Employment Rights Bill

Baroness Coffey Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Lord Frost (Con)]

My Lords, I support Amendment 1, although possibly not for quite the same reasons as those already expressed in this Chamber, and I regret I was not able to speak at Second Reading.

When dealing with a purpose clause, one cannot avoid spending a moment dwelling on the broader principles behind the Bill before coming to the amendment itself. It is worth noting that one of the reasons the British economy has surprised so many people over the last decade or so on the upside, despite all the gloomy predictions, is because it is an extremely flexible and responsive economy, particularly in the labour market. Most indices of these things put us in the global top 10 of labour market flexibility, which I regard as a good thing, although clearly many noble Lords who have spoken do not.

There is a paradox here, in that flexibility is the best way of delivering security—maybe not in any individual job, but security of employment and income over a period. The Government seem to think that the only way to ensure job security is to put in place more and more intrusive and detailed legislation to require it. That is why we are going to be discussing, no doubt at great length and with huge complexity, this massive Bill which tries to do just that. It is damaging that the Bill is being made up as it goes along to such a large extent; it just multiplies the complexity and difficulty.

I do not think that is the right way to look at job security. The best way to look at it is that flexibility produces security. If it is easier to change the terms and conditions of a job, or easier to dismiss people if they do not fit, then it is also easier to re-employ or shift resources from low-productivity to high-productivity sectors and to deliver growth in the economy. The approach in the Bill protects insiders at the expense of entrepreneurs and those who are outside the labour market, so it is not surprising that the representatives of trade unions are so supportive of it. The trade unions represent the insiders, but they are not the only people who have an interest in labour market flexibility.

I make these points because they go to the difficulty of drafting a satisfactory purpose clause for this Bill. It is desirable to have a purpose clause for something that is so complex and sprawling in the way it tries to legislate. The noble Lord, Lord Fox, has written it as cleverly and clearly as he possibly could in the circumstances. It is cleverly written, but the difficulty is not so much that it is not sufficiently exhaustive but that it contradicts the contents of the Bill. It sets out a number of things which the Bill simply does not do. For example, in paragraph (a) of the proposed new clause, it talks about “fairness”. Well, that may be fairness for employees on one definition but not for employers or those who are outside the formal labour market. Whose fairness are we talking about?

Paragraphs (b) and (d) in the proposed new clause do not “facilitate”—to use the word in the amendment—good labour relations; they actually make them more bureaucratic, complicated, difficult and hard to implement. Paragraph (c) makes provision for pay and conditions but, arguably, it should not be doing that at all—that is not the business of the Government but the business of employers and employees. The only one that is an accurate description of what is in the Bill is paragraph (e), the simple statement that it is to

“make provisions about the enforcement of labour market legislation”,

which it certainly does.

I am not sure that there is a satisfactory way of dealing with this. Nevertheless, I support this purpose clause amendment, because it seems to me that if it were to pass, the logical consequence, to be consistent, would be that large parts of the rest of the Bill would have to fall away to be consistent with the expressed purpose in this purpose clause. If the Bill were to be internally consistent with the things that we say are desirable, then much of this Bill is simply not consistent with that. Now, what goes first—the purpose clause or the rest of the Bill? I think we know how that is going to play out. Nevertheless, that is why it is difficult to get to a satisfactory purpose clause for this Bill. It would be good if much of the Bill fell away—no doubt we will come on to that in the next seven days—as it is going to cause a lot of damage to the economy and to growth.

To conclude, I support the amendment, if not perhaps for exactly the same reasons that others have supported it. It will enhance and make clearer, to some extent, what is a very sprawling, complex and unsatisfactory Bill.

[Baroness Coffey (Con)]

My Lords, I will speak to all of the amendments in the group. I spoke at Second Reading. As my noble friend Lady Noakes pointed out, we only had four to five minutes then, so this gives us an opportunity to consider further what the purposes should be. In the document published by the Labour Government, the Deputy Prime Minister and the Secretary of State for Business and Trade referred to the fact that this would be about getting more people into work. So far under this Administration, we have, unfortunately and regrettably, seen unemployment rise.

At the same time, comments have been made by noble Lords on the other side, such as by the noble Lord, Lord Monks, who referred to income inequality. What he may have forgotten is that, under the previous Labour Administration, income inequality rose. Meanwhile, under the recent Conservative Administration, income inequality fell. So, this is a case of trying to make sure that, as we take the legislation through, we focus on the outcomes it will have for people right across this country, rather than dogma. There is a combination of factors where, frankly, flexible labour has generally improved the prosperity of people in this country.

