Employment Rights Bill

Kate Dearden Excerpts

Wednesday 5th November 2025 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

I beg to move,

That this House disagrees with the Lords in their amendment 1B.

[Madam Deputy Speaker]

With this it will be convenient to discuss the following Government motions:

That this House insists on its disagreement with the Lords in their amendment 23 and amendments 106 to 120, does not insist on Commons amendment 106A but proposes Government amendments (a) to (c) in lieu of Lords amendment 23 and Lords amendments 106 to 120.

That this House disagrees with Lords amendment 48B.

That this House disagrees with Lords amendments 60B and 60C but proposes Government amendments (a) and (b) in lieu.

That this House insists on its disagreement with the Lords in their amendments 61 and 72 but proposes Government amendment (a) in lieu.

That this House insists on its disagreement with the Lords in their amendment 62 but proposes Government amendment (a) in lieu.

[Kate Dearden]

I am pleased to speak on the Employment Rights Bill for our second consideration of Lords amendments, and I refer Members to my entry in the Register of Members’ Financial Interests. I thank my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) for her outstanding work on employment rights and her unwavering advocacy for working people. I know how close this Bill is to her heart, and I am grateful that she is here in support today. I also thank my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders) for his work and dedication on this significant piece of legislation.

The Government’s top priority is to grow the economy and improve living standards. Essential to that is the recognition that greater productivity, security and dignity in work help to grow the economy. The stronger economic performance that our country needs cannot be built on the backs of people in insecure work. For too long employment law has failed to keep pace with the fundamental changes to how, when and where we work. It is time to build a modern industrial relations framework, fashioned on the principle of social partnership that consent and consensus must replace disputes and conflict in modern employment relations. That is good for workers and good for business. Both suffer when one employer is undercut by another, using reduced terms and conditions of service for their employees. Sustainable economic growth cannot be built on unfair competition and insecure employment.

The Employment Rights Bill extends the employment protections currently enjoyed by some employees in the best British companies to workers across the country. By doing so, work will become more secure and predictable while strengthening the foundations that underpin a modern economy. The Bill will back businesses that already do the right thing and give hard-working people the job security and opportunities they deserve. It is in tune with the times and in keeping with how the world of work is changing.

Industrial relations law in this country must move from the 20th century to the 21st. It has to recognise that certainty and security are essential for people at work, that the best relationship between employer and employee is best exemplified by fairness and trust within a framework for recruitment and retention that values both, and that dignity at work is as vital to the effective functioning of modern society as the dignity of work.

Some will seek to use this issue to entrench the idea that employers and employees have opposing interests that must always inevitably result in dispute and strife, and I reject that view. The very best trade unionists know, as do the best employers, that such a view only represents failure. For this Labour Government, success is to be measured not in division, but in the shared economic growth that we achieve, the opportunity and security we build and the prosperity we create, and that is at the heart of the Bill.

Today I ask the House to reaffirm its support for this important legislation as we move through the latest round of parliamentary ping-pong. We have listened carefully to the concerns that have been raised, and in response we are offering, where possible, amendments in lieu that we believe strike a fair and workable compromise with the proposed amendments. Although we appreciate the range of perspectives offered, we will be unable to support certain amendments that conflict with the fundamental principles of the Bill and may compromise its intended impact.

We acknowledge that Lords amendment 1B, which relates to zero-hours contracts, is an amendment in lieu, intended as a compromise. It proposes a shift from a full right-to-request model to one in which employers must notify workers of their right to a guaranteed hours offer, and make a guaranteed hours offer unless the worker declines or opts out. I appreciate the sentiment behind the amendment, but it would undermine the Bill’s core aim of ending exploitative contracts and providing security for the workers who need it most. We therefore cannot accept it.

The Government are committed to ending one-sided flexibility so that workers are not left guessing about their hours or pay. These reforms reward fair employers, modernise the system and come with clear guidance to help everyone prepare. For employers, clear expectations mean better staffing and lower recruitment costs through better retention. We also appreciate that some groups, including younger workers, value the flexibility of zero-hours contracts. That is why workers will be able to decline a guaranteed hours offer and remain on their existing arrangement if that works best for them.

The Government are also committed to supporting young people into work. The youth guarantee will include a targeted backstop under which every eligible and unemployed young person on universal credit for 18 months without earning or learning will be provided guaranteed paid work. The scheme forms part of the Government’s aim to provide targeted support for young people at risk of long-term unemployment. Further details will be confirmed at the autumn Budget, following further engagement, including with employers.

Let me turn to Lords amendment 48B on seasonal work. The Government recognise that work in certain sectors fluctuates seasonally, and that there are ways in which employers may account for that and remain compliant with the legislation. They may, for example, use annualised hours contracts, which offer variable numbers of hours at work at different times of the year. Additionally, the Bill already allows guaranteed hours offers to take the form of limited-term contracts where reasonable—for example, a fruit-picker could be engaged on a contract tied to the end of the picking season. In such cases, after the initial reference period, the employer would be required to guarantee hours only for the duration of that limited-term contract rather than on a permanent basis. The Bill also already provides powers to address seasonal work through regulations, ensuring flexibility as workforce needs evolve. Consultation with employers, trade unions and stakeholders will take place before such regulations are made. We therefore do not support the amendment.

Let me turn to unfair dismissal. Lords amendments 23 and 106 to 120 propose retaining a qualifying period of six months for unfair dismissal. These amendments have returned to this House as the Lords have insisted on them. We remain committed to delivering unfair dismissal protections from day one—not two years, not six months, but day one. That was a clear pledge in our manifesto and it will ensure that about 9 million employees who have worked for their employer for less than two years are protected from being arbitrarily fired. Crucially, day one protection from unfair dismissal will not remove the right of businesses to dismiss people who cannot do their job or do not pass probation, but it will tackle cases of unfair dismissal in which hard-working employees are sacked without good reason. A six-month qualifying threshold still leaves employees exposed to dismissal without good reason in the early months of a new job, which is why the Government cannot accept the Lords amendments on maintaining a qualifying period.

[James Wild (North West Norfolk) (Con)]

Does the Minister not listen to the voices of business and business organisations? They say that what the Government propose will make young people—whom it is riskier to take on—less likely to get jobs in the first place. Why does she think she knows better than employers and the people who create jobs in this country?

[Kate Dearden]

Yesterday, I was with the Hospitality Sector Council. I heard about all the brilliant work it does to provide employment opportunities for young people across the country. Indeed, my first job was in a café. Such opportunities to get on the employment ladder are significant for young people. That is why the Bill will work in alignment with all the other crucial work that the Government are doing through the youth guarantee.

As I have outlined on unfair dismissal, it simply is not fair that hard-working employees who have worked somewhere for 18 months can be unfairly dismissed and have no stability and predictability in their jobs. Protection through day one rights gives financial security to people who do not have it. We are striking a balanced approach by introducing a statutory probation period. As we have mentioned, the Government’s preference is for that to be a period of nine months, but we are engaging in consultation on the next steps for those light-touch standards. The probation period will ensure that in the early months of employment, employers can dismiss employees who might not be performing or might not be suitable. The measures will tackle the causes of unfair dismissal.

