Employment Rights Bill

Baroness Coffey Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

I rise to move Amendment 141 in the name of my noble friend Lady Bennett of Manor Castle. She is, about now, talking about net zero to students at Oxford University. It was an engagement that was made some time ago, but she wishes to express her thanks to the Minister for arranging a meeting to discuss this and later amendments, and for the constructive dialogue that followed.

This amendment speaks for itself, but I would like to describe a case where it would have been applicable. It is that of 19 year-old Ellen Reynolds, from Glasgow, who worked a five-hour shift in a restaurant. She told the BBC:

“I ran food and drinks to customers … I cleaned the tables, set up the tables, swept the floor, took people to their seats … took a few payments on the card machine”.


Before that shift, she had to buy a shirt and trousers as a uniform, costing £20. Then, she got paid nothing, and she did not get a job out of it.

The Department for Business and Trade’s guidance on national minimum wage eligibility includes a section on unpaid work trial periods, which discusses to what extent the national minimum wage applies to work trials undertaken as part of a recruitment process. It says that work trials can help employers to

“decide whether the individual has the skills and qualities … for the job”,

and that unpaid work trials can be a

“legitimate practice”,

so long as they are not used

“to obtain work or services for which at least the minimum wage should be paid”.

That, I believe, is an invitation to abuse: the kind of abuse that Ellen suffered, being expected to work for nothing—not getting less than the minimum wage, but getting nothing at all. We hear reports of employers who do this to a succession of workers.

For those who would like to explore this issue in more depth than I have time for today, I point them to a debate in Westminster Hall on 29 March 2023, secured by Stewart Malcolm McDonald MP. That followed the introduction by the same MP of a Private Member’s Bill in 2017 seeking to achieve the same outcome as this amendment. That Bill that won the backing of the Scottish Trades Union Congress and the National Union of Students, among others. The commendably persistent MP reintroduced it last year. So, it has been an issue that has been around a long time but still has no solution.

If the Minister feels that the amendment is not properly drafted, I have been assured by my noble friend that she is in no way attached to the detail of how it is written, although she thanks the Bill Office for its assistance so far. The point is to act and to actually create a solution for an abuse that is enacted on people who can least afford it.

I have heard some very familiar phrases in the past few groups: we need more information, this is not the right time, there is legislation elsewhere that deals with this and this is not the Bill. But if not now, in the Employment Rights Bill, then when and how? We have to protect workers such as Ellen. They are often young and vulnerable, and sometimes English is not their first language. Surely the point of an Employment Rights Bill is to protect people from exploitation such as unpaid work.

[Baroness Coffey (Con)]

My Lords, I am sympathetic to the intentions behind this amendment. There are risks of exploitation, which the noble Baroness has just set out. Where I am somewhat more concerned and have more sympathy with the amendment debated earlier today is about how people continue to do these sorts of jobs and still do not get paid.

To give a real example, the Department for Work and Pensions runs a programme called SWAP. It is quite a short-term programme and it is not quite the same as a boot camp, principally run by the DfE. It is often for people perhaps wanting to go into a new sector or who are open to new experiences, so there is an element of training. However, a key part of the SWAP is that you work and try out. There is no guarantee that, at the end of that, you will get a job with that specific employer, but what really matters is that it will give you a sense of aptitude and of getting back into the workplace, while you continue to receive benefits.

Let us not pretend that receiving universal credit for a week is necessarily the same as being paid the equivalent of a national minimum wage. But my principal concern with this amendment is that, while wanting to avoid exploitation, it would unwittingly or unknowingly shut down these broader opportunities and programmes which the Government run to help get people back into the world of work. That is why it needs to be considered carefully by the Minister, but ultimately rejected.

[Lord Goddard of Stockport (LD)]

I will speak briefly to this amendment, which proposes to prohibit unpaid trial shifts by ensuring that those who undertake such shifts are paid at least the national minimum wage. This issue echoes concerns raised in earlier debates on unpaid work experience.

