Employment Rights Bill

Lord Hunt of Wirral Excerpts

Committee stage
Thursday 8th May 2025 Lords Chamber

Moved by

[Lord Hunt of Wirral]

19A: Clause 1, page 10, line 3, at end insert—
(c) in determining whether it was reasonable to enter into a limited-term contract, regard must be had to the employer’s operational circumstances and information available at the time the contract was made, including—(i) genuine short-term business needs or uncertainty,(ii) seasonal, project-based, or event-based fluctuations,(iii) relevant financial or staffing forecasts, and(iv) industry norms or practices relating to temporary contracts.(d) a decision to enter into a limited-term contract must not be considered unreasonable solely because subsequent business conditions changed in a manner not reasonably foreseeable at the time the contract was entered into.”Member's explanatory statement
This amendment clarifies that the reasonableness of entering into a limited-term contract should be assessed based on the employer’s operational context and the information available at the time of contracting. It lists specific factors that may be relevant to that assessment and states that unforeseeable changes in business conditions after the fact should not, by themselves, render a decision unreasonable.

[Lord Hunt of Wirral (Con)]

My Lords, with Amendments 19A, 20 and 21 in my name and in the name of my noble friend Lord Sharpe, we return to guaranteed hours. As drafted, our concern is that the Bill risks creating rigidity which does not properly reflect the real-world operational needs of businesses across key sectors of our economy, particularly retail, hospitality and tourism, all of which contain seasonal work.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I thought I had already offered to have further discussions, but I take the noble Lord’s point.

[Lord Hunt of Wirral (Con)]

My Lords, I think my noble friend Lord Lucas and the noble Lord, Lord Fox, were looking for the draft regulations. I do not think I need to remind the Committee of my declaration of interests; at Second Reading, I reminded the House that I am still a practising solicitor. It is no accident that, last week, City AM—a newspaper circulated widely through the City—said that the Bill is the biggest boost for the legal profession that anyone had ever seen. Many more lawyers will be needed to wade through the complexities of the Bill.

In particular, as my noble friend just pointed out, we are constantly debating the Government’s power to introduce regulations, but Parliament is not allowed to see those regulations when it passes the primary legislation that gives Ministers the power, after consultation, to do whatever they wish whenever they wish to do it. We are going to have this time and again in this series of debates. Surely it is right that, if the Government are taking the power to introduce detail—in particular by amending primary legislation—we should see that detail, if only in draft, before we decide to give that power to Ministers.

[Lord Fox (LD)]

I do not know whether I am allowed to intervene on this, but I wonder whether the noble Lord heard the Minister say that the Government are consulting on draft regulations. Perhaps he might ask the Minister to share those draft regulations with us during the process of consultation.

[Lord Hunt of Wirral (Con)]

I completely agree and am very grateful to the noble Lord, who introduced the whole concept of “lumpy”. As well as “lumpy”, we are all talking about “flexible” and he also said “fluctuating”.

This has been a very helpful debate. I particularly enjoyed my noble friend Lord Moynihan of Chelsea describing the history of the introduction of the minimum wage and how it gave rise to zero-hours contracts in the first place. It is a reminder that we have to be careful every time we take a key step down the road to creating more employment law, as we have to be mindful of the consequences.

I agree with the noble Lord, Lord Londesborough, that we have to keep thinking of the start-ups and scale-ups, and the effect that this legislation will have on them. It was good that my noble friend Lady Noakes reminded us of the truth behind the Low Pay Commission 2018 Report that small and micro-businesses, as she put it to the Committee, need flexibility. My noble friend Lady Coffey reminded us that one’s job quite often depends on whether it is raining, as she put it. I think it was Mark Twain who once wrote that, in England, everyone talks about the weather but no one ever does anything about it. It is a fact that demand often fluctuates according to the weather and this was a good reminder of that.

I welcome the speech from the noble Lord, Lord Hendy. His four points were key; I accept them and will carefully ponder each one—particularly his point about escape routes. Our purpose—mine and that of my noble friend Lord Sharpe of Epsom—is to ensure that we do not need escape routes, because we will get a law that fits the way in which the economy can grow and be more competitive. That is what it is all about. It is not about short-term contracts being the answer here and another form of contract being the answer there. Most employers want stability so that they can look forward with confidence.

How right the noble Lord was to remind us of the importance of small and medium-sized enterprises. It must surely be a worry in his mind as to the effect this onerous Bill will have on those small and medium-sized enterprises looking to grow and expand that do not have an HR department that can set out for them exactly the way ahead through all the bureaucratic routes they have to follow. They want to be able to grow and expand without carefully checking which rulebook applies. They, of course, always allow bereavement leave. All the employers I have known, when there was a tragedy in a member of their workforce’s family—I am not talking about just my clients but across the whole sector—did, of course, allow people time off. Therefore, we should not be establishing rigidity.