[Ian Lavery (Blyth and Ashington) (Lab)]

Some 73% of employers support giving employees protection from unfair dismissal—the day one rights—according to the Institute for Public Policy Research and TUC research, and 83% of managers agree that improved workers’ rights can and do positively impact on workplace productivity. Does my hon. Friend agree that we should listen to that extremely important research?

[Kate Dearden]

My hon. Friend raises an excellent point about research. Providing employees with security at work results in a happier workforce, which increases productivity and helps businesses across the country, as well as our economy. The Bill will provide flexibility and security for people in workplaces across the country, which is vital for our productivity. That is our vision for our country and economy.

[James Wild]

The Minister referred to a nine-month probationary period as opposed to the six-month unfair dismissal period. A report from the Resolution Foundation—which is usually held in high regard on the Treasury Bench—says that this is a “messy compromise” that risks confusing employers and preventing them from taking people on. That is the point that I was making. Some 20% of jobs in my constituency are in the hospitality sector. The sector is not taking people on because of the jobs tax, and it will take on even fewer people because of these increased costs. Does she not realise the confusion that will come from this messy probation period, which is not on the face of the Bill?

[Kate Dearden]

As we have said from the start, the implementation of day one unfair dismissal rights will be done with a light touch. I am keen to work with employers across the country, including in the hospitality sector, which plays a key role in employing and providing opportunities for young people. I will work with all stakeholders on the next steps and implementation. As the hon. Gentleman knows, and as is the case for lots of employment rights legislation, we are setting the foundation here in this crucial Bill, but there are lots of details to work through in consultation, which I am absolutely committed to doing.

The framework will be founded on the principle of social partnership: consent and consensus must replace dispute and conflict in modern employment relations. That will ensure maximum flexibility, so that the new framework works effectively for employers and employees in each sector of the economy. We will minimise the cost of its implementation and operation.

The Government are committed to ensuring that employers can hire with confidence. As I have said, introducing the statutory probation period enables employers to fairly assess new hires’ performance and suitability for the role that they have been hired for. Most employers already use contractual probation periods of six months or less. The Government have been clear that our preference is for the probationary period to be nine months long. That would allow for a standard six-month term, with the option to extend supporting employee development without compromising operational needs.

We have heard the calls to ensure that the framework reflects real-world realities, and we have tabled an amendment in lieu to address that. Our amendment places a statutory duty on the Government to consult on key aspects of the framework. That would guarantee meaningful input from employers and employees, giving businesses a direct role in shaping the legislation to ensure a practical and fair approach. Additionally, we are tabling a further amendment in lieu, making technical changes to the words restored to the Bill by our rejection of the Lords amendments.

[Naushabah Khan (Gillingham and Rainham) (Lab)]

Does my hon. Friend agree that the Bill not only provides vital protections to the workforce, but gives businesses the certainty they need to grow our economy?

[Kate Dearden]

I completely agree. We are creating security for people across the country. Crucially, we are ensuring that employers do the right thing for their employees and go above and beyond the proposals in the Bill. That ensures a level playing field, which is good for our economy and for businesses that might otherwise be undercut by others that do not play by the rules.

We have also heard concerns about the pressures on the employment tribunal system. We will set up a taskforce to support us in fixing the employment dispute system, so that it works better for workers and businesses. The taskforce will have balanced representation from unions, businesses and other experts, including community organisations.

I turn now to the Lords amendments on heritage rail. The Government agree with the principle of the amendment and have tabled an amendment in lieu that captures the intent, while refining the drafting to provide more clarity and ensure that the legislation works as intended. The Government’s amendment, which has been tabled with the support of sponsoring peers Lord Parkinson and Lord Faulkner, places a statutory duty on the Office of Rail and Road and the Health and Safety Executive to produce guidance supporting 14 to 16-year-olds who volunteer on heritage railways.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I rise as co-chair, alongside Lord Faulkner, of the all-party parliamentary group on heritage rail. I express my thanks to the Government for bringing forward the amendment and recognising that volunteering with heritage railways is an immensely useful experience for young people aged 14 to 16. I am glad that we are now undertaking a 12-month assessment for guidance.

[Kate Dearden]

I thank the right hon. Member for working with us and for her support throughout the passage of the Bill. I understand her passion and work in this area. As she says, the guidance will offer a clear benchmark for reasonable activities and assist inspectors in important decisions. The Government are committed to the work, as she will know, with publication targeted by 31 March 2026. We believe that this collaborative effort will provide practical guidance that empowers children to engage safely and meaningfully in heritage railway volunteering.

Turning to the issue of political funds, Lords amendments 61 and 72 would remove clause 59 from the Bill. That clause reverses measures in the Trade Union Act 2016, which we have committed to repeal, that require members to opt in to political funds. This therefore reinstates longstanding arrangements where members are automatically included unless they choose to opt out. Removing clause 59 would break that commitment to restore balance and fairness in union operations. The opt-in system, introduced in 2016, added bureaucracy without improving transparency or strengthening members’ choice. To be clear, we are not removing that choice. At the point of joining, every new member will be clearly informed on the application form that they have the right to opt out of contributing to a political fund. The same form will make it plain that opt-out has no negative bearing whatsoever on any other aspect of union membership. That is why the Government cannot support Lords amendments 61 and 72.

We have heard reflections around how opt-out notices would take effect and have tabled an amendment in lieu to refine that process. Under the pre-2016 legislation, an opt-out notice was effective on 1 January following the year in which it was given. Under the Government’s amendment, opt-out notices will now have effect from either 1 January or the following year after it has been provided, or on a date specified or determined in the rules of the union, whichever of those dates comes first. This provides unions with flexibility in the legislation to act more quickly and process the member’s request to opt out, without having to wait until the subsequent 1 January to do so. In practice, unions already do this. We will also commit today to engage with unions directly, to continue to make clear our expectation that opt-out notices can be honoured as swiftly and practically as possible. Our amendment is simply about ensuring that legislation matches what has been the established practice.

[Jim Shannon (Strangford) (DUP)]

I hope that the Minister has not referred to this already, but small businesses in my constituency that do not have human resources departments tell me that they will find it hard to navigate these legislative waters. Although we need strong employment rights and I support the Bill’s objectives, we need to ensure that there is support for employers, so that they know how to implement the measures and how to defend themselves, which they will sometimes need to do, without paying costly solicitors’ bills that are detrimental to their business. Will the Minister reassure me on that matter?

[Kate Dearden]

I come from a family that has a business in the hospitality sector, which is close to my heart. In the first eight weeks that I have been in this role, I have had the pleasure to meet small and large businesses, and I have made clear our determination to work closely with them on the implementation of this legislation and to ensure that they are prepared for the changes when they come. We published our road map earlier this year and have committed to stick to that, which has been welcomed by businesses small and large.

Finally, turning to the issue of industrial action ballot thresholds, Lords Amendment 62 would remove clause 65(2) from the Bill, which would retain the existing 50% turnout threshold for industrial action ballots. The Government do not support this amendment. Clause 65 removes an unnecessary bureaucratic hurdle and aligns union democracy with other democratic processes, such as parliamentary votes and local elections, which do not typically require turnout thresholds but are still accepted as legitimate. As the period of disruption under the Conservatives’ watch between 2022 and 2024 has shown, bureaucratic hurdles only make it harder for unions to engage in the bargaining and negotiation that settles disputes. This Government’s approach will foster a new partnership of co-operation between trade unions and employers.