The amendment seeks to clarify that shift trials, defined as work undertaken in the hope of securing a temporary or permanent position, should be fairly compensated. This would address that potential gap in existing legislation and offer clearer protection for workers, ensuring that their time and labour are respect and valued. Such clarity is important for both workers seeking fair treatment and employers, and in maintaining transparent and ethical recruitment practices.

At the same time, it is important to consider the practical implications for employers who may rely on trial shifts as part of their recruitment process. I therefore invite the Minister to consider carefully whether this amendment strikes the right balance between protecting workers’ rights from exploitation and allowing employers reasonable flexibility in assessing candidates.

I look forward to the Government’s view on the best way to achieve a proportionate and effective approach that serves the interests of all parties involved.

--- Later in debate ---

[Baroness Coffey (Con)]

My Lords, this is an interesting debate. As the noble Baroness, Lady Jones, has pointed out, this idea was in both the 2022 Green Paper and in the paper that the Labour Party published during last year’s election. Clearly, there is an expectation that this needs to be addressed in this huge Bill, the main purpose of which, as I have said to this Committee before, could have been achieved through a statutory instrument.

However, one of the important things in the amendment, which has been carefully written by the noble Baroness, Lady Bennett, sets in place the idea that:

“The right to disconnect does not apply where … a worker is on call or standby duty and receiving appropriate compensation for such duty”.


In trying to get into this debate, which is a fair debate to have, we find that the legislation already addresses the majority of situations where this would already happen, and so all that would happen if this were to become law is that contracts would be written in such a way that, in effect, if necessary, everybody would be on call—which would not be a desirable outcome.

I want to build on that. The noble Lord, Lord Goddard, referred to a variety of anecdotes and his personal experience. Personal experience matters in considering how a good employer can act. For what it is worth, in my private office, which was very busy, and in my parliamentary office when I used to employ people, I required everybody to have their “do not disturb” setting on. The setting works such that if somebody really needs to get hold of you—if you are a Minister, say—switch will get through to you eventually. I have to say to the people on the Front Bench that that is the case even if you do not have your phone on. Those situations are already addressed.

One of the things the Bill is trying to do overall is to get that balance. However, it is fair to say that not everything needs to be put into legislation. It is about having a positive relationship, and some of that can be done through ACAS and in other different ways, such as guidance. Trying to micromanage every single relationship that the millions of workers have directly with their employer risks overcomplicating things. The fear that I have, given that this is in the Government’s manifesto, which they seek to put in place—it will be interesting to see how they want to make this happen—is that this will make for very tricky legislation. Although there may be instances where this would work, ultimately, it comes down to employment tribunals and somebody else’s judgment.

For what it is worth, we have an evolving variety of workplaces. A lot of people who used to work at home have now come back to the office so that they can leave their job behind, as opposed to feeling that they will open something up after dinner or whatever.

I look forward to hearing the Minister set out how the Government are planning to fulfil their manifesto commitment while trying to make sure that they do not micromanage every single element of how a job can be done in the workplace.

[Lord Ashcombe (Con)]

My Lords, I appreciate what the noble Baroness said, because this is about fairness and making sure life works. There are a lot of companies, big and small, where, to a great extent, what has been proposed is already working. However, there are a number of instances—including somewhere like where I work—where I do not think this would work.

I will just give your Lordships one quick example. I work in insurance for a huge insurance broker. We had a client in the United States who by 5 pm had not decided whether to renew his insurance contract in London. If he had not renewed it by 1 June—which I guess was a Sunday—he would have had no insurance on that specific part of his business. A member of my team kindly stayed online, for want of a better word—he was probably out and about with the phone in his pocket—and the call came through at some time after 9 pm. Looking at the way the clause is drafted, I am not sure whether that would be considered enough of an emergency to get a member of staff out of bed, so to speak. Equally, that company might have had to stop working, doing whatever it was doing in the oil and gas industry—I know that will not endear me to the noble Baroness, but that is a fact. But we had to bind that insurance contract once we got the order. It was all ready to go; it was just a question of sending a number of emails to say that it was done. So there are huge swathes of the country where it is in fact in place already, as the noble Baroness, Lady Coffey, has said, but in some of the big City environments where you are working across time zones particularly, it is extremely difficult to enact.

