering our manifesto commitment to repeal the previous Government’s failed Trade Union Act 2016. I remind noble Lords that that Act delivered more strike days: 2.7 million days were lost to strikes in 2023 and 2.5 million in 2024—the highest levels since 1989. That Act failed and that is why we are reforming it.

To pick up the noble Lord’s point on our economic record, let us have a look at it: employment has risen by 0.5 million since the general election and is now at a record high. Economic inactivity is down by more than 20%. Earnings are up and vacancies are down. We have a plan for change and a plan to invest in Britain’s renewal, and we are sticking to those plans.

Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Committee stage
Thursday 5th June 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I start by saying how pleased we are to see my noble friend Lord Holmes of Richmond in his place. I had the privilege of moving his previous amendments in his absence, but we are delighted to see him back with us and I thank him for proposing this important amendment.

The way my noble friend did it was very welcome because, at the heart of his speech, was a recognition that the labour market—especially the supply of temporary and agency workers—has to be fair and transparent. He used those particular words and stressed their importance. I agree with him that it is essential that all companies involved in these arrangements operate under the same clear set of rules. Too often, we see instances where umbrella companies or certain intermediaries do not meet the standards expected of traditional employment agencies, whether on pay, workers’ rights or transparency. This inconsistency undermines the integrity of the labour market and can put vulnerable workers at risk. Licensing could, in theory, help address this by ensuring that any business participating in employment arrangements meets minimum standards and is subject to proper oversight.

However, as my noble friend Lady Coffey stressed, the amendment raises some other important questions. Clause 34 broadens the definition of “employment business” to encompass a range of activities connected to supplying workers who are employed by one party but work under the control of another. This means that the regulatory net will be set much wider than before, potentially to cover businesses beyond traditional recruitment agencies.

Moreover, it is worth considering whether the same objectives could be achieved through improved enforcement of existing regulations rather than by introducing a new licensing framework. In this Chamber, we have to weigh carefully the costs and benefits, particularly to smaller businesses that may struggle with additional compliance burdens. We must also consider the impact on businesses and the wider economy. Many employment businesses operate with tight margins; for them, licensing means added costs, added paperwork and longer lead times to launch new services or respond to labour demand.

This is not an argument against regulation per se; it is simply a recognition that badly designed or poorly phased licensing can create barriers to entry, reduce competition and even push some providers underground, where abuses are harder to detect. In sectors that are already experiencing labour shortages, such as social care, hospitality and logistics, the cumulative impact could be significant.

As my noble friend Lady Coffey pointed out, there is also the risk of regulatory duplication or conflict. Some sectors already have licensing or registration schemes; others are subject to sector-specific standards set by Ofsted, the Care Quality Commission or the Financial Conduct Authority. Without co-ordination, we risk creating overlapping regimes, with businesses subject to multiple audits, rival codes of conduct and inconsistent enforcement. Workers too may be confused about their rights and the mechanisms available for redress.

I also note that the amendment does not contain any provisions for parliamentary oversight or consultation. The power it seeks to create is broad and, while it is subject to the discretion of the Secretary of State, it is not constrained by any statutory duty to consult stakeholders. In a sector as economically important and socially sensitive as this, there must be consultation. Against that background, I look forward to hearing the Minister’s response.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, I thank the noble Lord, Lord Holmes of Richmond, for his amendment concerning the licensing of employment businesses. I join the noble Lord, Lord Hunt, in saying how nice it is to see him in his place this afternoon. I share the privilege that the noble Lord, Lord Hunt, noted as I responded to the amendments that were tabled in the name of the noble Lord, Lord Holmes, and these were on important issues that he was right to raise. As the noble Lord, Lord Hunt, said, these are around fairness, transparency, equity and the problems that some less than scrupulous umbrella organisations and employment agencies currently raise in the market. He is not raising unimportant issues.

As the noble Lord, Lord Hunt, has already noted, through Clause 34, the Government have sought to amend the definition of “employment business” in the Employment Agencies Act 1973, so that it includes the concept of employment arrangements. This expanded definition will capture so-called umbrella companies and place them in the scope of regulation. As your Lordships know, employment businesses are subject to regulation through the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which were enforced by the Employment Agency Standards Inspectorate and subsequently will be enforced by the new fair work agency that Part 5 of the Bill creates.