[James Wild]

If this provision is introduced, does the Minister think that there will be more or fewer strikes?

[Kate Dearden]

Strikes were a failure of the Tory Government who had stopped listening and, to be frank, had stopped working, so I will not be taking any further interventions from the hon. Gentleman.

We want to create a modern and positive framework for trade union legislation that delivers productive and constructive engagement, respects the democratic mandate of unions and works to reset our industrial relations. Nonetheless, we recognise that this issue has generated debate, which is why the Government have tabled an amendment in lieu that will require the Secretary of State to have regard to any effects of the introduction of electronic balloting on the proportion of those entitled to vote in industrial action ballots who actually do so. We have previously committed to aligning the removal of the threshold with the establishment of e-balloting as an option for trade unions. This amendment gives statutory effect to that commitment and makes it explicit in the underlying legislation. In having regard to the effects of e-balloting, the Government will monitor and assess the practical impacts of e-balloting on participant rates and the 50% threshold.

To conclude, I urge hon. Members to support the Government’s motions before the House today, including our amendments in lieu, which are part of a package that strengthens rights and reflects the value we place on fair work. We have listened throughout the Bill’s passage and made meaningful changes where needed, and we will continue to listen to all relevant stakeholders as we move into implementation We are committed to full and comprehensive consultation with employers, workers, trade unions and civil society. As set out in our “Implementing the Employment Rights Bill” road map, we are taking a phased approach to engagement and consultation on these reforms. This will ensure that stakeholders have the time and space to work through the detail of each measure, and will help us to implement each in the interests of all. This is a win-win for employers, employees and a more competitive British economy.

[Andrew Griffith (Arundel and South Downs) (Con)]

Act in haste, repent at leisure: never has that been wiser advice than in respect of this Bill. It is a rushed Bill that was half-baked when it was introduced, and has got worse since. It has failed every test of scrutiny, from the Lords Delegated Powers and Regulatory Reform Committee to the Constitution Committee, to its low-balled impact assessment.

On the day that the Mayfield report outlines the scale of the challenge that we face on worklessness, it will create generation jobless. Every family in the country will know a son, daughter, niece or nephew who cannot get work as a result. As my hon. Friend the Member for Mid Buckinghamshire (Greg Smith) reminds us, every Labour Government leaves unemployment higher than when they started, but only this Government have actually legislated for that.

The Minister asks us to disagree with all the main compromise amendments from the other place. If she wished to listen to stakeholders, now would be a fantastic moment to start. Her motions to disagree reject sensible compromises on qualifying periods, seasonal working, guaranteed hours, strike thresholds and opting in to political funds. Who will be the victims if the motions are carried today? Young people, the neurodiverse, those with a disability, female returners to work, the over 50s and former prisoners—some of the most vulnerable groups in society who deserve their chance in life, their shot at employment and a job.

--- Later in debate ---

[Anneliese Midgley]

I thank my hon. Friend for his intervention and I absolutely agree with him about the work that my hon. Friend the Member for Middlesbrough and Thornaby East has done on this for over a decade.

This Bill brings changes that tip the scale in favour of working people and, taken together with the rest of the new deal for working people, it amounts to the greatest uplift in workers’ rights in our generation. That is down to the friends that I have just mentioned here today. It is their legacy and it is one that will change the lives of millions of working-class people for the better. I know that the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Halifax (Kate Dearden), will do a great job of completing the process.

This is personal for me, because it was my dad’s secure, well-paid, unionised job on the production line in Ford’s Halewood plant that gave me a better life than my mum and dad had. It lifted us out of poverty and provided us with enough money and stability for a decent home, and enough to live a life of dignity on. Everyone should have that, and that is why I will fight for work where people can flourish and thrive and for jobs to take pride in that can provide a good life. No way would I be here in this place, representing the place where I was born and raised, if it was not for my dad’s job.

The Tories, backed by the Lib Dems in the other place, are trying to water down the Bill. They are aided and abetted by Reform, who are never in this place to debate this and have consistently voted against the Bill. Some of the Lords amendments would rip out the heart of the Bill. I am going to speak briefly to amendments 23 and 106 to 120, which would delay protections from unfair dismissal until a worker had been in their job for six months. This would mean that a worker could be dismissed at whim, for no reason. How is this okay? How is it defensible? A day one right not to be unfairly dismissed is good for workers and good for businesses.

My hon. Friend the Member for Blyth and Ashington (Ian Lavery) spoke about the research from the IPPR and the TUC, which found that 73% of employers supported giving employees protection from unfair dismissal from day one of employment. The shadow Minister, the hon. Member for Arundel and South Downs (Andrew Griffith), dismissed the TUC’s research from the Dispatch Box, but it represents 5 million workers and everyone else at work. Are they not stakeholders who should be listened to as well? We know that good employers up and down the country already live up to the standards that we are setting out in this Bill. Today, we need to stop these attempts to water down the Employment Rights Bill, deliver the protections from unfair dismissal that our constituents voted for and make sure we deliver the new deal for working people in full.

[Kate Dearden]

I thank all Members for their brilliant contributions today and for their engagement with the Bill throughout the many months we have been debating it. That is incredibly appreciated and valued.

I start by reiterating a quote from Professor Simon Deakin at the Cambridge University centre for business:

“strengthening employment laws in this country in the last 50 years has had pro-employment effects. The consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity.”

I remind the shadow Minister, the hon. Member for Arundel and South Downs (Andrew Griffith), who made a number of contributions, of my opening remarks. UK employment laws are mostly a product of the 20th century. They have not kept pace with how businesses employ people or with how people experience their working lives today: when, how and where they work. The world of work has fundamentally changed in recent years. It is regrettable that the hon. Gentleman’s party spent 14 years impotently watching the rise of the gig economy and the many changes in our employment landscape but now pretends that the status quo still works for everyone. It simply does not. That is why the Bill is so important: it raises those standards and levels the playing field for businesses, so that they are not undercut by people who do not play by the rules, which negatively impacts their businesses and productivity. The Bill is important for working people so that they get that security and those rights at work, as well as for businesses, including those good businesses that already go above and beyond and do brilliant work supporting our workforce and different economies across the country.

The shadow Minister mentioned seasonal work. The initial reference period will be set out in regulations, as I have already spoken to. I reiterate that we believe that 12 weeks is the right length, balancing the need for qualifying workers to be offered those guaranteed hours reasonably soon after they start a role and the need for a reference period long enough to establish the hours that they regularly work.

I was surprised to hear the remarks from the shadow Minister on employment tribunals. On their watch, average wait times for an employment claimant increased by 60% between 2010 and 2022 due to funding cuts. The previous Government’s introduction of fees had a disproportionate impact on woman and the low-paid. Yet again, we are fixing messes that they left behind. The taskforce I mentioned in my introductory speech for how we can fix our employment tribunal system, and our work under the Fair Work Agency, which will be up and running next year, are incredibly important as part of that wider package.