This is where I find myself in total agreement with the noble Lord, Lord Fox: we do not want a two-tier system. However, as my noble friend Lady Noakes pointed out on our previous Committee day, there are various tiers already in the tax system. The exemption I sought in Amendment 21 surely does not in any way undermine the rights of workers but gives the Bill the flexibility it needs to succeed in practice. We have heard in this debate and from businesses across the country that a rigid one-way system for guaranteed hours simply does not reflect the way in which large parts of our economy function. Retail, hospitality, tourism, logistics, seasonal industries—all rely on flexible staffing, and they operate in environments that can shift rapidly, sometimes overnight.

I plead again with the Minister that these amendments provide a narrow, principled route for employers to propose changes: not to walk away from commitments but to respond when there is a genuine and material change in business operations. No retaliation, no loopholes, just a basic safeguard to ensure that businesses are not locked into obligations that are no longer viable.

Let us be honest, if employers are not able to make changes in response to real pressures—a drop in demand, a loss of control, over-capacity—they are far less likely to offer guaranteed hours in the first place. That is not speculation; it is what we are hearing from so many of those making representations about the Bill at the present time. The result is clear: fewer jobs offered, fewer guaranteed hours and fewer opportunities, especially for the very people who rely on flexible and part-time work. That means young people, students—who we will come to in a moment—workers with disabilities, carers and, of course, those trying to get their foot on the ladder.

Finally, I agree with my noble friend Lord Sharpe that it would be helpful to sit down with the Minister and her colleagues to see if we can find a way through. Otherwise, we shall have to return to this on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment 19A withdrawn.

Moved by

[Lord Hunt of Wirral]

19B: Clause 1, page 10, line 26, at end insert—
“(13) The duty to offer guaranteed hours under Section 27BA(1) does not apply to workers who are full-time students.”Member's explanatory statement
This subsection provides that the duty to offer a guaranteed hours arrangement under Section 27BA(1) does not apply to workers who are full-time students.

[Lord Hunt of Wirral (Con)]

My Lords, as I indicated, we now return to students and the guaranteed-hours exemption for full-time students. Amendment 19B is in my name and that of my noble friend Lord Sharpe of Epsom.

At Second Reading, I heard the Government’s intention, as part of their growth agenda, to get young people back to work who are not in education, employment or training—referred to as NEETs. Retailers provide flexible and part-time jobs tailor-made for people coming off benefits and the nearly 1 million 16 to 24 year-old NEETs. However, the evidence available clearly shows that the guaranteed-hours reforms, as currently drafted, fail to realise the realities of student employment.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, this has been a useful debate on the subject of those who may be made exempt from the scope of the right to guaranteed hours. First off, I say to the noble Lord, Lord Hunt, that it is quite right that the Government have a detailed plan to get young people into work and training. Of course, we want to provide new opportunities for all young people, and we are determined to do that.

Amendment 19B in the name of the noble Lord, Lord Sharpe, seeks to take workers who are full-time students out of the scope of the right to guaranteed hours. I say to the noble Lord, Lord Hunt, that the Government appreciate that zero-hours contracts or those sorts of arrangements can work well for many full-time students, who desire the flexibility that they provide. We have heard that from around the Chamber this afternoon. The noble Lord, Lord Hunt, talked about term-time or seasonal work, but I urge him to look back through the previous debates we have had and the comments I have made, because there are a variety of ways in which employers can offer that flexibility of contract and the limited-terms contracts that could address those term-time only or seasonal work issues. I am not persuaded of his argument in that regard.

I say to the noble Lord, Lord Jackson, and the noble Baronesses, Lady Lawlor and Lady Coffey, that there are workers who nevertheless are full-time students, and they can still experience that one-sided flexibility, similarly to the workers who are studying part-time. It seems disproportionate to exclude workers from the scope of that right simply on the basis that they are enrolled in full-time studies. Full-time students may value guaranteed hours to help them manage their job around their studies or arrange their childcare in the same way as those in full-time work.

I think there is an assumption in this debate that we are talking only about a particular age group of people and that it is a group of young people who are earning some extra beer money. This is far from the case. Many full-time students are mature students with family or other caring responsibilities, or even simply with rental or mortgage commitments. For those people, guaranteed hours can be a financial lifeline. According to a 2024 TUC poll, the majority—80% of students on zero-hours contracts—also reported that they had experienced difficulties managing study and education alongside their work. They certainly, in this generation, try to manage both of those a lot more than they did in my generation, and it is now much more expected that young people will work alongside their study. Many of those students want the opportunity to have regular hours to avoid the burden of incurring long-term student debt, which they would otherwise take into their ongoing working life. As we have said, it is entirely up to the student to say what is right for them, but there are very good reasons why the guaranteed hours should apply to all people and we should not make an exemption for students.