The Government acknowledge that the current regulations are not appropriate for application to umbrella companies so, following consultation, we will set out a new regulatory framework that will apply to umbrella companies. In our view, these regulations are the most proportionate way of reducing non-compliance in the umbrella company market, without introducing a new regime that would add complexity for business. The creation of a licensing authority at this time would therefore not be appropriate. I am happy to say that on this rare occasion, we share the concerns of both the Opposition Front Bench and the noble Baroness, Lady Coffey, from whom we heard earlier on this amendment.

The regulation-making powers in the Bill have been carefully considered and included only where the Government consider it justified and necessary. We are not convinced that the amendment will provide additional benefits for businesses or workers significant enough to expand this power, as it proposes.

The Government want to take care to get the regulations right. We have heard throughout our wonderful time spent discussing the Bill in Committee so far that there is a balance to be sought between the burdens that we create through new legislation and regulation on businesses, including small businesses, and protecting the rights of workers. It is a balance we get right, and we want to make sure that we get regulations right in relation to the new definition of employment businesses in this case. Our focus will be on that, alongside the establishment of the fair work agency.

Taking all these factors into consideration, I therefore ask the noble Lord, Lord Holmes of Richmond, to withdraw his amendment.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, we all owe a great debt of gratitude to the noble Lord, Lord Faulkner of Worcester, and my noble friend Lord Parkinson of Whitley Bay, for introducing a fascinating debate. My own relationship with heritage railways goes back some 45 years, to when I participated in all those wonderful railways in north Wales. I took my daughter Daisy to the top of Snowdon in one of these wonderful train rides. Sadly, the Western Mail had a picture of Daisy and me driving the locomotive, illegally, with the headline, “Daisy drives Dad around the bend”. I shall never forget that.

Therefore, like my noble friends Lady Neville-Rolfe and Lord Mendoza, the noble Earl, Lord Clancarty, and the noble Lord, Lord Palmer of Childs Hill, I approach this debate with some degree of positive expectation, because the noble Lord, Lord Katz, is going to reply. If ever there was anyone who would understand the need for this amendment, it is the noble Lord, Lord Katz. Whether his brief will allow him to show that level of understanding, we will have to wait and see.

This amendment brings welcome clarity and common sense to an area where outdated legislative definitions risk interfering with well-established and valued community practice. Heritage railways and tramways are not industrial undertakings in the conventional sense. They are, overwhelmingly, charitable or volunteer-led organisations dedicated to preserving history, offering educational experiences and engaging communities, often in rural or heritage-rich areas. This amendment recognises the important distinction between exploitive industrial labour and safe, structured, voluntary participation. Many young people who volunteer on heritage railways gain practical skills, develop a sense of responsibility and form connections across generations. It is, for many, their first taste of civic engagement and teamwork and is often a path into engineering, public service or the arts.

By inserting this narrow and well-defined exemption into the 1920 Act, this clause would ensure that young volunteers can continue to participate safely and legally in activities that benefit not only themselves but the broader public. Importantly, this does not in any way dilute protections against child labour or weaken employment law. It simply makes sure that our legal framework does not unintentionally penalise or prohibit what is clearly a public good.

[Lord Katz (Lab)]

My Lords, my reputation seems to precede me on this amendment. I am very grateful to my noble friend Lord Faulkner of Worcester for tabling Amendment 201 and have enjoyed a slight diversion in subject matter on the Employment Rights Bill. It is truly a pleasure to be able to continue the discussions that I have had with my noble friend Lord Faulkner about the railways for many years, both inside and outside this House. My noble friend is a true champion of heritage railways across the whole piece, not simply on this issue. I pay tribute to his role as president of the Heritage Railway Association.

It has been fantastic to hear from a number of noble Lords, including the noble Earl, Lord Clancarty, the noble Baroness, Lady Neville-Rolfe, and the noble Lords, Lord Mendoza and Lord Palmer of Childs Hill, all of whom extolled the virtues of heritage railways in providing a positive way of involving young people in transport, industry and civic engagement—as the noble Lord, Lord Hunt, was just saying—as well as contributing to the tourist sector and the Government’s mission for growth. The noble Lord, Lord Parkinson of Whitley Bay, spoke very strongly about that, and, as he pointed out, it is the 200th anniversary of the railway this year. We are doing a lot to commemorate that, and heritage railways will have their own role in that. I pay special thanks to the noble Lord, Lord Parkinson of Whitley Bay, for being the first person to out me as a rail nerd in this debate, and the noble Lord, Lord Hunt, also had that pleasure.

The noble Lord, Lord Parkinson, took us on a little tour d’horizon of the Private Member’s Bill debate we had in this House on this topic a few years ago, and mentioned a number of heritage railways. I can speak of the pleasure I had as a young child travelling on the Ruislip Lido railway, which was small in scale but mighty in reputation for those of us in north-west London. The noble Lord is right to point to the virtues of heritage railways, both as an economic activity and in individual engagement.

