Employment Rights Bill

Lord Leong Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I am very grateful to the noble Baroness, Lady Kramer, for setting out the position so clearly, but I am particularly grateful to my noble friend Lady Noakes because, as a result of her moving the key Amendment 5, we have had a remarkably positive debate about what I believe is the lifeblood of the UK economy, namely the small and medium-sized business sector. The noble Lord, Lord Londesborough, of course, is a great authority on all this, and it was good to hear from the noble Lord, Lord de Clifford, as well.

When we reflect for a moment on the speeches that have been made in this debate—apart from that of the noble Baroness, Lady Kramer—we have not had any contributions from the Government Benches. But, as my noble friend Lord Leigh of Hurley pointed out, the most important contribution will be made by someone who really does understand. The noble Lord, Lord Leong, knows all about small businesses, and I am thrilled and delighted that he is summing up the debate because he understands what so many of my colleagues have tried to point out. The noble Baroness, Lady Neville-Rolfe, said that bureaucracy can get in the way of success. Look at the amount of rules and regulations and bureaucracy.

I agreed with all my noble friends, including my noble friend Lord Ashcombe when he pleaded for a sensible and measured response. We all want to see bereavement leave—all good employers allow for bereavement leave. We want to see rights established very clearly, but my noble friend Lady Verma pointed out that if we impose them on the small and medium-sized sector in the way that my noble friend Lady Noakes outlined, three, four or five employees will suddenly have to deal with all this legislation.

Let us remind ourselves of the importance of small businesses. As several of my colleagues pointed out, at the start of last year there were 5.45 million small businesses with up to 49 employees, making up a staggering 99.2% of the total business population in the UK. We are talking about a massive sector, and therefore we have to worry and concern ourselves about the effect of the Bill. As the Federation of Small Businesses put it, in its current form the Bill risks becoming nothing short of a disaster for small and micro-businesses.

The noble Baroness from the Liberal Democrat Benches spoke about a two-tier workforce system, which those Benches object to. But as my noble friend Lady Noakes pointed out, we do in fact have tiering alive and well throughout the UK economy. It is not trying to impose one size fits all; it is recognising that over 99% of businesses in this country are small and cannot possibly cope with the burden of this Bill.

It just so happens that I already have a quotation from the noble Lord, Lord Leong, which I readily move to. We have heard from the Government on multiple occasions that they are committed to supporting SMEs and ensuring that they are not burdened with excessive costs or red tape. The noble Lord, Lord Leong, made a very important point during the passage of the Product Regulation and Metrology Bill:

“we do not want to burden SMEs with additional regulatory or financial cost”.—[Official Report, 25/11/24; col. GC 138.]

What wise words: we would love to hear those words from him again tonight. He will realise that the reality of this Bill is starkly different. The only thing this Bill seems to do for SMEs is to burden them with additional regulatory and financial costs. It is incredibly difficult to reconcile the Government’s stated intentions with the actual impact this legislation will have on small and micro-businesses across the country.

I know that my noble friend Lord Sharpe of Epsom and I have Amendment 282 in this group, but I do not want to go into it. I was taking the old Companies Act definition, and I do not need to go into all the findings of the Bolton committee and all those who have sought to define this, because I think my noble friends have done a great deal to define small and medium-sized enterprises.

We just need to know what the Government intend to do to alleviate the burden on small and micro-businesses. The impact assessment has highlighted the significant challenges that these businesses will face in implementing these reforms, and at the moment there is no adequate plan to support them.

I would like to ask the Minister these questions. First, will he please outline what the three main expected benefits of this Bill will be for small and micro-businesses? Secondly, how will the Government support small businesses in complying with the provisions of this legislation? What kind of guidance, training and resources will be made available to ensure that these businesses can navigate the new regulations without inadvertently falling foul of the law? Finally, can the Minister provide an assessment of the risk of unintentional non-compliance by small businesses? What steps are the Government taking to mitigate this risk and ensure that these businesses are not unduly penalised as a result of a lack of guidance in the legislation?

The Government have not consulted the small and medium-sized sector. If they have, can we please have a great deal more detail on what their conclusions were? If they have not consulted, will they please do so now?

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

My Lords, I thank all noble Lords who contributed to this group of amendments with such passion. The noble Baroness, Lady Noakes, together with the noble Lords, Lord Sharpe and Lord Hunt, tabled several amendments—Amendments 5, 124 and 282—that seek to remove micro-businesses and small and medium-sized businesses from the scope of large sections of the Bill.

--- Later in debate ---

[Lord Leigh of Hurley (Con)]

With respect, the statement that was issued on April Fools’ Day seems to be in support of the minimum wage, not of the specific clauses in the Bill.

[Lord Leong (Lab)]

I thank the noble Lord for that, but IKEA is pretty supportive of the overall intention of the Bill and of the national minimum wage, which is obviously outside the scope of the Bill, such as what we are doing on zero-hours contracts, other short-term contracts and all that. I will write to the noble Lord with further details on the various clauses that it supports.

Various noble Lords asked about the impact assessment. The benefits of the Bill that were published by the TUC show that even modest gains from reforms to workers’ rights will benefit the UK economy by some £13 billion. Opposing this, the impact assessment says that the costs to business would be some £5 billion or 0.4% of employment costs. The benefit is huge, and economists have done research on this.

I cannot agree more with the noble Lord, Lord Londesborough, who says that start-ups and scale-ups definitely generate employment. It is absolutely right that we have to support them and I strongly believe that the Bill does support them.

Various noble Lords mentioned day-one rights and difficulty in recruiting employees. Remember that, when you run a small business, yes, it is very competitive to employ your first employee: sometimes you have to compete with the big companies in matching salaries or even benefits. I believe passionately that the Bill puts SMEs on a level playing field with large companies, where they can offer the basic benefits in the Bill.

Sometimes we asked: why are we excluding SMEs because it is so difficult for employers to recruit, and why should employees in SMEs not get day-one rights? My answer is: why not? Why should they not get day-one rights? As I said, they are the people who work for the owners, for the owners to make the profit. Without them, the owners will not have a business, so it is very important that they are supported and I believe strongly that good businesses provide fantastic support to their employees.

[Lord Ashcombe (Con)]

My Lords, I am not sure that it is the difficulty in recruiting that is the real problem for small and micro businesses; I think it is the fear of recruiting. That is a really different point.

[Lord Leong (Lab)]

I thank the noble Lord for that. I might turn that around and say that, if I am looking for a job, I have a choice of big or small companies. I am taking a chance and a risk working for a very small company. I am not sure whether that company will last. That risk works two ways. I strongly believe that most people work for companies not because of what the company does but because they look at the owner or the founders and whether they want to work with such people. At the end of the day, the employees will also be taking a chance on the employer.

[Baroness Verma (Con)]

My Lords, there is a huge difference between a large business—and its culture and the ability to respond to all the new burdens that will be placed on it—and a small business. The Minister himself said that a happy business and happy employees add to a good bottom line. The problem is that, if an employer is so burdened by so many things to comply with because it is a small employer, that happiness is soon going to disappear. All I think that all noble Lords around the House are asking is that we ease the burdens for small and micro-businesses by removing not the rights but just the burdens.

[Lord Leong (Lab)]

I thank the noble Baroness for that. There are other additional responsibilities, not only in terms of HR. A company that sets up needs to have IT support and payroll support. How many SMEs have their own IT department or payroll department, let alone an HR department? There will be big businesses that will be providing services to support SMEs. The whole argument is about responsibility: basically, when you set up a business, you have all these responsibilities, and this is part of those responsibilities.

[Baroness Verma (Con)]

My Lords, I do not want to labour the point but, if the Minister were to speak to the small businesses that people like us are speaking to, I think they would really argue that these are huge implications for them.

[Lord Leong (Lab)]

I thank the noble Baroness. I will not hold the House for too long, because I think the dinner break is coming up, but I will obviously meet up with her to talk further on this.

To conclude, the Government believe that having an entitlement to fair, flexible and secure working should not be reserved for those people who work for large companies. It is fundamental that our “make work pay” reforms, including those in this Bill, apply across all employers. Any exceptions to this provision based on the size of the business would create a two-tier labour market, with some workers facing fewer rights, entitlements and protections. This would reduce the talent pool from which SMEs could attract employees, as I mentioned earlier. This in turn would lead to an uneven playing field between employers of different sizes and reduced incentives for small businesses to grow. I therefore ask the noble Lord, Lord Sharpe, to withdraw Amendment 282 and the noble Baroness, Lady Noakes, to withdraw Amendments 5 and 124.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

Moved by

[Lord Leong]

14: Clause 1, page 4, line 2, at end insert—
“(8A) Subsection (8B) applies where—(a) a worker’s contract or arrangement requires an employer to make work available to a worker for a number of hours, and(b) some or all of those hours may be made available either on days falling within a reference period or on days falling within another period (all of the days on which the hours may be so made available together forming “the longer period”).In subsection (8B), “the unassigned hours” are the hours that may be made available at any time during the longer period as described in paragraph (b).(8B) Where this subsection applies—(a) subsection (3)(a)(ii) is to apply as if the contract or arrangement required the employer to make work available to the worker during the reference period for the apportioned number of the unassigned hours (in addition to any other hours that the employer is required to make available to the worker during the reference period);(b) “the apportioned number” of the unassigned hours is—Image-1where—H is the number of the unassigned hoursD1 is the number of days in the reference period that fall within the longer periodD2 is the number of days in the longer period.(8C) Where there is more than one longer period in relation to the same reference period, subsection (8B) is to be applied separately in relation to each longer period.”Member's explanatory statement
This amendment makes provision, for the purposes of proposed section 27BA(3)(a)(ii) of the Employment Rights Act 1996, about the calculation of the number of hours for which an employer is required to make work available to a worker during a reference period in cases where hours might be made available in that period or another period.

--- Later in debate ---

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Baroness Coffey (Con)]

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

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

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


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

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the Minister for his detailed introduction to the amendments in this group. As he was speaking, I thought that he had inadvertently highlighted the mind-boggling complexity of what employers are up against when dealing with this Bill. I did hear all the words but, to paraphrase a famous comedian, I was not entirely sure that they were necessarily in the right order.

As my noble friends Lady Coffey and Lord Murray, and the noble Baroness, Lady Kramer, have pointed out, the Government tabled these 27 amendments only a few days ago. Perhaps they are simply technical amendments, but I am afraid I am inclined to agree with the other speakers that they do not appear to be so. I will just pick a few items at random from the Minister’s speech. If amendments involve national security, insolvency and the death of a claimant at an employment tribunal, these are matters of substance; they are not technical at all.

This is not the way to do business in this House. The last-minute approach is symptomatic of a much deeper issue, which is the lack of care and due diligence when it comes to this Bill. It is rushed, it is poorly thought-through, it has been inadequately consulted on, and it is one that these Benches will scrutinise to the fullest possible extent.

We have to ask why the Government have still not tabled any amendments to address the concerns of businesses regarding the changes to zero-hours contracts in this Bill. These are not niche or minor concerns; they go to the heart of how businesses—especially, as we have been discussing all evening, small and seasonal employers—operate.

We have heard already some of the germs of the future scrutiny that these amendments can expect to receive in depth. We will not oppose them today, but we of course reserve the right to revisit them at a later stage, when we have had time to digest them and read the Minister’s comments in much more detail.

On a personal note, I read Amendment 14 with mounting horror. It induced a minor heart flutter because it reawakened memories of a particularly unsuccessful algebra exam I took when I was about 16. I would be very grateful if we could have a minor health warning on any future amendments of that type.

[Lord Leong (Lab)]

I thank all the noble Lords for their contributions. Some noble Lords raised concerns about the number of amendments tabled by the Government, and I would like to reassure the Committee that these really are technical amendments, brought about as a result of welcome scrutiny of the Bill. They are entirely appropriate and an ordinary part of making good legislation. I remind noble Lords that we had tons of government amendments when we debated the Procurement Bill recently, so this is not unusual.

I will answer some specific points raised by noble Lords. The noble Baroness, Lady Coffey, asked about Amendment 53. This is one of a number of technical amendments designed to ensure that the Bill operates as it was intended to operate. As an example of how technical they are, Amendment 53 seeks to amend new Section 104BA because we realised that it was not clear that Section 104 of the Employment Rights Act 1996 already ensured that dismissal in such cases was automatically unfair.

The noble Lord, Lord Murray, mentioned scrutiny. There will be technical regulations tabled at a later stage, or during the course of this legislation, and the House will have every opportunity to scrutinise these through the affirmative procedure. There will be time for noble Lords to scrutinise delegated powers and this Bill.

[Lord Murray of Blidworth (Con)]

The Minister appears to be saying that the House’s deficit in scrutiny can be made up by the fact that we can scrutinise secondary legislation. As the Minister will be well aware, the last time this House negatived a statutory instrument was, I think, in the 1970s. It is an all or nothing: either we agree to a statutory instrument or we do not; we cannot amend a statutory instrument. The Minister will surely agree that, realistically, this is not an avenue for scrutiny.

[Lord Leong (Lab)]

I take the noble Lord’s point, but I am sure he will appreciate that, when he was a Minister, a number of statutory instruments were placed before the House and we had every chance to scrutinise them. There is a question over whether noble Lords want to table whatever options are open to them, but the whole objective is that the House will be able to scrutinise regulations as well.

I refer to the point about algebra from the noble Lord, Lord Sharpe. I had to read three times the formula in Amendment 14 to understand what it actually means. I will try to explain in plain English what we are trying to achieve with H times D1 over D2.

To qualify for guaranteed hours, a worker’s existing guaranteed hours need to be lower than the threshold and the worker needs to work more than the guaranteed hours in the reference period. That condition does not work for someone whose guaranteed hours may or may not fall entirely in the reference period, such as someone on an annualised-hours contract with no clarity on when those hours fall.

--- Later in debate ---

[Baroness Kramer (LD)]

Before the Minister sits down, could he answer my question on whether or not there will be a code of practice? I can see many businesses struggling their way through all this stuff. I think his attempt to clarify the complex algorithm illustrates the need for such a code very powerfully.

[Lord Leong (Lab)]

I thank the noble Baroness for her question, which I have written down. In response to an earlier grouping, my noble friend the Minister said that the Government would publish detailed guidance on the government website, which I hope will give some clarity on that.

Amendment 14 agreed.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Thursday 8th May 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to my noble friend Lord Lucas for introducing this group with his Amendment 21A. I could not agree with him more that flexibility is a key part of an efficient economy. That deserves to be written in stone. I am also grateful to my noble friends Lady Lawlor and Lady Noakes for their support for various amendments in this group and to the noble Lord, Lord Fox, for his positive comments.

I shall speak to Amendments 22, 24 and 28 in my name. There are many circumstances in which an employer has no choice but to make a request or cancel a shift on short notice—my noble friend Lady Lawlor gave us some very useful examples of that. But to go on a bit, for example, if a colleague calls in sick, which is something that is likely to increase in frequency with changes to statutory sick pay governed in other areas of this Bill, or if events beyond the employer’s control intervene, such as local flooding or public disturbances, payment for unworked cancelled shifts becomes an additional financial burden at precisely the time when a business is already experiencing a downturn. It is not simply about inconvenience; it is actually about viability.

To give another particular example, we have heard from the hospitality industry that the proposed rights around notice and cancellation of shifts could severely undermine existing staffing practices. For instance, in the case of pubs, which as we know are under pressure anyway, those with outdoor garden spaces in particular operate in a highly unpredictable environment. One representative of the sector made it very clear to us when he said:

“The new right to notice of shift allocation and cancellation could undermine a pub’s ability to offer voluntary overtime”.


During the course of the discussion, the examples were magnified to some extent—and to some extent the example that I am about to give is the flipside of the one that my noble friend Lady Coffey highlighted with regard to restaurants in a previous group, and the fact that they are pre-charging for tables. The representative of the industry pointed out to us that in many cases, for example, offering food in a pub Monday to Wednesday is a highly marginal business, and they often let their staff go early, and so on. He is of the opinion that, as a result of the Bill, much of that work will simply disappear; they will not bother to open, because it will be too complicated to administer. Not the least of it is that it is not just the administration but the costs of offering the compensation that is governed by this clause. That would obviously not be very good for consumer choice, plus of course there are implications for tax receipts and a whole host of other areas as well.

In practice, these businesses rely heavily on flexibility, which includes voluntary shift swaps and short-notice availability. As we have discussed on numerous occasions, if the weather turns—and in Britain, let us be honest, that is not a small variable—a pub expecting a busy day may suddenly find itself very overstaffed. Under the Bill, cancelling those shifts could result in mandatory compensation.

I turn to Amendment 24. Another flaw identified in the Bill is that it presumes that, in every instance, a cancelled, moved or curtailed shift entitles the employee to compensation. This rigidity, however, does not account for the unforeseen events which, as noble Lords across the House will know, are a common occurrence throughout the working world. We have heard many examples of those. The assumption that the employer is always somehow at fault does not reflect the realities of working life. Our amendment therefore seeks to clarify and incorporate a degree of flexibility into the Bill. As the noble Lord, Lord Fox, pointed out, we are proposing that the conditions that govern this entitlement to compensation should be subject to regulation in this case. There is a strong case to be made for this exception to our general principled dislike of the amount of regulation on which the Bill relies. As defined by the Secretary of State, this could be nuanced to ensure greater parity in the employer/employee relationship.

It is vital that we remember throughout these debates that we are discussing a piece of legislation that will profoundly affect workers and employers across the country. I am concerned that, in certain elements of this Bill, an ideological assumption is made about the relationship between the worker and the employer, which leads to absolute positions—another point that the noble Lord, Lord Fox, raised in a previous group. We all have a duty to ensure that the Bill meets the practical demands of the real workplace and does not just speak to such assumptions. This amendment would balance the relationship between the employer and the employee and would make sure that those who provide the work are protected, alongside those who undertake it. There is an essential symbiosis that needs to be maintained in order for us to have a thriving economy, with good jobs available for workers. We cannot fall prey to inflexible, absolute stances that upset this relationship. Our amendment seeks to correct this mistake in the text of the Bill.

I am very grateful to my noble friend Lady Noakes in particular for her support for Amendment 28, because she raised unarguable points. The reasonable belief test outlined in the Bill raises several concerns. One of the most substantial is that the term “reasonable” is incredibly broad and creates a great deal of uncertainty for both workers and employers. As noble Lords across the House will know, this part of the Bill is designed to make working entitlements clearer and provide greater clarity and certainty to workers about the shifts they are working and the sort of income they can therefore expect to receive. However, the text in its current form is wide open to a massive range of interpretations and fails to provide clarity or protection for either workers or employers. How is either party to know what constitutes a reasonable expectation? Redefining this element of the Bill so that a formal confirmation of a shift is required for entitlement to compensation will provide clarity for both parties and will create a mutual responsibility between the worker and the employer to make expectations and duties clear.

It is my understanding that the Government intend this section of the Bill to place an obligation on the employer to clearly communicate shift assignments to workers in order to avoid misunderstanding. We agree that this should be the case, although the current text of the Bill uses language that is far too vague. If the Government want to promote the clear communication of shift assignments, surely providing for a formal commitment of work, rather than the belief of being needed, is the way to make sure that that obligation is met. Our proposal of a formal confirmation requirement would mean that both employer and employee know where they stand and what is expected of them and would address the shortcoming in the text as it stands.

I will say just a few brief words on Amendment 27, in the name of the noble Lord, Lord Fox. Forty-eight hours seems to us a perfectly reasonable notice period regarding the time before a shift is due to start. A survey from the Association of Convenience Stores found that 90% of colleagues in the convenience sector report that they have never had a shift cancelled with less than 48 hours’ notice. Unless a reasonable notice period is reflected in the new requirements, it is likely to lead to a cautious approach to staffing by many hospitality and retail businesses. This would mean restricting operating hours and/or staff numbers during periods of uncertain footfall, rather than offering shifts that may ultimately be surplus to operational needs on the day, thus incurring compensation costs for late cancellations.

