Employment Rights Bill

Debate between Lord Katz and Lord Sharpe of Epsom

Committee stage
Thursday 8th May 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I join the general praise and congratulations for my noble friend Lady Penn for her Amendment 64. There is not much more for me to say, other than that I echo the comments of the noble Lord, Lord Fox. I hope the Government are listening and will address the issue raised by my noble friend as we get to the next stage. If they do not, I would be more than happy to support my noble friend in her future endeavours.

Amendment 66 in the name of the noble Lord, Lord Watson, was expertly spoken to by the noble Baroness, Lady O’Grady. I was going to echo very much the same points about the employment tribunals. An awful lot will be expected of them but, as we know, the simple fact is that the backlog is increasing, there is a shortage of funds and the waiting times are increasing—they are up to two years. It does not seem very plausible to expect that employment tribunals will be able to cope with the amount of work that is coming their way—I am afraid that will probably include work with regard to that amendment. I look forward to hearing the noble Baroness’s comments.

[Lord Katz (Lab)]

I am afraid the noble Lord will not; he will hear from me. I thank my noble friend Lord Watson of Invergowrie in absentia for tabling Amendment 66 and my noble friend Lady O’Grady of Upper Holloway for so ably speaking to it. I also thank the noble Baroness, Lady Penn, for tabling Amendment 64. This has been a broadly helpful debate, if somewhat spicier than expected, on flexible working.

This group and the next deal with flexible working. I agree with many of the comments that noble Lords across the Committee made in highlighting how important flexible working is in helping people to balance work with responsibilities in their personal lives, particularly caring responsibilities. As the noble Lord, Lord Ashcombe, pointed out, flexibility can lead to happier, healthier and more productive employees. He is absolutely right on this point. It is good for employees, good for businesses and, in turn, good for the economy.

As the noble Baroness, Lady Penn, outlined in some detail, along with the noble Baroness, Lady O’Grady, a primary benefit of flexible working for families is that being able to work part-time, or having flexible start and finish times, can make it easier for parents to balance work and childcare needs. Similarly, for those caring for a vulnerable adult or a child with a disability, flexible working can help people to manage their caring responsibilities while remaining in work.

I echo some of the comments of the noble Lord, Lord Fox, about how we regard flexible working. To be clear, flexible working is not solely about working from home—something on which, post pandemic, we have become somewhat focused. Indeed, the ACAS guidance sets out eight examples of flexible working, and working from home is only one of those eight. It talks about compressed hours, staggered hours, remote working, job sharing and part-time hours as well as working from home.

According to the 2023 flexible jobs index, although nine in 10 want to work flexibly, only six in 10 employees are currently working flexibly and only three in 10 jobs are advertised with flexible working. Equally, the Government recognise that business needs vary and that not all flexible working arrangements are possible in all circumstances. That is why the Government are increasing access to flexible working by making it the default, except where not reasonably feasible. I concur with the comments of the noble Lord, Lord Fox: this is not a soft policy but an important economic and human management tool, and we should regard it as such.

Amendment 66 in the name of my noble friend Lord Watson would require the Secretary of State to review and publish a statement on the adequacy of the maximum compensation that an employment tribunal may award to an employee with a successful claim related to flexible working. The maximum compensation award is currently set at eight weeks’ pay for an employee bringing a claim to a tribunal.

Section 80I of the Employment Rights Act 1996 already means that the Government may review the maximum number of weeks’ pay that can be awarded to an employee. If they consider it appropriate to do so, they can then use this power to change the specified number of weeks’ pay by which the maximum amount of an award of compensation is set. It is therefore not necessary to include anything further in the Bill. It is worth pointing out to noble Lords that the maximum has risen every year since its introduction, from £250 in 2002 to £719 now—so this is not something that is caught in aspic. Therefore, we would argue that a statutory review on the maximum compensation award within six months of Royal Assent could create uncertainty across the board and detract from some of the other important reforms that employees, employers, trade unions and the wider economic and business community will need to prepare for.

Before leaving this, it might be helpful to speak to the wider points from the noble Lord, Lord Fox, on tribunals. I cannot speak in any great detail on this issue, but I understand that the Ministry of Justice is undertaking a review of the employment tribunal system. I would hazard that it has not been sufficiently invested in in recent years, and the slowness of that system is certainly something that we should seek to address.

Before leaving Amendment 66, it is worth pointing out that there is a risk in creating uncertainty for both businesses and workers alike by creating the possibility of differing awards for different types of claims. As things stand, a number of types of claims—for example, relating to redundancy and unfair dismissal—face the same maximum award as those relating to flexible working. It might be undesirable to create confusion and undue complexity through in effect having a two-tier system.

I turn to the amendment proposed by the noble Baroness, Lady Penn, Amendment 64, which would extend the right to request flexible working to candidates with a job offer. In practice, the Government believe that this is already the case. The right to request flexible working, which is being strengthened in this Bill, is already a day one right. This means that employees can request flexible working from their first day in a role. We know that, in practice, many employers and employees will begin discussions about working arrangements before the candidate starts work.

As the noble Baroness said, before joining an organisation, informal and constructive discussions can offer a more effective way in which to identify working arrangements that work for employees and employers than a one-off formalised request and response might otherwise achieve. Mandating through legislation a right to request flexible working prior to appointment would not account for the fact that not all job offers come to fruition, for a number of reasons. However, candidates with a job offer have some limited rights. Discrimination and contractual rights are among those. The hypothetical example that the noble Baroness cited in her contribution would indeed be taken care of; discrimination based on protected characteristics is currently outlawed during the recruitment process. However, we would contend that it is not a status that we would want to overformalise at this point.

Additionally, under this proposal, employers would still have up to two months to consider and respond to a request. If the intention of this amendment is to significantly bring forward in time people’s ability to have a flexible working request accepted, it would not succeed in this respect. While the Government encourage employers to start conversations about flexible working with new starters at an early stage, it would not be appropriate to extend the legal framework for flexible working to all candidates under offer.

Lastly, to respond to the point made by the noble Lord, Lord Jackson, on sex discrimination, I contend that this form of discrimination would actually carry a higher risk of penalty and payout than unreasonable refusal of flexible working, so it is probably a little out of place in the debate on this amendment.

To close, I therefore seek that noble Lords do not press their amendments in this group.