Employment Rights Bill

Jim Shannon Excerpts

Consideration of Lords message
Monday 8th December 2025 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

Under Lords amendment 1, the duty would be shifted to the employee to request guaranteed hours, as opposed to it being down to the employer to offer hours. That means that the employee can request hours, and then the employer can cancel them at the last minute. Can the Minister reassure me that provision will be made to protect workers, ensuring that if they are given hours, they are compensated in the right way?

[Kate Dearden]

I will speak to zero-hours contracts later in my contribution. This is about rebalancing power —giving workers access to guaranteed hours if they need and want them.

Let me return to the unfair dismissal protections that we will bring in from 1 January 2027. Our intention is to adopt a commencement approach that would extend protections immediately from that date to employees who already have six months’ service or more. For example, under this proposal, someone employed from today will gain protection against unfair dismissal on 1 January 2027. That is almost a full year earlier than under the current law. Other employees will gain protection once they reach six months’ service; for example, someone who starts work on 1 November 2026 will qualify for protection from unfair dismissal on 1 May 2027—International Workers’ Day—which is 20 months earlier than under the current law. This approach was taken in 1999, when the qualifying period was reduced from two years to one. This approach will prevent a two-tier system, in which some people would remain on a two-year qualifying period while newly hired employees were subject to a six-month qualifying period.

The commencement of the unfair dismissal provisions will be set out in commencement regulations, as is standard practice. I am happy to commit to making those regulations early next year, implementing our commitment to commencement on 1 January 2027. This change will benefit millions of working people, who will gain greater security at work, and it will offer businesses and employers the flexibility to ensure new hires can do the job, get the skills to match, contribute to business success, and build a stable and secure working life.

To further strengthen these protections, the Government amendments will also ensure that the unfair dismissal qualifying period can only be varied by a future Government through primary legislation, and will remove the compensation cap. I know that some businesses have expressed concern about the agreement to lift the compensation cap; I can tell the House that we want to remove the scope for employment tribunal cases to be more complex and convoluted than they need to be. We need a tribunal system that works for employees and employers alike—one that is not gummed up by process and unnecessary delay nor bedevilled by bogus claims. Our aim is to make the tribunal system work more effectively and efficiently for all, so that those judged to have been unfairly dismissed get the compensation they deserve, the system works to resolve cases more speedily and unfounded claims are dismissed more urgently.

As we review the tribunal system, in the spirit of partnership, we will work with businesses and trade unions to create a tribunal process that is fairer and faster. No committed employee should lack the protection they deserve, nor should any reasonable employer fear the consequences of an unsubstantiated claim. For several other employment rights, the amount of compensation that can be awarded by a tribunal is limited by cross-referring to the unfair dismissal cap, so our amendments will ensure that these consequential issues can be considered and dealt with effectively through secondary legislation.

We know that security of work is critical for working families, and we are also acutely aware of the challenges businesses face. That is why we are committed to open and constructive dialogue with all stakeholders. If these changes are to create the conditions for lasting, fair and flexible labour laws, dialogue and co-operation must be our watchwords. I hope the other place can attach similar importance to that co-operation, and that it will let this Bill—the product of a general election mandate and the good will of both business and trade unions—proceed to Royal Assent. These discussions and the workable compromise highlight the importance of participation, and I urge those listening to today’s debate to engage with the consultations set out in the implementation road map.

I will now speak to the Government amendments in lieu that relate to zero-hours contracts and the right to guaranteed hours. We have tabled amendments that will create a statutory duty to consult on the length of the initial reference period and the length and timings of subsequent reference periods before exercising the relevant powers. These amendments will ensure that vital stakeholders can have the opportunity to contribute before the lengths of the reference periods are determined by regulations that work for worker and employer alike. By delivering this change with the input of stakeholders, we will provide a fair and balanced approach.

Let me turn to the Government amendments in lieu of Lords amendment 48B, which relate to seasonal work. In order to help address fluctuating demand, the Bill allows guaranteed hours offers to take the form of limited-term contracts where reasonable. The Government have tabled amendments that place a statutory duty on the Government to consult before making any regulations to specify what counts as a temporary need. This means that before any such regulations are introduced, employers, trade unions, and other parts of civil society with an interest in seasonal work, will be fully consulted.

I will now address the issue of political funds and the related Government amendments in lieu of Lords amendments 72D to 72H. The Government remain committed to the repeal of the Trade Union Act 2016. That includes reinstating the long-standing practice that existed for 70 years before that Act, whereby new union members are automatically included as contributors to a political fund unless they choose to opt out. This will return us to arrangements that worked well for decades, removing bureaucratic red tape on trade unions that works against their core role of negotiation and dispute resolution in the interests of working people. We have heard the concerns about how opt-out notices would take effect, and we believe our amendments will refine that process.

Under the pre-2016 legislation, an opt-out notice could only take effect on 1 January of the year after it was given. Under the Government’s amendment, opt-out notices will now take effect on either 1 January of the following year or on a day specified or determined by the rules of the union, whichever comes first. We are aware that in practice, prior to 2016, unions generally gave effect to opt-out notices before the subsequent 1 January date anyway; amendment (a) in lieu affirms that flexibility in the legislation. We have also tabled amendment (b) in lieu, which places a statutory duty on the Government to issue guidance within three months of the clause coming into effect. That guidance will set out the kind of provision that unions should include in their rules about the timing of giving effect to opt-out notices.

Finally, I will address the issue of industrial action ballot thresholds and related Government amendments in lieu of Lords amendment 62. As I have said, this Government want to end disputes and conflict in the labour market; we also want more trade union members to have a say in decisions about escalating disputes where they arise. We will repeal the 50% threshold and—as we have previously stated—align this with the establishment of non-postal balloting, including e-balloting, so that decisions about industrial action keep pace with the communication channels of modern life.

Our amendment (a) in lieu cements that intention by requiring the Secretary of State to have regard to any effects of the introduction of non-postal balloting, including e-balloting, on the proportion of those entitled to vote in industrial action ballots who actually do so. In having regard to the effects of e-balloting, the Government will monitor and assess the practical impact of non-postal balloting on rates of participation in industrial action ballots, so that we will be confident that modernising the means of balloting increases member participation. In addition, we have tabled amendment (b) in lieu, which will place a statutory duty on the Secretary of State to lay a statement before Parliament that demonstrates how the Government have had regard to non-postal balloting before making regulations to repeal the 50% threshold.

I urge hon. Members to support the Government motions before the House today, including our amendments in lieu. Together, they form a package that strengthens workplace rights, reflects the value we place on fair and flexible labour markets, and demonstrates the Government’s willingness to listen to concerns and act on them. We place a premium on dialogue and compromise as key components in modern labour relations; we want to consign the narrow, partisan, party political prejudice of previous decades to the dustbin of history, and build instead a modern industrial relations framework that values partnership, dialogue, flexibility and fairness for all sides. Our amendments in lieu fully reflect that approach, and in that light, I commend them to the House.