Employment Rights Bill

Debate between Lord Londesborough and Lord Hendy

Report stage
Wednesday 23rd July 2025 Lords Chamber

[Lord Londesborough (CB)]

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

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

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

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

[Lord Hendy (Lab)]

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

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

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

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

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

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