Moreover, there is a notable asymmetry in the Bill as drafted, because there are no reciprocal requirements for employees to provide notice when they are unable to work at a scheduled shift. That gap will have significant implications. One of the biggest challenges for employers, particularly in retail, is managing last-minute cancellations by employees due to illness, childcare needs or other issues. When employers must find cover at short notice, how are they to meet the same reasonable notice requirements that they themselves are held to?

We need common sense in this legislation, so I urge the Government to accept my and other amendments, or to be honest about why they will not.

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

My Lords, before I address the amendments in this group, I take this opportunity to refer to the letter I wrote regarding the algebraic formula. There are existing formulae in employment rights legislation—for instance, in relation to the calculation of the amount payable to an agency worker as calculated in Section 57ZH of the Employment Rights Act 1996, so this is not something new. We will, however, publish full and comprehensive guidance in due course, which I am sure many noble Lords will find fascinating.

This has been a very useful debate, and I am very grateful for the contributions of all noble Lords. We have covered several areas in this debate related to the amendments tabled. The noble Lord, Lord Lucas, in his Amendment 21A, is seeking to make changes to the period of notice deemed reasonable for cancellation of or change to a shift for agency workers. The noble Lord, Lord Sharpe of Epsom, in Amendment 22, is seeking to make changes to the right to reasonable notice of shifts for directly engaged workers. The noble Lords, Lord Sharpe of Epsom, Lord Fox and Lord Goddard of Stockport, are seeking to make changes to the right to payment for short-notice shift cancellations, movements and curtailments in Amendments 24, 27, 28 and 29.

Before I address each of these amendments in turn, let me share some analysis that the Living Wage Foundation did in 2023. It suggested that 59% of workers whose hours vary from week to week, which includes zero-hours and low-hour workers, receive less than a week’s notice of shifts, with 13% receiving less than 24 hours’ notice. The vast majority of respondents—90%—stated that they do not receive full payment when their shifts are cancelled unexpectedly, 74% receive less than half, 51% receive less than a quarter and 26% receive no payment. Further analysis, from the Chartered Institute of Personnel and Development, suggests that approximately 33% of UK employers who use zero-hour contracts compensate workers for shifts that are cancelled with less than 24 hours’ notice, with 48% of employers responding that they do not.

I turn first to Amendment 21A. The noble Lord, Lord Lucas, says in his explanatory statement that this amendment

“seeks to define a reasonable maximum period of temporary work for agency workers in primary legislation”,

which

“will help remove any uncertainty for businesses worried about genuine temp work being caught in the new zero-hours regulations”.

The noble Lord seeks to achieve this by providing that the period of what is presumed to be reasonable notice for agency workers must be no greater than 24 hours. This would mean that it would be presumed reasonable if an agency worker receives 24 hours’ notice, but unreasonable if they receive less, so only in those latter situations would the agency or hirer have to prove that the period of notice was still reasonable in the circumstances.

I am not clear how this amendment would achieve this. The amendment would be made to Clause 2, concerning rights to reasonable notice for directly engaged workers, and appears to prevent workers being given more than 24 hours’ notice of cancellation or change to a shift. I reassure the noble Lord that the Bill provides for periods of notice “presumed reasonable” to be set in regulations for directly engaged workers and agency workers, as well as the factors that should be taken into consideration in individual cases.

Following consultation, it may be that the “presumed reasonable” periods of notice and the factors that should be taken into consideration will be different for agency workers and directly engaged workers. We intend to consult on what period is presumed reasonable, because it varies from case to case. Setting a period of reasonable notice in primary legislation would thus pre-empt consultation and not allow us to take into account stakeholders’ views.

--- Later in debate ---

[Lord Fox (LD)]

These are probing amendments; they are designed not for us to tell the Government what we think, but for them to tell us what they think. Simply knocking our argument down does not really achieve that objective. Secondly, as I predicted in a sense, the Government have set up a consultation process, but they have already ruled out the offer of 24 hours from the noble Lord, Lord Lucas, and disparaged 48 hours. What other things have they ruled out before the consultation has been completed?

[Lord Leong (Lab)]

To a certain extent, we are not ruling anything in or out. We are basically saying that we will be consulting with all stakeholders. I take the noble Lord’s point—yes, the amendment says that, and I am responding to the amendment by saying that we will be undertaking further consultation and bringing forward regulations in due course.

I believe the noble Lord wishes instead to provide that a right to short-notice payment will arise only where the worker has received formal confirmation that they will work the shift from their employer, or, in the case of agency workers, hirer or work-finding agency. The Government’s view is that it would be overly prescriptive to specify that the right to short-notice payments arises only in cases where formal confirmation has been provided. While in many cases, a reasonable belief will arise only where the worker has received confirmation in writing from the employer that they will work the shift, different businesses have different practices when arranging shifts, and it would not be appropriate to adopt a universal, one-size-fits-all approach.

For example, when a worker agrees to work the shift after being contacted individually to work it, they would likely reasonably believe that their agreement corresponds to them being needed to work the shift, if it is standard practice that they will be needed to work despite additional confirmation not being provided. So, it is fair that the worker in this scenario should receive a payment if the shift is then cancelled, as they expected to work it and may have incurred costs preparing to do so. It would also be overly burdensome for the employers to have to provide confirmation where this would not otherwise be needed in order to be confident that they will have staff for that particular shift.

The Government believe that, in most cases, it will be clear to both the worker and the employer, or the agency worker and the agency or hirer, whether the worker was expected to work a shift. The Government will also publish guidance to help with interpretation. As a last resort, where disputes cannot be settled, employment tribunals will be able to determine whether a worker had a reasonable belief that they were needed to work a shift with a result that is fair. We wish to retain this flexibility to allow for the broad range of circumstances that may arise.

[Lord Fox (LD)]

I apologise for intervening again. That is a really helpful response, because it confirms my fears. The less specific the supporting documentation is around what is reasonable, the more likely it is that this is going to go to a tribunal in order to define what is reasonable. We all know that this will take a great deal of time and a lot of money, and it will leave uncertainty probably for years before such time as a case is heard. Do the Government accept that, by being more specific in the first place, they can avoid this greater, costly uncertainty?

[Lord Leong (Lab)]

I am not sure about that. Basically, we do not want to be too prescriptive and define what reasonableness is, because it varies from case to case and company to company. There needs to be that flexibility there.

Amendment 29 is a probing amendment from the noble Lord, Lord Goddard of Stockport, which seeks to add a power into the Bill to make regulations setting out factors that determine whether a worker reasonably believed they would be needed to work the shift. The Government tabled an amendment during Commons Report stage to ensure that a worker will not be entitled to a payment for a short-notice cancellation, movement or curtailment of a shift unless at some point prior to that they reasonably believed they would be needed to work the shift. This is considered appropriate because it is only where a person reasonably believes that they will work a shift that it is reasonable for them to prepare to work and incur costs as a result.

This amendment was necessary to eliminate the risk of workers taking cases to tribunals and making claims for shifts they did not reasonably believe they needed to work. This is particularly important in situations where an employer offers a shift out to multiple people, for example if they organise shifts through a large WhatsApp group. In cases like this, we want to be clear that people should receive cancellation payments when they are told they are not needed at short notice only if they reasonably believed they would work the shift in the first place.

For example, as set out in the Explanatory Notes, if there is an established practice of “first come, first served”, and an individual says they will work a shift after they have seen that another individual has already done so, they should probably not expect to work that shift. Even where a shift is offered only to one worker, they should still reasonably believe they will work it in order to be eligible for a short-notice payment. For example, if an employer offered a shift four weeks in advance, and the worker accepted the shift only two hours before the shift, it seems less likely they should expect actually to work that shift.

These are the kind of scenarios the Government considered when making the amendment; however, there are other scenarios where issues about this may arise. The Government wish to avoid being overly prescriptive by setting out factors in regulations, given the range of scenarios where this may be relevant. Instead, the Government consider it more appropriate to leave it to tribunals to determine on a case-by-case basis and we want to ensure that tribunals maintain flexibility to do so as they consider appropriate.

Before I conclude, I will answer the questions from the noble Baroness, Lady Lawlor, and the noble Lord, Lord Sharpe, about reasons outside of employers’ control. With better planning, employers need not cancel as many shifts, but it is not right that, when there is uncertainty, the entire financial risk rests with the workers. We really need to have a fair balance, and the Bill offers exemptions as a possibility for that. We will consult on that; however, any exemptions are likely to be narrow, as we do not believe that workers should take the whole financial hit.

I hope that I have been able to persuade all noble Lords and provide assurances on the Government’s wider commitment to consult with stakeholders and businesses. I therefore respectfully ask noble Lords not to press their amendments.

[Lord Sharpe of Epsom (Con)]

Is the Minister really saying that the points that we were making are related only to employers’ bad planning? How on earth are they supposed to plan for natural disasters, floods and so on? Secondly, I apologise for using the wrong reference to the Bill, as the Minister helpfully pointed out. He also helpfully pointed out that much of the Bill is being written on the hoof, so I would be very grateful if he would commit to stop producing new iterations of the Bill, which are ever expanding.

[Lord Leong (Lab)]

I am sure that the noble Lord will be happy to hear that I will consult with everybody as widely as possible, including him. We can have further conversations to explain the purpose of the Bill and why we are doing it. We are not doing this in isolation. I believe that the Bill is pro-business and pro-worker, and we need to get that message across to him and other noble Lords.

[Lord Fox (LD)]

On a number of occasions, the Minister set out that the Government are consulting. What is the timetable for that consultation, and when can we expect the results from it?

[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.

[Lord Sentamu (CB)]

I want the Minister to explain something. He has refused to set the definite hours in which this needs to be done. He said that that would be prescriptive and that the tribunal will determine whether the matter is reasonable. Is it not quite odd to rely on the tribunal to execute what noble Lords are trying to suggest in their amendments? Should not the Bill itself include those hours? If you do not want to be prescriptive, you can say, “Up to 24 hours”, or, “Up to 48 hours”, which means that they do not have to go all that way—that is slightly less prescriptive. I am baffled that the Minister wants the tribunals to enter into these matters. He and I know that they take a long time and cost a lot of money. Why is he legislating to open a door in this area to tribunals, which everybody should try to avoid?

[Lord Leong (Lab)]

I thank the noble and right reverend Lord for his intervention. I can say only that I thought we were all agreed that flexibility is a good thing, and I am sure we do not want anything in the Bill that would restrict either an employee or an employer from making a reasonable judgment on a case-by-case basis. On that, I rest my case.

[Lord Lucas (Con)]

My Lords, I am grateful to the noble Lord for his analysis of my amendment. I certainly do not intend to press it today, but I very much look forward to taking up the issues when we sit down with the team to discuss lumpiness.

On the noble Lord’s preference for keeping “reasonable” broad, I can see the attractiveness of that. If a business is wiped out by a flood, postponing employees’ work for the next day at zero notice but saying, “We’ll want you in the day afterwards so you can start the clean-up” would presumably be reasonable. At the same time, giving very little notice when it is obvious that more notice could have been given would obviously be unreasonable. But allowing the whole pattern of this to be developed slowly through individual cases in tribunals does not seem to be the right way of going about it.

--- Later in debate ---

Moved by

[Lord Leong]

23: Clause 3, page 22, line 32, after “description” insert “that requires the employer to make some work available to the worker”
Member’s explanatory statement
This amendment is being made to bring the amended provision into line with other provisions in the Bill.

--- Later in debate ---

Moved by

[Lord Leong]

25: Clause 3, page 23, line 20, leave out from “given” to end of line 25 and insert “—
(i) less than a specified amount of time before the earlier of when the shift would have started (if the shift had not been moved, or moved and curtailed) and when the shift is due to start (having been moved, or moved and curtailed);(ii) on or after the start of the shift;”Member’s explanatory statement
This amendment is consequential on my amendment to clause 3 that expands the meaning of the movement of a shift.

--- Later in debate ---

Moved by

[Lord Leong]

30: Clause 3, page 26, leave out lines 19 to 25 and insert—
“(6) The duty in subsection (2) is to be taken not to have applied if—(a) the employer pays to the worker an amount in relation to a number of hours that is at least equal to the amount of the payment that the employer would have been required to make to the worker under section 27BP(1) in relation to the same number of hours but for regulations made under subsection (1)(c), and(b) the payment is made on or before the day on which the payment under section 27BP(1) would have had to be made if the employer had been required to make it.”Member’s explanatory statement
This amendment changes the date by which a payment must be made in order for the duty to give a notice under proposed section 27BR(2) of the Employment Rights Act 1996 to be disapplied.

--- Later in debate ---

[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.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Hunt and Lord Goddard, for their contributions, and the noble Lord, Lord Sharpe of Epsom, for tabling the amendments in this group, covering Amendments 33 and 36 to 38.

Before I speak to these, I reassure all noble Lords, especially the noble Lord, Lord Goddard, that the Government respect and appreciate all the amendments tabled by noble Lords. The whole purpose of this is to address individual amendments and see where the Government are coming from and how we can find a way forward. There are some things in noble Lords’ amendments that may not be required because the Bill already covers them elsewhere. We are trying our very best to address every amendment and we welcome noble Lords’ scrutiny of the Bill. I reassure noble Lords that we are not being flippant about any of these amendments.

--- Later in debate ---

[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.

[Baroness Fox of Buckley (Non-Afl)]

I am delighted that consultations are occurring but, as legislators, we are asked to vote on a Bill without having seen the consultations. The Minister can tell me that there are no gaps because it will all be done for us. I do not know why we do not sack ourselves; what are we doing, sitting here, reading through line by line in Committee and discussing a Bill that we are told not to worry our little heads about? Those are the gaps.

[Lord Leong (Lab)]

First, I did not say “little heads”. It is important that we continue to have conversations with stakeholders. Most noble Lords know, and I am sure the noble Baroness knows, that employment law includes a lot of regulations. Previous employment legislation puts further regulations in place. It is important and right that we speak to a wide group of stakeholders, businesses, workers, trade unions and everybody involved in this, so that we get it right.

[Baroness Fox of Buckley (Non-Afl)]

One last thing: to be frank, I want the Government to speak to wider groups of stakeholders than the official bodies that represent people. It is simply that it should have been done before the Bill was brought to us. I want it to be noted on the record that wide consultation work should have been done, but the Government should not have brought legislation that could have unintended consequences that damage workers’ rights, while they proclaim that it will save workers’ rights. If they had not done the consultations, they should never have brought it to Parliament to be discussed.

[Lord Leong (Lab)]

I hear what the noble Baroness has said. The Bill has gone through the other House and been scrutinised line by line. We have also taken the point on board here and we will continue with further consultation.

[Lord Fox (LD)]

When I talked about taking the Bill on a holiday, I was not joking; I was serious, and it would be quite nice if the Minister would take it seriously and respond.

[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?

[Lord Leong (Lab)]

I just want to clarify that we are still sticking to seven days, and the recess I mean is the Whitsun Recess at the end of this month. It will come back.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Tuesday 13th May 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Penn for her very thoughtful amendments in this group. I acknowledge the valuable contributions from all noble Lords, in particular the noble Baroness, Lady Lister, for introducing her amendments, and the noble Lord, Lord Palmer of Childs Hill, for introducing his amendments and, perhaps more importantly, reminding the House of the Conservative-led coalition Government’s work in this area—although I note that he did not heap praise on the then Secretary of State for Work and Pensions, my right honourable friend Iain Duncan Smith.

We fully recognise and support the intention behind these proposals, which is to strengthen support for families and in particular to enhance the role of paternity leave in allowing fathers to spend essential early time with their children. This is a laudable aim that clearly finds broad sympathy across the House.

However, while the objective is clear and commendable, we must also consider the practical implications of how such policies are implemented, particularly in relation to the impact on businesses. Many employers, large and small, continue to face significant challenges in the current economic climate, as we have discussed at length this evening. The introduction of new requirements, even when limited to large employers, must be approached with caution and care, and I acknowledge that my noble friend Lady Penn addressed many of those concerns directly in her speech.

As for the reporting obligations set out in Amendment 128, tabled by my noble friend, these would apply to businesses with 250 employees or more. While this threshold helps to focus the requirement on larger organisations, we should still be mindful of the potential administrative and financial burdens such reporting could entail. Even within that category, resources vary significantly, and not all may be equally equipped to take on new reporting functions—a point that was addressed by my noble friends Lord Bailey and Lord Ashcombe. That said, transparency and data collection can play a valuable role in shaping effective policy. If it can be clearly demonstrated that these measures would bring mutual benefits, improving employee well-being and retention, for example, without imposing disproportionate costs or complexity on employers, it is certainly something that we should be prepared to consider further.

Ultimately, we have to strike the right balance, ensuring meaningful support for families while safeguarding the viability and flexibility of the businesses that employ them. That is the lens through which we should view not just this amendment but the broader provisions of the Bill.

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

My Lords, this has been a wide-ranging, informative and very exciting debate. I thank all noble Lords who have contributed. I take this opportunity to congratulate the noble Lord, Lord Harlech, on his four month-old son. I begin by recognising the key role that parental leave plays in supporting families—I wish it had been available when I became a father, at a much older age, some 18 years ago. I thank the noble Lord, Lord Gascoigne, for sharing his story about the difficult time he had during the birth of his children.

This Government understand that the arrival of a child, whether through birth or adoption, is the most transformative time in a family’s life. We understand that the current parental leave system needs changing so that it better supports working families. We have committed to do this and we are taking action in a number of different ways. Through this Bill, the Government are making paternity leave and parental leave day-one rights, meaning that employees will be eligible to give notice of the intent to take leave from the first day of employment. I hope that many noble Lords will welcome this position. This brings such leave in line with maternity and adoption leave, so simplifying the system.

[Baroness Penn (Con)]

The Minister said that this brings paternity leave in line with maternity leave, but for maternity leave, the right to pay is also a day-one right. Does he acknowledge that the Bill does not create alignment between maternity and paternity?

[Lord Leong (Lab)]

The noble Baroness is absolutely right. I just said that the leave is the same as maternity leave, not the pay. This brings paternity leave in line with maternity leave and adoption leave, thereby simplifying the system. We are removing the restriction preventing paternity leave and pay being taken after shared parental leave and pay, to further support working parents in assessing the entitlements available to them. Separate from the Bill, planning work is under way for the parental leave review, which will explore how well the current system supports working families and what improvements could be made.

Amendments 127, 80, 138 and 139 seek to make changes to paternity leave and pay. Amendments 127 and 139 are in the name of the noble Baroness, Lady Penn. Amendment 127 seeks to extend statutory paternity leave and pay from two weeks to six weeks and to increase the rate of pay to the lower of 90% or national median pay—although the drafting relates specifically to pay. Amendment 139 seeks to make statutory paternity pay a day-one right for all employees by removing the current continuity of working requirements. The noble Lord, Lord Palmer, has laid two similar amendments, Amendments 80 and 138. Amendment 80 would increase the minimum length of paternity leave from two to six weeks and require regulations to introduce the ability to take paternity leave at any time in at least the first year following birth or adoption. Amendment 138 calls for the existing flat rate of statutory parental payments to be increased, by doubling the rate from £184.03 to £368.06.

I hope to reassure the noble Baroness and the noble Lord, in part by highlighting several reforms to paternity leave and pay which took effect in April last year. These changes now allow eligible parents to take their leave and pay in two non-consecutive weeks; to take their leave and pay at any point in the first year after the birth or adoption of their child, rather than only within the first eight weeks, as was previously the case; and to give shorter notice for each period of leave. I hope that the noble Lord, Lord Palmer, will therefore agree that, while well-intentioned, Amendment 80 is not necessary in relation to when paternity leave is taken, for the reasons I have just explained.

--- Later in debate ---

[Baroness Penn (Con)]

Will the noble Lord clarify whether he just said that there are no day-one rights to parental pay, including for maternity?

[Lord Leong (Lab)]

I will read it again. Amendment 139 would make statutory paternity pay a day-one right. Currently, no parental pay entitlements are available from day one, including maternity pay.

[Baroness Penn (Con)]

Does the noble Lord acknowledge that maternity allowance is available from day one, at the same rate of pay as statutory paternity pay?

--- Later in debate ---

[Lord Leong (Lab)]

The noble Baroness is absolutely right: maternity allowances are available from day one.