As a Government, we recognise and support the valuable opportunities young people have through volunteering to do a wide range of different work activities, including on heritage railways. Obviously, it is important that these things are carried out in a safe way, with employers, organisers and volunteers supervising activities to make sure that risks are properly controlled. To give some background, I will say that noble Lords will be aware that the Health and Safety Executive is responsible for regulating health and safety at work, but, in the case of the heritage railways, the Office of Rail and Road is the enforcing authority. Both these regulators have considered carefully what powers they have and how these would be applied in the case of young people aged between 14 and 16 volunteering on a heritage railway.

The Employment of Women, Young Persons, and Children Act 1920, which my noble friend Lord Faulkner of Worcester referred to, is a long-standing piece of legislation intended to prohibit the employment of children carrying out high-risk work, such as construction in industrial settings. To be honest, amending or repealing it would not be a straightforward matter.

The law protecting children in the UK is also a complex area, and this amendment touches on not only health and safety protections but other legislation and local authority by-laws. These are all devolved matters in Northern Ireland, and this amendment would impose changes there too. The 1920 Act is old legislation; amending it should be considered only after a thorough review of the impact on other areas of law, as there may be unintended consequences. It is worth pointing out that the primary legislation governing child employment, including light work, is the Children and Young Persons Act 1933. Amending or repealing the 1920 Act would still leave the 1933 Act in place, which—together with any by-laws made under it by local authorities—limits children to undertaking only light work. So repealing the 1920 Act could have unintended consequences across a number of sectors, and a full impact assessment would be required.

As we have heard, modern health and safety legislation does not prevent children and young people volunteering on heritage railways. I was pleased that my noble friend Lord Faulkner of Worcester referred to the Heritage Railway Association survey, which demonstrated that there are around 800 under 16 year-olds volunteering on heritage railways across the country. There may be activities that are unsuitable for young volunteers to carry out—for example, safety-critical tasks such as train diving—but I am pleased to say that both regulators are very willing to work with the Heritage Railway Association, as we have heard from my noble friend Lord Faulkner of Worcester, to determine what sorts of activities would be safe, appropriate and suitable for young volunteers aged 14 to 16 to perform on the railways.

Of course, regulators should, and do, take a proportionate approach to enforcement action. It is worth noting that the last time the 1920 Act was used to support health and safety enforcement was in 2009. As my noble friend Lord Faulkner of Worcester told us, there have been no prosecutions under the 1920 Act, either of public bodies or private individuals, which proves that the status quo is not absolutely terrible.

The aim of this amendment is to remove any barriers to allow children to gain valuable experience volunteering on heritage railways and tramways. Nobody wants to see more young men and women developing an interest and, indeed, a career on the railway more than I do. It is not clear that there is an overwhelming amount of evidence that this legislation is creating any barriers and, as we know, many heritage railways run very successfully with young people volunteering in a wide range of activities to support those ventures.

Both the Office of Rail and Road and the Health and Safety Executive remain very willing to work with the Heritage Railway Association to develop additional guidance and, possibly, examples of good practice to ensure that young volunteers can continue to work safely in heritage railway settings. While this is a sensible and proportionate way forward to address this issue, I have heard the strength of opinion on this matter from across the Committee. I am more than happy and willing to facilitate a meeting with my noble friend Lord Faulkner of Worcester—other noble Lords may be interested—with the HRA, DfT, ORR and HSE to further pursue this issue. Without making any further commitments, I therefore ask my noble friend to withdraw this amendment for now.

--- Later in debate ---

[Lord Katz (Lab)]

I am very happy to write. I resist the idea that I am not being candid here. The noble Baroness may not like what I am saying, but the point stands. I am of course very happy to write to her and to the noble Lord, Lord Leigh of Hurley, with more detail.

In conclusion, we expect that, in many cases, employers and trade unions will be able to agree the terms on which access takes place, including for digital access. In the event that there is no agreement, the CAC can impose terms, including terms dealing with digital access. I repeat: the precise details of how this will work in practice will be set out in secondary legislation following further consultation. I therefore ask that Amendment 208A be withdrawn and that noble Lords do not press their other amendments.

[Lord Hunt of Wirral (Con)]

My Lords, first, I say to the House authorities that we greatly appreciate the way they have tolerated the fact that we have gone way beyond the normal rising time on a Thursday, particularly as we are sitting tomorrow at 10 am. In mitigation, I note that we have tried to truncate what is a hugely important group of amendments. There are many things that we would want to probe further, so we will have to return to this on Report.