The noble Lord, Lord Hendy, complained that people in work were on universal credit. That is a large point of it. We have finally got rid of tax credits, which went earlier this month. Those had been introduced by previous Labour Governments in order to increase people’s pay—which employers were not doing. It was done in a rather crude way, such that capital was not taken into account. When we were moving people from tax credits to universal credit, we discovered—particularly early on, when we were doing some of our test and learn approach—that there were people with capital of over £100,000 who were still receiving tax credits and who decided that, although they would be entitled to one more year of such a transition payment, they did not think it was right to do so.

It is about that sort of element, of trying to consider what we want to see as an increase in prosperity and productivity. However, I am concerned, given the recent increase in unemployment and all the messages that we are receiving from businesses, small and large, that we will instead start to see a significant increase in unemployment and indeed more people going on to benefits. As I say, the whole point of universal credit is that you will be better off working than not working. The approach is to try and support people as they reach higher salaries.

My noble friend Lady Neville-Rolfe is right to say that, if we were considering further things to add to the proposed new clause set out in Amendment 1, competitiveness and growth should be there. I would add that the outcome should also be about increasing the number of people in employment. I know that the Secretary of State for Work and Pensions has set an exceptionally ambitious target of 80% of people being in work—which would be the highest in an exceptionally long time—but, to do that, she needs to work with other parts of her Government to make sure that more jobs will be created, so that people can go into those jobs at the rate that is set.

After thinking through what will happen with this legislation, I made the point at Second Reading that the Bill started off at 149 pages—and I am conscious of the 100-day deadline set by the Deputy Prime Minister to present it—and that it had basically doubled by the time it left the Commons. Not a huge amount of time was set aside for consideration of the additional 103 pages that were considered on Report there. As we have already heard, we are starting to see more amendments come in from the Government that this House needs to consider.

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[Lord Fox (LD)]

My Lords, I think I am allowed to come back in Committee. I want to respond to the noble Baroness, Lady Carberry, because I probably did not articulate terribly well what I was proposing. I certainly was articulating a right to request, but I was also assuming there would be an obligation to meet that request, given certain thresholds that the noble Lord, Lord Wolfson, was talking about. It would not be an option for the employer as long as the request was within those thresholds. I suspect that is not what the noble Baroness thought I was proposing, and I just wanted to set the record straight.

[Baroness Coffey (Con)]

My Lords, I support Amendment 8. I commend my noble friend Lord Wolfson on his excellent speech, bringing the reality of employing so many people into the heart of this debate, along with the constraints and the concerns being raised, while still recognising that I understand why so many people consider casual work and zero-hour contracts to be particularly poor when people are trying to have certainty of employment over some time. I also support Amendments 7, 12 and 13—in essence, any amendment that refers to specifying the reference period in the Bill.

I say that because, when thinking of 26 weeks, I think in particular of the hospitality industry in coastal areas. There are a number of employers around the country who literally shut down their businesses, or move to a much lower level of needing people, at certain times of the year, and then, in the summer, are desperately trying to find people. We need to give flexibility. The 12 weeks simply does not recognise that, as has been referred to. It is perfectly usual for people to work at different points throughout the year, potentially in on annualised-hours contract, but varying the number of hours expected to match the demand of customers requiring a particular service. I fear that the 12 weeks does not address that sort of business.

Across the country, 2 million people work in the hospitality industry. It is one of our biggest industries, and for many families it is key to how they support their household income. For the flexibility that employers want, and—thinking of how many people lose their childcare at certain times of the year—for employees to have flexibility around their hours worked, bringing in casual staff is a key element in how employers keep those businesses going.

There is another element that needs thinking through. While I appreciate that the Government seek to reduce the number of agency and bank workers in the NHS, let us not get away from the fact that, unfortunately, many NHS trusts are actually terrible employers. A lot of people leave or reduce their permanent contracts because they simply cannot get the flexibility that they need working in the NHS. That could be for caring reasons, for all sorts of people—it does not matter whether it is men or women; people provide care to their families and to their friends. I am concerned, and I intend to discuss further with NHS Professionals how this will impact on the NHS fulfilling its expectations for people right across the country. I appreciate that it is not simply NHS Professionals; many individual trusts have their own bank. That is intended to provide flexibility based on need, and recognises that simply not everybody can work the NHS shifts expected.

Thinking of the 26 weeks or the 12 weeks, I am also concerned that, at the other end of the Corridor, 650 Members of Parliament are all individual employers. They have to sign contracts, which are provided, but when people are ill or go on maternity leave, MPs can and do take people on through certain term contracts. I am concerned that there will be unintended consequences for the provision of services. As a real example, if you had to guarantee hours beyond when the employee came back, you could end up in a situation that you simply could not manage.

It is for those reasons that we need to think very carefully about the reference period when we are considering the different employment situations that small employers find themselves in, as well as the large sectors, such as hospitality and retail, which have already been discussed.