Parental pay entitlements require employees to meet an average earnings test. Calculating whether newly employed parents have met this threshold would present a significant challenge to their new employers who administer parental payments.

Amendments 127, 138 and 139 would introduce a cost burden to the Exchequer at a time when public finances are under pressure. When considering calls to increase the level of parental pay generally, any changes will need to take account of the economic situation, the financial impact on employers and the needs of parents, and be made in consultation with businesses and stakeholders. The Secretary of State for Work and Pensions is required by law to undertake an annual review of benefits and state pensions, including statutory payments. This is based on a review of trends in prices and earnings growth in the preceding year. Generally, as with other benefits, parental payments are increased in line with CPI. For example, statutory maternity pay, statutory paternity pay and statutory adoption pay will all increase by 1.7% in April 2025, in line with the September 2024 CPI figure.

[Baroness Penn (Con)]

Does the noble Lord acknowledge that, in linking the payments to CPI, what is actually happening is that we are seeing a bigger gap between statutory payments and people’s salaries, as the national minimum wage is increasing by a greater degree? The process that the noble Lord has laid out is increasing the problem that we have of payments not coming anywhere close to replacing wages.

[Lord Leong (Lab)]

I thank the noble Baroness for that. That is the situation as it is now. Until and unless things change, that is what is happening.

Depending on individual circumstances, additional financial support will be available to parents. For example, universal credit, child benefit and the Sure Start maternity grant may be available alongside statutory parental pay.

I turn to the issue of shared parental leave. Where fathers and partners want a longer period of leave and pay, shared parental leave and pay is already available. Shared parental leave and pay offers up to 50 weeks of leave and up to 37 weeks of pay, which can be created for parents to share from maternity entitlements that the mother does not intend to use. Parents can use the scheme to take leave together for nearly six months, or intersperse periods of leave with periods of work.

I turn to Amendment 136, again laid by the noble Lord, Lord Palmer, and supported by the noble Baroness, Lady Whitaker, which calls for individuals who are self-employed or contractors to have access to statutory adoption pay within six months of the passage of the Bill. It would also require the terms “self-employed” and “contractors” to be defined in regulations, to set out a clear description of who would qualify for statutory adoption pay under this extended eligibility.

I want to reiterate my appreciation and gratitude towards all adoptive parents, who provide loving and stable homes to children who are unable to live with their birth parents. Currently, parental leave and pay entitlements are generally not available to the self-employed. This focus on providing parental leave and pay to employees is rooted in the understanding that employees often have less flexibility and control over their working conditions than those who are self-employed. There is of course the exception of maternity allowance, which is available to self-employed mothers as an important health and safety provision. It makes sure that mothers can take time away from having to work to recover from childbirth, bond with the child and establish breastfeeding if they wish to do so. For parents who do not qualify for adoption pay—for example, those who are self-employed or contractors—statutory adoption guidance advises local authorities to consider making a payment similar to maternity allowance.

In November 2024, the Government published Keeping Children Safe, Helping Families Thrive, in which we allocated £49 million to the adoption and special guardianship support fund for this financial year. This will enable local authorities and regional adoption agencies to offer a wide range of tailored support, including psychotherapy, family therapy and creative therapies, to adoptive families. These services are available following a locally conducted assessment of the adoptive family’s needs.

Amendment 128, tabled by the noble Baroness, Lady Penn, would commit the Government to introducing regulations requiring organisations which employ more than 250 people to publish information about their parental leave and pay policies. It is true that parental leave and pay policies are not extras. They are essential policies that allow people to manage their professional and personal responsibilities and play a huge role in addressing wider social and economic issues.

The Bill contains a number of measures which will improve the support working families receive, most notably by: putting in place legislation that makes it unlawful to dismiss pregnant women, mothers on maternity leave and mothers who come back to work for a six-month period after they return—except in specific circumstances; making flexible working the default, except where not reasonably feasible; and the requirement that large employers produce equality action plans. We feel that we are already striking the right balance between doing more to help working families and ensuring that these changes are manageable for employers to respond and adapt to. Therefore, we do not believe this is the right time to legislate to require publication of parental policies.

Amendment 76, tabled by my noble friend Lady Lister, would make it a legal requirement for the Secretary of State to begin a review of paid parental leave within six months of Royal Assent and to lay the review before Parliament within 18 months. I share the desire of all the noble Lords and Baronesses who have tabled these amendments today: I too want to see change made to the parental leave system to better support families, and I thank them for their clear dedication to improving the lives of parents and children. I recognise their concerns that the current system reinforces outdated gender roles. The responsibility for childcare remains, for many families, with the mother. For many, this will be through choice, but it is also reflective of a system that grants fathers and partners a short period of time off to be with their partner and child during this first year of life. Shared parental leave is available to qualifying fathers and partners who wish to take a longer period, but take-up remains low.

Family life has changed radically since the 1970s, when the then Labour Government passed the Employment Protection Act, which established the right to maternity leave for working mothers. We all agree that improvement needs to be made, and this Government have already begun that work by making paternity leave and parental leave day-one rights through this Bill. This removes a layer of complexity and makes the system more accessible. More needs to be done, and I recognise the fair point raised by my noble friend Lady Lister in Amendment 76 that a review needs to address the disparities in the current system.

The plan to make work pay—a manifesto commitment —committed to a review of the parental leave system within the first year of a Labour Government to ensure that it best supports working families. Planning is under way, and we hope to provide further detail soon.

[Baroness Penn (Con)]

Can the Minister confirm that the Government will meet that manifesto commitment to start the review within the first year, and can he give a timescale not just for when the review will start but for when it will be completed?

[Lord Leong (Lab)]

I can give the commitment that we will do this within the first year of the Labour Government.

[Baroness Penn (Con)]

Is that to start the review?

[Lord Leong (Lab)]

We are planning and conducting the review within the first year of the Labour Government.

It would be premature to make further legislation in this space before the parental leave review has taken place. We will, however, take my noble friend’s ideas and concerns into consideration, and I look forward to updating your Lordships’ House on the review.

Before I conclude, we understand the concerns raised by—

[Lord Fox (LD)]

Before the Minister exits the review, it clearly reflects on a number of the issues in the Bill. It would make an awful lot of sense, if the Government are going to do this within the first year—which, by the way, is not very much longer—to be able to present us with the findings of that review so that we can reflect them in what we bring back on Report.

[Lord Leong (Lab)]

I thank the noble Lord for that intervention, and I will speak to my officials and write to all noble Lords accordingly regarding the review.

We understand the concerns raised by micro and small businesses around proposed day-one rights to paternity leave. Those employers often work with very lean teams and tight margins, so any perceived increase in entitlement can raise questions about costs and continuity. Introducing day-one rights is about fairness and consistency. It ensures that all fathers, regardless of tenure, have the opportunity to support their families at a critical time.

[Baroness Penn (Con)]

I am sorry to interrupt the noble Lord again. He has just talked about the importance of a day-one right to paternity leave, giving fathers the ability to take that leave, but, as the noble Baroness, Lady O’Grady, said, unless it is paid, swathes of dads will not be able to afford to take it. If the Government recognise the importance of this, why will they not make it paid?

[Lord Leong (Lab)]

I thank the noble Baroness for that. As I said in my previous paragraph, we are making day-one rights such as this and consulting, and the review will look at all the issues that the noble Baroness has brought forward. Until we get the review done, I really cannot commit to anything at this stage.

For businesses, this kind of support fosters loyalty and improved retention in a competitive hiring environment. Demonstrating a commitment to family-friendly practices helps attract and keep skilled employees. We also encourage proactive workforce planning. Cross-training and flexible staffing arrangements can mitigate disruption during short absences. Many small employers already manage similar situations around holiday leave or illness, so this policy is not about adding burden but about building a workplace culture where staff feel valued from the very start. We are committed to working with small businesses to ensure that the transition is smooth, supported and sustainable.

I hope I have reassured all noble Lords of the Government’s commitment to parental leave and respectfully ask that the amendment be withdrawn.

[Lord Russell of Liverpool (CB)]

My Lords, before the Minister sits down, can I, first, just make an observation? Having listened to him reading from his brief, I wondered how many members of the team who prepared the brief have themselves ever been able to take paternity leave, because it certainly did not sound like they had. Secondly, as the noble Baroness, Lady O’Grady, said in her intervention, she was very happy with the support from across the House for paternity leave being changed, and quickly. Those of us in the House who are in front of and to the side of the Minister were able to witness the body language of his Back-Benchers. Having seen that, I will say only that I suggest that going and sitting down with them as a group between now and Report might be helpful.

[Lord Leong (Lab)]

I thank the noble Lord for that, and I will probably take up his idea.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Lord Lucas (Con)]

My Lords, as a proprietor of a small business, I can say that anything with the words “all reasonable” in it is going to meet with some very careful consideration. Of course, I am going to take advice and spend a good deal of time internally looking at the consequences. For me, and I would expect for most businesses like mine, there are going to be costs. As the noble Baroness, Lady Fox, said, employment lawyers do not come cheap, and I expect that this is going to cost a great deal more than the Government say it is.

Of course, I can also see the benefits. If I read Clauses 19 and 20 together, and apply them to the way schools are run, I think we are going to get discipline at Katharine Birbalsingh levels, because schools will have an active duty to make sure that their staff are not harassed by pupils or parents. They will be required to come up to the best standards, so I can see the Government’s ambitions in this. Amendment 97, which proposes a really accurate look at the benefits and costs of this part of the Bill, would be therefore helpful so that we all understand how to make the best of what are undoubtedly, at their heart, some very good intentions.

In case the noble Lord, Lord Fox, is reaching for his matchbox again tonight to light his straw men, here are a couple of examples from my experience. One is from visiting someone my age in hospital who was recovering from a serious operation. A couple of other people on the ward, under the influence of the shock of the operation and the drugs they were on, had reverted 50 years; the way they were treating the black nurses was quite extraordinarily horrible. The nurses were taking it on the chin and carrying on giving the best possible care. The other example is a disabled woman in a wheelchair who asked for help getting on a train at a station but was refused for reasons she thought condescending. She got a bit cross, and the station manager said, “Right, we’re not putting you on any train today”.

Those situations would both be impacted by Clause 20 in particular. How will this Bill work in practice? Looking at those two circumstances, will it be possible for the NHS, or indeed other caring organisations, to offer care where patients have become, for reasons that are not to do with their conscious selves, completely unreasonable? Is it reasonable to leave a disabled woman marooned in London just because she had a disagreement with a member of staff who got upset about it? How is this going to work? A really good understanding of that—rather than us all having to worry about what the impact of this section might be —would be a really helpful thing to find in this Bill.

[Lord Leong (Lab)]

My Lords, this has been a very thought-provoking debate, and I thank all noble Lords who have contributed. I thank the noble Lord, Lord Sharpe of Epsom, for tabling Amendment 97. The noble Lord is seeking to add a new clause that would require the Secretary of State to assess the impact on free speech and on employers of Clauses 19 to 22 when the Bill becomes an Act. We have already produced and published an extensive set of impact assessments. Indeed, we have produced and published no fewer than four impact assessments covering provisions in the scope of the noble Lord’s amendment.

[Lord Hunt of Wirral (Con)]

In order to get his speech off to a really good start, can the Minister include his defence of the red rating given to those impact assessments by the Regulatory Policy Committee, a completely independent assessment?

[Lord Leong (Lab)]

I thank the noble Lord for reminding me of this; we covered it last week. The RPC did not question the policy of the Bill. It just questioned the evidence—and I will go further on this Bill.

These assessments are based on the best available evidence of the potential impact on businesses, workers and the wider economy. We plan to further define this analysis in the future, working with a range of stakeholders including businesses, trade unions, academics, think tanks and the Regulatory Policy Committee to do so.

The Government are steadfast in their commitment to tackle all forms of harassment in the workplace. We know that harassment at work can have a huge impact on affected individuals, as well as broader economic impacts. The burden of holding perpetrators to account and of driving change is too great to be shouldered by employees alone. These measures send a clear signal to all employers that they must take steps to protect their employees from harassment, including from third parties, to encourage a cultural change.

We know that the vast majority of employers agree that harassment is unacceptable and are working to ensure that their employees are treated with respect. We will work in partnership with them towards this shared goal and will support them with these changes. We will publish an enactment impact assessment once the Bill receives Royal Assent, in line with the Better Regulation Framework. This will account for amendments made to primary legislation during the Bill’s passage through Parliament that would significantly change the impact of the policy on business. This impact assessment will be published alongside the enacted legislation. Additionally, we will publish further analysis, alongside carrying out further consultation with stake-holders, ahead of any secondary legislation, to meet our Better Regulation requirements.

According to our best estimates, across all our harassment measures the monetary cost to businesses will not be significant. Other than the initial one-off familiarisation cost, repeatable costs to businesses are very low. All three measures will also bring benefits to businesses in avoiding the harassment of staff.

[Lord Jackson of Peterborough (Con)]

I hear what the Minister says, but even the economic analysis says there will be a 15% increase in individual enforcement cases in employment tribunals arising from litigation because of the Bill. The analysis says:

“The exact impact on the enforcement system is difficult to predict because the number of cases that enter the system each year fluctuates”,


and that

“final policy decisions taken at secondary legislation will alter the number of workers in scope of protections and likelihood of a worker making a claim. These decisions are still subject to consultation and further policy development and therefore cannot be assessed with confidence”.

Later it says that the

“initial analysis on the impact of the Bill on enforcement is subject to change as policy development continues”.

The Minister is asking us to wave this clause through on the basis of information that has not been presented to this House.

[Lord Leong (Lab)]

No, I was not saying that. What I said is that we are carrying out consultation and we will conduct further impact assessments. We are not saying that we are finished with it and that this is it. We have already assessed the impact of provisions about third-party harassment on SMEs in our impact assessment on third-party harassment. In all our impact assessments we assess the impact on SMEs, and the Bill is not expected to have a disproportionate impact on SMEs.

[Lord Lucas (Con)]

My Lords, “all reasonable steps” is serious stuff. You not only have to employ someone who has a breadth of experience that goes beyond yours as an SME to advise you as to what “all reasonable steps” are; you also have to work out, in conversations with your staff, how those are to be expressed in practice. I reckon it would cost me £1,000 in year one. In year two the cost does not go down much, because things change: the law clarifies and develops, and you have to go back to the expert. Internal conversations may be clear, so it may be £500. Multiply that across SMEs—we are not a huge SME—and you get a much bigger figure than the Government are talking about. I would really like to know where they are getting their figures from.

[Lord Leong (Lab)]

This is precisely why we need to have consultation and to talk to the stakeholders out there. The more information we have, the better it is for us to assess the impact. Let me carry on, and I will come back to various noble Lords’ questions.

The proposed amendments would not add value, given the expansive impact assessments the Government have already committed. Some 27 impact assessments have already been done.

The noble Lord, Lord Hunt of Wirral, asked for evidence. The ONS figures have been published, so I do not need to repeat them. They state that some 21.8% of the people aged 16 years and over who say they have experienced sexual harassment in person in the last 12 months experienced it at their place of work. On third-party evidence, the ONS states that some 9.2% of the people aged 16 years and over who say they have experienced non-sexual harassment in the last 12 months had been harassed by a client or a member of the public contracted through work.

Before I conclude, let me share a personal story which I still find it very difficult to talk about and share. Like the noble Lord, Lord Fox, I also worked in a pub in my student days. That time is a period that I would rather not remember, but because of the nature of the debate today, I am sharing this with noble Lords for the first time—including some of my colleagues. This is a very personal story. Every day that I worked at the pub, I was harassed. I was called “Kung Fu Fighter” and “Ching”; I was called everything under the sky. Every time they wanted to ask for a pint, all names were shouted at me. I complained to the manager then and he said, “Oh, it’s the British culture. It’s a bit of banter”. It was not a bit of banter, because until today I still find it very difficult to talk about. This is perhaps my contribution to whatever impact assessment the noble Lords want. I left the pub after, probably, two weeks because I just could not take it anymore. When I made some money, I wanted to buy the pub so that I could sack the manager, but, unfortunately, the pub was closed.

This is a very personal story, and I just want noble Lords to reflect. I am just one of millions of people affected in this way. I therefore invite the noble Lord to withdraw his amendment.

[Lord Hunt of Wirral (Con)]

We are all very grateful to the Minister for sharing that personal experience. I believe he can be comforted by knowing that there is a shared desire right across this House to ensure that all workplaces are safe, respectful and free from harassment. I hope that he would also expect, in the light of his personal experience—and I think several of us could probably share our personal experiences—that we must, however, act as a Parliament should act, which is that well- intentioned legislation has to be workable, proportionate and underpinned by clear evidence.

The noble Lord, Lord Hendy, made the point about the benefits, but any impact assessment will not be restricted to looking at the costs but will also look at the benefits. Any proper impact assessment should give the full picture, so that when the legislation is presented to Parliament, we can adjudicate on it. In many ways, the consultation he instanced is coming the wrong way round. The consultation should accompany the intention to legislate. Then, once the consultation is complete, we are subject to parliamentary scrutiny. Consultation is no excuse for lacking accountability to Parliament. That is, I think, where the issue divides us.

[Lord Leong (Lab)]

I take on board every contribution made by every noble Lord. This is a very important aspect, and we need to get it right. Rather than me reading a couple of sentences provided by my officials in the Box, I make an offer to all noble Lords that I will organise a meeting so that we can sit down and go through this in more detail.

[Lord Hunt of Wirral]

There is no need for me to say any more. Thank you very much. I accept that offer, and I beg leave to withdraw my amendment.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I join the general congratulations offered to the noble Baroness, Lady Smith of Llanfaes, on her very comprehensive introduction of these amendments; she deployed some incredibly powerful examples.

We are all in agreement that violence and harassment, particularly sexual harassment and gender-based abuse, have absolutely no place in any workplace. Every worker, whether in an office, on a site or working remotely, deserves to feel safe, respected and protected. Tackling those issues must remain a top priority.

The amendment before us seeks to introduce stronger duties on employers to prevent and respond to these harms. Measures such as risk assessments, training and clear reporting systems can be important in building a workplace culture where abuse is not tolerated and victims are supported, so we absolutely understand the intention behind the amendment.

Although we agree that there is a need for action, we do not believe that the Health and Safety Executive is the right body to enforce these new responsibilities. That is not meant as a criticism of the Health and Safety Executive; it is simply a recognition that there are fundamentally different areas of concern that we think require a different kind of regulatory response. That is not the same as saying that we do not support the intentions of the amendment.

We do not support Amendment 100. We need solutions that deliver real protections to address sexual harassment. Finally, I have to say, from a very personal point of view, that I completely agree with my friend, the noble Baroness, Lady Fox, and her reservations about proposed new subsection (3B).

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

My Lords, first, I thank the noble Baroness, Lady Smith of Llanfaes, for her patience and apologise to her that it has taken until our fifth day in Committee for her to introduce her amendments. I thank her again for Amendments 99 and 100.

I assure the noble Baroness and all noble Lords that the Government are fully committed to protecting workers from workplace violence and harassment. This is a top priority for this Government, with our manifesto commitment, as mentioned earlier by the noble Baroness, to halve violence against women and girls in a decade. In response, I am happy to say that we already have a strong and, in the Government’s view, appropriate regulatory framework in place that ensures that workers are protected from such risks.

I refer to the Health and Safety at Work etc. Act. Under the statutory provisions made under the existing Act, employers have a very clear duty to protect their workers from health and safety risks, including workplace violence. Employers are required to assess and take appropriate steps to eliminate or reduce this risk. The Health and Safety at Work etc. Act, along with other related legislation, also mandates employers to take measures to reduce the risk of workplace violence.

As part of this, the Management of Health and Safety at Work Regulations 1999 require employers to assess risks in the workplace, including the potential for violence, and to take suitable action to reduce or eliminate this risk. The Health and Safety Executive—HSE—and local authorities are responsible for enforcing the Health and Safety at Work etc. Act and carry out both proactive and reactive measures to ensure that employers are complying with their duties. This includes ensuring that employers assess risks and implement appropriate measures to protect their workers and anyone else affected by their work from workplace violence. The HSE has also published accessible guidance on its website to help employers comply with their legal obligations. It also works very closely with other regulators to promote co-operation, share intelligence and, where appropriate, co-ordinate joint activities.

