Growth and Infrastructure Bill

Baroness Turner of Camden Excerpts

Wednesday 20th March 2013 Lords Chamber

The best the Minister has been able to say is that this scheme is not for very many companies, but I think that the figure of 6,000 is something of a finger in the wind. It may well be that no companies take it up at all, and I ask your Lordships’ House if this is a sensible way to proceed. This clause needs to be removed now, and faith and trust built up between employers and employees, with them sharing the risks and benefits of growth and success. Clause 27 is not the way to do it.

[Baroness Turner of Camden]

My Lords, I opposed this clause at Second Reading and in Committee, and I do so again. I support the noble Lord’s amendment to remove this clause. I believe this Bill to be one of a series of government Bills designed to remove employment rights from individual workers without seeming to do so. The clause seeks to get workers voluntarily to give up employment rights by pretending to make them part-owners of the company. We are told that it will be entirely voluntary to become an employee shareholder. Will it really, when there is so much unemployment and consequently high concerns about employment security? People will be told that it is in their interests to become employee shareholders and that it will offer better internal progress, possible promotion and security, so that they do not have to worry about these old-fashioned employment rights. It is a way of dividing the workforce as well: an end to collectivity, with no unions to represent or negotiate for workers or to press for higher wages.

This Government do not like employment rights. LASPO, which we discussed in this House last year, rules out legal aid on employment law and on welfare. This clause is another way of getting rid of employment rights which previous generations fought hard to establish. The Government want tame workforces, where employers can hire workers—cheaply of course—and get rid of them easily when no longer required; in other words, disposable people. It is really surprising why this should be regarded as modern when it takes us back about 120 years. I do not believe that people should ever be regarded as disposable. I oppose this clause because that is what it is all about. The possession of shares in no way compensates for the loss of employment rights such as the right not to be unfairly dismissed, the right to a redundancy payment in suitable cases; the right to flexible working, and the rights relating to constraints on the notice about maternity and parental leave. I do not really believe that it is intended to.

I do not think the Government will succeed with this. Good employers do not like it. Shareholding schemes already exist in some enterprises without workers having to give up employment rights in order to participate—the John Lewis Partnership is one such enterprise. This clause is backward-looking and dishonest. The Beecroft recommendations were widely opposed when pronounced and it was clear that they could not be introduced in quite that form, so we have Beecroft by the back door, to persuade workers voluntarily to give up employment rights to which they are currently legally entitled. We should throw out this clause. The TUC is against the clause and tells us that it has the potential not only to remove employment rights but to cause hardships to employees and their families. It can also open up damaging tax loopholes, to which reference has already been made. It is thoroughly unpleasant and should be thrown out by this House.

[The Lord Bishop of Bristol]

My Lords, I have put my name in support of this amendment to remove Clause 27 for two main reasons, one general and one specific. In preparing my thoughts on what I was going to say today, I am grateful to a number of family charities, including the Family and Parenting Institute, the Daycare Trust, Working Families and the Fawcett Society, for their efforts in making the case against what I sense many of us instinctively feel is a seriously flawed proposal, which will create many unintended consequences.

Permitting companies to purchase certain rights in this way seems ethically wrong in principle. It is foremost the precedent of allowing employment rights to be bought and sold like a commodity that I believe must be rejected. Basic safeguards against unreasonable employer behaviour should not have a price tag attached to them. To quote from Michael Sandel’s latest book:

“Such treatment fails to value human beings as persons, worthy of dignity and respect; it sees them as instruments of gain and objects of use”.

For example, the right to protection against unfair dismissal, through placing a responsibility on employers to act reasonably, discourages arbitrary behaviour and the sham redundancies that can be used as a cover for discrimination or to penalise whistleblowers. It is not enough to give employees who have such unfortunate experiences recourse to an employment tribunal; employment law must discourage the behaviour from taking place at all. Likewise, redundancy payments are a modest but important safeguard for employees, providing a minimum cushion to support people who have lost their jobs and have family and financial commitments. Employees acquire these rights only after two years of service and they represent a proportionate responsibility for employers whose employees have made a long-term commitment to their businesses.

These safeguards are particularly important because there is no provision for advice for jobseekers before taking up this kind of contract. This point has been well made. I expect therefore that many workers who find themselves in the employee shareholder category will be those who are most vulnerable to poor employment practice, where the imbalance in power and financial means between employer and employee is most marked. Employment law is effective precisely because it constitutes a coherent framework based on clear principles of fairness and responsibility. Allowing companies effectively to buy off those rights undermines the integrity of that framework.

More specifically, I am also very concerned that employee shareholder contracts are not family-friendly and could discriminate against women. Women, particularly those with caring responsibilities, are most likely to exercise the right to request flexible working and will be most affected by the requirement to give longer notice periods when returning from parental leave. They will find it more difficult to take up the employee shareholder status and may be indirectly discriminated against in the recruitment process as a result, either being overlooked by potential employers or pressured into accepting the status as a condition of a job offer. Whatever the take-up of this new employment status, it will create a new subset of jobs that are unsuitable for many parents and carers.

Furthermore, the proposal reinforces inaccurate perceptions among some of the business community that flexible working is a burden to be avoided if at all possible. I strongly believe that society as a whole shares with families a responsibility to support those with caring responsibilities. One way in which we express this collective commitment is through promoting the rights of parents and carers to work flexibly. Removing these protections for some workers sends a negative message about the value of flexible working rights, undermining the very real progress that has been made in this area in recent years.

As currently constructed, the proposed employee shareholder status is fundamentally flawed. It puts a price on employment rights that should never be up for sale and takes a step backwards in efforts to promote a more family-friendly employment culture. For these reasons, I hope your Lordships will support this amendment.