[Lord Sharpe of Epsom (Con)]

My Lords, Amendments 3, 6 and 17 stand in my name and that of my noble friend Lord Hunt. Before turning to the detail, I would like to frame the debate in its proper context.

At the heart of this issue lies the question of incentives. Much of the discussion around zero-hours contracts rightly concerns the security and well-being of workers. We must not lose sight of the fact that only a relatively small proportion of the workforce is employed on such contracts, or in other forms of temporary work. Many of these individuals are young people—as my noble friend Lady Lawlor illustrated in her very detailed speech—who are starting out in their careers. Others are disabled people, who may be able to work only a limited number of hours due to their personal circumstances. If we make the regulatory environment too rigid, we inadvertently create a disincentive to hire precisely these groups. We reduce the number of vacancies, reduce opportunities and end up harming those we most wish to support. Good intentions do not alone lead to good results. It is the incentives that lead to results.

I thank my noble friend Lord Moynihan and the noble Lords, Lord Fox and Lord Goddard, for their contributions in this group, and I will come on to others. My noble friend Lord Moynihan made a compelling argument to leave out this part of the clause altogether, because it is simply unworkable in its current form. I look forward to hearing what the Minister has to say in response.

I turn to the specifics of my amendments. Job security is vital, and there can be no disagreement on that point, but we have to recognise that guaranteed-hours contracts are not always practical or appropriate across all sectors of the economy. The principle that we wish to uphold is simple: autonomy. Workers themselves are best placed to judge their own circumstances and to decide whether a guaranteed-hours contract would suit their needs.

Research from the Chartered Institute of Personnel and Development, published in its report on zero-hours contracts, found that workers on such contracts often report a better work-life balance and higher well-being compared with other workers. This is an important reminder that flexibility, when genuinely chosen, can be empowering rather than exploitative.

Not every worker wants a rigid schedule. Young people, parents with caring responsibilities and disabled people may actively prefer the flexibility that variable hours allow. A one-size-fits-all approach simply does not reflect the realities of the modern labour market. Sectors such as retail, hospitality and tourism, and other seasonal industries, are heavily dependent on flexible staffing to meet seasonal demand. It is these very sectors that offer the vital entry-level opportunities to workers who might otherwise struggle to find employment.

Despite the Government’s understandable ambition to improve labour market fairness, the Bill as currently drafted risks reducing that flexibility rather than enhancing it. The automatic obligation placed upon businesses to offer guaranteed-hours contracts once certain thresholds are met would impose significant and disproportionate administrative burdens, even when the worker involved may have no desire to change their current arrangements.

The problem is particularly acute for larger employers, such as national retailers, as we have heard from my noble friend Lord Wolfson, who delivered an expert speech. They would be forced into a continual cycle of recalculations and offers, simply because an employee’s working patterns have shifted slightly. As my noble friend Lady Verma explained, that affects small businesses as well. In practice, firms would face a daily or weekly obligation to offer a new contract based on changing patterns, resulting in huge and unnecessary administrative costs. This would not only create inefficiency but would discourage businesses offering overtime and additional work voluntarily, thereby reducing opportunities for those who value flexibility.

The amendments I propose take a different approach. Instead of an automatic right to be offered a guaranteed-hours contracts, we propose a right to request a guaranteed-hours contract. It entirely respects the spirit of the Government’s intentions. As the noble Lord, Lord Fox, has already explained, it would impose the same the obligations on employers as the Government’s Bill. This would preserve the choice for workers, empowering them to seek greater stability when they wish, but it would avoid imposing blanket obligations on employers that may lead to perverse outcomes. The Government’s current drafting, with an automatic right to guaranteed hours, risks creating a bureaucracy that neither workers nor businesses have asked for.

On the subject of businesses, it is worth referring to the letter received from five employers’ organisations. For reference, those are Make UK, the CBI, the IoD, the Federation of Small Business and the British Chambers of Commerce. They say in that letter:

“Not every job can be made compatible with every possible need. This reform means businesses incur admin costs whenever an employee works variable hours. The result is that firms are discouraged from offering variable hours even when the flexibility is requested by workers, including voluntary overtime. The cost associated with administering and calculating contract offers on a rolling basis whenever staff work additional hours is also disproportionate and provides no clear benefit to workers”.


I could not have put it better myself.

There has been some reference on the other side, by the noble Baroness, Lady Carberry, to the Low Pay Commission, which met seven years ago. That ignores the fact that, over the last seven years, working practices more generally through the economy—whether on flexible-hours contracts or not—have changed very dramatically, partly as a consequence of the pandemic. I note that the FSB has now signed the letter which includes the quote I have just delivered, so it has clearly changed its mind.