[Amanda Martin]

It is good to hear about the taskforce. Could the Minister give us more information about what other things it will look at and investigate that will support employees?

[Kate Dearden]

The taskforce will bring together different stakeholders so that we can assess the problems within the system and work out the best way to fix them, because at the moment it is not working for employers or workers, who want access to justice and want it quickly.

[Andy McDonald]

Would the Minister agree that the introduction of these rights and protections is absolutely critical, but equally important is the ability to enforce those rights? The Fair Work Agency has the potential to bring that to fruition and ensure that when people are in those circumstances and are the beneficiaries of an award, they will ultimately receive it, because far too many people take on these cases and do not get any redress.

[Kate Dearden]

We met Matthew Taylor, the new chair of the Fair Work Agency, this week to discuss the agency’s progress to ensure that it is up and running at speed. As my hon. Friend rightly points out, enforcement is vital, and it is crucial that workers are aware of their rights. That is why the agency is so transformational in our approach and important for our wider agenda.

To respond to the Liberal Democrat spokesperson, the hon. Member for Richmond Park (Sarah Olney), I urge her to support the Government as we seek to update and upgrade our employment rights to be fit for the 21st century. She mentioned lots around detail. As I mentioned earlier, as is standard for lots of employment rights legislation, we want to consult extensively with businesses, unions and employers to ensure that we get this right, and I am sure that she agrees with that approach.

The hon. Member mentioned turnout thresholds. As I have mentioned, we want to create an industrial relations framework fit for a modern economy and workforce and that works for everybody. We have been clear that we intend to ensure that trade union legislation is proportionate and effective and does not create unnecessary bureaucratic hurdles. We remain committed to removing the 50% turnout threshold for industrial action ballots through the repeal of the Trade Union Act 2016. We support a strong mandate for strike action, but a threshold set in legislation is not the best way to achieve that.

My right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) talked about our proud Labour legacy of the courage and conviction to change lives, and she is a powerful and inspiring demonstration and testament to that. That is why this legislation is so important, reshaping the world of work and delivering security and dignity that people can feel, as she rightly mentioned. We cannot build a strong economy through employment insecurity. The legal loopholes that exist have contributed to the erosion of living standards and allowed a race to the bottom. I am always grateful for her support and thank her for her offer of support as we proceed to Royal Assent and the implementation stages to ensure that everybody across the country can benefit, workers and business alike, and that is why the Bill is pro-worker, pro-business and pro-growth.

My hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders) made a powerful speech and responded eloquently to lots of points raised by Opposition Members, and I thank him for that. I reassure him that we remain committed to the repeal of the 50% turnout threshold, and we have been clear that it is our intention to align the removal of thresholds with the establishment of e-balloting as an option for unions. The amendment does not change that commitment. We are working at pace to permit electronic balloting by April 2026. He will be pleased to know that we will shortly launch a consultation on an electronic and workplace balloting code of practice, and I encourage all stakeholders to respond to that consultation.

I thank my hon. Friend the Member for Tipton and Wednesbury (Antonia Bance) for her excellent points on the importance and use of political funds. I reiterate my remarks on the 50% threshold and hope that she is reassured by them. She will have heard the Government’s commitment to delivering the Bill in full from the Prime Minister and the Secretary of State at Labour conference. I hope to have reiterated that commitment at the Dispatch Box today.

I thank my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for all his work on this legislation. It has been a pleasure to work with him over a number of years. He mentioned fair pay agreements, which we are introducing for social care, as he rightly said. We will learn from that process before considering their introduction in other sectors, but I appreciate his passion for this area. I am sure that we will be in touch with him to speak about that progress.

--- Later in debate ---

[Laurence Turner]

May I invite the Minister to respond to two things? First, I was asked earlier how many times the word “maternity” appears in the Bill. The word “pregnancy” appears 16 times, “parental” 27 times, and “bereavement” 34 times, but we cannot restrict the debate to individual phrases. Secondly, this is not some abacus exercise; the real impact of the Bill is the change and improvement it will make for millions of working families thanks to day one rights.

[Kate Dearden]

I thank my hon. Friend for that excellent and well-made point. I am glad that he has managed to find the ctrl+F function with such speed. I always rely on him to provide such efficiency and clarity. The Bill will benefit more than 15 million workers. That is an incredibly powerful statistic to give at the Dispatch Box. More than 2 million people on zero-hours contracts could benefit, as well as the many workers he mentions who will benefit from further protections and rights at work.

[Michael Wheeler]

I thank my good and hon. Friend for giving way. Millions of workers, including those on zero-hours contracts, stand to benefit from the measures in the Bill. Does she agree that the amendments tabled by Liberal Democrat peers on the right to guaranteed hours are an unworkable bureaucratic mess that opens up scope for abusive practices in the workplace and removes the Bill’s meaningful protections from far too many workers?

[Kate Dearden]

I thank my good and hon. Friend for his important contribution. Like him, I meet many people in my constituency who do not know day to day whether they will have enough money for food and rent because they do not know how many hours they will work that week. That is why it is so important that we give people basic security by banning exploitative zero-hours contracts. We know that people value the flexibility that those contracts offer, which is why we are tackling the exploitative ones, as he rightly outlines. Those amendments might look for a different route to tackle exploitative zero-hours contracts, but we want to protect working people, because it is so important that they have certainty, week by week, on what they will be paid—that is what they deserve. I thank him for all his work in this area over a number of years. He brings a wealth of experience to this part of the Bill.

The Government are clear that we cannot build a strong economy while people are in insecure work. Employment law has not kept pace with modern working patterns, and that has allowed some employers to exploit gaps in the law, undercut responsible businesses and fuel a race to the bottom. Backed by our new industrial and trade strategies, the Bill will drive productivity, foster innovation and lay the foundations for long-term secure growth. It will level the playing field for good employers and put the UK economy in step with competitors in other advanced economies.

As we have heard today, I stand on the shoulders and build on the incredible hard work of many right hon. and hon. Friends. I pay tribute to them, and put on record my thanks and gratitude for all their work in getting us to where we are today. I hope that all hon. Members support the Government in our determination to get the Bill over the line and update our employment rights legislation in this country, for businesses and for employers, for the future and for growth. I thank hon. Members for their contributions.

Question put, That this House disagrees with Lords amendment 1B.

Oral Answers to Questions

Kate Dearden Excerpts

Thursday 30th October 2025 Commons Chamber

[Calum Miller (Bicester and Woodstock) (LD)]

1. What steps he is taking to support the hospitality sector in Bicester and Woodstock constituency.

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

As this is my first time at the Dispatch Box, if I may I would like to thank my predecessor, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders). It is an honour to build on his work, particularly on employment rights and championing fairness and dignity at work.

Hospitality businesses, including those in the constituency of the hon. Member for Bicester and Woodstock (Calum Miller), are vital to the UK economy, driving growth, creating jobs, and strengthening our communities. The Government are delivering targeted support under the small and medium-sized enterprises strategy to boost productivity, cut red tape and revitalise our high streets. Our £1.5 million hospitality scheme aims to help businesses boost productivity and adapt to local needs, while the licensing taskforce seeks to address unnecessary barriers that hospitality businesses face. Furthermore, we plan to permanently reduce business rates for eligible retail, hospitality and leisure properties.