In the noble Baroness’s proposed amendments, there is a request for HSE to publish a health and safety framework specifically focused on violence and harassment in the workplace. Employers already have duties under the Management of Health and Safety at Work Regulations to ensure they have sufficient arrangements in place to manage health and safety risks in the workplace, including violence and aggression. Although workplace harassment could be addressed under the Health and Safety at Work etc. Act, the HSE does not intervene where there is a more appropriate regulator or where more directly applicable legislation exists.

--- Later in debate ---

[Lord Russell of Liverpool (CB)]

I am grateful to the Minister for laying out the plethora of different types of Act and instrument that are meant to be woven together into a seamless whole to stop abuse in the workplace happening. He started off by mentioning an Act passed 51 years ago. He then talked about regulations enacted 26 years ago. He then spoke about the harassment Act of 18 years ago and the Equality Act of 16 years ago. With the greatest respect, if the combination of these regulations has been in force for as long as they have been and we are in the situation we now find ourselves in, with the evidence of what is happening in a variety of workplaces, large, medium and small, clearly all is not well.

The idea of bringing forward amendments such as these is not that they are word perfect from the word go. Everybody in the House knows that perfectly well. Committee is to probe; to try to see if we can come to agreement across the Chamber that it ain’t working and we need to do something better. With the best will in the world, standing up and trying to defend the status quo, when the status quo quite clearly is not working as it is meant to do in theory, is not helping anybody. So, I again ask and suggest—and I am sure the noble Baroness will say this when she responds to the Minister—that we accept that it is not working properly and that it would be a no-brainer to try to work together, across this House and with another place, to see if we can use this Act as a way to improve on what clearly is not working at the moment.

[Lord Leong (Lab)]

I thank the noble Lord, Lord Russell of Liverpool, for that, and I hear what he says. But I stress here, with all the current legislation in place, that there must have been cases before us that we can learn lessons from. What we need to do, and do better, is use “black box thinking”, where we can learn from what has happened and hopefully share with other regulators what works and what may not have worked, so that we can address a problem rather than bring in more legislation. We can look at what has been successful and share those successes among other enforcers as well.

I conclude by saying that the Government remain committed to raising awareness of this important issue. I can confirm that the Minister, my noble friend Lady Jones, has already met with Minister Jess Phillips and Alex Davies-Jones, and we continue to work with them to try to see how we can come together on this. I therefore respectfully ask the noble Baroness to withdraw her amendment.

[Baroness Smith of Llanfaes (PC)]

My Lords, I thank everyone who has spoken in this debate. I am grateful to those who have shown support for these amendments and also those who support the outcome these amendments are trying to achieve. I will reflect on what we have discussed in this debate today, ahead of Report.

On the point made by the noble Baroness, Lady Fox, about a “gender-responsive approach”, I can clarify what that entails. The amendment addresses the different situations, roles, needs and interests of women, men, girls and boys in the design and implementation of activities.

As we have hit on during this debate, the status quo is clearly not working. I know that the Minister outlined in his response the preventative measures being put on to employers. But, as I have explained, those preventative measures are not actually preventative, because you have to prove your sexual harassment claim in order for it to be a breach. Even in the language we use about what is currently in place, it is not preventative. I welcome further discussion with the Minister following this, and hopefully we can come to an agreement on how we can bring this forward within the wider approach.

I will withdraw my amendment today, but I retain my right to bring back further amendments on Report. I hope that His Majesty’s Government reflect on this debate and that we can engage further on this matter. I beg leave to withdraw my amendment.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, this has been such a valuable debate, for a number of reasons. We are grateful to the noble Lords, Lord Aberdare and Lord Knight of Weymouth, and the noble Baronesses, Lady Wolf of Dulwich and Lady Garden of Frognal. In many ways, it gives us an opportunity just to see where we are going, and to identify the fact that, for many of us, apprenticeships mean something deep and profound.

I am delighted to see the noble Lord, Lord Monks, in his place. He probably will not remember but, 32 years ago, he came to see me when I had responsibility for this area of policy. Accompanying him was the noble Lord, Lord Jordan, and they said to me, as Secretary of State for Employment, that apprenticeships needed to be brought into the modern age and that there had to be something deeper, wider and more productive for the individual than the idea of standing by a machine for five years and then qualifying. They were talking particularly of young apprentices. I was persuaded, and, slowly but surely, modern apprenticeships have evolved.

I do not think that the noble Lord, Lord Monks, remembers this, but that was followed by a cartoon in the Guardian, which my children still show me—I should not talk like this on my birthday. The cartoon demonstrates me getting into a large four-poster bed with the noble Lord, Lord Monks, who was in the form of a large cart-horse—the cart-horse had the face of John Monks. This gives me an opportunity to apologise to the noble Lord. I suppose that the Guardian was saying that it looked as though the Conservative Government were listening to the TUC. We did, and modern apprenticeships have taken off ever since.

The levy though, as the noble Baroness, Lady Garden of Frognal, reminded us, has shifted the emphasis and the whole intention, which was to encourage younger people to get more involved. In a way, we need to identify that—and I hope that the Minister will recognise that apprenticeships are the lifeblood of the new economy, in particular, provided that they receive that special status. It was very helpful that my noble friend Lady Coffey reminded us about age, and that perhaps 25 is a better age in this regard. My noble friend Lady Stowell of Beeston also put it much more into context, and the noble Baroness, Lady Watkins of Tavistock, gave an additional dimension. It has been a valuable debate.

I remind the Minister that we are talking about specific instances where there has to be an apprenticeship contract containing often wide-ranging provisions but giving security and opportunity. So it is a balanced and measured amendment that acknowledges the critical reality that apprenticeships are not just simply jobs—they are a structured training programme, often the very first experience that a young person has of the workplace. For many of these individuals, particularly those youngsters, an apprenticeship is a gateway not just to employment but to the habits, responsibilities and expectations of adult working life.

We are already in a time, as many of my noble friends pointed out, when young people are struggling to access secure employment. The noble Lord, Lord Londesborough, reminded us about the serious problems affecting NEETs, which have cropped up several times in this debate already—and also the fact that, in other European countries, apprentices have a special legal status. In many ways, that is recognised in this amendment, because it talks about a contract. We can identify that we are talking about a very special situation, and I hope that the Minister sees that.

I will just add that, without legal clarity around probationary periods, particularly in the case of apprenticeships, many employers will be left uncertain—and uncertainty breeds hesitation. It becomes less likely that they will take on the risk of hiring an inexperienced young person, especially under a regime of day one unfair dismissal rights, with no allowance for the formative nature of apprenticeships. I shall be very interested to hear the Minister’s response on that matter, on how the Government seek to balance the protection of apprentices with the practical realities of probationary periods. I support the amendment.

[Lord Leong (Lab)]

My Lords, first, I take this opportunity to wish the noble Lord, Lord Hunt of Wirral, a very happy birthday. It is a fine way to spend a birthday this evening.

I thank all noble Lords who have contributed to this debate, notably the noble Lord, Lord Aberdare, for speaking on behalf of the noble Baroness, Lady Wolf of Dulwich. I thank the noble Baroness for her amendment and for all the work that she has done in primary and secondary education—especially her book, The XX Factor, which should be read widely by every person involved in education policies.

This group relates to apprenticeships; a later group delves deeper into unfair dismissal and probation. The Government recognise the significant value of vocational learning, and on-the-job training will continue to be fundamental to building the skills that the economy needs to grow. We recognise that employers value building knowledge and skills through apprenticeships, and this Government are committed to apprenticeships.

The Government are providing day one protections against unfair dismissal to all employees, including apprentices. Maintaining a qualifying period for apprentices will leave them open to being fired without any recourse to legal challenge on the grounds of unfair dismissal during their apprenticeship. This amendment would not create a probation period, as the noble Lord, Lord Londesborough, said; it would deny young people their day one rights. The Government’s preference is for statutory probation to be a period of nine months; in some instances, when an apprentice completes their apprenticeship, an employer may not have a permanent job for them. Most apprenticeship contracts are around two years in duration; in this case, the apprenticeship contact will expire and the normal tests for unfair dismissal will apply.

--- Later in debate ---

[Lord Goddard of Stockport (LD)]

My Lords, I wish to speak in support of the amendments put forward by my noble friend Lord Fox, who is unfortunately away today, on NATO business I believe. Tomorrow, no doubt, he will pore over today’s Hansard. I hope that the noble Lord, Lord Hunt of Wirral, will be available then. I cannot unsee the picture of him in a four-poster bed with the trade union man climbing aboard, and will have to try to explain down the telephone to my noble friend Lord Fox, “It was quite humorous”. We will see what happens with that tomorrow.

My noble friend Lord Fox’s concerns include his Amendments 116 and 121, which offer much-needed clarity and balance to the protections around contract variations and unfair dismissals. The issue of predatory fire and rehire, as seen in the widely condemned P&O Ferries case highlighted by the noble Lord, Lord de Clifford, is an unacceptable, serious and pressing concern that employment legislation rightly needs to address now. No worker should be threatened with dismissal simply to impose worse terms and conditions on that person.

My noble friend Lord Fox’s proposals to exclude routine non-detrimental contract changes from triggering automatic unfair dismissal protections, as in Amendment 116, and to safeguard reasonable flexibility clauses expressly agreed in contracts, as in Amendment 121, would help ensure that protection against abuse is balanced with the practical realities that employees face. His further clarification in Amendments 117 and 122—that dismissals linked to redundancy with offers of suitable alternative employment and the lawful use of fixed-term contracts should not be unfairly restricted—rightly recognise that not all contract variations are harmful and that employees must be able to operate flexibly and fairly.

The amendments in the name of the noble Lord, Lord Sharpe, would facilitate contractual changes for financial organisations or workforce-related reasons. Although the intention is understandable, it is crucial that the Government provide clear guidance to ensure fair protection for workers, particularly those in smaller businesses. The approach to seasonal and variable-hour workers also requires careful consideration to safeguard their rights. We will return to that in a later group.

These amendments collectively illustrate the careful line that the Government must tread. Although it is crucial to clamp down on unfair and predatory fire-and-rehire tactics, as addressed by my noble friend Lord Fox’s amendments, we must equally recognise the legitimate need for flexibility and contract review in a changing economic landscape. I commend my noble friend’s amendments for their clarity and fairness in this regard, and encourage the Government to consider how best to incorporate these protections. At the same time, I urge the Committee to approach other proposed changes—as in Amendments 115 and 115A, which seek to clarify reasonable adjustments and productivity improvements—with a measured and practical mindset, to support both workers’ rights and sustainable business operations. I look forward to the Minister’s comments.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords who have spoken in this debate. This Government are absolutely clear that the use of unscrupulous fire-and-rehire practices must end. Employers should not be able to impose contract changes through threats of dismissal, except in the most limited and justified circumstances. We recognise that, at times, businesses may need to restructure to survive and protect jobs. The legislation accounts for such cases where there is genuinely no alternative and a business faces immediate financial difficulty. Fire and rehire may be used, but only following a proper good-faith process, grounded in open dialogue and mutual understanding.

Let me begin by addressing Amendments 113ZA, 113B and 118 from the noble Lords, Lord Sharpe and Lord Hunt, Amendment 115 from the noble Lord, Lord de Clifford, and Amendment 116, spoken to by the noble Lord, Lord Goddard, on behalf of the noble Lord, Lord Fox. These amendments aim to exclude certain types of contract variations from the clause, such as those relating to terms other than pay, benefits, hours or location, or to allow changes made for good or operational reasons. When a change in contract is essential and the employee will otherwise become redundant—for example, due to a move in location—or where the changes are necessary to reflect a change in the law, the employer will still be able to explain to the employee when proposing these changes. However, such changes should always be a result of meaningful consultation. Employers and employees must reach mutual agreement, allowing both sides to understand and assess the impact of the proposed changes. Open dialogue is key.

I turn to Amendment 114 from the noble Lord, Lord Sharpe, and Amendment 115. These propose broadening the permitted use of “fire and rehire” to include changes that are reasonably necessary to improve workforce productivity. The Bill is the first phase of delivering our plan to make work pay. We are supporting employers, workers and unions to get Britain moving forward. Alongside this and a new industrial strategy, the Bill will support the Government’s mission to increase productivity and create the right conditions for long-term, sustainable, inclusive and secure economic growth.

The Government do not support these amendments. We believe this practice should be allowed only where an employer faces no reasonable alternative and is under imminent financial threat. The noble Lord, Lord Hunt, mentioned what happens if a company is facing insolvency. I am sure most noble Lords know that insolvency does not come straight away. There is a whole process, and it is during this that consultation should happen between the employer and employee. When it comes to the last resort, when until and unless something happens the company is going to go belly-up, there may be a practice of “fire and rehire”, but before that, there should be consultation along the way.

These amendments would significantly widen the exemption and make it necessary for employers to use “fire and rehire”. That is not our intention. While businesses can still agree changes to boost productivity, such changes must come through proper negotiation, not coercion, as I just mentioned.

I now turn to Amendment 119, also from the noble Lord, Lord Sharpe, which proposes allowing “fire and rehire” if the changes are reasonable and supported by a majority of affected employees. This issue here is subjective. What is reasonable for one employee may be deeply unreasonable for another. Our goal is to protect individual rights. Clause 26 is designed to reduce the use of “fire and rehire” as a means to push through significant changes without individual consent.

I will address Amendments 117 and 122 from the noble Lord, Lord Fox, and Amendment 120 from the noble Lord, Lord Sharpe. They focus on whether dismissals for redundancy or the end of a fixed-term contract should be considered automatically unfair under Clause 26. The Government’s position is that, where a role is no longer viable under current terms, employers should follow due process, including meaningful consultation to seek agreement to vary contracts. If employees do not agree, and if the employer no longer requires the work to be done, redundancy may still be appropriate. In such cases, redundancy procedures must be followed, including consideration of alternative roles. Where the principal reason for a dismissal is redundancy, the dismissal will not be automatically unfair under Clause 26.

Now I turn to Amendment 121 from the noble Lord, Lord Fox, which concerns variation clauses in employment contracts. I wish to reassure the House that existing case law already governs the enforceability of such clauses. This clause applies only where there has been a dismissal, and so would not apply where a lawful variation clause has been lawfully exercised. Courts and tribunals will not uphold variation clauses if they are oppressive and exercised unreasonably. This amendment is therefore unnecessary as a legal protection already exists.

I now turn to Amendments 120A and 120B, which relate to the factors a tribunal should consider when assessing the fairness of a dismissal under the clause exemption. It is appropriate that tribunals should consider where the employer offered the employee something in exchange for agreed-to changes. Fair contract variation should be built on dialogue, not pressure. It is right that the Secretary of State should have the power to specify additional relevant factors for tribunals to consider in future. These regulations would be subject to affirmative resolution procedure, ensuring full parliamentary scrutiny.

Finally, Amendment 113 from the noble Lord, Lucas, seeks to limit the clause to only substantial contract changes. We reject that. Even minor-seeming changes can have major consequences for individual employees. Individuals must be allowed to consider proposed changes without facing dismissal threats. That principle underpins the clause.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, I have a feeling that although the Minister was doing his best, he was reading from a script that had been drafted before this debate took place. I listened to my noble friend Lord Lucas and the noble Lords, Lord de Clifford and Lord Goddard of Stockport. They were just giving ordinary examples that need clarity. We did not get from the Minister a clear exposition of how, in those individual cases instanced by colleagues in the debate, they could prevent the Minister’s overall objective. We all agree with him that we have to try to prevent the sort of situation that arose, which we all condemned, ever happening again. But do not let it be so wide that it will stop just minor organisational changes.

[Lord Leong (Lab)]

I thank the noble Lord for giving way. The principle here is that we have to consult with employees before the final resort. Fire and rehire should be the final resort and remedy. Before we even reach that, the whole process of consultation and sitting down and finding a solution should be an underpinning principle.

[Lord Hunt of Wirral (Con)]

I think we are all in agreement, except that the Bill goes too far. For a minor change of address when a company moves offices to be caught by all this in the way that we have exemplified—I think we need greater clarity. But, of course, the hour is late and I do not want to prolong the debate. In the meantime, I beg leave to withdraw the amendment.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

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

My Lords, I thank all noble Lords who have spoken. Before I turn to the amendments, may I wish the noble Lord, Lord Fox, a speedy recovery? I am just sorry that he was not cast in the next “Mission: Impossible”. I wish him a speedy recovery and return to the Committee, as we miss him here as well.

I turn to Amendments 132 and 137. Amendment 132, tabled by my noble friend Lord Pitkeathley of Camden Town, seeks to expand the scope of independent advisers who can advise individuals entering into settlement agreements. Settlement agreements in this context are a way in which employers and workers can settle potential claims. I am delighted that the noble Lord, Lord Jackson of Peterborough, had such a great experience with his trade union rep and got a really fair settlement. I hope he was pleased with that experience.

However, it is important that individuals understand the terms and effect of the proposed agreement and its effect on their ability to pursue claims in an employment tribunal. That is why legislation requires individuals to receive advice from a relevant independent adviser. Legislation outlines a range of advisers that can be used, including qualified lawyers and authorised officers of an independent trade union.

My noble friend’s amendment would expand the list of relevant independent advisers to include a certified member of the Chartered Institute of Personnel Development, an association of human resources professionals. This amendment would also give the Secretary of State the power to make regulations to include other professional bodies whose members would also be capable of giving advice.

While I understand that my noble friend has put forward this amendment on behalf of the CIPD, we believe current arrangements are working well and strike the right balance. I appreciate my noble friend’s passion and thank him for his contribution to this debate. We are happy to engage further on this issue at another time, but we do not think this amendment is required.

I now turn to Amendment 137, tabled by the noble Lord, Lord Palmer of Childs Hill, which seeks to expand the right to be accompanied by a certified companion at disciplinary and grievance hearings, as supported by the noble Lord, Lord Ashcombe. The law already provides that, when workers are invited to attend a disciplinary or grievance hearing, they are entitled to bring a companion who is either a fellow worker, an official employed by a trade union or a workplace trade union representative that the union has reasonably certified as having received training in acting as a worker’s companion in disciplinary or grievance hearings. Employers can now allow workers to be accompanied by a companion who does not fall within the above categories. Some workers have a contractual right to be accompanied by persons other than those listed earlier —for instance, a professional support body, a partner, a spouse or a legal representative.

The current law seeks to keep disciplinary and grievance procedures internal to workplaces, given that they are one of the initial steps in resolving tensions in a worker-employer relationship. Expanding the types of organisations that could be involved in representing workers at disciplinary and grievance meetings could lead to these hearings requiring legal representation for both the worker and the employer. This would therefore increase the costs of these hearings and reduce the chances of an amicable outcome. In addition to introducing legal expertise at these hearings, it could also reduce the likelihood of ACAS conciliation or mediation as the next step to resolve a dispute, as legal arguments will have already been made during an internal hearing. This could increase the likelihood of a tribunal claim being made. An amicable solution is, therefore, the fastest way to justice, as set out by my noble friend Lord Barber.

It is unclear where the demand for expanding this right is coming from and which workplaces would benefit. There are, of course, certain organisations, such as those that provide casework and legal services, that would benefit. But, as I have already set out, should an employer wish to nominate an organisation to accompany their workers, they can set this out in the terms and conditions of their workplace.

I therefore ask my noble friend to withdraw Amendment 132.

[Lord Pitkeathley of Camden Town (Lab)]

My Lords, I thank all noble Lords who have taken part in this short but important debate. I appreciate that my amendment may seem controversial to some, not to mention unfeasibly long, but I believe it is vital that the voices of all in the workplace are heard. I am pleased that they have been today. I emphasise that small employers are just as committed to their workforce as larger firms, and they want to attract and retain the best people too. This Bill is, in my view, both pro-worker and pro-business, and we should keep all sides in mind when we shape its final form.

I particularly appreciate the concerns raised by my noble friend Lord Barber of Ainsdale. I reassure him that I do not raise this amendment in the spirit of confrontation, as I am sure he knows, and I am sure these are conversations that we will continue. I know that we both want to achieve the best for all workers. None the less, I beg leave to withdraw the amendment.