However, as we noted, flexibility for workers is important and the Government are not seeking to change that, where workers value that flexibility and have some benefit from a zero-hours contract. As I say, that is why workers who are full-time students and want to retain their zero-hours contracts or arrangements will be able to do so by rejecting the guaranteed-hours offer. They can accept it or reject it.

However, it is the Government’s view that they should be able to choose, based on their individual circumstances, whether to accept a guaranteed-hours offer, rather than being denied that right, as the noble Lord’s amendment seeks, purely on the basis of the fact that they are studying. I hope the noble Lord will look again at his amendment. I feel as if it is penalising young people and students in a way that feels quite unreasonable in the circumstances where everybody else is entitled to this right. Therefore, I hope he will be prepared to withdraw the amendment.

[Lord Hunt of Wirral (Con)]

My Lords, this has been a valuable debate; I agree with the Minister. Indeed, I welcomed her admission that zero-hours contracts work very well for students and are valued by them. I was interested in the TUC survey. All the surveys I have seen so far tell this Committee that full-time students do not want to lose zero-hours contracts.

It may be that the Minister will say, “Why is this amendment necessary, because they will not request full-time employment?” However, under the Bill, the employer has to work out how the business will be able to offer someone on a zero-hours contract full-time employment as and when they request it. It comes later, of course, when we are moving amendments, that we can say that it should not be the duty of the employer to give the opportunity of full-time employment; it should be the right to request full-time employment. What I think we are arguing about is whether all employers will have to go through the process in advance of any request being received. Under this legislation, they have to work out how they will be able to respond positively to an offer.

My noble friend Lady Lawlor shared the real-life experience and the way in which various students have taken advantage of these contracts. But what if they are not going to be offered them and given the opportunity of working as and when, in the flexible, lumpy way they want to organise their studies, as my noble friend Lord Jackson of Peterborough, pointed out? I thank him for going down memory lane; it was a fascinating glimpse of life as a stacker. I suppose all of us will remember what we did as students. I volunteered. I crossed Whiteladies Road in Bristol and offered my services to the BBC. The BBC took me on as a freelance newsreader.

[Lord Goddard of Stockport (LD)]

As everybody does.

[Lord Hunt of Wirral (Con)]

Yes. I had to turn up at 5 am and then read the news.

[Lord Fox (LD)]

I am excited by the noble Lord’s anecdote, as I was by other noble Lords’ anecdotes, but would he perhaps concede that that was several years ago and the employment market, and indeed the student body, might have changed somewhat since then?

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[Lord Hunt of Wirral (Con)]

Sadly, yes. I was on a student grant and they were abolished, so I cannot draw too many analogies. My noble friend enticed me down memory lane.

I just wanted to see what the adverse effect of this amendment might be if we were to exclude full-time students. My noble friend Lady Coffey quite rightly reminded us that there is such an exemption in other legislation, such as that around universal credit. Therefore, the Minister will not be blazing a new trail; she will merely be responding to the very fact that, under legislation, full-time students do not necessarily fit into the pattern laid down by the Bill.

I am sure we will return to this. In the meantime, we can hardly wait for this meeting with the Minister, in which she will take us through the way this will all operate to cover flexible and lumpy employment. While reserving the right to return to the issue on Report, I beg leave to withdraw the amendment.

Amendment 19B withdrawn.

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[Lord Leong (Lab)]

Although the noble Lord expects me to give him a specific timeframe, I cannot do so now. I will consult with my officials and come back to him.

[Lord Hunt of Wirral (Con)]

On the first day in Committee, we already discussed the implementation plan of the Minister, the noble Baroness, Lady Jones of Whitchurch. We then moved on to discuss the draft implementation plan, and the noble Baroness gave us a commitment. Can the the noble Lord, Lord Leong, update that commitment? By when will we see the draft implementation plan?

[Lord Leong (Lab)]

I give the noble Lord my commitment that it is very much a work in progress.

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Moved by

[Lord Hunt of Wirral]

33: Schedule 1, page 167, leave out lines 28 to 30 and insert—
“(2) Determining whether reasonable notice of a shift was given must include an consideration of—(a) whether the work-finding agency offered the shift to the agency worker as soon as reasonably practicable after receiving confirmed information about the shift from the hirer in accordance with Regulation 18 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (S. I. 3319/2003);(b) any time reasonably required by the agency to carry out suitability assessments in accordance with those Regulations.”Member’s explanatory statement
This amendment clarifies how “reasonable notice” should be assessed for agency workers. It ensures that the work-finding agency must offer the shift to the worker as soon as reasonably possible after receiving confirmed details from the hirer, and after the agency has conducted suitability assessments, in line with relevant regulations.