[Several hon. Members rose—]

[Calum Miller]

I wish all the questions were just about Bicester and Woodstock.

I welcome the Minister to her place. Becky, who runs the Red Lion in Eynsham, and Donna, who runs the Oxfordshire Yeoman in Freeland, tell me that they are working upwards of 80 hours a week just to keep their pubs open. Despite loyal customers and rising turnover, they are struggling to meet soaring bills from employment costs, food, energy, business rates and a tied tenancy, which means that prices are over £100 more per barrel. In small villages across my constituency, pubs are the lifeblood and fabric of the community. Will the Minister meet Becky, Donna and me to discuss what more the Government can do to support the vital village pub?

[Kate Dearden]

I agree with the hon. Member that pubs are the lifeblood of our local communities. We recognise the challenges facing the hospitality sector, particularly our pubs. They play such an important role in our local communities as places where people can come together to celebrate, connect and build communities, and that is especially true of the pubs that he mentioned in his constituency. I would of course be happy to meet him and his pub managers to celebrate their contribution to his constituency. We continue to work closely with the Hospitality Sector Council and industry leaders across the country to understand the pressures facing pubs, and to co-create solutions for the long-term stability and local economic growth that are vital for our communities and our country.

[Martin Rhodes (Glasgow North) (Lab)]

2. Whether his Department held discussions with experts from the global south as part of its review of the UK’s approach to responsible business conduct.

--- Later in debate ---

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

10. What assessment he has made of the potential merits of implementing fair pay agreements in a range of business sectors.

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

I thank my hon. Friend for his long-standing advocacy in this area. We want to work constructively with unions, employers and stakeholders to build on the Employment Rights Bill. Our first priority for a fair pay agreement is adult social care, a large and complex sector with over 19,000 providers and 1.5 million dedicated workers. As such, our priority is ensuring that this process works effectively, which is why I am delighted that the Government have announced a £500 million investment in the first ever fair pay agreement in the social care sector. We will use what we learn to consider where fair pay agreements can offer similar benefits across other sectors.

[Andy McDonald]

I thank the Minister for her response, but with the cost of living pressures continuing, it is clear that delivering increased real incomes and better living standards is our No. 1 priority. Can the Minister say a little more about which further sectors are most ready for fair pay agreements, and what steps the Department is taking to meet the UK’s obligations, as a member of the International Labour Organisation, to extend sectoral collective bargaining as a means to raise pay and improve living standards?

[Kate Dearden]

I welcome my hon. Friend’s support for sectoral collective bargaining and collective agreements as a key steer for improving living standards across workplaces in the country. As he knows, we are demonstrating our commitment to sectoral collective bargaining with the social care and school support staff sectors. The UK is committed to working internationally to strengthen workers’ rights and enhance Labour standards globally. We fully support the work of the International Labour Organisation and will continue to meet our obligations under the ILO.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

12. What steps his Department is taking to improve the UK's trading relationships with other countries.

--- Later in debate ---

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I launched my “Pub of the Year” award at the Goods Yard in Broadstone last week. Fifty-four pubs and two breweries in Mid Dorset and North Poole support 1,600 jobs and underpin the vibrancy of our towns and villages, but two thirds of them have had to cut jobs or hours since the damaging jobs tax. Hospitality venues typically operate seven days a week, and sometimes more than 12 hours a day, so they need many part-time workers. Will the Government consult on a new lower rate of employer national insurance for workers earning £5,000 to £9,100, to support the employment of part-time workers and drive growth?

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

I come from a small business family in the hospitality sector, so I completely understand how important the sector is for local economies and jobs—especially pubs, which are the backbone of our high streets and important for pride in our local economies and communities. We are helping pubs through our £1.5 million hospitality support scheme, and through brilliant initiatives such as Pub is The Hub, for which £440,000 was recently announced. More will be announced soon.

Employment Rights Bill: October Consultation

Kate Dearden Excerpts

Thursday 23rd October 2025 Written Statements

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

The Government’s top priority is to grow the economy and improve living standards. We are clear that we cannot build a strong economy while people are in insecure work. For too long, employment law has failed to keep pace with fundamental changes to how, when and where we work. This has allowed bad actors to take advantage of loopholes in the current law via exploitative practices, fuelling a race to the bottom, undercutting responsible businesses, and eroding the living standards of working people. We are clear that unfair competition, where a bad employer undercuts a good employer by reducing the terms and conditions of service for their employees, is bad for business, bad for workers and bad for growth.

Our plan to make work pay will modernise our employment rights legislation, extending the employment protections already given by the best British companies to millions more workers across the country. Strengthening this underlying framework will make work more secure and predictable, putting more money into working people’s pockets and strengthening the foundations that underpin a modern economy. It will also offer dignity to those going through the toughest personal circumstances, support working families to juggle the demands of work and raising children and help more working parents to stay in the workplace. This is a win-win. Policies that improve workforce wellbeing and job satisfaction also improve retention, boost productivity, promote fair competition and economic growth.

We are committed to full and comprehensive consultation with employers, workers, trade unions and civil society. By delivering this change together, we will back employers who do the right thing and give hard-working people the security, fairness and job satisfaction they deserve. As set out in our “Implementing the Employment Rights Bill” publication (published 1 July 2025), we are taking a phased approach to engagement and consultation on these reforms. This will ensure stakeholders have the time and space to work through the detail of each measure and to help us implement each in the interests of all.

Today I am launching an initial package of consultations covering the following four measures. Alongside a programme of direct stakeholder engagement, these will support us in determining how best to put our plans into practice.

Consultation 1: enhanced dismissal protections for pregnant women and new mothers

Discriminating against women because they are pregnant or on maternity leave is already unlawful. However, pregnant women and new mothers continue to face a significant and unique risk to their job security. Every parent should feel secure at work, and that includes ensuring motherhood is not a barrier.

Starting with the Employment Rights Bill, the Government are introducing legislation which will make it unlawful to dismiss pregnant women, mothers on maternity leave, and mothers who return to work for at least a six-month period—except in specific circumstances. The Bill establishes the requisite powers to then set out the detail of the policy in regulations. Other powers taken ensure that those taking other types of family-related leave can be brought into the policy’s scope, subject to the outcome of the consultation.

The consultation seeks views on how the enhanced dismissal protections should work in practice, including the “specific circumstances” in which the dismissal of pregnant women and new mothers should still be allowed; when the protections should start and end; whether other new parents should be covered by the protections; policy measures to support implementation and impact; and how to mitigate against any unintended consequences.

This consultation will close after 12 weeks on 15 January 2026.

Consultation 2: bereavement leave

Bereavement and the loss of a loved one is a deeply personal experience that impacts everyone differently. In some cases, employees will need to take time and space away from work to grieve; in other cases, employees might wish to continue working as normal. For too long, employees facing bereavement have had to navigate their grief without the security of knowing they have a legal right to the time they need away from work. While many employers do give their employees the time they need, some do not. Fair competition demands some statutory protections for bereaved workers.