--- Later in debate ---

The debate we just had was demoralising because I thought this Bill was an employment Bill. Clearly, for the Government, it is an employment Bill as long as it is done their way. People who are not in trade unions should have representation, and this Government should be big enough to acknowledge that. We shall support this amendment. I hope that the Government will at least commit to giving us a measurement, a review, so that we can see just what is going on.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords who have spoken. I have listened to every noble Lord’s concerns. To be fair to the Secretary of State for Defra and my fellow ministerial colleagues at Defra, I should say that they are in regular contact with the farming community and farmers. The Secretary of State has recently spoken at the National Farmers’ Union conference. My noble friend Lady Hayman comes from a farming community and understands the problems that noble Lords have raised.

I turn to Amendment 133, tabled by the noble Lord, Lord Sharpe of Epsom. As I have repeated multiple times throughout the debate in this place, we have already published a comprehensive set of impact assessments, based on the best available evidence, on the workers likely to be affected by these measures. This includes an assessment of the economic impacts of the Bill, including impacts on workers, businesses, sectors and regions. We intend to publish further analysis in the form of an enactment impact assessment when the Bill secures Royal Assent and, as I have said previously, further assessments when we consult on proposed regulations to meet Better Regulation requirements. The 23 amendments on impact assessments tabled by the Opposition would pre-empt work that the Government are already planning to undertake.

It should also be mentioned that this Government are steadfast in our commitment to Britain’s farming industry. It is why we will invest £5 billion into farming over the next two years, the largest amount ever directed to sustainable food production in our country.

It is with immense sadness that we hear about suicides in the farming community, and I agree with noble Lords that we need to have accurate and timely data. I promise noble Lords that I will speak to my ministerial colleagues at Defra and the ONS as far as their request is concerned.

It will be no surprise to the noble Lord that we oppose Amendment 133 and ask him to withdraw it.

[Lord Sharpe of Epsom (Con)]

I thank the Minister for his response and all noble Lords for their contributions to this important debate. I particularly thank my noble friends Lord Deben and Lord Roborough for their expertise, which I think noble Lords around the Committee will agree shed great light on this tricky subject. I also greatly appreciate the support of the noble Lord, Lord Goddard, for what is a very modest amendment, and I am therefore disappointed with the Minister’s response, although pleased that he will consult Defra further.

On the subject of inheritance tax, the noble Lord asserted that Defra has been steadfast in its support for the farming community, but it is not clear that the farming community has recognised that steadfastness, because over a dozen leading farming organisations, including the National Farmers’ Union and the Country Land and Business Association, have condemned the Government for a lack of transparency. Those groups have written directly to the Treasury demanding the release of modelling and evidence behind the policy.

When pressed to explain why they rejected the fairer clawback option for inheritance tax reforms, Treasury Ministers offered nothing more than vague assertions—no consultation, no published impact assessment—and when challenged under freedom of information laws, the Treasury responded by saying that it was

“not in the public interest”

to disclose this analysis. How can the Government possibly claim this is not in the public interest? Are they really arguing that the means of food production and all that pertains to it are not in the public interest? We are talking about reforms that could rip through the foundations of multigenerational farms, force land sales and strip the viability from small rural businesses.

If this Government’s approach so far was not reckless enough, a fresh report from the Environment, Food and Rural Affairs Committee has added yet more weight to the call for caution and transparency. The cross-party group of MPs has urged the Government to delay its proposed reforms to agricultural property relief and business property relief for two years, pushing back the implementation date from April 2026 to April 2027, with any final decisions postponed until October 2026. That is because the reforms are intended to tighten inheritance tax reliefs on farms and agricultural businesses and were introduced without adequate consultation or any formal impact assessment. The committee highlighted that rushing ahead without proper analysis risks serious consequences, including impacts on land values, tenant farmers, family farms and food production, and it warned that this could disrupt the food supply chain, potentially driving up supermarket prices and hitting consumers across the UK. Noble Lords should take seriously my noble friend Lord Deben’s warning about food shortages and what it does to government popularity.

What is particularly striking is the committee’s citation of a March 2025 survey which found that 70% of farmers were optimistic about their rural businesses before the Autumn Budget, but that figure plummeted to just 12% afterwards. That collapse in confidence speaks volumes about the uncertainty and fear that these policies have created within rural communities, and the same attitude is now evident in this Employment Rights Bill. Once again, we are seeing major legislative changes with profound economic impacts pushed through without proper consultation, without proper published impact assessments and without any serious recognition of the realities facing British farmers, and that is precisely why this modest amendment is so important.

At the bare minimum, before further damage is done, we should demand an independent, published assessment of how these employment law changes will affect UK farm businesses—not months after the fact and not hidden behind opaque Treasury memos. It is in the public interest, so it should be within 12 months of this Act passing. That is a modest, proportionate and entirely reasonable request. I will withdraw the amendment on this occasion but reserve the right to return to it. Again, I refer to my noble friend Lord Deben’s suggestion, or perhaps warning: 9 million people are watching.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, we are very grateful indeed to the noble Baroness, Lady Jones of Moulsecoomb, for introducing us to a fascinating debate. The noble Lord, Lord Goddard of Stockport, put us in touch with the real world, and then my noble friends Lady Coffey and Lord Ashcombe reminded us about what happens in real life. I suppose I have immediately to declare my interest as a practising solicitor. My phrase, which I always used to share with Albert Blighton, was that I was available 168/52. The number 168 is 24 times seven. So you quickly appreciate that, as a solicitor, you have to be available all the time.

When I won the contract to represent cricket with the England and Wales Cricket Board, they wanted to know whether I would be available on a Sunday evening when there was an incident at a Sunday league match, and I said, “Yes, of course I would”. So it is very much up to the individual to make themselves available.

When I was asked to join the Front Bench in the House of Commons in 1977, I do not think anybody expected that I would refuse to answer an Adjournment debate, even though it might have been at 3 am, which it was on one occasion. Therefore, you set your working parameter in the way in which you develop your own workaholic tendencies, but you should not expect it of everyone, and I think that is what the amendment is all about.

Do you have the right to disconnect? Although I am sympathetic to the idea that you should be able to switch off, which the noble Lord, Lord Goddard, put in context, when the Bill is already introducing considerable uncertainty for employers around shift notice periods, payment for cancelled shifts and wider questions of how flexible working is to be managed in practice, we have to be very cautious about layering on yet another rigid and potentially burdensome obligation.

The noble Baroness may have put forward what appears to be a straightforward proposal, giving workers a right not to respond to emails or calls outside their contracted hours, but in reality, as the Government have quickly realised, despite what they may have said in advance of the election, this whole proposal raises serious practical and legal questions. What does “working hours” mean in a world of flexible, hybrid and self-managed work? How do we define an emergency? What happens in small teams, in customer-facing sectors, which my noble friend Lord Ashcombe highlighted, and in businesses operating across time zones?

Employers, especially small businesses, already face growing compliance costs. This would add yet another administrative requirement. There would have to be a written policy on the right to disconnect, a consultation process, enforcement procedures and, of course, exposure to tribunal claims. So, we must ask: is this really the right moment to introduce such sweeping regulation?

The Bill already creates new rights and obligations that will take time to bed in. There is uncertainty around shift scheduling, compensation for cancellations and the cumulative compliance burden. I have to say to the noble Baroness that I believe the effect of this amendment would be to increase that uncertainty further and risk undermining flexibility for both sides. Most workers and employers already navigate these boundaries reasonably and sensibly. A blanket legislative approach risks making day-to-day communications feel legally fraught, especially in smaller organisations where roles are not so rigidly defined.

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling Amendment 141B, which was moved by the noble Baroness, Lady Jones of Moulsecoomb.

We firmly recognise the vital importance of achieving a healthy work/life balance. The noble Baroness and the noble Lord, Lord Goddard, can be confident that we will indeed introduce a right to switch off. We understand that, in today’s fast-paced world, it is more important than ever to ensure that individuals and families are able to manage the demands of their work alongside their responsibilities and needs at home.

Our close consultation with businesses and civil society since the election has shown how important it is that we develop this policy in collaboration with those who will be affected: workers and the firms who employ them. The right to switch off must account for the full diversity in types of employment and sectors that exist in our modern economy. It represents a substantial shift in the way some businesses operate. This amendment does not account for that diversity and the need for collaboration. That is why we have decided to take a careful and considered approach to introducing the right to switch off, as was alluded to by the noble Baroness, Lady Coffey, and the noble Lord, Lord Ashcombe.

The focus for now is the Employment Rights Bill, which contains decisive and immediate action, such as reforms to flexible working that will make it easier to strike a better work/life balance. These reforms are not just policies; they are practical steps to support everyday lives and help people to draw clearer boundaries between their work and personal lives.

To add this amendment to the Bill would not do the right to switch off any justice. As drafted, it could create unnecessary burdens on businesses, particularly small businesses, as stated by the noble Lord, Lord Hunt. Significant new requirements in proposed new subsection (3)(a) to (d) would force all employers, no matter their size, to produce written disconnection policies and specify new technological and organisational measures and protocols, while also establishing reporting systems for any violations. These new rules would be onerous and inflexible.

--- Later in debate ---

[Baroness Coffey (Con)]

My Lords, I rise to speak on this really quite interesting clause. I have carefully read Hansard from the other place in trying to understand what it is really putting in place. I am concerned by aspects of the comments made by the Minister at the other end, Justin Madders. He said that it really means only that businesses have to consult on their location and only with trade union representatives, and that, “By the way, these things get sorted in legal debate in the courts, and we hope the courts will understand”. That is not good enough when we are writing primary legislation.

In thinking this through, it is important for the Committee to consider what is happening here. Why is this needed? It has apparently been done to reduce the pressure on people with a vulnerability. Let us take the example of a pub chain, which has quite a big estate and has decided that it is going to reduce its number of hours. That could be a consequence of some of the other measures being brought in by the Government or just a trend that is happening. So it starts to think about what it is prepared to do in terms of how many people it employs in its pubs. It may not want to do that straight away; it may want to think about it in different sections and to leave that discretion to local managers. The man or woman in the street would think that that is perfectly sensible.

However, the businesses that gave oral and written evidence to the Bill Committee are worried—which the Minister recognised in saying that they should not worry—because that is exactly what the legislation is saying they will have to do. They could be undertaking consultation at huge expense, right across the country, while recognising that some of those situations could be very localised.

We already have sensible measures in place. When there are going to be significant redundancies across the country, it is already a legal requirement for them to go before Ministers, whether from the Department for Business and Trade or the Department for Work and Pensions, who can then mobilise local jobcentres and the like to prepare for those redundancies. Imagine going back to the business considering the impact of that on what can be quite localised operations. The Explanatory Notes are silent, frankly, which is why I took to reading Hansard from the Commons.

I am concerned and would be grateful to hear from the Minister why this is the right approach and how, despite the uncertainty still left in this legislation, the Government want this to be in place. Instead, they should accept the amendments tabled by my noble friend Lord Hunt to make sure that these situations are well considered and that we do not end up in a situation where, despite the primary legislation, we have to go to an employment tribunal again and again. For that reason, I hope the Minister accepts my noble friend’s amendments.

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Sharpe of Epsom and Lord Hunt of Wirral, for tabling these amendments. We have been listening to feedback from businesses on the clause as introduced. It requires collective consultation whenever 20 or more redundancies are proposed to be made across an employer’s organisation. Businesses told us that this would put them in a constant state of consultation. That is why we have made amendments in Clause 27 to the Trade Union and Labour Relations (Consolidation) Act 1992; they aim to limit the burdens on employers while still expanding protections for employees, by ensuring that collective consultation is triggered when a threshold number of employees are proposed to be made redundant across an entire organisation.

The purpose of Clause 27 is to strengthen collective redundancy rights. The Government worked with stakeholders, including businesses, to address their concerns, which include not counting employees who are already being consulted on redundancy. We will set an appropriate threshold number in due course, via secondary legislation, following further engagement with stakeholders and a public consultation. We will look to balance the interests of both employers and employees when setting this threshold. Business stake- holders have welcomed the Government’s engagement on this clause and the opportunity to input to the threshold number via a public consultation.

Amendment 141BA seeks to exclude employers going through insolvency proceedings from the scope of a new trigger for collective consultation. I refer to the point made by the noble Lord, Lord Moynihan of Chelsea, about how one expects an employer which is going insolvent to consult employees across the entire organisation. The Government believe that collective consultations are an important part of ensuring fairness and transparency between employers and employees. The benefits of consultations are felt by both. I heard what the noble Lord said, and I must say that employees are an important part of the organisation, as are the suppliers and the whole supply chain. Whatever is due to them should be paid, as is the same for other creditors.

The law already recognises that consultation may not always be fully practical in insolvency situations. That is why Section 188(7) of the Trade Union and Labour Relations (Consolidation) Act 1992 includes a special circumstances defence for employers to depart from the collective redundancy obligations where it is genuinely justified and they have shown that they have taken all practical steps to comply. That flexibility should be applied on a case-by-case basis, not by removing that duty altogether.

Amendment 141C seeks to ensure that obligations are triggered only where redundancies are linked to a connected reason. We recognise that collective consultation will be most productive when workers and employers are focused on a common issue. However, employers and unions have told us that they believe it is not possible to define what is connected or “common reasons” in a suitable, clear way and that this could lead to more litigation. They tell us that attempting to restrict these new rights to connected redundancies in this way would create further burdens, rather than relieving them.

Amendment 141D seeks to exclude seasonal workers or those on fixed-term contracts from the scope of collective redundancy measures in the Bill. First, it may reassure the noble Lord to know that the expiry of a fixed-term contract at the end of its term does not trigger collective consultation obligations. Therefore, any fixed-term contract expiring at the end of its term will not add to the running total for the new threshold introduced for collective redundancies. We will consider further how employees on fixed-term contracts should be counted for the purposes of calculating an employer’s overall workforce that might be needed for the purposes of a national trigger for collective redundancies.

Amendment 141E aims to avoid an obligation to combine consultation by inserting two new subsections into Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, but new subsection (2A) already strikes the right balance here. Employers will be well placed to determine how to divide consultations appropriately where the national threshold has been met. We agree that each group should receive meaningful collective consultation and intend to set up guidance on this point in a new code of practice.

On Amendment 141F, it is already the case that where collective consultation on redundancies has already begun those redundancies will not be counted when determining whether subsequent new redundancies reach the threshold for collective consultation. We do not believe that this should be extended to exclude employees who have been individually consulted, as individual redundancy consultations have a different character and purpose from collective consultations.

On Amendment 142, we agree with the noble Lord that the threshold number that will trigger collective consultation should be proportionate and not overly and unnecessarily burdensome on employers. However, this amendment is unnecessary and disproportionate to address this issue.

On Amendment 142A, the term “establishment” has already been settled and is well understood in employment law. It works well in practice, so we consider that attempts to change the definition here would create confusion and lead to more litigation with very few clear benefits in return.

Finally, Amendment 142B would undo the Government’s extension of the protective award period to 180 days. This change was made following a full public consultation in October 2024 and has been carefully considered. It makes it harder for unscrupulous employers to price in non-compliance with their collective consultation obligations, as we saw in the case of P&O Ferries. The Government are committed to strengthening employment rights in this landmark legislation. I therefore ask the noble Lord to withdraw Amendment 141BA.

[Lord Hunt of Wirral (Con)]

The Minister started off by referring to government amendments. I just wonder which amendments he is referring to, because I am not aware that any other government amendments to Clause 57 are planned.

[Lord Leong (Lab)]

I apologise. I can be much clearer. I said the amendments tabled in the other place which are now under Clause 27.

[Lord Hunt of Wirral (Con)]

This has been a very valuable debate on a very important clause, Clause 27. I am very grateful to my noble friends Lord Moynihan of Chelsea, Lady Lawlor and Lady Coffey, who gave some practical examples, particularly of the unintended consequences of previous legislation. A lot of questions have been raised by the Minister. I do not want to prolong this debate now, so I summarise by saying that there are many questions that we still want to ask and we will be returning to this on Report. In the meantime, I beg leave to withdraw the amendment.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

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

My Lords, I thank the noble Lord, Lord Hendy, for tabling Amendment 143.

The Government agree that employers should not be able to deliberately ignore their obligations, and it should never be financially beneficial to do so. However, this amendment would offer a disproportionate response to address the issue. First, employment tribunals have jurisdiction over the majority of employment matters, including the enforcement of protective awards in cases of collective redundancy. It would not be appropriate to amend this jurisdiction solely for collective redundancy cases and it would lead to a disparity within the legal structure governing employment rights and their enforcement.

Furthermore, Section 15 of the Employment Tribunals Act 1996 already offers routes for affected individuals to pursue unpaid employment tribunal awards via the county courts, for England and Wales, and the sheriff courts, for Scotland. Finally, the amendment may have the unintended consequence of an increase in scenarios where employers are forced to become insolvent in response to both paying a protective award and requiring the reinstatement of affected employees.

Responsible employers across the country already go further than the current obligations to consult collectively. They agree with the Government that collective consultation with their workforce is a valuable tool in finding solutions to some of the challenging situations that employers find themselves in. Clause 29 closes a loophole in our collective redundancy legislation which meant that P&O Ferries could not be prosecuted when it dismissed people without warning, including because they worked abroad on foreign-registered ships. This goes some way to addressing the ILO’s concerns about the lack of an effective remedy. Our measure to confer powers on Ministers to create a mandatory seafarers’ charter will also help to create a level playing field in the sector and prevent such events happening again. A couple of amendments in subsequent groups will address that issue.

Doubling the protected period means that employees who were not afforded any consultation when being made redundant will now be awarded up to 180 days’ pay. Employment tribunals can award a further uplift of up to 25% where an employer unreasonably fails to comply with the code of practice on dismissal and re-engagement. Taken together, these measures increase the potential statutory payout per person far beyond that which P&O Ferries offered to dismissed employees. This clause will provide a balanced approach that gives certainty to employers, employees and tribunals, and will provide an increased deterrence against deliberate breaches of the collective redundancy requirements, without disproportionately penalising employers which attempt to comply with their obligations.

I hope that this provides some assurance to my noble friend, and I therefore ask that his amendment be withdrawn.

[Lord Hendy (Lab)]

My Lords, I am grateful to my noble friend Lord Davies for his support. I am also grateful to the noble Lord, Lord Sharpe, for his contribution. In response to him, I note that the proposal is not that employment tribunals should make a declaration that a dismissal was void and of no effect. Instead, the idea is that the High Court will make a declaration based on another declaration already made by the employment tribunal that the employer has breached the law by failing to consult—or by failing to consult properly.

The remedy I am proposing, since it is going to be in the hands of a High Court judge, will not be granted for technical or administrative errors; it will be for only the most egregious breaches.

On the point that an injunction might be granted months later, that cannot be so because delay will always defeat an injunction. Injunctions are only ever granted if the application is brought in a timely fashion, and whatever the court orders can be fulfilled.

I am grateful for the Minister’s very full response. I am not sure that the measure I propose is disproportionate —it is intended only for the most egregious breaches of the duty to consult—or that it distorts the remedies available for employment matters. As my noble friend pointed out, employment tribunal awards already have to be enforced in the civil courts and not by tribunals themselves. I am not sure about the unintended consequences. I know everything he says about The Seafarers’ Charter; my concern is with those on land. I have heard everything he says with sympathy, and on that basis, I beg leave to withdraw my amendment.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Thursday 5th June 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, we are very grateful to the noble Earl, Lord Clancarty, the noble Lords, Lord Freyberg and Lord Hendy, and the noble Baroness, Lady McIntosh of Hudnall, for bringing this very important subject to the attention of this Committee. All sectors of the economy, including the creative industries, deserve fair and proportionate attention in the development and review of employment law, particularly when, as the noble Earl pointed out, the workplace is changing so fast and at such speed.

As the noble Earl reminded us, we need a framework which strikes the right balance. We are all grateful to him for not commenting in any detail about an ongoing dispute, which we will all carefully avoid mentioning any more, although we all agree we must keep a watching brief on what is happening as regards that particular instance.