I recognise that there may be an even simpler and more effective alternative to the right to request, which would be an automatic offer of a guaranteed-hours contract combined with the right for the worker to opt out if they so wish, so Amendment 17 introduces a worker opt-out mechanism. A qualifying worker may opt out of receiving a guaranteed-hours contract provided that the employer has provided clear written information about the guaranteed-hours system, the worker has given written notice in a prescribed form, and the employer reminds the worker at regular intervals, at least every six months, that they can opt back in at any time. Under that model, every eligible worker would be enrolled on to a guaranteed-hours contract after the reference period by default.

However, those workers who genuinely value the flexibility of their zero-hours arrangement—and there are many, particularly, as we have already discussed, young people, carers and so on—would have the right to decline the offer by providing written notice. This approach would strike a better balance, because it would ensure that guaranteed hours are the norm unless the worker themselves chooses otherwise, thereby protecting workers who might otherwise feel pressured not to request more security. Equally, it would avoid the unnecessary administrative burden on employers of offering contracts that in many cases would be rejected. We would be sparing businesses the cost and disruption of a process that delivers little practical benefit where flexibility is mutually valued by both employer and employee. It would ensure that the choice remains a real and continuing one, recognising that workers’ needs and circumstances evolve.

--- Later in debate ---

If the measures in this Bill go through, many small businesses and microbusinesses will not be able to do what others have done—namely, grow rapidly and develop exponentially—as we have heard. There is a very strong case for exempting small businesses, particularly micro-businesses, as has been proposed. I hope that the Government will listen.

[Baroness Coffey (Con)]

My Lords, I too support Amendment 5. Without small businesses growing and taking on people, we will not achieve the outcomes that the Government have set for getting more people into work. I referred in a debate on an earlier group to the 80% target.

I am conscious of what happened with the Kickstart scheme. We particularly encouraged small businesses to participate in the scheme and to consider the opportunity of an extra pair of hands, giving them the confidence that they could grow their business and employ people, often for the first time. That was an important step in thinking about how to minimise risk in the first instance. A considerable proportion of people were offered permanent jobs as a consequence.

That first step of taking people on is often the hardest for many small businesses and microbusinesses. That is why I would be even happier if this amendment was altered on Report to make it solely for microbusinesses, not just small businesses, as that first step is one of the hardest.

We already have thresholds in many other employment practices. We already have thresholds about things that connect with pension contributions, and other financial thresholds have been referred to. But this is about having the courage to take on people. You may decide to expand your services, whether in the care sector or elsewhere, as you do not want to let clients down, but you need to make sure that you can guarantee quality support to your clients. That is one of those uncertain things when we discuss a wide range of the amendments to Part 1 of the Bill.

There are other opportunities where I will raise the issues impacting small businesses in the Bill, but overall we should take the successful approach of previous Governments, including Labour Governments, of keeping small businesses out of this area. The impact assessments talked about mitigations they plan, but there is no mention of what those mitigations may actually be, and that level of uncertainty is one of the things that will hold back growth, which we are led to believe is the number one mission of this Government. I fear that without some of the exemptions, we will not see that growth coming in our UK industry.

[Lord de Clifford (CB)]

I rise in support of the gist of these amendments with regard to small businesses. I declare my interest as the owner of a medium-sized business with 130 employees, so it would not apply to me. But the burden on small businesses, certainly of Part 1, will seriously restrict their ability to grow and have the courage to take that step of employing people. I certainly think that micro-businesses should be exempted from a lot of these burdens. As we go through Part 1, we need to keep those micro-businesses in our thoughts.

Employment Rights Bill

Baroness Coffey Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

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

My Lords, I beg to move government Amendment 14 and shall speak also to government Amendments 23, 25, 26, 30, 34, 35, 39, 40, 41 and 45 to 61. I reassure the Committee that these are technical amendments brought about as a result of very welcome scrutiny of the Bill.

The amendments incorporate technical and clarificatory adjustments, close loopholes to safeguard policy functionality, and resolve uncertainties to ensure the measures are comprehensive and will accurately deliver the policy intent set out in the plan to make work pay, delivery of which was a clear manifesto commitment of this Government. They do not introduce new policy; they simply ensure the Bill works to achieve its intended aims effectively. Making technical amendments to the Bill in this way is an entirely appropriate and ordinary part of making good legislation.

On Amendment 14, as the Bill is drafted, workers on annualised contracts—or other contracts where the hours are guaranteed over a period longer than the reference period—that have a total number of guaranteed hours of work but little detail as to their allocation may fall out of the scope of the right to guaranteed hours. This is because the worker would be on neither a zero-hours contract nor a contract guaranteeing a certain number of hours over the reference period. It is the case even if they would otherwise be eligible. Workers may therefore fall out of the scope even if they are guaranteed only a very small number of hours over a year.