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[Lord Hunt of Wirral (Con)]

My Lords, as we now move to consider reasonable notice in agency work, I will speak to Amendments 33 and 36 to 38.

Unfortunately, and despite all their show of consultation, I believe the Government have failed to realise how agencies operate in the labour market, so once again the drafting of the Bill shows the failure of a one-size-fits-all approach. The challenge we face in the context of the Bill is clear. Work-finding agencies operate in a highly dynamic and often unpredictable environment, where the flow of information from hirers is essential in matching workers to available shifts.

This brings us to the core concern. Agencies often rely on information from hirers about the availability and cancellation of assignments. Without timely and sufficient details from hirers, agencies cannot predictably or properly fulfil their role. Therefore, any new obligation to provide reasonable notice for agency workers must consider the time taken for agencies to receive this confirmed information and make the necessary arrangements and assessments.

Regulation 18 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 lays down that an agency cannot

“introduce or supply a work-seeker to a hirer unless the agency or employment business has obtained sufficient information”

to assess the suitability of the worker for the role in question. The issue here, therefore, is straightforward. Agency workers often find themselves without income as a consequence of cancellations initiated by hirers, yet agencies are held financially liable for those decisions, even though they have no control over the cancellations.

To illustrate the risk, let me provide a scenario. A work-finding agency places an agency worker with a hirer for a shift. However, due to unforeseen circumstances, the hirer cancels the shift at short notice. The agency, having no control over the cancellation, is still required to compensate the worker. The financial burden therefore falls on the agency, despite the cancellation being the decision of the hirer.

How will this amendment help to ensure that small and medium-sized agencies are not disproportionately impacted—that is what we seek to do here—bearing in mind the financial responsibility associated with hirer-induced cancellations, particularly when the business in question may already be financially vulnerable? Do the Government believe that it is justified to place the financial burden of a cancellation or curtailment on the agency when the failure to provide notice lies entirely with the hirer?

I believe that the Minister understands the complexities of the agency-worker relationship, but the Bill in its present form does not make proper allowance. How do the Government propose to monitor and enforce the full accountability of hirers for failures in notice arrangements? This is an issue that has to be faced, given the rigidity of the legislation we are required to consider under this Bill. I beg to move.

[Lord Goddard of Stockport (LD)]

My Lords, I am pleased to speak to this group of amendments, which seek to clarify the framework governing agency workers, and I have some sympathy with the views of the noble Lord, Lord Hunt, on this matter. It seems to me that a third person looking into this process will see the Labour Party trying to protect employees and give them 100% rights and the Conservatives trying to ensure that small and other businesses have a level playing field to employ, create jobs and grow the economy, which I thought was the Government’s objective. I wonder why, with this employment Bill, we cannot get a little closer to dealing with the mechanics.

The answer that the Minister gave to my probing amendment baffled me. I wanted to get up to ask him to explain what he said to me. Millions of people who listened to it or who read Hansard tomorrow will not have a clue. As my lumpy noble friend has said in previous debates, we seek clarity before the Act comes into power. We need to know these things. I spent four years on the Secondary Legislation Scrutiny Committee. The watchword on that committee was quite clear: do not give Ministers unfettered powers. What is in the tin of a Bill is what it says on the front of the tin of a Bill. I wonder whether this tin will say “tomatoes” but when you open it, you will have carrots—a problem for somebody that does not eat carrots.

Running through this group of amendments, we on these Benches are trying to bring the parties together to understand that it is a two-way thing. I have been a committed trade unionist for 25 years. I have also run a business and employed 20 people. Those two things are compatible, but they are complicated, because you have different pressures from a different standpoint. As with all legislation, we try to move it through by being sensible and finding common ground for what the trade union movement wants, what the Government want and what employers want. I had guests in yesterday who were asking about the Bill. I roughly outlined it, and they could not believe it. They employ 30 people. They said, “We can’t afford HR, we can’t afford lawyers, we can’t afford for people to take us to tribunals. We just want to employ people, make a small profit and grow the business”. I cannot understand how this has become so complicated.

On Amendment 33, concerning the interpretation of “reasonable notice” when shifts are offered to agency workers, the aim appears to be to require agencies to make offers promptly once details are confirmed by the hirer and all the checks have been completed. While this may be an attempt to bring greater clarity, I question whether that proposal and that language fully address the practical realities of agency work. The intention may be sound, but there is a risk of replacing one form of ambiguity with another. That said, for agency workers some degree of predictability and transparency is important and long overdue.

Amendment 36 introduces the idea of joint liability between work-finding agencies and hirers when a shift is cancelled or curtailed at short notice. There is merit in exploring whether a shared responsibility could lead to fairer outcomes, particularly when neither party should be able to shift all risk on to the other. Equally, it is important to consider how such provision would work in practice and whether it risks disincentivising the use of agency labour altogether.