I thank my noble friends Lord Jackson of Peterborough, Lady Lawlor, Lord Leigh of Hurley and Lady Coffey for their contributions. I was interested, as always, to hear the noble Lord, Lord Hendy, and the noble Baroness, Lady O’Grady, although I hope that she will mitigate the damage she may have done with her remarks about one of the biggest investors in the UK, Amazon.

[Lord Hunt of Wirral (Con)]

I am sorry about that discordant note, introduced into what has been a really useful day in Committee on this important Bill.

I hope that people outside will realise that we have been debating a group of amendments that were made at the last moment in the House of Commons. They have not had any scrutiny at all in Committee in the Commons. That is why this House has so much responsibility to ensure that, in a fast-moving digital world, we do not transgress in a way that places employers and employees in an impossible position.

I thank the noble Lord, Lord Goddard of Stockport. He asked some direct questions, but we have not yet had the answers to them. It may well be that the Minister will write generally to us all to respond to the points he did not have time to answer today. I appreciate that he has limited time too, but he might like to respond in writing to us all, covering the points that he has not yet been able to deal with.

[Lord Katz (Lab)]

I am very happy to write, particularly to the noble Lord, Lord Goddard.

[Lord Hunt of Wirral (Con)]

On that positive note, I beg leave to withdraw the amendment.

Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Committee stage
Tuesday 13th May 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

I agree with the noble Lord, Lord Fox, whose fox has not been shot.

This has been such an interesting, important, fascinating and deeply moving debate. We owe a debt of gratitude to the noble Lord, Lord Palmer of Childs Hill, for very positively introducing the fact that unpaid carers are the backbone of the care system, and for bringing us up to date with the reality of modern families. I think the Committee has spoken with one voice as we await the reply from the Government Front Bench. Have we not united in saying what we want the Government to do? It will be very interesting to hear the response. I hope they will use every moment between now and Report to be more specific about how they wish to respond to the issues that have been thrown up in this debate.

Like the noble Lord, Lord Palmer, I acknowledge the importance of kinship carers—the grandparents, aunts, uncles, siblings and other close family members who step forward when children need a stable and loving environment. These individuals often take on significant responsibilities with little preparation or support, and they always do so with compassion and commitment. The contribution of kinship carers cannot be overstated. As the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate the Bishop of Newcastle reminded us, they help prevent children entering the care system. They keep families together, and often do so at great personal and financial cost.

I have to acknowledge the contribution of my noble friend Lord Young of Cookham, who had some wonderful specific quotes to share with the Committee. There is an important strategic alliance here, particularly with the noble Baronesses, Lady Pitkeathley and Lady Lister of Burtersett, and it will be important to respond positively to the points that they have made.

I believe there is a genuine case for us to explore how we might better support those who take on these caring responsibilities in such difficult circumstances. While I appreciate that statutory leave may not be straightforward to implement, especially in the current economic climate, there is room, as the noble Lord, Lord Fox, suggested, for a wider conversation about what more might be done. There should therefore be further consultation on this matter—with kinship carers themselves, with businesses and with the wider public—to understand the practicalities and to gather the necessary evidence. If we can find a solution that is proportionate, workable and rooted in the realities faced by both carers and employers then that will deserve our serious consideration. As the noble Baroness, Lady Smith of Llanfaes, has said, there is room here for a modest move forward that would make a significant contribution.

We have to acknowledge the moving speech of the noble Lord, Lord Brennan of Canton, about bereavement leave. He spoke movingly of his Commons colleague Sarah Owen, MP for Luton North, who has blazed a trail of understanding in some areas that previously have not been properly understood, and we need to respond positively to that.

The noble Baroness, Lady Grey-Thompson, talked about serious childhood illness, pay and leave, supported by the noble Lord, Lord Hogan-Howe. That that is another area where we need to explore how we can better tackle these challenges. In all these areas, I am confident that, through continued dialogue, we can work towards a sustainable strategy.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, this has been another wide-ranging debate and I am grateful for the contributions of all noble Lords. As the noble Lord, Lord Hunt, my opposite number, just said, it has been a moving and profound debate that has demonstrated the complexities of the issues in front of us. There is unanimity across the Committee, I am sure, that we should do as much as we can to support carers. We have to ask ourselves how best we do that. We have picked up the baton from the last Government, who passed the Carer’s Leave Act, and we must move forward on that—but I am getting ahead of myself.