On the other hand, workers on annualised hours contracts who have a sense of when their hours will be worked may fall into scope of the right to guaranteed hours if they have a certain number of hours guaranteed during the reference period. This is not our policy intention—workers on annualised contracts may experience one-sided flexibility in the same way as those on weekly or monthly contracts. As the Bill is drafted, there may also be a perverse incentive for employers to place workers on to annualised hours contracts guaranteeing a very small number of hours with no indication as to when they should be worked to avoid being in scope of the right to guaranteed hours.

Amendment 14 will ensure that the policy works as intended and expected and will act as an anti-avoidance measure. It makes provision to determine what the minimum guaranteed hours are in the relevant reference period by providing a calculation method to find the apportioned number of any unassigned hours under the contract for that reference period.

Amendments 49 to 57 add grounds on which a dismissal would be automatically unfair. A dismissal would be automatically unfair where an employee was dismissed for bringing a complaint to an employment tribunal that they were wrongly issued a notice by their employer stating that their guaranteed hours offer had been withdrawn or for alleging the existence of any circumstance which would constitute a ground for bringing such proceedings. Adding these grounds aligns with the approach taken where a worker is unfairly dismissed for taking a claim to an employment tribunal on other grounds relating to the right to guaranteed hours. All employees deserve protection from unfair dismissal. These amendments will ensure that employees who make a claim in an employment tribunal on any of the grounds related to the right to guaranteed hours will be protected from being dismissed as a result of making such a claim. Consequential amendments have been tabled to amend the right not to suffer a detriment for workers and agency workers to ensure consistency when referring to the proceedings that can be brought or referred to and that could lead to that detriment.

Amendments 25, 26, 34 and 35 relate to the movement of shifts for the purposes of payment for workers for shift movement at short notice. These amendments make technical changes to the definition of the “movement” of a shift. This is to provide for situations where a shift is split in two or more parts, or where a part of a shift is moved with the result that the shift ends later than it otherwise would have but the start time remains the same. For example, a worker could have a 9 am to 5 pm shift changed at short notice to 9 am to 12 pm and 4 pm to 9 pm. In this case, it is right that a payment for a short-notice change is granted given that the worker may have already incurred costs for plans associated with the shift, such as childcare or other care arrangements.

Amendments 30 and 40 make technical changes relating to payments for shifts that have been cancelled, moved or curtailed at short notice where an exception applies. Where an exception applies—meaning that the employer is not required to make a payment for that changed or cancelled shift—the employer must provide the worker with a notice so they are aware that they will not receive a short-notice payment and why. The notice must be given to the worker within a certain amount of time, which will be specified in regulations. This period may be shorter than the deadline for making payment, which will also be specified in regulations. Under the current drafting, even if they make the payment despite an exception applying, the employer still has to provide an exception notice if they make the payment after the deadline for giving a notice. The amendments change this so that employers do not need to provide a notice if they pay the worker within the deadline for making the payment. The same applies in respect of work-finding agencies and agency workers.

Amendment 23 aligns the wording used in Clauses 2 and 3. To be eligible for the right to short-notice payment, workers must be on a contract of a specified description, if they are not on a zero-hours contract or arrangement. This is referred to in Clause 2 as a contract

“that requires the employer to make some work available to the worker”.

We are adding the same description into Clause 3 to ensure that this is included in the provision.

Amendment 39 is a minor and technical amendment that corrects a cross-reference to align paragraph 23(5) of new Schedule A1 to the Employment Rights Act 1996 with new Section 27BR(3) of the same Act, both inserted by this Bill. This concerns the duty to give notice where an exception applies that means that no payment is due for a shift that has been moved, cancelled or curtailed at short notice. The amendment ensures that, for both directly engaged workers and agency workers, only the requirement to give an explanation in the notice of exception does not require the disclosure of information where that would contravene data protection legislation or breach a duty of confidentiality, or where the information is commercially sensitive.

Amendment 45 signposts at Clause 6 the definition of “work-finding agency” in Clause 4. This minor and technical amendment adds the definition of “work-finding agency” to the interpretation section in new Section 27BZ2, with other definitions used for that part. It does this by referring to its meaning in new Section 27BV of Part 2A of the Employment Rights Act 1996.

Amendments 46, 58 and 61 amend Schedule 6 to the Insolvency Act 1986, Schedule 3 to the Bankruptcy (Scotland) Act 2016 and Section 184 of the Employment Rights Act 1996 so that employees can receive short notice payments in the same circumstances as they receive other wages on the insolvency of their employer. When an employer goes insolvent, outstanding wages due to employees are treated as preferential debts—or preferred debts in Scotland. Amendments 58 and 61 ensure that outstanding short notice payments are also treated as preferential or preferred debts.

Amendment 46 enables employees to obtain payment of unpaid short notice payments from the Secretary of State in the same circumstances as they receive other wages under the scheme created by Part 12 of the Employment Rights Act 1996.