On working from home, we all worked at home for some time; personally I loathed it—I am back in the office almost as much as I can be. However, I have members of staff who like working at home, and, let me tell your Lordships, they know how to turn themselves off when they do not want to talk to us anymore, and they are good at it. So they should be, and I respect them for it. But if you really need them, you can always find them.

Finally, you can turn the damn machines off. Be it a telephone, a computer, an iPad or whatever it is, there is an off button out there. Certainly when I was a child, we were told never to call anybody after 9 pm, and that was friends and family. So there are some unwritten rules out there that are already very effective.

--- Later in debate ---

[Baroness Lawlor (Con)]

I support my noble friend Lord Hunt of Wirral’s amendment and have little to add to what he and my noble friend Lord Moynihan have said. I emphasise that we ought to support such amendments for reducing the levels of collective consultation for companies involved in insolvency proceedings. We should do so in the interest of reducing the escalating costs to a company as a result of compliance and protracted timing. I support these amendments for that reason.

As we have heard, the Insolvency Act 1986 obliges the administrator to act in the best interests of the creditors. The more time and compliance are demanded of a company, the more it will cost and the less there will be for creditors. These costs will escalate under Clause 27 as drafted. As a result, the creditors will have less available to pay their bills and their employees. We will see a domino effect on companies left short of cash flow and on their ability to pay their bills and their employees. These amendments are very important, because we cannot afford a domino effect, with businesses left short of cash because of the compliance costs and protracted timings posed on companies facing insolvency proceedings. They are suffering anyway; their bills have not been paid. In the end, the less that is available to pay them, the worse the outcome will be for the whole economy, for employment levels as a whole and for the cost of living.

[Baroness Coffey (Con)]

My Lords, I rise to speak on this really quite interesting clause. I have carefully read Hansard from the other place in trying to understand what it is really putting in place. I am concerned by aspects of the comments made by the Minister at the other end, Justin Madders. He said that it really means only that businesses have to consult on their location and only with trade union representatives, and that, “By the way, these things get sorted in legal debate in the courts, and we hope the courts will understand”. That is not good enough when we are writing primary legislation.

In thinking this through, it is important for the Committee to consider what is happening here. Why is this needed? It has apparently been done to reduce the pressure on people with a vulnerability. Let us take the example of a pub chain, which has quite a big estate and has decided that it is going to reduce its number of hours. That could be a consequence of some of the other measures being brought in by the Government or just a trend that is happening. So it starts to think about what it is prepared to do in terms of how many people it employs in its pubs. It may not want to do that straight away; it may want to think about it in different sections and to leave that discretion to local managers. The man or woman in the street would think that that is perfectly sensible.

However, the businesses that gave oral and written evidence to the Bill Committee are worried—which the Minister recognised in saying that they should not worry—because that is exactly what the legislation is saying they will have to do. They could be undertaking consultation at huge expense, right across the country, while recognising that some of those situations could be very localised.

We already have sensible measures in place. When there are going to be significant redundancies across the country, it is already a legal requirement for them to go before Ministers, whether from the Department for Business and Trade or the Department for Work and Pensions, who can then mobilise local jobcentres and the like to prepare for those redundancies. Imagine going back to the business considering the impact of that on what can be quite localised operations. The Explanatory Notes are silent, frankly, which is why I took to reading Hansard from the Commons.

I am concerned and would be grateful to hear from the Minister why this is the right approach and how, despite the uncertainty still left in this legislation, the Government want this to be in place. Instead, they should accept the amendments tabled by my noble friend Lord Hunt to make sure that these situations are well considered and that we do not end up in a situation where, despite the primary legislation, we have to go to an employment tribunal again and again. For that reason, I hope the Minister accepts my noble friend’s amendments.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, for tabling these amendments. We have been listening to feedback from businesses on the clause as introduced. It requires collective consultation whenever 20 or more redundancies are proposed to be made across an employer’s organisation. Businesses told us that this would put them in a constant state of consultation. That is why we have made amendments in Clause 27 to the Trade Union and Labour Relations (Consolidation) Act 1992; they aim to limit the burdens on employers while still expanding protections for employees, by ensuring that collective consultation is triggered when a threshold number of employees are proposed to be made redundant across an entire organisation.