Amendment 37 proposes that compensation should be triggered only when a shift has been formally confirmed, rather than relying on the more subjective “reasonable belief” test. I appreciate the effort to bring objectivity to a murky area, but workers should not be left guessing whether an assurance from an agency amounts to a genuine commitment. We need to understand how this might interact with the fast-moving nature of some temporary staffing such as seasonal work or that connected with the weather. Ambiguity in the current framework serves no one, least of all the workers.

Finally, Amendment 38 provides that the agency would not be liable to pay compensation where the hirer fails to give appropriate cancellation notice. This is arguably a fairer allocation of risk, as agencies should not be penalised for the failure of others. However, it must be clear that such changes would not weaken the overall protections intended for the worker.

While these amendments raise important issues around the treatment of agency workers, I am not yet convinced that they strike the right balance in all aspects. There is a risk that in seeking to impose clearer structures, we introduce new complexities and unintended burdens. I think that this is what the Government are trying to say. Nevertheless, the underlying objectives—clarity, fairness and accountability—are ones that we should continue to pursue. Any changes to the framework must support clearer obligations and deliver fairer outcomes, for the workers and for the agencies and hirers. If these amendments highlight anything, it is the pressing need for the Government to offer clarity and consistency in this area.

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So, the Bill includes provisions in new paragraph 27 to enable agencies to recover costs from the hirer, but only where the arrangement between the agency and hirer was entered into no later than two months from Royal Assent and not modified since. The Government consider this the right approach to protect contractual freedom while ensuring timely payments for agency workers. It will protect agencies in existing arrangements from being liable for payments that they were not responsible for incurring. I hope those responses reassure the noble Lord and that he can withdraw his amendment.

[Lord Hunt of Wirral (Con)]

My Lords, this has been a helpful short debate. I join with the noble Lord, Lord Goddard of Stockport, in seeking clarity, fairness and consistency. The Minister has given us some answers to the questions we posed, but it is just another example of where it is so important to think through the issues, as they affect all those who are in any way covered by the Bill. We will need to return to this matter during the further passage of the Bill to ensure that my objective and that of the noble Lord, Lord Goddard, is fulfilled—namely, that the provisions offer a fair and workable solution for all the parties involved.

Lastly, in an unguarded moment, the Minister, in responding to the previous amendment, said that the draft implementation plan was “a work in progress” and that he was considering it with his colleagues. I make an offer on behalf of all in the Committee: we would be willing to help this work in progress by looking carefully through the first draft of the implementation plan, while accepting that it may not be the final draft. At least it would give us an idea of what is in the Government’s mind as to implementing rather complicated provisions in the Bill, which are currently shrouded in some degree of mystery as to what they will bring forward in secondary legislation.

I just repeat what we have said several times in the debate so far: when you amend primary legislation through secondary legislation, it is far better, in our view, to have those amendments in the Bill rather than being left to some further process—admittedly, consultation—that would then amend that primary legislation through secondary legislation. Like the noble Lord, Lord Goddard, I too have served on the other committees of this House, which find that Governments perhaps do not give secondary legislation the priority it needs but should never seek to amend primary legislation through secondary legislation. Many of our committees have said that time and again. If we could see the first draft of the implementation plan, we could assist the Minister and his colleagues to get this Bill right. I beg leave to withdraw the amendment.

Amendment 33 withdrawn.

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Moved by

[Lord Hunt of Wirral]

62: After Clause 8, insert the following new Clause—
“Impact assessment: sections 1 to 8(1) The Secretary of State must conduct a review of—(a) the impact of sections 1 to 8 on the operation of employment tribunals, and(b) the ability of employment tribunals to manage any increase in applications resulting from those sections.(2) The Secretary of State must lay the review made under subsection (1) and the Government’s response to the review before Parliament.”Member’s explanatory statement
This new clause would require the Secretary of State to conduct a review of the impact on the employment tribunals of the Bill’s provisions on zero hours workers.

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[Lord Hunt of Wirral (Con)]

My Lords, we now move to consider the impact assessments, or lack of them. Amendment 62, which I will speak to first, considers the impact on employment tribunals of the zero-hour contract provisions. Amendment 63 would require an impact assessment within six months, specifically for the hospitality sector, the retail sector and the health and social care sector. I greatly welcome the noble Baroness, Lady Fox of Buckley, who has kindly given her name to that amendment, along with my noble friend Lord Sharpe of Epsom.

Earlier this week we heard, and it was reported in the Financial Times, that the UK employment tribunal backlog had hit record levels. Some 49,800 cases were waiting to be heard by an employment tribunal at the end of the final quarter of last year, up from 39,000 in the same period of 2023. That is according to data from HM Courts & Tribunals Service. Earlier this afternoon, the Government refused to accept Amendment 21, which I spoke to and which would allow businesses to make a dismissal in the case of genuine business needs. By rejecting this amendment, as well as any suggestion from businesses throughout their consultation, I think that the Government are risking overloading the employment tribunal system even more than is the case today.