Amendment 59 amends Section 202 of the Employment Rights Act 1996 to ensure that information does not have to be provided and will not be disclosed to a tribunal or court under the zero-hours provisions where a Minister is of the opinion that such disclosure would be contrary to the interests of national security.

Amendment 60 amends Section 206 of the Employment Rights Act 1996 to ensure that, in the event of a worker’s death or the employer’s death—or the death of another respondent in the case of agency workers—tribunal proceedings under the zero-hours provisions can still be instituted, continued or defended as appropriate by a personal representative of the deceased.

Amendments 41 and 47 amend Section 12A of the Employment Tribunals Act 1996 and the provisions on short notice payments for agency workers in order to enable employment tribunals to impose financial penalties on all types of respondents in claims brought under the zero-hours provisions where there are aggravating circumstances.

Amendment 48 amends Section 16 of the Employment Tribunals Act 1996 to include payments for cancelled, moved or curtailed shifts in scope. This ensures that regulations can be made to enable benefits to be recouped where a worker has not received such a payment and so has had to claim benefits, and the tribunal has then ordered the employer or work-finding agency to make the payment. The amendment also ensures that regulations can be made so that benefits can be recovered from all types of respondents in claims brought under the zero-hours provisions—for example, in respect of the payments that are compensation for loss of wages.

These amendments seek to prevent workers receiving double award where their rights have been breached and ensure that employers and other respondents do not benefit from breaching these rights. I therefore beg to move these amendments.

[Baroness Coffey (Con)]

My Lords, I rise to speak to this group of government amendments. I am surprised that the Minister made the assertion that they are all technical. Amendment 53, for example, extends the types of dismissal that will be regarded as “automatically unfair”. That is not a technical amendment; it is an extension of what is already considered potentially controversial in being added to the Bill in this way.

There are other amendments in this group that really concern me in their drafting. Multiple amendments leave out several lines of the previous Bill presented to this House and the other House and then leave the employment tribunal and the employer to get into the detail. For example, Amendment 52 states:

“It is immaterial … whether or not the proceedings were, or would have been, well-founded provided that the agency worker acted in good faith in bringing the proceedings or alleging the existence of the circumstance”.


I ask the Minister, what has changed? Why do we now have an employment tribunal group which has to decide whether the actor worked in good faith? They will not necessarily need to know what the Government proposed before, but it would be very helpful to understand why significant parts of the Bill on the operation of the employment tribunal are being changed at this stage.

Steel Industry

Baroness Coffey Excerpts

2nd reading
Saturday 12th April 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, it is fair to say that the steel industry has been in special measures for some time. The noble Lord has just referred to the acquisition that was made in 2020. Indeed, the last Government made sure that Scunthorpe did not close, and there was only one private investor prepared to invest in British Steel. I am conscious that the last Government nationalised another steel producer, Sheffield Forgemasters, again recognising how important that was to the needs of national security.

The strategy put out for consultation less than two months ago recognises that primary steel is still important, but the end is nigh for this blast furnace way of producing it. I am concerned that, on the one hand, we now seem to be in a temporary situation: let us recognise that the technology is not around the corner; it will be a long time before we are able to produce primary steel in a more environmentally friendly way. At the same time, it is concerning that Scunthorpe is close to its life end. I want to understand from the Minister whether she has asked the HSE for its view on the lifetime of these assets and the cost of repair. I am not suggesting that the Government should shy away from seeking to extend its life, but it is important to understand the amount of money being invested.

The other issue is the supply of coke. As has just been explained, that is the only way that steel can be produced with a blast furnace today. Yet, within a week of taking office, the Government decided to pull out of the legal case concerning the coke mine in Cumbria. I would like to understand from the Government whether they will revisit this, recognising that, at the moment, they are trying to source coal from around the world.

Thinking further about the issues with the Bill, the sunset clause has already been mentioned. With candour to the House, I can see these powers probably being used for at least 10 years. In taking charge of effectively nationalising British Steel, the Government have made a commercial decision. On Clause 7, I therefore want to clarify the following: while the regulations will not be available and will be done by negative resolution, is it the Minister’s expectation that there will be a 100% reimbursement to the owners of British Steel?

On thinking ahead, the steel strategy very clearly talks about the electric arc furnace. I am conscious that the Government had the deal in Port Talbot to make that transition, and I expect that they will want to make that transition in Scunthorpe in due course. However, there seems to be one part of the country where there is a site ready, with planning permission already granted and connections already sorted with the national grid and where there is already the political will locally, but it seems there is very clearly not the political will nationally. I am sorry: it feels, just because the voters of Teesside decided to vote for my noble friend Lord Houchen of High Leven, that, where there is an open deal to be done—it is my understanding from speaking to my noble friend that the owners of British Steel are keen to invest in Teesside—the Government have indicated that there is no way that they will help British Steel to do that. Thinking just about political back and forth is not—dare I say it—a grown-up way. We should be looking to the future, to have a comprehensive steel strategy, and to make sure that the political colour of who represents people locally does not matter or determine whether there will be good green electric arc furnaces producing steel in the future, which are necessary for the expansion of many industries. Living in Suffolk, not far away from the nuclear power station but also very close to where a significant number of wind farms are being or will be constructed, I am conscious that we need to try to increase the amount of production of those turbines onshore with green energy.