The purpose of Clause 27 is to strengthen collective redundancy rights. The Government worked with stakeholders, including businesses, to address their concerns, which include not counting employees who are already being consulted on redundancy. We will set an appropriate threshold number in due course, via secondary legislation, following further engagement with stakeholders and a public consultation. We will look to balance the interests of both employers and employees when setting this threshold. Business stake- holders have welcomed the Government’s engagement on this clause and the opportunity to input to the threshold number via a public consultation.

Amendment 141BA seeks to exclude employers going through insolvency proceedings from the scope of a new trigger for collective consultation. I refer to the point made by the noble Lord, Lord Moynihan of Chelsea, about how one expects an employer which is going insolvent to consult employees across the entire organisation. The Government believe that collective consultations are an important part of ensuring fairness and transparency between employers and employees. The benefits of consultations are felt by both. I heard what the noble Lord said, and I must say that employees are an important part of the organisation, as are the suppliers and the whole supply chain. Whatever is due to them should be paid, as is the same for other creditors.

The law already recognises that consultation may not always be fully practical in insolvency situations. That is why Section 188(7) of the Trade Union and Labour Relations (Consolidation) Act 1992 includes a special circumstances defence for employers to depart from the collective redundancy obligations where it is genuinely justified and they have shown that they have taken all practical steps to comply. That flexibility should be applied on a case-by-case basis, not by removing that duty altogether.

Amendment 141C seeks to ensure that obligations are triggered only where redundancies are linked to a connected reason. We recognise that collective consultation will be most productive when workers and employers are focused on a common issue. However, employers and unions have told us that they believe it is not possible to define what is connected or “common reasons” in a suitable, clear way and that this could lead to more litigation. They tell us that attempting to restrict these new rights to connected redundancies in this way would create further burdens, rather than relieving them.

Amendment 141D seeks to exclude seasonal workers or those on fixed-term contracts from the scope of collective redundancy measures in the Bill. First, it may reassure the noble Lord to know that the expiry of a fixed-term contract at the end of its term does not trigger collective consultation obligations. Therefore, any fixed-term contract expiring at the end of its term will not add to the running total for the new threshold introduced for collective redundancies. We will consider further how employees on fixed-term contracts should be counted for the purposes of calculating an employer’s overall workforce that might be needed for the purposes of a national trigger for collective redundancies.

Amendment 141E aims to avoid an obligation to combine consultation by inserting two new subsections into Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, but new subsection (2A) already strikes the right balance here. Employers will be well placed to determine how to divide consultations appropriately where the national threshold has been met. We agree that each group should receive meaningful collective consultation and intend to set up guidance on this point in a new code of practice.

On Amendment 141F, it is already the case that where collective consultation on redundancies has already begun those redundancies will not be counted when determining whether subsequent new redundancies reach the threshold for collective consultation. We do not believe that this should be extended to exclude employees who have been individually consulted, as individual redundancy consultations have a different character and purpose from collective consultations.

On Amendment 142, we agree with the noble Lord that the threshold number that will trigger collective consultation should be proportionate and not overly and unnecessarily burdensome on employers. However, this amendment is unnecessary and disproportionate to address this issue.

On Amendment 142A, the term “establishment” has already been settled and is well understood in employment law. It works well in practice, so we consider that attempts to change the definition here would create confusion and lead to more litigation with very few clear benefits in return.

Finally, Amendment 142B would undo the Government’s extension of the protective award period to 180 days. This change was made following a full public consultation in October 2024 and has been carefully considered. It makes it harder for unscrupulous employers to price in non-compliance with their collective consultation obligations, as we saw in the case of P&O Ferries. The Government are committed to strengthening employment rights in this landmark legislation. I therefore ask the noble Lord to withdraw Amendment 141BA.