However, as we consider wider reforms to employment rights and protections, we must ensure that we are not unintentionally leaving out those in less conventional work arrangements. Performers and others working in the creative industries often operate outside the normal employer and employee model. They frequently rely, as we have heard, on casting directories and digital platforms to access work—platforms that are increasingly central as to how creative labour is bought and sold, and have been for a number of years. Yet this part of the labour market is rarely the focus of legislative scrutiny. That must change.

I hope we are all agreed that we cannot claim to be modernising employment law if we ignore how it interacts with one of the fastest growing and culturally significant sectors of our economy. This amendment does not, of course, call for regulation but for understanding. A review will help us grasp better whether existing protections are functioning as they should, and whether any further action is needed to ensure fairness and transparency in the systems on which performers so clearly depend. I look forward to hearing from the Minister as to how he would like to respond to what is a fast-changing situation.

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

My Lords, I thank all noble Lords who have contributed to this very short but very interesting debate, and declare an interest that many and perhaps all my actor friends are registered with Spotlight. I take this opportunity to thank the noble Earl, Lord Clancarty, and the noble Lord, Lord Freyberg, for tabling Amendment 204C.

Providers of work-finding services, which can include digital services, are regulated through the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which are enforced by the Employment Agency Standards Inspectorate, and in due course they will be enforced by the fair work agency. I hope that answers the question of the noble Lord, Lord Freyberg, on who enforces regulations in this area.

The conduct regulations also allow for employment agencies to charge work-seekers in specific occupations, such as actors, musicians and singers, fees for their inclusion in a publication for the purpose of work finding. These costs can be no more than a reasonable estimate of the cost of production and circulation of that publication.

I am sure that all noble Lords will appreciate that I cannot say anything more about the ongoing litigation between the actors’ union and that particular organisation. However, I will share with all noble Lords how the Government are supporting the creative sector.

The UK is home to world-class creative industries. Every single day, our arts and culture bring joy to millions of people, not just in our four nations but all over the world. Every second, someone somewhere will be listening, reading or hearing one of our creative artists. They are part of our soft power, part of our economic power and part of the joy that we so generously give the world. They enrich our lives, bring our communities together and drive our economy. The creative industries have been identified as a growth-driving sector in our strategy, Invest 2035.

People and skills are an important part of this strategy. The Government have been working closely with the sector, including through the creative industry sector plan task force, to develop a plan for the sector. The Creative Industries Taskforce includes Creative UK, the British Fashion Council and the Royal Shakespeare Company, and I hope that it will address some of the issues that were asked about earlier by the noble Lord, Lord Freyberg. I appreciate the noble Lord’s efforts to improve the working conditions of those in the creative industries, and I will discuss this further when we debate a later amendment on the performing arts and entertainment sectors tabled by the noble Lord, Lord Freyberg.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Tuesday 10th June 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, I will speak briefly to Amendments 215 and 332, both in the name of the noble Lord, Lord Sharpe. Amendment 215 proposes a new clause to grant trade union members a statutory “right to switch off”; that is, to disengage from contact initiated by trade union representatives.

It raises the wider question of work/life balance and members’ autonomy. That is not a bad thing to raise and probe in this amendment. However, the caricature by the noble Lord, Lord Hunt, of a typical union member is a little fanciful. When I was a shop steward, I certainly would not be ringing up union members at 8 o’clock when England were playing football against somebody. I would have got very short shrift and probably would not have been the shop steward the following week. That is the power of trade unions: they can remove and add shop stewards on a whim.

We just need to be a little bit grown-up about the modern trade unionist. We are living in a different age now. It would be wrong for me to say that communication does not happen, but it is now via text, X and WhatsApp, and that is completely acceptable. Where the line is drawn is around giving people a statutory right to switch off, or not. I think it is down to individual members to decide whether they want to be able to be contacted. It should be for the members themselves to decide that, rather than there having to be some statutory right. It is not for me to pass judgment on the desirability or otherwise of it, but I would be interested to understand the rationale and the evidence underpinning the need for such measures.

Amendment 332 is more technical in nature, providing for the commencement of these provisions a year after the Act receives Royal Assent. This delayed implementation may allow for guidance to be prepared or for institutions to adapt. With that in mind, I would like to hear the Minister’s response to both these things—bearing in mind that, at the end of the day, trade unions exist because of their members; if members do not like a trade union, they can leave a trade union. That point has not been brought up anywhere in this House by anybody. You are free and able to join a trade union. You are also free and able to leave a trade union.

I know that, in 1973 and 1974, people did leave the GMB union over some policies that the union had. It was not an impossible thing to do. They were still treated fairly; they were given full consultation and assistance. It was for us to persuade them to come back into the union, which nine times out of 10 they did. It is not always a one-way street. I would hope that the Conservatives understand that unions are controlled by members.

We have annual congresses. One of the greatest things we used to do as the Lancashire region was to overturn the executive once a year in conferences; to us, that was the object of conference. It did not go down well with John Edmonds and the senior management team. I would stand there berating them for the poor pay of gas workers and objecting to a 2% pay rise, and I would get full support. Then I would have to go and see Mr Edmonds. The words he once said to me were, “You control the union for one week and we control it for the other 51 weeks, so I will let you have this week, David. Now leave”. I have deleted and added words there to avoid using any language that would be unfit for this House.

Again, it is a balancing act. I do hope that the Minister will address it in that manner and not just ignore amendments that come in from the Benches opposite. There is something behind the amendments. They are probing amendments and we are just trying to get the flavour of where the Government sit on membership and the unions, with regard to consultation. We spent a few hours—a lot of hours—the other night talking about union rights and members’ rights. I think this issue just touches on the end of that. I can see why it was not raised in that group, but it is still something that needs explaining a bit more clearly.

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

My Lords, I first thank the noble Lord, Lord Goddard, for his very entertaining contribution, and the noble Lord, Lord Hunt of Wirral, for speaking to Amendments 215 and 332 in his name and that of the noble Lord, Lord Sharpe.

The proposed new clauses would create a right in primary legislation for trade union members to switch off from contact from trade union representatives. As far as I am aware, there is not any demand to introduce such a requirement on trade unions. I have not heard this from my colleagues, or from trade union members, or from any worker, or indeed from any employer or employer organisation that I have spoken to lately.

It is difficult to see what benefit or purpose such an obligation inserted into membership contracts might serve. Currently, there is no obligation for a trade union member to reply to communications from their trade union, as was ably set out by the noble Lord, Lord Goddard. There is nothing stopping a member ignoring them or telling them to **** off.

This Government are committed to the well-being and positive work-life balance of all workers. The Employment Rights Bill is proof of this commitment, with relevant measures including making flexible working the default except where not reasonably feasible. This will help employees and employers to agree solutions which work for both parties.

I say politely to the noble Lord, Lord Hunt, that I reject his allegation of trade union influence and power interfering with people’s lives. As it stands, every member can ignore the messages and communications —whoever has approached them—outside work. There is no evidence that this is currently happening. I ask the noble Lord, Lord Hunt, to reflect on that and to be careful with some of the pretty harsh words he has said. I invite him to withdraw his Amendment 215.

[Lord Hunt of Wirral (Con)]

My Lords, the noble Lord has to face the reality of the situation when looking at today’s world, where trade unions represent only 12% of private sector workers. He tells the Committee that this provision is not necessary now, but we are entering a new era. It is one that I recall vividly, when I first came into the House of Commons, just under 50 years ago, at a time when the trade unions dominated lives to a huge extent. Talking to some of my friends in the trade union movement, I sense that they look forward to the day when the trade unions will re-emerge in the private sector and become again dominant in public life.

I too was very grateful to the noble Lord, Lord Goddard of Stockport, for talking about work-life balance. I am rather sad that the noble Lord in responding did not really get into that. That is what this amendment is all about. In sharing with us his experiences in the GMB, the noble Lord, Lord Goddard of Stockport, put it in context. I have, in the past, done a lot of cases for the GMB; it is a wonderful, friendly society that looks after people in a huge way. This amendment is not ideological, it is not radical and it would not weaken unions. It would not restrict collective bargaining or impose new administrative burdens on trade unions. All it and the subsequent amendment seek to do is to offer trade union members the right—the dignity—to say, “Not now. Not after hours. Not in my living room. Not when I am at home, off duty and seeking the same privacy and peace of mind that every working person deserves”. We are looking forward to that day, or are we?

If these new provisions give additional power to unions in the Bill, why do the Government not stop for a moment to ask how this will affect ordinary members? Not union leaders, not officials, not full-time organisers, but the actual members who just want to get on with their lives, in peace. That is what this amendment is about—not disruption, not dilution, but balance. I fully accept that many of these members will not complain about out-of-hours contact from a union, but not because they agree with it but because almost certainly they will be tired and will not want confrontation, as they worry that pushing back could lead to exclusion, being labelled or being isolated within the very structure that they joined for protection.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, I speak to Amendment 251C through to Amendment 252, in the name of the noble Lord, Lord Sharpe. These amendments would introduce a wide range of limitations to the new right not to suffer detriment for participating in protected industrial action. The amendments seek to define and restrict the scope of protection, introducing exclusions based on business continuity, public safety, union membership status and compliance with employer instructions. They propose new requirements around compensation, such as proof of financial loss, statutory severity bans and caps on awards.

Although I understand the desire to ensure clarity and prevent misuse of these protections, I am concerned that, taken together, these amendments risk hollowing out the underlying right. They would place significant hurdles in the way of workers seeking redress and could undermine confidence in the fairness and accessibility of the system. I would be grateful if the Minister could clarify whether the Government support this overall direction of travel and how they intend to ensure that the core principle of protection from unfair treatment during lawful industrial action is preserved in practice.

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

My Lords, I thank the noble Baroness for her contribution, and I thank the noble Lord, Lord Sharpe of Epsom, for tabling these amendments. I ask noble Lords to bear with me as I respond to each of them.

I want to be clear about why this clause is required. Clause 73 inserts new Sections 236A to 236D into the Trade Union and Labour Relations (Consolidation) Act 1992. New Section 236A is required because the Supreme Court ruled in April 2024 that Section 146 of the 1992 Act is incompatible with Article 11 of the European Convention of Human Rights.

Amendments 251C, 251F, 251H and 251J are unnecessary as their purpose is already covered in existing legislation. In the case of Amendment 251C, Clause 73 already requires a ballot compliant with Section 226, as specified in Section 219(4) of the 1992 Act, and makes it clear that protection is limited to cases where the action is compliant. Furthermore, in the case of Amendment 251J, secondary action is already prohibited under Section 224 of the 1992 Act, and the new protection of Section 236A will not apply where the industrial action was unlawful secondary action.

With regard to Amendments 251F and 251H, Section 240 of the 1992 Act allows for criminal prosecution of those who intentionally and maliciously endanger life or cause serious injury to a person by going on strike. Furthermore, if an act of an employer is motivated primarily by health and safety concerns, not for the sole or main purpose of preventing or deterring the employee from taking protected industrial action or penalising them, they have a defence from detriment claims, and the tribunals will consider whether the employer’s act or failure to act constitutes detriment.

Amendments 251D and 252 seek to prejudge a full and open consultation on this issue by setting out circumstances in which the detriment protection will not apply. We will prescribe detriments in secondary legislation only once we have conducted a comprehensive consultation seeking views across the public, including those of workers, employers, trade unions and all other stakeholders.

With reference to Amendment 252, that protection from prescribed detriment applies only where the sole or main purpose of subjecting the worker to detriment is to prevent, deter or penalise the worker from taking protected industrial action; for example, if a worker is subjected to detriment solely or mainly because they have harassed or bullied non-striking workers, the protection will not apply. I can be clear that criminal law will continue to apply to pickets.

Amendment 251E would be an unnecessary limitation on the protections from detriment. The prohibitions that new Section 236A places on an employer are clear: the sole or main purpose of the action must be to deter or penalise industrial action, which would not apply in the case of genuine maintenance of critical operations. Amendment 251G would be an unreasonable restriction to apply to detriment protections. Non-union members have the right to participate in official protected industrial action and, where that is the case, must be afforded the same protections from detriment as union members.

Amendments 251L and 251N would place a burden on individuals to prove that they had suffered financial or economic loss as a result of detriment, and would limit the circumstances where they were eligible for compensation. These hurdles and limits would potentially deter them from engaging in industrial action, limiting compliance with the Supreme Court ruling and Article 11.

Amendments 251M and 251P seek to restrict compensation with regard to business deeds. I want to be clear that an employer’s action or failure to act in relation to prescribed detriments will be a legal obligation that cannot be breached proportionately, and there is no legitimate business interest defence for seeking to deter or penalise an employee for taking protected industrial action.

Amendment 251K seeks to establish bands of detriment severity of “minor”, “serious” and “extreme”, and would require the Secretary of State to specify maximum compensation limits for each, which tribunals would have to comply with. New Section 236D is already clear that employment tribunals must have regard to any loss sustained by a claimant that is attributable to the actions of, or failures to take action by, an employer. Therefore, tribunals will award compensation based on what the tribunal considers to be just and equitable and will be able to proportionately determine the amount of compensation, taking into account all the relevant circumstances. I hope I have reassured the noble Lord. I therefore ask him to withdraw Amendment 251C.

[Lord Sharpe of Epsom (Con)]

I am very grateful to the Minister for his very comprehensive answer, and also to the noble Baroness, Lady Kramer, for her comments. I will have to read Hansard very carefully, because there is quite a lot of detail in the Minister’s answer, but I will say that for months we have listened to Ministers speak at considerable length about the urgent need to address bad actors in our workplaces. On a number of occasions, they have painted fairly vivid pictures of unscrupulous employers who exploit workers, flout employment law and engage in practices that undermine good industrial relations. However, having been presented with clear evidence of equally concerning bad actors within the trade union movement, the Government’s response has been, in effect, to stay silent. I repeated those Unite comments, and I will repeat them again here, that

“the employer is routinely treated as a target to be defeated not a friend to be convinced”.

To use a word that came up in the last group, that is not “constructive” or collaborative; that is very hostile in intent.

Without going into enormous detail, Amendment 251L, for example, would require proof of actual financial loss, which is a basic principle that would prevent speculative claims. I do not see how that would deter anyone with a legitimate claim from engaging in industrial relations, so how would their Article 11 rights be infringed, as I believe the Minister outlined?

We will have to come back to these amendments because, as I say, there was a good deal of detail in there. Once again, the Minister is relying on the mythical consultation; I would like to know when that consultation on these aspects of these amendments will take place. Of course, that also calls into question when he expects all this to be implemented—a subject to which I am quite sure we will return on a number of occasions this evening. But for now, I beg leave to withdraw.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, I thank the noble Lord, Lord Prentis of Leeds, for describing this amendment to us. It is simple and easy to understand but founded on a very difficult and testing industrial dispute. Looking back over my time as a parliamentarian, I often found that facts get distorted, beliefs underpinned and positions entrenched. The last thing that should ever happen is an overt change in the law. I do not believe that is necessary. Let me explain why.

The Minister should not support this amendment, which, as the noble Lord, Lord Prentis, explained, seeks to extend Section 145A of the Trade Union and Labour Relations (Consolidation) Act 1992 to cover the exclusion or omission of a worker from an offer on grounds related to trade union membership or activity. While the noble Lord presented this amendment as a measure to strengthen workers’ rights and reinforce freedom of association, in reality, on reflection, as he virtually admitted when he introduced it, it is poorly drafted, conceptually flawed, legally confusing and potentially deeply damaging to the legitimate and practical functioning of workplace relations.

At its core, the amendment misunderstands the balance that needs to be struck between protecting the rights of trade union members and preserving the autonomy of employers to make operational decisions in good faith. The current law already provides robust protections against unlawful inducements that seek to undermine collective bargaining. I recall, because I was in government at the time, that Sections 145A and 145B were carefully crafted to target deliberate attempts by employers to bypass or undermine collective agreements. This amendment goes significantly beyond that, seeking to introduce for the first time in statute a wholly ambiguous and legally unstable concept—exclusion from an offer—without providing any meaningful guidance or definition as to what such exclusion means, how it is to be assessed and in what contexts it is to be deemed unlawful.

An offer, by its very nature, is made on the basis of specific criteria—sometimes economic, sometimes strategic and sometimes tied to an individual’s performance or to business need. To say that a worker has a right not to be omitted from any offer and to link any such omission to trade union membership or activity would place an intolerable burden on employers. It would open the door to speculative claims and second-guessing of decisions that may have been made for entirely legitimate and neutral reasons, relying on an inference of motive in the absence of solid evidence. Effectively, it demands that employers should treat all workers identically in every instance of any offer—whether it is financial, procedural or preferential—or face litigation and the reversal of the burden of proof. Let me explain.

The amendment proposes that in any case brought under the new Section 145A(1A), it will fall to the employer to demonstrate the grounds upon which the worker was excluded. That is a fundamental reversal of the ordinary legal principle that a claimant must prove their case. It turns routine management discretion into presumed unlawful conduct unless proven otherwise. Such a reversal may be appropriate in narrow cases where discrimination is clearly alleged and supported by a pattern of conduct, but to write it into statute so broadly and in such general terms is not only disproportionate, it is potentially destructive to employer-employee trust and clarity. No employer, however well intentioned, will be able to manage negotiations or individual agreements with confidence under such a regime.

Furthermore, the amendment also risks creating legal confusion by overlapping with other provisions already in place to protect against victimisation or unfair treatment. Section 146 already protects against detriment related to trade union activities. Section 145A already prohibits inducements that would bypass collective bargaining. If the goal is to ensure fair treatment of trade union members, the proper route is through targeted enforcement of those provisions, not through the introduction of vague and speculative new rights that overlap and conflict with existing law.

The amendment is also unbalanced in its approach. It fails to consider that there are many reasons why an individual might not be included in an offer that are entirely unconnected to trade union status. It might be on account of their role, their location, the timing of their employment or performance-based factors. Yet under the proposed amendment, a worker could simply allege that their omission was because of trade union membership or activity, and the burden would shift entirely to the employer to justify its actions. That is not just an invitation to abuse; it is a structural distortion of fairness in employment law.

It must also be acknowledged that this amendment could have chilling effects on legitimate collective bargaining. Employers may feel compelled to make across-the-board offers rather than engaging in more flexible, targeted negotiations that take into account differences in role, responsibility or need. That could undermine not only business efficiency but also the ability of unions themselves to secure advantageous outcomes for specific groups of members. The very act of negotiating special terms for one group might now trigger complaints from others, citing this amendment as grounds for a claim of exclusion.

In conclusion, let me be absolutely clear: freedom of association is a vital right and must be protected. I do not believe, however, it would be served by new laws that are unclear, that burden employers without cause or that generate more confusion than clarity. This amendment—despite its rhetorical appeal to equality and fairness—will in practice be a blunt and imprecise instrument, increasing litigation, reducing operational flexibility and contributing little, if anything, to the genuine promotion of union rights. I hope the Minister will agree with that.

[Lord Leong (Lab)]

I thank the noble Lord, Lord Hunt, for his lengthy contribution. All he had to say was, “I do not support the amendment”. I thank and appreciate my noble friend Lord Prentis of Leeds for tabling Amendment 253A, which sets out that workers have a right not to be omitted from an offer by their employer because, among other reasons, they are trade union members. This amendment has been laid in response to a particular matter regarding the housing association Livv Housing Group, which last year reportedly made a pay offer to only those members of its workforce who confirmed that they were not trade union members. I am pleased that this matter has now been positively resolved in the workplace, as set out by noble friend.

--- Later in debate ---

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Coffey, for her contribution and I will endeavour to respond to her amendments. However, I will not respond to Amendment 256, because it is not in this group; it is in group 6.

I respectfully disagree with the noble Baroness, Lady Lawlor. Trade unions do not cause chaos in this country. They are fighting for the better pay of their members. This Bill will update the UK’s outdated employment laws and turn the page on an economy blighted by insecurity, poor productivity and low pay. We will raise the floor on workplace rights to deliver a stronger, fairer and brighter future for the world of work in the UK.

I agree with the noble Baroness, Lady Noakes, that we must be conscious of how the reforms will impact SMEs, and I will come back to that later.