I am conscious that this Bill will sail through today and that the Act will be in place for a long time, but we need to make sure that, while steel is produced domestically, it covers all the sectors heading forward, as well as those that we are trying to rescue today.

Steel Industry (Special Measures) Bill

Baroness Coffey Excerpts

Committee stage
Saturday 12th April 2025 Lords Chamber

[Lord Moylan (Con)]

My Lords, I rise on the back of that very interesting amendment to take the brief opportunity to ask again the question that I asked when we debated the Bill earlier today, which relates to the same clause of the Bill—namely, when the Bill says that the Secretary of State has the power to exercise force on entering premises, which force in practice would he intend to use? The Bill gives him no power to direct chief constables; it would be practically, and probably constitutionally, improper for him to send civil servants from his department to force entry into premises. There is also no provision in the Bill allowing him to seek a warrant that would result in bailiffs being able to enter the premises.

I genuinely want to know how, in practice, the Secretary of State would exercise force. When I asked that question in today’s earlier debate, I did not get a satisfactory answer—or, indeed, any real answer at all. I have no doubt that, now that the Minister has had the opportunity to discuss it with the Attorney-General, who is sitting next to her, it may be possible that she can answer me in her response to this debate.

[Baroness Coffey (Con)]

My Lords, I will speak to the amendment tabled in my name. I am conscious of the extraordinary powers that are being granted to the Secretary of State today.

I will briefly speak in response to the amendment tabled by the noble Baroness, Lady Freeman of Steventon. It is my understanding, having been in government, that anything in the name of the Secretary of State can be automatically delegated to a civil servant, but it cannot go beyond that. As we have seen in a number of cases, civil servants already have some powers to gain entry, but only in relation to specific Acts of Parliament—so perhaps this amendment would give a wide-ranging element.

This is clearly not an occasion to use the Civil Contingencies Act, but something that surprises me about this Bill is that the powers being given to the Government and the Secretary of State today are extraordinary and go way beyond what happened with the Coronavirus Act 2020. The inspiration for my amendment comes from the Bill that was presented to Parliament then. It set out that, to have scrutiny, a report would be put forward by the Secretary of State—over several periods, not just a year—and that there would be a debate on that report. Having a report matters because it would bring together how the powers have been used: have they been used in the way that both Houses anticipated? It may even extend to the provision of how the finances would be distributed for the regulations we have yet to see.

Overall, it is important that, when we give these powers for just one industry—I guess that if we were to name the company it would end up being a hybrid Bill, so that has been deliberately avoided to make sure that it covers the entire steel industry—we should be able to have regular discussions, not simply because this is the steel industry but due to the scale of the powers being granted. To that end, that is why I have literally lifted, with a bit of adjusting, what happened in the Coronavirus Act. Frankly, for something that took over our country in such an unprecedented way, I hope that the Government would concede to think carefully about how they will report back to this House and how this House can be involved.

[Lord Fox (LD)]

My Lords, I will speak to Amendment 5, which is in my name and that of my noble friend Lady Brinton.

The whole House heard my contribution during the take-note debate, and I am grateful for the subsequent supportive comments that noble Lords made to me afterwards. Amendment 5 reflects that contribution. As noble Lords can see, it calls for a debate in Parliament after six months. That would be a substantive debate on which the House could vote if it so decided.

The whole House also heard me pledge to work constructively with the Government to get a solution to the question of giving Parliament an opportunity to debate a possible continuation or cessation of these emergency powers. I hope that the constructive discussions we have had over the past hour or so will bear fruit and that the Minister will be able to accept the spirit, if not the letter, of Amendment 5 from her Dispatch Box. Like the noble Baroness, Lady Coffey, we too have, in a sense, lifted experience from Covid, but—with all due respect to her—we believe that Amendment 5 offers more flexibility to the Government while also giving the oversight that Parliament needs at a level that is not overbearing.

These are emergency powers and periodic debate is essential. Equally, the Minister called for sufficient flexibility for the power to be either kept or discarded. We should recognise that there will be times when this may need to be turned on and turned off, and the process I propose would allow that happen. Our amendment provides for that flexibility while also somewhat enhancing parliamentary scrutiny. I hope that the Minister can reassure your Lordships that she agrees with us.