The Employment Rights Bill introduces a new statutory right to bereavement leave which will ensure all employees have a right to time away from work to grieve. Government amendments tabled on Report in the Lords extend bereavement leave to include pregnancy loss before 24 weeks, to enable the Government to consult on the full range of bereavement leave and ensure long overdue recognition for the women and families affected by pregnancy loss.

The Bill provides framework powers to establish the new right to bereavement leave, and we are consulting on the details to be set out in secondary legislation, ensuring that the entitlement is fully informed by the needs of both employers and employees from the outset.

The Bill sets out that the leave must be a minimum of one week and employees must be allowed at least 56 days from the date of the loss in which to take the leave. The consultation will ask questions about who should be eligible for bereavement leave, including specific questions on different types of pregnancy loss. The consultation will also ask for views on the maximum length of leave and the timeframe in which it should be taken, and what else the Government can do to support employers to implement the new entitlement to bereavement leave, such as guidance. Lastly, the consultation will ask for views on what notice and evidence requirements an employee may be required to give to an employer to allow us to balance the needs of bereaved individuals with the needs of their employers to manage staff absence with minimum disruption.

This consultation will close after 12 weeks on 15 January 2026.

Consultation 3: trade union employer duty to inform

A lack of awareness about the right to join a trade union may be contributing to reduced engagement from workers in collective bargaining and access to representation when they need it. At present, employers are not required to inform workers of this right, either at the start of employment or subsequently. While employees and workers are legally protected if they choose to join a union, there is no obligation on employers to make them aware of this. This legal omission needs correction in law.

The Employment Rights Bill will introduce a new duty on employers to provide their workers with a written statement of their right to join a trade union at the start of their employment and at other times. This new duty addresses an existing information gap by ensuring workers are better informed of their rights.

This consultation seeks views on how this duty should work in practice—what the statement should say, in what manner it should be given, and how often the statement should be delivered outside the start of employment.

The consultation will close after eight weeks on 18 December 2025.

Consultation 4: trade union right of access

Effective trade unions are important to tackling insecurity, inequality, discrimination, poor working conditions and low pay. The best employers value their role in the workplace and experience the benefits of working in partnership.

Within the current legislative framework, trade unions do not have an independent right of access to workplaces protected in law. They may only act through individual members or by voluntary access arrangements with employers. Where membership is limited, and there are no voluntary arrangements in place, there is limited scope for trade unions to represent and support their members in employment-related matters.

The Employment Rights Bill will establish a new legal framework for unions and employers to negotiate access into the workplace, formalising a trade union’s right to access workplaces physically, and to communicate with workers both in person and digitally. A statutory access framework gives clarity to employers on how to agree access and will enable unions to contribute positively to workplace culture, fostering open communication and trust between workers and employers and leading to more stable and constructive industrial relations.

We are seeking views on how this framework should operate in practice, consulting on the practical details of the policy before we set them out in secondary legislation. The consultation will cover how unions will request access and how employers will respond; factors the Central Arbitration Committee will take into account when determining whether access should be granted and on what terms; and how breaches of access agreements should be assessed by the CAC.

The consultation will close after eight weeks on 18 December 2025.

Next steps for consultation

This package sets out the next steps in delivering our plans. As trailed in “Implementing the Employment Rights Bill”, further packages of consultations are planned for later in the autumn and into the winter. These will be central to shaping the practical implementation of this legislation, helping Government deliver reforms that are both effective and inclusive. It is in everyone’s interest to get the relationship between employer and employee right. These consultations will help us make work pay for both.

[HCWS986]

Trade Union Workplace Access

Kate Dearden Excerpts

Wednesday 22nd October 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

It is a pleasure to serve under your chairship, Mr Twigg. I thank my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for securing today’s important debate—I know we say it a lot that debates are important, but this one truly is. It is close to my heart, as I know it is to my hon. Friend’s.

I thank my hon. Friend for his contributions to debates during the passage of the Employment Rights Bill, including on this specific issue. It was always a pleasure to work with him on this topic in my previous life working for a trade union for many years—in fact, I declare my entry in the Register of Members’ Financial Interests as a proud trade union member. The amendments that my hon. Friend tabled on Report, which he alluded to in his speech, demonstrate his interest in this area, and I welcome his continued commitment to a productive discussion on the topic today. I thank all other members here for their contributions and interest in this topic—not just hon. Members, but proud trade unionists and friends.

As my hon. Friend will know, the Government’s plan to make work pay and our Employment Rights Bill represent the biggest upgrade to workers’ rights in a generation. Taken together, they support our plan for change by ensuring that employment rights are fit for a modern economy, empowering working people and contributing to economic growth.

The Employment Rights Bill creates a modern, fairer labour market where workers are better protected, more empowered and supported through every stage of working life. It is pro-worker and pro-business, and it supports the Government’s objective of boosting growth and improving living standards across the country. As part of that, the Government are strengthening collective bargaining rights and trade union recognition—I want to take a moment to say how proud I am to be saying that from the Front Bench. After many years of the previous Government, who sought to weaken workers’ voices and trade union rights, we are rebuilding a culture of respect and co-operation with trade unions.

I know that my hon. Friend will agree that trade unions are essential to tackling issues of insecurity, inequality, discrimination, enforcement and low pay across the economy. The Employment Rights Bill will modernise trade union legislation, giving trade unions greater freedom to organise, represent and negotiate on behalf of their members. Strong trade unions are key partners in building a stronger, fairer economy.

A key part of our reforms in this area is the introduction of a new trade union right of access. Under existing legislation, trade unions do not have a general right of access to workplaces and can exercise their functions only through individual trade union members in the workplace or through access that has been agreed on a voluntary basis with the employer. In situations in which membership is limited and no voluntary agreement is in place, there is limited scope for trade unions to exercise their core functions within the workplace. Although the Government want employers and unions to continue to agree and use those voluntary access arrangements where possible, the Bill introduces a new right for trade unions to access the workplace in a responsible and regulated manner. That will provide certainty and clarity to all parties involved.

It is worth explaining briefly how the new right of access will work in practice, which will hopefully answer lots of my hon. Friend’s questions. Under the new right of access, an independent union can provide an employer with a request for access. That could be a request for physical access to a building or virtual access to a group of workers—such as via a Teams call—or both. My hon. Friend spoke eloquently about the importance of digital access as part of our consideration of the legislation.

If both parties agree on the terms of access between themselves, they will notify the Central Arbitration Committee to record the terms of the access agreement and proceed with the access as agreed. If no agreement can be reached within a set timeframe, the union or employer can refer the case to the CAC for a determination on whether access should be granted under the terms requested.

The CAC will make its determination on whether access should be granted in line with factors set out in secondary legislation. If the access application meets certain conditions, it will qualify for a potentially expedited route through the CAC process. The CAC will also enforce access agreements once they are in place, hearing complaints about breaches of those agreements by any party, with the power to issue fines for non-compliance.

This debate is timely, because the Government will shortly be launching a public consultation on the details of the new trade union right of access policy, including the matters that the CAC must have regard to when deciding whether access should take place and the level of fines for non-compliance with access agreements. We want to see a fair and workable access framework, so the Government strongly encourage unions and employers of all types and sizes to share their views. As I say, the Government are committed to strengthening collective bargaining rights and trade union recognition, and we see the new right of access as a key part of that.