I join the noble Lord, Lord Hunt, in paying tribute to the noble Lord, Lord Palmer of Childs Hill, and the noble Baroness, Lady Grey-Thompson, for putting the issue of kinship care in front of us, tabling Amendments 77, 78, 79, 134, 135 and 144. I also thank my noble friend Lord Brennan of Canton for tabling Amendment 81. I will do my best to get through these amendments at a decent pace.

I will begin with kinship care, speaking to Amendments 78 and 79, tabled by the noble Lord, Lord Palmer. I join others in emphasising how greatly I and the Government appreciate kinship carers, who generously step into the breach and offer loving homes for children who cannot live with their parents. I am sure that the whole House shares these sentiments.

I reassure noble Lords that the Government are committed to ensuring that all employed parents and carers receive the support they need to manage both their work and their family lives. As we have heard, Amendment 78 aims to establish a new “kinship care leave” entitlement for employed kinship carers. Amendment 79 then seeks to creates a legal definition of “kinship care” to be used to establish eligibility for kinship care leave.

The right reverend Prelate the Bishop of Newcastle, my noble friend Lord Watson of Invergowrie and, indeed, the noble Lord, Lord Palmer, himself, rightly talked about the amazing work done by kinship carers across the country, supporting children in times of greatest stress and need, in their own households, and in so doing relieving local authorities and the wider care system.

The Government recognise that the current support for working families needs improvement. We have already begun work to improve the system for kinship carers. We are defining kinship care through other legislation that is currently before this House, and later this year we will begin trialling a kinship allowance in several local authorities.

We are pleased to say that, for the first time, through the Government’s Children’s Wellbeing and Schools Bill, we will create a legal definition of kinship care for the purposes of specific duties within that Bill: the requirement to provide information about services to kinship families, and the duty to promote the educational achievement of children in kinship care. This will help to ensure that all local authorities interpret and apply the definition uniformly in relation to the new duty to publish information required, reducing ambiguity and potential disparities in information provided about support by different local authorities. This will, we hope, make life much easier at the sharp end of providing kinship care. It is a vital part of our commitment to keeping families together and supporting children to achieve and thrive.

I am also very pleased to say that the Government have recently announced a £40 million package to trial a new kinship allowance. This is the single biggest investment made by any Government in kinship care to date; indeed, it is the first of its kind. This financial commitment could transform the lives of vulnerable children who can no longer live at home. It would enable children to be raised within their extended families and communities. As we heard from the noble Lord, Lord Palmer, and others, it would minimise disruption to their formative years, allowing them to focus on schooling and building friendships—in short, having a normal life, as we want for all our children.

In addition, qualifying employed kinship carers may already benefit from various workplace rights aimed at supporting employees in managing work alongside caring responsibilities. These include a day one right to time off for dependants, which grants a reasonable amount of unpaid leave to deal with unexpected emergencies involving a child or dependant; the right to request flexible working; and unpaid parental leave, which, through this Bill, we are making a day one right.

Employees may not automatically have parental responsibility as a result of being a kinship carer, but they can acquire parental responsibility through different legal methods such as a special guardianship order. The Government have also committed to a review of the parental leave system to ensure that it best supports all working families. This review will be conducted separately from the Employment Rights Bill, and work is already under way on planning for its delivery.

Amendment 77 would provide foster carers with one week of leave every 12 months. As we have heard, foster carers play a life-changing role in the lives of children who need a safe and supportive environment. At times when young people are facing significant challenges, foster parents offer not only care and security but emotional support and consistency. I pay tribute to all those who step forward to provide the essential service of foster-caring—not least, as we have heard, the noble Lord, Lord Young of Cookham, who has now changed his place but is very much with us in the Chair.

It is important to highlight that a range of workplace rights already exists to help employees who take on the responsibilities of fostering. From their first day on the job, employees have the legal right to take unpaid time off in emergency situations involving their dependents. This enables them to respond swiftly to sudden issues, such as arranging care for a foster child. If a foster carer is looking after a child with a long-term illness or disability, they are entitled to carer’s leave. This provides them with up to a week of unpaid leave in a 12-month period, to manage healthcare needs or attend appointments. Those fostering with the intention of adopting may be eligible for paid adoption leave, provided they meet the necessary criteria. In addition, all employees are entitled to submit a request for flexible working arrangements from day one of their employment. Given that these existing provisions go a long way to help foster carers to balance work and their foster care responsibilities, it does not seem right to add a new entitlement without a proper assessment of the need for it and the impact it might have.