Employment Rights Bill: Productivity

Baroness Coffey Excerpts

Monday 31st March 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

I am grateful to my noble friend for making these points. I should reiterate that Britain’s working people and businesses will be the driving force of the UK economy, but the current labour market is not delivering for either. The productivity gap with France, Germany and the US has doubled since 2008; average salaries have barely increased from where they were 15 years ago; and the average worker would be more than 40% better off if wages had continued to grow as they did leading into the 2008 financial crisis.

A final point: alongside its productivity performance, the UK lags the OECD average on most employment protections. We inherited an economy that was in decline, with poor productivity, and we intend to fix that.

[Baroness Coffey (Con)]

My Lords, Jonathan Reynolds rightly met Rupert Soames, the chairman of the CBI, to listen to its concerns about the reference period for seasonal-hour workers. Will the Minister undertake to meet the FSB, which is looking for a rebate of statutory sick pay? The Government should consider this, at least for days 1 to 3.

[Baroness Jones of Whitchurch (Lab)]

My Lords, of course I am happy to meet with all the stakeholders. No doubt a programme will be put together to do just that.

Employment Rights Bill

Baroness Coffey Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, I congratulate my noble friends. I will start with the noble Baroness, Lady Cash, who I have known for 35 years from when we were students together. She was elegant and eloquent then, and that will continue. I am also looking forward to my noble friend Lord Young of Acton, as I am sure he will spice things up if we are to judge by some of his past publications. I extend my congratulations to the noble Baronesses, Lady Berger and Lady Gray of Tottenham. Without destroying their reputations in this House, I consider them to be friends, having come into the House together with them and worked with the noble Baroness, Lady Gray, in government too. I am sure that they will continue to staunchly uphold their principles as well as contributing to national debate.

In terms of national debate, this Employment Rights Bill entered the other House 100 days into this Government with 149 pages. After Committee in the other place, there were 191 pages, and now there are 299 pages, which it will be generous to get through in seven days of Committee consideration. Today, I want to focus on just a handful.

On Clause 59 relating to union finances, I agree with the noble Lord, Lord Burns. I do not understand the trend, with all the consumer and legislation protection that we put in place, for encouraging people to have to opt in to contractual arrangements. The default now by and large is that you are automatically opted out. I believe that should be continued, especially when there is a section in the legislation which suggests that union members who have not opted out should be reminded only every 10 years that they have the opportunity to do so.

On small businesses, I know the FSB is particularly concerned about two matters: the day-one risk of taking people on with there being no statutory probation period yet in law, and statutory sick pay. It used to be the case that SSP was rebated to all employers. I know that because when I worked at Mars, I used to fill out the forms every year to get the refund. However, that got taken away, recognising some of the improvements to be made in occupational health. It is important that the Government reconsider that with this shift to day-one rights, or at least produce an impact assessment.

On getting automatic rights on day one of employment and unfair dismissal, this already applies through the Equality Act. There is consideration of people with disabilities and other protected characteristics. I support the Government’s measures for a right to try in getting people a job, but perhaps the same should apply to employers. They have a right to try out employees and the statutory notice period should be put in the Bill and not left to regulations.

It is important that we continue the work of the occupational health task force to make sure that we have positive arrangements in place so that people can start, stay and succeed in work, but we need to remove the uncertainty, because I fear that companies will simply choose not to grow. I know that from my experience in Suffolk and some of the flexible working practices there. I understand why the Labour Government have chosen to put even more controls on them, but without the support of small businesses we will not get growth in productivity and, indeed, economic growth more generally.

On the fair work agency, I welcome the construction of this combination of regulators—it is a sensible approach—but I consider Clause 113 to be novel. When I asked the Minister in the other House, Justin Madders, he seemed to suggest that the EHRC had similar powers. The Equality Act actually gives the same powers as Clause 114, under which legal assistance can be provided, including advice, representation and other forms of assistance, but not the situation where the fair work agency could take a case on behalf of a worker, or somebody who has applied for a job and is not even a worker. Subsection (6) removes any liability from the Secretary of State towards that same worker. Of course there will be a need to recover legal costs from the worker. I understand that, if there is a big payout, the Government may want to recover the funds that they have given out, but the regulations need to change to the affirmative rather than the negative procedure. In Clause 114, who will get the money to take people’s cases to court? Will it be the unions or a bunch of law firms? That does not feel like the approach we should be taking with taxpayers’ money, although it admittedly strengthens rights.

I should say to the Government that I have nothing against trade unions; I actively encourage people to join them. They can play a valuable role. I have never felt the need to join one myself, although it is in my blood: I looked at the 1921 census and my grandfather was an apprentice shipbuilder. It was also noted in the census that he was on strike, so it certainly runs through the Coffey veins. Indeed, other people were trade union organisers. But we need to be careful that we do not end up destroying growth rather than promoting it.