In that light, when the CAC takes decisions on access, it will be guided by the access principles provided for in the Employment Rights Bill. Those principles set out that trade unions should be provided access to workplaces

“in any manner that does not unreasonably interfere with the employer’s business”

and that the employer

“should take reasonable steps to facilitate”

that access. They also set out that

“access should be refused entirely only where it is reasonable in all the circumstances to do so.”

The principles provide a default in favour of access, but the Government are aware that some employers may find it more difficult than others to facilitate access arrangements, and that there may be circumstances where it would not be appropriate for access to take place. That is why we will consult on the factors that the CAC should take into account when deciding on access, and consult on what the value of fines should be for non-compliance.

[Ian Lavery]

Does the Minister agree that it is absolutely essential that lawbreakers and bad employers are not allowed to price in any breaking of the law to the detriment of people in the workplace?

[Kate Dearden]

I agree with my hon. Friend, and enforcement will be really key to that. I encourage him to get involved in the consultation and to share his views on exactly that point.

The Government will review responses to those two consultation questions with interest, as we will the responses to the consultation as a whole. The consultation matters, because it is important that the implementation of the right of access works in practice, not just on paper. That is why the Government have committed to support businesses throughout the implementation of the Bill, and why we will produce a new code of practice for the policy. That will contain practical guidance on how access should take place in practice to help support employers and businesses to manage the process smoothly and effectively. The Government will consult on that code next year before the new right comes into force in October 2026.

My hon. Friend the Member for Middlesbrough and Thornaby East also mentioned enforcement, and I welcome his support for the Fair Work Agency and its newly appointed chair, Matthew Taylor. Strengthening our labour market, compliance and enforcement is absolutely key to this issue, and to our wider Employment Rights Bill.

[Andy McDonald]

Does the Minister agree that there are many good employers across our economy who actively engage and encourage trade union access and recognition? They could be of great service in the process that she describes for supporting other businesses as the regulations are implemented.

[Kate Dearden]

I could not agree more. There is brilliant practice across the country and across workplaces, with good employers and unions working together in the better interests of the workforce. That is why the Employment Rights Bill, which the Government are proud to be implementing, is such a positive step forward for workers, employers and our wider economy.

The new right of access will deliver for everybody, recognising the needs of unions and employers. Building on the good work that already exists across this country, it will deliver on our make work pay commitment to ensure access is responsible and regulated. It will also provide the opportunity for many workers to understand their rights and access trade unions, which are such a vital part of our economy.

I look forward to working closely with my hon. Friend the Member for Middlesbrough and Thornaby East and with all other hon. Members present, on both sides of the House, to deliver this positive change for the British economy. I thank my hon. Friend again for securing the debate, and I thank all other hon. Members who have contributed to it. I look forward to working with them as part of this agenda.

Question put and agreed to.

Employment Rights: Impact on Businesses

Kate Dearden Excerpts

Tuesday 16th September 2025 Westminster Hall

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

It is an absolute pleasure to serve under your chairmanship, Dr Murrison, in what I am proud to say is my first time responding for the Department in a Westminster Hall debate. I thank the shadow Minister and all other Members for their kind words and welcome. I am grateful for all the thoughtful and considered contributions from both sides of the Chamber.

Business impact rightly remains a recurring theme in discussions on the Employment Rights Bill. I pay tribute to the SMEs and businesses that all Members have mentioned today, and particularly to those in my constituency that I have had the pleasure to meet over the past year, as their Member of Parliament. I am delighted to have the opportunity to reiterate this Bill’s positive impact on employers, workers and the wider economy.

I also pay tribute to the work done by those before us, not least that of my predecessor, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders)—

[Dame Harriett Baldwin]

On a point of order, Dr Murrison. I appreciate that this is the Minister’s first time responding to a debate in Westminster Hall. My point of order is simply that she may wish to consider putting her entry in the Register of Members’ Financial Interests on the record.

[Dr Andrew Murrison (in the Chair)]

Minister?

[Kate Dearden]

I was just about to get to that point. I thank the shadow Minister for the reminder.

I pay tribute to my predecessor for all his work and to the officials and colleagues who worked with him. Many Members of this House and the other place engaged constructively with the team, and their insight has materially shaped the Bill. I thank them for their valuable insights. Likewise, the Bill has been shaped by extensive engagement from external stakeholders, businesses, trade unions and civil society alike. I thank them all for their engagement to date, and I reassure them that this Government remain committed to full and proper consultation on the Bill’s implementation.

I declare my interest as a proud trade union member. I look forward to working with trade unions, businesses and all stakeholders, and to continuing the positive engagement that many stakeholders have had with the Department and with this Government so far.

The Government were elected on a manifesto that committed to implementing “Labour’s Plan to Make Work Pay” in full and to putting more money in working people’s pockets. The Employment Rights Bill is the legislative backbone of that promise. We will deliver the single biggest upgrade of workers’ rights in a generation. That is good for workers and good for business, because we believe that a strong package of workers’ rights and protections go hand in hand with a strong economy. Many good employers already know that. When staff feel secure, they stay longer, are more productive and help the business to succeed. The Bill will help to make that the norm across the economy.

Our first mission as a Government is to deliver economic growth in every single part of the country. The Employment Rights Bill is a vital step. It represents a cornerstone of our mission to grow the economy, and it is designed to modernise the UK labour market, raise living standards and support long-term growth.

Securing that growth is worth doing only if working people actually feel the benefits of it in their pay, in their security and in their daily lives. Too many people face practices that undermine both their security and our economy, from fire and rehire to zero-hours contracts and last-minute shift cancellations. Those practices breed insecurity, and insecurity stifles productivity.

That is why the Bill is at the centre of the Government’s plans and is so significant. It will benefit at least 15 million workers, or half of all UK workers, protecting them from those practices and providing economic safety for the lowest paid in our labour market.

Let us consider a few of the changes that the Bill will bring. Some 9 million employees will gain protection from unfair dismissal, not after two years, but from day one. Workers in some of the most deprived parts of the country will keep hundreds of pounds a year in their pockets instead of losing them to the hidden costs of insecure work, and nearly 1 million more people each year will benefit from bereavement leave when they lose a loved one.

I thank the hon. Member for York Central (Rachael Maskell) for her comments in support of the Bill and of the Government’s work in this area, and for her work on the impact of bullying in the workplace over a number of years. I would be happy to meet her to discuss those matters further.

Economic impacts were a key part of the contribution of the hon. Member for Spelthorne. Some still argue that stronger rights are a cost, but I reject that. Stronger rights are an investment in people, in stability and in long-term growth. As set out in the Government’s published impact assessments for the Bill—I will respond in detail to his points on that—there are clear, evidence-based benefits to tackling issues holding back the UK labour market, which will have a positive impact on economic growth and will help to raise living standards across the country.

[Steve Barclay]

I join colleagues in welcoming the Minister to her place. She said in her reply to my hon. Friend the Member for Spelthorne (Lincoln Jopp) that there would not be an additional cost, but the Association of Directors of Adult Social Services has raised concerns about the additional costs and the funding gap, given that it will fall on local authorities and will therefore, in turn, require Government support. Could she clarify what she expects to be the extra cost of the Bill in terms of social care?