I thank the noble Lord, Lord Sharpe of Epsom, for tabling Amendments 254 and 255, and the noble Lord, Lord Fox, for Amendment 258, moved by the noble Baroness, Lady Kramer. On Amendments 254 and 255, our impact assessment of the repeal of the strikes Act was published on 21 October 2024 and is available for all to read. I remind all noble Lords that repealing the Strikes (Minimum Service Levels) Act 2023 is a manifesto commitment. The Act received Royal Assent in July 2023, but, since then, 2.7 million working days were lost to strikes in 2023—up from 2.5 million in 2022. Therefore, the Act has not proved to be effective, even though it has had a short lifespan. It has not prevented a single day of industrial action but has contributed to industrial unrest. Before the Strikes (Minimum Service Levels) Act 2023, most industrial action was consulted on, and voluntary agreements were put in place for minimum service levels in the interests of security. The system worked perfectly, so I do not see why this Act should be in place. There is nothing new to add to that assessment.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Coffey for her amendments; they are measured, necessary and principled amendments to Clause 85, which rightly restore a degree of parliamentary scrutiny that had been quietly eroded in the original draft of the Bill. As we stated at Second Reading, there are 173 delegated powers in the Bill, which is unacceptable—not just to those the legislation will impact, but to the House.

In the Minister’s contributions on similar legislation in the past, she expressed her strong reservations about the use of delegated powers. I recall well her interventions, which were made with clarity and conviction, as she tabled amendments recommended by the Delegated Powers and Regulatory Reform Committee. But we now find ourselves considering a clause that does precisely what she once warned against because it carves out certain sensitive and constitutionally significant areas and exposes them only to selective scrutiny.

The original version of Clause 85 created a two-tier system. Some regulations would require affirmative approval from this House, while others—no less consequential—would not. This piecemeal approach to oversight is not only undesirable but unnecessary. Regulations made under Section 293 of the Trade Union and Labour Relations (Consolidation) Act are not merely technical: they pertain to fundamental matters, such as the rights of trade unions, the balance of power between employers and employees, and the protections afforded to those who take lawful industrial action. It is therefore only right and proper that all regulations made under this section should be subject to the affirmative resolution procedure: they should be laid before and approved by both Houses of Parliament.

My noble friend’s amendment achieves this. It does so with economy of language, but with significant constitutional consequence. It removes the artificial distinction introduced by subsection (5), and instead applies a uniform standard of scrutiny to the entirety of Section 293.

Since the Government took office, many of us across these Benches have expressed concern about the growing use of skeleton Bills, Henry VIII clauses and broad enabling powers that allow Ministers to legislate without adequate consultation or scrutiny. This amendment is a quiet but firm step in the other direction back towards balance, principle and the proper functioning of Parliament.

Again, I thank my noble friend for tabling her amendment, and I hope the Government will not merely accept it but embrace it to show their commitment to transparency and to the constitutional propriety of this House.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Sharpe, for his contribution. I remember standing before him during the PRaM Bill and we discussed this very matter. Some of this negative resolution is required because not only does it save parliamentary time but it is technical. Anyway, I thank the noble Baroness, Lady Coffey, for tabling Amendments 257B and 257C, which would make all the powers under Clause 56 subject to the affirmative procedure, as well as existing regulation-making powers that are currently covered by the negative procedure, by virtue of current Section 293 of the Trade Union and Labour Relations (Consolidation) Act 1992.

It is worth noting that most of the access regulations are already subject to the affirmative procedure. Indeed, as the noble Lord, Lord Sharpe, mentioned, only four of the 12 delegated powers are subject to the negative procedure. Given the technical nature of those delegated powers, and to save parliamentary time, the Government are of the position that making them subject to the affirmative procedure would not be appropriate.

Further to this, as mentioned in previous debates, all regulations under Clause 57 will be consulted on via public consultation, the outcome of which will be published for all to see. This is an important process, which will help ensure that our policy development is informed by the practical experience and needs of trade unions, businesses and stakeholders.

The noble Baroness, Lady Coffey, and the noble Lord, Lord Sharpe, will have noted in previous debates in this place that the Delegated Powers and Regulatory Reform Committee said that

“it is heartening that in a Bill with so many delegated powers”—

the noble Lord, Lord Sharpe, mentioned 173—it had

“only found four on which to raise concerns”.

Clause 56 was not one of those. Therefore, I ask that the noble Baroness, Lady Coffey, to withdraw Amendment 257B.

[Baroness Coffey (Con)]

My Lords, I thank my noble friend for his comments. Undoubtedly, in the last decade, this House has started to move to have far more under the affirmative procedure, so it gets a level of scrutiny, although I appreciate your Lordships’ House does not vote against them. That is how to make sure legislation is properly considered, recognising it will be put to debate, which is certainly not the case with many regulations considered in the negative way. With that, I beg to withdraw.

--- Later in debate ---

[Baroness Lawlor (Con)]

My Lords, I support my noble friend Lord Sharpe’s amendment to ask for an impact assessment that details the number of days lost to strikes in the 12 months since the Act was passed and in the previous 12 months. He spoke about the repeal of elements of the 2016 Act and about the ONS statistics.

Part of the reason why we need an impact assessment on the number of days lost to strikes is because, as my noble friend said, we have no evidence. This Bill, in particular aspects of Part 4, is likely to increase the number of strike days. I say that because the main problem with many of these clauses is that they undermine the balance between the employer and the employee, which my noble friend Lord Fuller spoke about as both a public sector and private sector employer. They remove the arrangements on a number of accounts which allow for a balance to be struck between the interests of employer and employee, and for agreement to be reached.

The clauses also remove the inducements and encouragements to avoid industrial action. We spoke earlier about Clause 73, on protection against detriment for taking industrial action: new Section 236A gives workers the right not to be subject to detriment as a result of official and protected industrial action and stipulates that an employer may not take action, and may not refrain from an action, to prevent the employee engaging in legitimate industrial or protected action. Yet excluding the employer’s ability to give inducements to workers for not taking protected industrial action where others do, is in fact prohibiting actions by the employer to hold back or to encourage workers not to take such action. One example might be to offer a bonus or withhold some extra benefit.

There are very good reasons to avoid strikes, not least for the good of the whole economy and the good of this country. Employers and employees should be given a level playing field, and many of the measures taken by the previous Government since 2016 and before then, all of which are in the 1992 Act, allow for that level balance to be struck between both parties. But many of these measures will encourage industrial action, which is not to the good of workers, employers or to the country at large. An impact assessment would at least provide the evidence that the country so badly needs if we are to start putting pressure on the Government to restore the balance in this delicate arrangement between both parties.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Fuller, and the noble Baroness, Lady Lawlor, for their contributions. I will be brief; I do not want to stand between noble Lords and their dinner break.

I thank the noble Lord, Lord Sharpe of Epsom, for his Amendment 262. We have already debated impact assessments at great length and I will not repeat the same arguments. Any industrial action is regrettable and all parties have a duty to seek a resolution to such disputes. Failure to do so is basically a lack of management and leadership by all. We have also debated the repeal of the 2016 Act in previous debates. I will not mention that either. Furthermore, it is a manifesto commitment.

Despite its good intentions, the amendment would impose a review procedure that in effect repeats what the Government already intend to do. We recognise the importance of ensuring that the impacts of these policies on workers, business and the economy are considered, and that analysis assessing these impacts is published. Our impact assessment also outlines a plan for monitoring and evaluating the impact of the Bill and subsequent secondary legislation.

As noble Lords will see from the impact assessment, our Employment Rights Bill could have a positive direct impact on economic growth, helping to support the Government’s mission for growth and ensuring that we raise living standards across the country and create opportunities for all. The Bill is expected to benefit people in some of the most deprived areas of the country by saving them up to £600 in lost income from the hidden costs of insecure work.

To conclude, I reassure your Lordships that we already have robust plans in place to assess and review the Bill’s impacts, including on industrial action. My commitment in an earlier debate to meet noble Lords to discuss the impact assessment further still stands. I therefore ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 262.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Leong, for his answer, but I am, of course, disappointed. I must say to him that of course he could not repeat the argument about the impact assessment because it is manifestly inadequate and overreliant on the word “could”, which he just used again.

So it is with a sense of frustration that I close this debate on Amendment 262 because, let us be blunt, the Regulatory Policy Committee has already deemed the Government’s own analysis inadequate. It found that the assessment underpinning this Bill failed to consider important variables, lacked robust modelling of strike-related costs and omitted any real evaluation of how the repeal of the 2016 Act provisions might drive up the number of working days lost to industrial action. That is criticism born not of political bias but of technical expert judgment, but the Government persist in asserting that an independent stocktake of actual strike days would be superfluous.

During the Bill’s passage, no fewer than 160 government amendments were tabled on Report, some of the most consequential of which would fundamentally alter the trade union landscape: changes to ballot thresholds, as my noble friend Lord Fuller explained; adjustments to picketing rules; and alterations to facility time arrangements. Many came late, with scant time for meaningful consultation and no accompanying update to the impact assessment. In effect, we are being asked to sign off on a statute the final shape of which was revealed only in piecemeal fashion and for which no comprehensive evaluation has ever been produced. There is more flesh on the skeleton now, but it still makes for a pretty unsavoury sight.

The consequences of this are already evident. Businesses stand in limbo. They are unsure how to prepare—again, the lack of an implementation plan. HR directors, legal advisers and finance teams are all left guessing which rules will apply. If the Government can point to a single one who is not, could they please say so, because we have spoken to very many and cannot find a single one who is not left guessing? They require clarity, not uncertainty. They need to know, for instance, whether a union ballot will again require a 50% turnout, or whether the conduct of pickets will be governed by new or old prescriptions. In their absence, investment decisions are deferred, retention and, especially, recruitment strategies are on hold and the workforce, unsure of its rights and obligations, faces unnecessary anxiety.

To deny acceptance of this amendment is to deny the very notion that policy should be tested against outcomes and treats legislation as unchallengeable, rather than a living instrument whose impacts must be monitored, and it tells employers, workers and the public alike that we legislate in the dark. So I regret deeply that the Government have chosen to reject the amendment. Doing so signals a reluctance to subject themselves to the discipline of evidence, shirks the responsibility to measure the real-world consequences of their own handiwork, and turns a blind eye to the limbo in which businesses and the public languish. That is not acceptable. If the Government’s reforms truly will deliver better industrial relations, they should welcome the chance to prove it. If Ministers are as confident as they claim to be, let them fast-track the assessment. Let them demonstrate that strike days are falling, that workplaces are more harmonious and that public services are protected. For now, I beg leave to withdraw the amendment.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

To give the Minister due notice, I tabled an amendment to the commencement clause such that commencement is delayed specifically in respect of SMEs, as defined by the Small Business, Enterprise and Employment Act, to allow them to understand what is in the Bill and plan accordingly. I very much hope that the Government are in listening mode.

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

My Lords, I thank all noble Lords who contributed. I will pick up the points that the noble Baroness, Lady Verma, and the noble Lord, Lord Leigh, made about SMEs. Last Wednesday, I gave a speech at an event on the Commons Terrace to a group of SMEs. Most of them were B Corp companies. I think there were about 2,000 of them. I spoke to them about what we are doing with this Bill. I must say, the atmosphere in the room was actually very supportive. Every one of them said that they welcomed the Bill. In fact, some of them said they would do more than what the Bill is doing. So what the noble Lord, Lord Leigh, said about the Government not talking to SMEs is basically not true. We are in constant, regular conversations, whether it is me, Minister Jones or the Secretary of State; we have meetings, including with officials, with all kinds and sizes of business on a daily basis.

I thank the noble Lord, Lord Sharpe, for his amendments, which were spoken to by the noble Lord, Lord Hunt. The Bill provides that a number of clauses related to the repeal of the Trade Union Act 2016 will commence two months after Royal Assent. This includes clauses related to the notice and mandate period for industrial action, trade union political funds and simplification of industrial action notices, which the Government consulted publicly on from October to December last year. We have been clear about our intention to repeal the great majority of the Trade Union Act 2016—it was a manifesto commitment—which places unnecessary red tape on trade union activity that works against their core role of negotiation and dispute resolution.

More generally, the Bill provides for a number of provisions in Part 4 to come into force on or two months after Royal Assent, while other provisions can be commenced via regulations. These amendments would frustrate those intentions by allowing no part of Part 4, covering all of the provisions regarding trade unions and industrial action, to commence until a report following consultation on the effects of the provisions in Part 4 has been published. The further consultation suggested is not required, given that the Government regularly engaged with business, employers, members of the public and unions in advance of introducing the Bill.

The plan to make work pay was established in collaboration with businesses, trade unions and business organisations, and the Government continue to undertake comprehensive engagement. Furthermore, we have been continuing to provide many opportunities for everybody to input into the development of the Bill. For example, we ran a public consultation with all stakeholders—unions represented only 16% of the respondents on specific trade union-related measures in Part 4—from October to December last year. That was open to all to enable the consideration of their views. The Bill will, of course, continue to be subject to parliamentary scrutiny in the usual way, and we will also be conducting further public consultation.

[Baroness Verma (Con)]

Can the Minister tell me what percentage of the consultation was among BME businesses?

[Lord Leong (Lab)]

I thank the noble Baroness for her question. I do not have the figure, but I will find it out and write to her.

The Bill will, of course, continue to be subject to parliamentary scrutiny in the usual way. We will also be conducting further public consultation on certain parts of Part 4 where there is detail to be set out in secondary legislation or codes of practice. Further consultation of the kind envisaged by these amendments before Part 4 can come into force is therefore not required.

These amendments run counter to the Government’s manifesto commitments, as I said earlier. They seek to delay the commencement of essential parts of the Employment Rights Bill with no valid justification and would hinder the delivery of improved workers’ rights. I therefore ask the noble Lord, Lord Sharpe, to withdraw his amendment.

[Lord Leigh of Hurley (Con)]

Will the Minister clarify something? In relation to the jolly reception he went to on the Terrace where the delegates were rapturously applauding the introduction of the Bill—in fact, going further—did he say that they were all from B Corp companies, with all the ramifications that brings?

[Lord Leong (Lab)]

I would not say all, but most of them were members of B Corporations.

[Baroness Noakes (Con)]

Further to that point, will the Minister clarify whether he is talking about medium-sized companies, which might just about cope with the bureaucracy of being a B Corp, or about the vast majority of businesses in this country, which are small and micro companies? There is a big difference between companies with fewer than 50 employees, or fewer than 10 in the case of microcompanies, and those that run up to 250 employees. The issues are quite different.

[Lord Leong (Lab)]

I thank the noble Baroness for her question. I am very clear about micro-businesses, medium-sized businesses and small businesses. At the event I attended, we had everybody. Not all were B Corps. We had owner-run businesses, businesses with just one or two employees and medium-sized businesses as well.

[Lord Hunt of Wirral (Con)]

My Lords, I am disappointed that the Minister does not wish to engage in responding positively to this amendment. My noble friend Lady Coffey put it very much in context, and my noble friend Lady Verma stressed again the complexity of what we are talking about so far as small and medium-sized enterprises are concerned. My noble friends Lord Leigh of Hurley and Lady Noakes further put questions to the Minister, to which I do not think he has responded positively.

I say once again that I cannot see why the Government cannot accept this amendment. On trade union recognition, for instance, there has been no consultation at all. Yet this is a major change. It is the “etc” in Part 4 that I get worried about. Part 4 is described as:

“Trade unions and industrial action, etc”.


There is so much here that has not been consulted on. I agree with the Minister that there has been some consultation, but have the Government really listened to the results of that consultation? Why have they not consulted more widely, particularly on trade union recognition? I think this is an aspect to which we will have to return on Report. In the meantime, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

I always have tremendous respect for the noble Lord, Lord Davies of Brixton, in particular his knowledge of pensions, because he, like me, is an actuary. Whereas he is a true actuary, I am just an honorary fellow of the Institute and Faculty of Actuaries, so I always respect his views.

I am not sure there is very much I can say in intervening between him, his Secretary of State and the Minister. All I will say is that his amendments represent a shift from a consultative culture to a more legalistic and punitive model. That would be a shift at great cost. Like him, I believe that people are entitled to proper pensions and proper security. Like him, I fought on many occasions to ensure that that is an enforceable right.

I do not want to anticipate what the Minister will say, but we have to consider the employer’s perspective. We all want to see businesses offer generous, flexible benefit schemes—things such as pension contributions, healthcare and travel allowances—but if those are brought into tight regulatory definitions and packages, and enforcement frameworks, I worry that some employers might feel discouraged from offering them at all. I await the response of the Minister.

[Lord Leong (Lab)]

My Lords, I thank the noble Lord, Lord Hunt, for his contribution, and my noble friend Lord Davies of Brixton for tabling Amendments 264, 265 and 324.

I respect my noble friend’s concern for upholding rights relating to pensions. The power in Part 2 of Schedule 7 would allow us to extend the fair work agency’s remit to cover enforcement of pensions legislation in the future, but it would not be appropriate to make this expansion to the fair work agency’s remit at this time. Changing how pensions are enforced would be a significant undertaking, requiring careful consideration, consultation and planning, not least regarding how the fair work agency would interact with the current Pensions Regulator. Therefore, I must respectfully resist these amendments.

Amendment 324, also in the name of my noble friend Lord Davies of Brixton, seeks to ensure that pension arrangements are covered by the definition of remuneration. While I understand my noble friend’s concern here, this amendment is not necessary and its introduction would have far-reaching implications across the Bill. While pension arrangements are already covered by some of the provisions in the Bill, it brings forward issues around sectoral collective arrangements, which I am sure my noble friend would not want to frustrate. So while I appreciate the intentions of my noble friend Lord Davies of Brixton, I respectfully ask him to withdraw Amendment 264.

[Lord Davies of Brixton (Lab)]

I thank my noble friend the Minister for his remarks. I am unpersuaded but, at this stage, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Coffey for her amendment in this group and for her introduction. I will speak to Amendments 266 and 267 in my name. These amendments are not presented in opposition to the spirit or general objectives of the Bill. Indeed, we fully support the aims of enforcing employment rights and ensuring that bad employers do not undercut fair ones. These amendments respond to a real and serious concern about the breadth of the power that the Bill currently gives to Ministers—a power that, if left unchecked, would allow a future Government to expand the remit of the fair work agency with far-reaching consequences but only the most minimal parliamentary oversight.

Paragraph 35 of Schedule 7 allows the Secretary of State to add to the list of enactments that fall under the enforcement remit of the fair work agency by way of regulations. That list, set out in Part 1 of Schedule 7, includes a range of statutory rights covering pay, working time, sick pay and protections against exploitation. The current drafting allows for the addition of any enactment that relates to employees, workers, employers or trade unions. That is an extraordinarily broad formulation. It would allow the Secretary of State to bring into the fair work agency’s scope virtually any area of employment or labour law, potentially even those governing union recognition, industrial action or collective bargaining, by secondary legislation and with no meaningful boundary in statute.

Amendment 266 seeks to address this by narrowing the scope of this delegated power. It would limit the types of enactments that can be added to those that relate to hours, pay or holidays. These are, after all, the core minimum terms and conditions of the employment relationship. They are well understood, capable of objective enforcement and already subject to statutory minima in other parts of the Bill. They also reflect the matters over which the recognised trade unions typically have statutory bargaining rights. There is, therefore, a clear and principled rationale for limiting the fair work agency’s enforcement jurisdiction to these domains.

We put forward this amendment on the grounds that it is both reasonable and proportionate. It would still allow Ministers to respond to emerging issues in labour markets, such as new forms of pay abuse or evasion of working time rules. It would, however, prevent this power being used to draw the FWA into controversial or contested areas of employment law, or into territory where individual enforcement through tribunals is more appropriate than systemic enforcement by a regulator. It would preserve the coherence of the agency’s function and protect against mission creep over time.

We anticipate that Ministers will argue that this amendment is too prescriptive and does not allow sufficient flexibility to bring in related rights that may not neatly fall into the categories of pay, hours or holidays, but that are none the less important for fair work—for example, information rights, certain protections from detriment or emerging contractual abuses not yet addressed by current law. The Government may say that drawing such hard lines in primary legislation is undesirable and that a degree of discretion is necessary for effective future-proofing.