Moreover, it is worth noting that the Government have previously tabled so-called technical amendments that would have required employers to make work available to zero-hour workers. This alone highlights how impractical the current zero-hour contract provisions are when viewed through the lens of tribunal risk. It is deeply concerning, in particular, that the Regulatory Policy Committee has given a red rating to the Government’s impact assessment on day-one rights over unfair dismissal.

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[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Hunt, Lord Fox and Lord Londesborough, and the noble Baronesses, Lady Fox and Lady Stowell, for their contributions, and thank the noble Lord, Lord Sharpe of Epsom, for tabling Amendments 62 and 63. These amendments cover the impact of the Bill’s zero-hour contracts provisions on the employment tribunal system and on specific sectors.

Let me place on record that the Government recognise the vast contribution that the hospitality, retail and health and social care sectors make to the nation’s economy, and that they employ millions of people. I will give some examples. The hospitality sector currently employs 330,000 people on zero-hours contracts, which makes up 28.9% of the workforce. The retail and wholesale sector employs close to 90,000 people, equating to 7.8% of the workforce. The health and social care sector employs 190,000 people, contributing 16.5% of the workforce.

Zero-hours contracts offer flexibility for some workers, but evidence indicates that they have been exploited by certain UK companies, leading to job insecurity and limited work rights. This pro-business, pro-worker Bill aims to address these issues by effective enforcement and by closing the loopholes, to ensure fair treatment for all workers so that we can grow our economy.

Amendment 63 seeks to insert a new clause requiring the Secretary of State to publish an assessment of the impact of the zero-hours provisions in the Bill on specific sectors of the economy within six months of the passage of the Bill. As the Committee will know, the Government have already published a very comprehensive set of 27 impact assessments, spanning close to 1,000 pages. These are based on the best available evidence of the sectors likely to be affected by these measures. As mentioned by the noble Lords, Lord Hunt and Lord Fox, the RPC’s opinions refer to the evidence and analysis presented in the impact assessment and not to the policy itself. Our impact assessments provide initial analysis of the impacts that could follow. We will therefore be updating and refining them as we further develop the policy and continue consultation and engagement.

[Lord Hunt of Wirral (Con)]

Can the noble Lord respond to the red rating which the RPC has given the Government’s impact assessment? Are the Government continuing discussions with the Regulatory Policy Committee to try to reverse that red rating, to meet the necessary requirements that the Regulatory Policy Committee imposes on all Governments? When will we see an end to the red rating and an acceptance that the Government have learned from the experience and judgment of the RPC?

[Lord Leong (Lab)]

I thank the noble Lord. This impact assessment will continue. I will be mentioning later in my speech that there will be further impact assessments. Regarding his specific point about the RPC’s rating, I will write to him.

We recognise the importance of ensuring that the impacts of these policies on workers, businesses and the economy are considered, and that analysis is published outlining this. We already intend to publish further analysis, both in the form of an enactment impact assessment when the Bill secures Royal Assent and further assessments when we consult on proposed regulations, to meet our Better Regulation requirements. In addition, we are committed to consulting with businesses and workers ahead of setting out secondary legislation, as we have said on previous groups, including those from the sectors listed in the amendment.

Amendment 62 would insert a new clause to require the Secretary of State to undertake and publish a review of the impact on employment tribunals of the zero-hours provisions in the Bill. The detailed package of analysis, to which I referred a moment ago, also includes an illustrative impact assessment of the Bill’s measures on employment tribunal cases. We intend to refine this over time by working closely with the Ministry of Justice, His Majesty’s Courts & Tribunals Service, ACAS and wider stakeholders. We recognise the importance of assessing the impact of these policies on the enforcement system and have worked in partnership with these organisations throughout policy development.

We already intend to publish further analysis, both in the form of an enactment impact assessment when the Bill secures Royal Assent and further assessments when we consult on proposed regulations, as I mentioned earlier. In the meantime, the Government are taking various steps to increase capacity within the employment tribunal system. For example, ACAS currently provides information to employees and employers on employment law, and early conciliation for potential employment tribunal claims. It also offers post-claim conciliation. The Government have taken various steps to increase capacity, such as the deployment of legal caseworkers and recruitment of additional judges.

HMCTS continues to invest in improving tribunal productivity through the deployment of legal officers to actively manage cases, the development of modern case management systems and the use of remote hearing technology. We are committed to looking at what more we can do in this area, working with the Ministry of Justice and wider stakeholders such as ACAS, as I just mentioned. We are already helping many employers and workers to reach settlement before they need to go on to a further hearing.