[Kate Dearden]

I am happy to come back to the right hon. Member on the particular social care interests and concerns that he might have.

Improving worker wellbeing, supporting productivity, reducing workplace conflict and creating a more level playing field for good employers would grant significant benefits, worth billions of pounds per year. That is why delivering the benefits of the Bill would offset the costs. That assessment is shared by organisations such as the Resolution Foundation. The £5 billion figure from our impact assessment, which the hon. Member for Spelthorne mentioned, is a top-end estimate of that cost, and will largely represent a direct transfer to the lowest paid in society, with the central estimate close to £1 billion. Even if we take that high-end estimate, the costs are therefore likely to be less than 0.4% of our national wage bill, and could even be as low as 0.1%. That is our best estimate at this stage.

[Andy McDonald]

If workers are in good, well-paid work, they can go on to lead good, flourishing lives, and they will return that as a dividend through their collaboration with their employer. They will also be in a position to be more active in the economy. We know that when working people have money, they are able to spend it and generate activity in the economy. Does the Minister agree?

[Kate Dearden]

I absolutely agree that all workers will benefit in some way from the Bill and be able to give back to the economy, whether by spending in the local economy or by contributing to other local businesses.

[Lincoln Jopp]

I think I am right in saying that the impact assessment’s estimate of a cost of £5 billion was at the higher end, but I read out quite an extensive set of quotations from the RPC saying that it was an inadequate impact assessment and that it completely under-gunned the financial impact of the measures. Does she just think that the RPC is wrong?

[Kate Dearden]

I will come back to the hon. Member’s point in a moment. A number of the measures already have strong support from businesses. An Institute for Public Policy Research survey of businesses found that the majority—at least 75%—supported the measures in our Bill, including nearly seven in 10 small businesses.

The hon. Member also mentioned the Regulatory Policy Committee’s opinion. I want to make it clear that that refers to the evidence and analysis presented in the impact assessment, not the policy itself. Our impact assessments provide initial analysis of the impacts that could follow, and we will be updating and refining them as we further develop the policy and continue our consultation and engagement. I reiterate just how important that is in our next steps with the Bill. I am keen that we continue to work with businesses as part of that consultation and engagement.

All in all, with this legislative framework, we need to ensure that we can make work pay, by addressing the challenges that Britain faces today and by including up-to-date employment protections in areas that have cost Britain’s workers and businesses so dearly over a number of years and that are desperate need of updating. For that reason, the package is pro-growth, pro-business and pro-worker. It supports our Government’s objective to boost growth and improve living standards for all.

The scale of the impacts will, of course, depend on further policies, which are ready for secondary legislation. I have already said that we will continue to engage and consult—[Interruption.]

[Dr Andrew Murrison (in the Chair)]

Order.

[Kate Dearden]

Thank you, Dr Murrison. The hon. Member for Spelthorne also mentioned particular groups of workers who will benefit. I am glad he did so, because younger workers, women, people with disabilities and people from ethnic minority groups make up a higher than average share of those workers who will benefit from the package. Flexibility and the rebalancing of security are very important for that section of the workforce, so I am proud that the Bill will help those people to stay in work and that it will make their work more family-friendly, improve their living standards and put more money in their pockets.

[Euan Stainbank]

I welcome the Minister to her place. She is making an excellent point, but I refer her to specific sectors in which some Opposition parties have called for carve-outs. Does she agree that it is important that we do not carve out, for any particular sector, the strong provisions in the Bill, and that it is both morally and economically wrong to say to a young worker that if they work behind a bar, they should have fewer rights than if they worked behind a desk?

[Kate Dearden]

I want every single worker, no matter where they work, to have a good standard of rights in their workplace and to know their rights. The Bill will ensure that we can provide that opportunity for so many people, including young workers, and that they benefit from the legislation.

[Lincoln Jopp]

Will the Minister give way?

[Kate Dearden]

I want to make a bit of progress and respond to the hon. Member for Strangford (Jim Shannon). I thank him for his warm welcome and his contributions to the debate. Our small businesses are absolutely crucial for our economy, and I pay credit to the businesses in his constituency that he mentioned.

The hon. Member also mentioned sick pay and cost. Our legislation is so important because 1.3 million employees will now be entitled to statutory sick pay. The Health and Safety Executive found that stress, depression or anxiety accounted for 17.1 million working days lost in 2022-23. That is the equivalent of more than £5 billion of lost output annually. That is why it is important that sick pay is extended to so many workers in our economy; it will ultimately benefit businesses, because we can keep people in work, but people do not have to make that decision. The pandemic shone a light on the terrible situation that many workers face; I am proud that we will be extending sick pay to so many people, so they will not have to make that decision. Ultimately, that will help businesses, because we can keep people in work and support them when they need it.

We have listened carefully to concerns raised by business groups, trade associations and individual employers. I have already mentioned my predecessor, my hon. Friend the Member for Ellesmere Port and Bromborough, who was tireless in his efforts to engage with stakeholders, and spoken of my intention to do the same.

The Bill brings an opportunity to modernise outdated practices and reduce exploitation. It aims to create a level playing field for responsible employers to start to operate and build their businesses. We are also, of course, mindful of the needs of small and medium-sized enterprises. I speak as someone with personal experience: I come from a family of small business owners, and I know at first hand the pressures that they face.

That is why many provisions will be phased in, giving time to adapt, and the Department will give clear guidance and consultation. We are committed to ongoing engagement with businesses. The implementation road map, which we published on 1 July, has received high levels of praise from businesses for the clarity that it has provided. I hope that that reassures the hon. Member for Richmond Park (Sarah Olney), as she also mentioned it in her remarks.

Decent employers stand to gain when the rules are fair. The shadow Minister mentioned her concerns about the impact of the Bill on growth. In the three months to July, GDP grew by 0.2%, meaning that cumulative growth this year has already exceeded the Office for Budget Responsibility’s forecast for the whole of 2025. I am absolutely confident in this Government’s growth agenda. We want to be bolder and more creative, and to ensure that every single area of this country feels the benefit of this Government and our growth priority. This Bill is absolutely key to that, as I have already outlined.

Our new Secretary of State for Business and Trade, my right hon. Friend the Member for Hove and Portslade (Peter Kyle) has already spoken with more than 100 business leaders. He made putting that partnership at the heart of our growth mission a priority on coming into office. That laser focus on implementation, with his priority to double down on growth, is an absolute cornerstone of building powerful partnerships with business. We have shown we are listening; he touched on that a lot in the debate yesterday, so I will not repeat the arguments that he made very eloquently in the House.

To conclude, I reiterate that this Bill is about raising standards. It is about fairness, unlocking growth and future-proofing our economy. Fairness can drive growth. Businesses that treat their workers well can innovate more and grow faster. Stronger employment relations are absolutely essential to that.

As is typical with employment legislation, the technical details of many of the policies in this Bill will be provided through regulations, and in some cases codes of practice, following Royal Assent. We will be consulting extensively, because this Employment Rights Bill is a positive step forward for workers, for employers and for the economy. I look forward to working closely with all hon. Members of this House, and people outside it, to deliver on this landmark reform and make a real difference to workers, employers and our British economy.