If the Government do not accept Amendment 266 on the grounds that it is too narrow, it follows that the strength of Amendment 267 becomes even more essential. This amendment would require that any regulations made under paragraph 35 be subject not merely to the affirmative resolution procedure but to the super-affirmative resolution procedure, which I know the noble Baroness, Lady Jones, is fond of, as defined in Section 18 of the Legislative and Regulatory Reform Act 2006.

The super-affirmative procedure is not some theoretical or obscure mechanism. It exists precisely for circumstances such as this, where Parliament grants the Executive a broad power to amend the application of primary legislation by secondary means. The procedure ensures that Parliament is properly consulted, that draft regulations are subject to scrutiny before they are laid and that there is an opportunity for representations to be made, considered and reflected in the final statutory instrument.

The two amendments offer a choice. If the Government agree with us that the power to amend Schedule 7 should be tightly confined, they can accept Amendment 266. If they prefer to retain flexibility, they must accept that that comes with the responsibility of subjecting that power to a higher standard of parliamentary scrutiny, in which case Amendment 267 is the minimum safeguard necessary. What would be constitutionally unacceptable is for the Government to reject both amendments, leaving in place a broad and undefined power exercisable by ordinary affirmative resolution. That would be to hand the Executive a blank cheque over the shape and scope of labour-market enforcement in this country, without adequate safeguards in place.

To conclude, I urge the Government to consider carefully the implications of paragraph 35 as currently drafted. It is not enough to say that Ministers do not intend to use this power in a wide-ranging or politically contentious way. We are legislating not just for the current Secretary of State but for future ones, too. If the Government want discretion, Parliament must have oversight, and if they want latitude, we must have safeguards. The amendments give the Government the opportunity to make a choice: define the limits of this power clearly or accept the heightened scrutiny that wide powers properly demand.

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Coffey, for tabling Amendment 264ZA, which concerns the fair work agency’s remit. I also thank the noble Lord, Lord Sharpe of Epsom, for Amendments 266 and 267, which seek to alter the delegated powers in Part 2 of Schedule 7.

Amendment 264ZA would seriously restrict the fair work agency’s ability to tackle labour exploitation of a more serious nature where the threshold does not meet the requirement under the Modern Slavery Act. There are no other enforcement provisions in the Bill that would cover this scenario. Currently, a number of Gangmasters and Labour Abuse Authority investigations have to be abandoned when the modern slavery threshold is not met. Since 2023, 104 cases have been dropped. That is bad for labour abuse victims and for taxpayers.

We are adding elements of the Fraud Act to the fair work agency’s remit precisely to address this issue. It will allow the fair work agency to investigate cases of financial fraud by abuse of position. That has specifically been included within the Bill following extensive discussions with stakeholders, including the Gangmasters and Labour Abuse Authority and the Home Office. Removing the Fraud Act offences from the fair work agency’s scope would truly limit the agency’s effectiveness, and I must therefore respectfully resist this amendment.

Amendment 266, tabled by the noble Lord, Lord Sharpe, would drastically narrow the scope of the power. This would undermine the very purpose of the fair work agency, which is to simplify and consolidate the enforcement of labour market legislation. The fair work agency will be greater than the sum of its parts as its remit is further expanded. This will relieve pressure on a struggling employment tribunal system, which I have heard many times from noble Lords across the aisle.

The power to expand the fair work agency’s remit has appropriate safeguards and limitations. Any expansion of its scope will be informed by the advice from the agency’s tripartite advisory board, and with consideration of the overall enforcement strategy. Furthermore, any changes to the remit will be through affirmative-resolution regulations that will be laid before Parliament and, where relevant, will require the consent of the relevant Northern Ireland department. This power is crucial to the long-term flexibility of the fair work agency. By enabling the remit to expand over time, it can respond to developments in the labour market. If we were to restrict the power to such a narrow range of issues, we would be tying our own hands.

Amendment 267, also in the name of the noble Lord, Lord Sharpe of Epsom, would require that a super-affirmative resolution procedure be used when the Secretary of State exercises the delegated power in Part 2 of Schedule 7. In my almost three years in this House when the party opposite was in government, I never heard them bring any super-affirmative resolution in any of the Bills they brought before this House, so I do not understand the sudden change of heart.

This amendment is unnecessary. The Bill provides for appropriate parliamentary scrutiny as use of this power will be subject to the affirmative resolution procedure. I also highlight that the recent report by the Delegated Powers and Regulatory Reform Committee did not raise any concern with this power as currently drafted. The additional scrutiny this amendment calls for would place unneeded burdens on parliamentary time, which is currently stretched. With this point in mind, I ask the noble Baroness to withdraw Amendment 264ZA.

[Baroness Coffey (Con)]

I thank the Minister for that comprehensive response to my amendment. To be candid, if that had been in the Bill’s Explanatory Notes, it might have made life easier. As the Minister knows, the creation of this fair work agency, with the novel powers it is going to have, is one of the reasons why my noble friends on the Front Bench have been pushing for the super-affirmative procedure. We will briefly get into a bit more discussion about the advisory board, but it is those elements—recognising the novel powers—that we are concerned about. With that, I withdraw my amendment.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Coffey for her amendments that comprise this group, and I speak in support of them. They bring much needed clarity and constitutional discipline to the question of to whom the Secretary of State may delegate important public functions.

Clause 89, as drafted, grants the Secretary of State, as my noble friend has explained, broad discretion to delegate enforcement and other key responsibilities to a public authority. However, the current definition of that term is overly expansive. It could include not only departments under direct ministerial control, but also non-ministerial departments and other bodies with a degree of operational independence from the Government, which raises fundamental issues of accountability.

If enforcement powers, which could be potentially intrusive and far-reaching, are to be delegated, they should be exercised by those within the direct chain of ministerial responsibility. They are civil servants who operate under the authority of Ministers and who are, in turn, accountable to Parliament. Amendment 267ZA, therefore, rightly confines the scope of Clause 89 to public authorities that are comprised of civil servants and are not non-ministerial departments. That would ensure such functions are not handed to bodies that lack clear ministerial oversight or democratic accountability.

Amendment 267AA serves as a necessary consequential safeguard because it ensures that any legal substitution of the Secretary of State with another authority in the eyes of the statute is similarly limited to such core public bodies. Without this clarification, we risk a situation where statutory references to ministerial powers are extended, potentially without scrutiny, to entities with a more ambiguous constitutional status. This is not about casting aspersions on the competence or integrity of non-ministerial departments. Many do good work, but they are deliberately designed to operate at arm's length from Ministers. They should not be the recipients of powers that the public rightly expects to be exercised under ministerial responsibility.

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Coffey, for Amendment 266A, 267ZA, 267AA and 267AB.

Employment Rights Bill

Lord Leong Excerpts

Committee stage
Wednesday 18th June 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, these amendments collectively highlight the critical importance of supporting small and medium-sized enterprises as they adapt to the changes introduced by the Bill. We have raised this issue repeatedly throughout our deliberations. Night after night, this comes up in other parts of the legislation. It all comes back to small businesses. My biggest postbag at the moment is from small businesses concerned about their future—of no political persuasion at all. This is one of the few chances, in this small debate, where we get to talk about those challenges and the enforcement mechanisms, especially around things such as holidays. As alluded to by the noble Lord, Lord Sharpe, compliance can be complex and resource-intensive, although I do not fully agree with his complete doom-and-gloom scenario of this part of the Bill.

Recent data shows that SMEs employ around 60% of the UK workforce, yet many report that regulatory burdens can disproportionately strain their limited administrative capacity. The amendments proposed by the noble Lord, Lord Sharpe, such as Amendment 279ZZB, would place a duty on the Secretary of State to assess how effectively the SMEs can meet those obligations and to identify any practical barriers that they face. It is important to ensure that the Bill’s ambitions do not inadvertently disadvantage the very businesses that form the backbone of our economy. That the Government should have a means of tracking how the Bill’s implementation is impacting on the economy is vital.

I briefly turn to the reviews called for in Amendments 305 and 309, which seek to examine the Bill’s impact on employment, youth opportunities, job creation and regional labour markets, especially in the north-west of England, where my heart still lies and where the Industrial Revolution began. We are trying to embrace AI. We are trying to become ground-breakers again at Manchester University and other establishments. I know that these really affect the regional labour markets, but these are valid concerns, as we are still recovering from the recent economic shocks. The requirement for independent assessment would help us get a clearer picture of this legislation and how it affects businesses and workers. While amendments by the noble Lord, Lord Sharpe, and others are cautious in their approach, they reflect a genuine concern that implementation must be manageable for SMEs, without stifling growth for employment.

As we move forward, I look forward to hearing the Minister’s view on these amendments and would appreciate some remarks about how the Government intend to physically support SMEs throughout these changes and the unintended consequences. Because that is at the heart of this. You can have and develop the policies, but what businesses are asking me is, “What are you going to do? What can I see that helps me to embrace this legislation and to take people on, train them and employ more people?”—as opposed to the perception that the burden is against that, which is an unintended consequence of trying to do the right thing of giving everybody employment rights, and it is a fine line. We are politicians and we understand it a bit clearer than people in a small company employing 10 or 15 people. They are just concerned that something is going to overwhelm them: something is going to come that they cannot control.

I want the Minister to explain the following to me and members of my group. What practical things will the Government put in place to give those small businesses confidence to embrace this and to work with them to make employees more secure, safer and have better rights? Meanwhile, how can small and medium-sized companies, not the giant multi-million companies, carry on creating jobs, developing the economy and lifting us out of the doom and gloom? We have done it before, and we can do it again. That is the question that needs answering—whether or not the Minister can do so tonight, we need some clarity before Report, or we will be meeting other people. This is important. This is not just me grandstanding; small businesses are saying to me, “Just ask the Government what they are doing and how they can help us”. This is what I am trying, clumsily, to say as we draw to a close this evening: if the Minister can give me some hope that what we are doing and have put in place will help small and medium businesses, I will be satisfied.

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

My Lords, here we go again on impact assessment. I hope that the noble Lord, Lord Sharpe, will forgive me if some of my notes repeat what was said in previous debates, but I will answer some of the points here. First, I thank the noble Lords, Lord Sharpe, Lord Hunt and Lord Goddard, for their amendments relating to impact assessment.

I refer to the point by the noble Lord, Lord Goddard, about what the Government are doing concerning SMEs. I have just recently been appointed as the spokesperson for the Department for Business and Trade, and my priority is to have regular communications with micro-businesses and small businesses. That is what I will be focusing on. Today, we appointed the Small Business Commissioner, who will start work very shortly in tackling late payments and some of the abuses that small businesses experience from big companies not paying them on time. We will be publishing a small business strategy very soon, and our industrial and trade strategy very soon as well, hopefully sometime next week or thereabouts. We are doing a lot—not only myself but the Secretary of State, my noble friend Lady Jones and all the Ministers in the department. We have regular contact right across the business community.

We have had extensive debate already on impact assessments related to this Bill. My commitment in an earlier debate to meet noble Lords to further discuss the impact assessments still stands. The Government have already published a comprehensive set of impact assessments based on the best available evidence on the workers likely to be affected by these measures. This includes an assessment on the economic impacts of the Bill, including on workers, businesses, sectors and regions. This package shows that there are clear, evidence-based benefits from tackling issues holding back the UK labour market. This analysis is based on the best available evidence and consultation with external experts and stakeholders, including academics and think tanks. Further analysis will be forthcoming, both in the form of an enactment impact assessment when the Bill secures Royal Assent and when we consult on proposed regulations to meet the Better Regulation requirements.

Before I conclude, I share with noble Lords some really startling statistics. We already know that healthier and happier workers are more productive workers. The Health and Safety Executive estimates that stress, depression or anxiety accounted for something like 17.1 million working days lost in 2022-23, which is equivalent to a loss of something close to £5.3 billion in output per year. In addition, close to 2 million employees report feeling anxious about hours worked or shifts changing unexpectedly. By increasing the job security of these workers, the Bill would have well-being benefits worth billions of pounds a year. The Bill will therefore create a healthier and happier workforce, which is not only the right thing to do but will help businesses by making the workers more productive as well as resulting in lower treatment costs for the NHS.

Earlier, the noble Lord, Lord Sharpe, asked me what we have done to support growth since getting elected. I am proud to share with the noble Lord that, since the election, 500,000 more people are in work. In recent weeks, we have had the strategic defence review with some 30,000 new jobs building submarines created, and the announcement of the Sizewell C project, which will create some 10,000 new jobs. So, we are creating new jobs.

In addition, we have people who are investing in this country and who have confidence in this Government. Jamie Dimon, who has run one of the largest US banks, JPMorgan Chase, for two decades, told the Financial Times:

“I’ve always been a believer in the UK’s inherent strengths as a place to do business and there’s much to like about the new government’s pro-growth agenda”.


Further, a couple of weeks ago, Jon Gray, president of Blackstone, one of the largest private equity companies in the world, which has invested close to £100 billion in the UK and employs some 50,000 people, told the Times:

“I would give the UK government a lot of credit for embracing business”.


This is not what the Government are saying, but what people with money who are investing in this country are saying to us. Further, every single day, £200 million is being invested in tech companies in this country. I do not call that a small sum, I call it confidence in the UK Government and what we are doing for business.

[Baroness Noakes (Con)]

My Lords, I listened very carefully to that wonderfully rosy picture of the UK economy. Can the Minister reconcile that with the most recent employment statistics, which show a decrease in payrolled employment and an increase in unemployment? That does not reconcile with what he is trying to convince us is the case.

[Lord Leong (Lab)]

I thank the noble Baroness for that. Figures go up and down every month but let us look at it in the longer term. We are creating new jobs and that is what is really important. In conclusion, I ask the noble Lord, Lord Sharpe, to withdraw his amendment.

[Lord Sharpe of Epsom (Con)]

I am enormously grateful to the Minister for his passionate defence of his Government and for his remarks. I am genuinely delighted that he has taken on a new role in small business because, unlike the vast majority of his Government, he actually knows what he is talking about when it comes to small business. We are very pleased to hear that and we welcome his general remarks. I also agree with Jamie Dimon about the growth agenda, but the fact is the Bill will not help the growth agenda. That is the argument we are trying to make.

I am also grateful to the noble Lord, Lord Goddard, for his remarks. He accused me of being doomy and gloomy, but I did not get those statistics out of thin air; they were all supplied by the employer organisations that we referenced. If he would like, I will happily put him in touch with them all. The fact is that, once again, the Minister could not rise to the challenge of naming a single business that expects to increase hiring because of the measures in the Bill, and references to the strategic defence review do not help that argument.

The other reason why I am doomy is because, the other day, I came across a notice in a window in London that said, “After much reflection, and as a result of the substantial business rate and national insurance cost increases imposed on us in this year’s Budget, we have made the difficult decision to close. Our final day of service will be 28 June 2025”. That is a real business going out of business—that is disgraceful.

The Government’s impact assessment of the Bill, which we have debated a number of times and which I know irritates the Minister every time we bring it up, was simply inadequate. There is not enough detailed rigorous analysis to understand how these enforcement measures will affect businesses and employment across the country. Without that, we are walking blindly into serious economic risks. At this rate, if the Bill proceeds without the necessary amendments and safeguards, it will not just fall short, it will create unemployment. The additional burdens on employers, especially small and medium-sized businesses and crucial sectors like manufacturing, threaten to reduce hiring, stall investment and ultimately cost jobs. This is not speculation; it is happening, as my noble friend Lady Noakes pointed out. It is a clear and present danger based on the evidence that we have seen, and the trend is unlikely to diminish.

We support workers’ rights, but not at the expense of widespread job losses and economic harm. The Government have to provide a proper, thorough impact assessment—one that honestly addresses these risks—before we proceed further. I am grateful to the noble Lord for his offer of a meeting to discuss this, but I am not sure what there is to discuss without the actual impact assessment or the commitment to hold it as soon as possible. If this does not happen, the Bill will fail both workers and employers, and we will face the consequences of higher unemployment as a result. That is something no one wants. I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, I congratulate my noble friend Lady Penn on tabling this important amendment. The requirement for certain company directors to maintain and report a register of dependent contractors under substitution clauses is a measure that would bring much-needed transparency to a complex area of employment. It recognises the evolving nature of work arrangements in sectors such as courier services and taxi operations. Of course, there are compliance burdens associated with maintaining such registers, especially for large companies operating over multiple jurisdictions. Additionally, data protection considerations must be carefully addressed to ensure sensitive personal information is handled appropriately and securely. These are important factors that require careful balancing against the benefits of increased transparency. We look forward to hearing the Minister’s response.

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Penn, for her Amendment 280 and for meeting with my noble friend Lady Jones and me last month to discuss this very important issue.

I reassure the noble Baroness that the Government are already taking action to tackle the main risks that arise from substitution, including illegal working. As she mentioned, substitution is a complex area on which we are still gathering data.

An ONS online survey of around 10,000 businesses from across the UK, published this month, found that close to 3% of UK businesses use substitution clauses. While we do not know the number of substitution clauses used in the gig economy, we know that this could impact a large number of individuals. Although estimates of the number of gig economy workers vary vastly in various surveys, from around 500,000 to 4.4 million people—the noble Baroness mentioned some 4.7 million people—the CIPD finds that roughly 75% of those in the gig economy consider themselves to be self-employed.

We have introduced an amendment to the Border Security, Asylum and Immigration Bill, as was mentioned by the noble Baroness, to extend the scope of employers required to carry out right-to-work checks to those who engage limb (b) workers or individual sub-contractors, such as those working in the gig economy. This requirement will cover those working as substitutes.

We understand the complexity of these issues, and of employment status more widely, and that is why we have committed to consult in detail on a simpler framework for employment status. Comprehensive consultation will better account for the full range of today’s employment relationships, while addressing the minority of employers who will seek to avoid legal obligations.

We were clear that some reforms in our plan to make work pay will take longer to undertake and implement. We do not have a set timeline for consulting on employment status at this point, and I assure the noble Baroness that we will keep her up to date as and when this happens. We understand the complexity of employment status, as I mentioned earlier, and we are definitely committed to consulting in detail. Comprehensive consultation will better accounts for the full range of today’s employment relationships, while also addressing the minority of employers who will seek to avoid legal obligations, as I mentioned.

The noble Baroness’s amendment would create significant additional reporting burdens for businesses and would not necessarily change how those businesses use substitution clauses, as I mentioned in my earlier speech. I therefore ask the noble Baroness, Lady Penn, to withdraw Amendment 280.

[Baroness Penn (Con)]

Before the Minister sits down, could I confirm what I think I heard, that the amendments to the borders and immigration Bill will cover the use of substitute workers and substitute clauses with the extension of right-to-work checks?

[Lord Leong (Lab)]

I had better clarify this. I said that the amendment to the Border Security, Asylum and Immigration Bill will extend the scope of employers required to carry out right-to-work checks to those who engage limb (b) workers—perhaps one could classify that as those without many rights—or individual sub-contractors, such as those working in the gig economy. Perhaps that answers the question of the noble Baroness.

[Baroness Penn (Con)]

So not, therefore, the use of substitute workers. That answers my question, but it leaves the issue unaddressed. The challenge before the Government is that they have acknowledged the existence of this problem, with amendments brought to the borders and immigration Bill on Report, but they propose to leave this loophole unaddressed. The powers they are bringing in that Bill will require further consultation and then secondary legislation, and the Minister was not able to put a timeline on that. If this is not addressed by those proposals in that Bill, then when will it be addressed?

[Lord Leong (Lab)]

I thank the noble Baroness. I stand corrected on that point. The officials have just given me a note that it does cover substitute workers.

[Baroness Penn (Con)]

Okay. Perhaps it might be good to sit down between now and Report and clarify the exact proposed powers in that Bill. If it does—although the powers are then for secondary legislation and the detail is to be worked through—if the Government are taking the powers to address this loophole and can do it through secondary legislation under that Bill, that is welcome news. The transparency measures proposed in my approach were really an interim measure due to scope and other wider considerations. If we can directly place the obligation to carry out right-to-work checks on those organisations engaging people and their substitutes, then that would be very welcome news indeed. In the meantime, I beg leave to withdraw my amendment.