Our work will also include looking at opportunities for the fair work agency to take on enforcement, where that would help both workers and businesses reach resolution more quickly without needing to go to an employment tribunal.

I refer to the point from the noble Baroness, Lady Fox, about gaps in the Bill. The Bill does not have any gaps. Some elements of the Bill await engagement or future engagement and consultation with stakeholders, so that we can ensure that the policies work for all involved.

I hope I have reassured your Lordships and that the noble Lord, Lord Hunt, will withdraw his amendment.

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[Lord Leong (Lab)]

I take the noble Lord’s point. At the rate the Bill is going, we may reach recess before we come back again to discuss it further.

[Lord Hunt of Wirral (Con)]

My Lords, that was a very significant admission by the Minister, for which we thank him. We will need the recess to rethink quite a lot of the Bill.

I agree with the noble Baroness, Lady Fox of Buckley, that this is a gap-filled Bill. I know that the Minister is told in his brief to say there are no gaps, but there are gaps. Wherever you look in the Bill, there is further work to be done before the Government will say what they will do. It takes huge powers—Henry VIII powers—to amend primary legislation through statutory instruments. That is a hugely significant step, and we as a reasonably sensible Chamber cannot possibly allow the Government to get away with that.

You cannot get away with saying to Parliament, “We’re not going to give you the detail of what we’re going to do. Indeed, we’re not going to tell you what we’re going to do, because we’re going to consult and then we will do it by statutory instrument”. That is not the way to legislate. The contribution of the noble Baroness, Lady Fox of Buckley, has been very helpful. I also thank the noble Lord, Lord Londesborough, for reminding us about the creative industry—the gig industry.

As the noble Baroness reminded us, we have to have a relevant impact assessment so that Parliament can see what effect the Bill will have on a rapidly changing workforce. The workforce has changed dramatically over the last 15 to 20 years and the modern landscape has changed substantially.

[Lord Leong (Lab)]

I thank the noble Lord for giving way. I appreciate what he has said. We are all for parliamentary scrutiny of the Bill—we welcome it. We welcome every single amendment and clause being scrutinised. The Government believe that the delegated powers in the Bill are necessary. I am pleased, as the noble Lord will have noted, that the DPRRC found it

“heartening that in a Bill with so many … powers it has only found four on which to raise concerns”.

The Government will respond formally in due course to the DPRRC.

[Lord Hunt of Wirral (Con)]

I just happen to have the report of the DPRRC here, and it does raise serious concerns. One of the concerns it has constantly raised about all Governments is that they should not amend primary legislation by secondary legislation. They should be upfront about what they are going to do, and change.

It may well be that the Minister will take great comfort in the fact that there are only 18 black lines of criticism—18. I hope that he will take the advantage that has been given to him on all sides to take the Bill away and try to find a better solution.

We must not forget that the Bill I originally saw at Second Reading in the House of Commons has changed substantially: 160 amendments were tabled on Report in the Commons. They were not scrutinised line by line—they could not be, because they were produced at the last moment.

The Government have to recognise that, as my noble friend Lady Stowell said, it may well be that the Bill is going to disincentivise a whole range of employment situations, which is going to have a massive impact on the whole employment scene. It may well be that my noble friend is right that it is going to create more problems. I recognise that the noble Lord, Lord Fox, has already got a major concession concerning the utilisation of the recess, but we need to pause and say to the Government, can we now see the overall impact assessment and, in particular, have an undertaking that they will continue to scrutinise carefully the effect of all this legislation on the employment market before it is too late?

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[Lord Hunt of Wirral (Con)]

I was looking to a longer holiday for us all to scrutinise the Bill. There is no need for the Minister to keep clarifying his comments. I just take them at face value, and it is an undertaking on his part to reflect on all the issues that have been raised, particularly the impact assessment. In the meantime, I beg leave to withdraw the amendment.

Amendment 62 withdrawn.

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Moved by

[Lord Hunt of Wirral]

68: Clause 10, page 37, line 9, leave out paragraph (b) and insert—
“(b) in subsection (2), for “four” substitute “two”.”

[Lord Hunt of Wirral (Con)]

My Lords, I will speak to Amendments 68, 69, 70 and 71 standing in my name. I will speak to Amendment 68 first. It concerns the removal of the three-day waiting period for statutory sick pay. While we recognise the principle of supporting workers during periods of ill health, we also have to acknowledge the pressures that this places on employers, particularly small businesses which, unlike the state, bear the direct cost of statutory sick pay.

The original waiting period served as a guard-rail, ensuring that statutory sick pay was reserved for genuine and sustained periods of incapacity. Its removal would risk increasing claims for short-term absences, many of which might previously have gone unclaimed or been resolved informally.

The proposal in the Bill to abolish waiting days for statutory sick pay for all workers, including those on temporary contracts and working via employment agencies, introduces an additional cost burden for many small and medium-sized recruitment firms in particular, especially in a period of stagnant growth.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I am pleased that we have moved on and that we are now debating the Bill’s important provisions to improve the provision of statutory sick pay for millions of people across the country. I therefore thank the noble Lords, Lord Sharpe and Lord Hunt, for tabling Amendments 68, 69, 70 and 71 on this topic and speaking to them. These amendments would significantly change the statutory sick pay measures in the Bill.

The pandemic exposed just how precarious work and life are for those on low incomes, with many forced to choose between their health and financial hardship. Strengthening statutory sick pay is part of the Government’s manifesto commitment to implement our plan to make work pay, ensuring that the statutory net of sick pay is available to those who need it most. These changes are important. Estimates indicate that up to 33% of influenza-like illnesses are acquired in the workplace. One sick employee coming into work can lead to 12% of the workforce becoming sick, according to WPI Economics’ modelling.

The changes to remove the waiting period and lower earnings limit from the SSP system will therefore benefit employers by reducing presenteeism, which in turn can lead to overall productivity increases and can contribute to a positive work culture that better helps recruit and retain staff. This can help to reduce the overall rate and cost of sickness absence to businesses, and also contribute to reducing the flow of employees into economic inactivity.

I will turn first to Amendments 68 and 70. Removing the waiting period is essential to ensure that all eligible employees can take the time off work they need to recover from being sick, regardless of whether they are an agency worker. Removing the waiting period will also better enable phased returns to work, which evidence shows can be an effective tool in supporting people with long-term health conditions to return to and stay in work. This change should help to reduce the overall rate and cost of sickness absence to businesses, contributing to reducing the flow of employees into economic inactivity.

I regret that the noble Lord’s amendment would make this more challenging, as it would mean that employees would have to take two consecutive days off to be eligible for statutory sick pay. I do, however, understand the noble Lord’s concerns about the impact of the waiting period removal on businesses, but if employers have the right policies and practices in place—and most good employers do—the risks of inappropriate absenteeism can, of course, be mitigated. Crucially, the additional cost to business of the SSP reforms is around a relatively modest £15 per employee. We have been lobbied from both directions on these provisions because, for example, many on our own Benches would say that the rates we are proposing here should be much higher. I am sure they will make their concerns heard at some point during the passage of the Bill. It is not a great deal of money—as I say, it is £15 per employee—and it is certainly aimed at the lower rate that could be available.

On Amendment 69 regarding agency workers, one of the fundamental principles of the Bill is to ensure that people who work through employment agencies and employment businesses have comparable rights and protections to their counterparts who are directly employed. Amendments that limit the entitlement of agency workers would undermine this objective and have no reasonable justification. The noble Lord, Lord Hunt, said that employment agencies have more of an arm’s-length arrangement with their agency workers, but I would say the opposite: in fact, employment agencies are in a powerful relationship over their agency workers, meaning that those workers are less likely to abuse such a scheme.

Amendment 71 seeks to limit the maximum entitlement of SSP for employees with multiple employers so that they would receive no more statutory sick pay than they would be entitled to if they worked for only one employer. However, this would be administratively very complicated to deliver for businesses, particularly SMEs, and carries a high risk of SSP being miscalculated and employees being underpaid. It would particularly harm the very lowest-paid people who are working a limited number of hours. I also question the necessity of such an amendment. As it stands, employees with more than one job can already receive SSP from their employers if they earn above the lower earnings limit. The measures in the Bill will not change that, and I regret that this amendment would impact only the lowest-paid employees.

That is all I have to say on this issue at this stage, and I therefore ask the noble Lord to withdraw his amendment on the basis of the assurance I have given.

[Lord Hunt of Wirral (Con)]

My Lords, I recognise that the Minister says that she understands the concern that has been expressed. We are aware too that many agencies have raised with the Government the serious impact on small businesses and the risk of increased absenteeism. I believe their concerns are valid and I hope the Minister will continue to keep an open door for those agencies to perhaps respond in more detail directly to the Minister.

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[Baroness O’Grady of Upper Holloway (Lab)]

Before the noble Lord sits down, it would be very helpful if he could confirm and clarify that, in expressing a concern that removing the waiting days would lead to more and sporadic absenteeism, it is not being implied that workers are swinging the lead. If it was being implied, where is the evidence?

[Lord Hunt of Wirral (Con)]

Of course it is not being implied. It is outrageous that the noble Baroness should think so and voice so in this debate, which has seen a very calm and careful consideration by the Minister, who sets a good example for us all. I hope the noble Baroness will follow it. I beg leave to withdraw.

Amendment 68 withdrawn.