Employment Rights Bill

Lord Pannick Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

[Lord Murray of Blidworth (Con)]

My Lords, first, I declare an interest as a barrister who occasionally practices in employment law. Secondly, in Committee on 18 June, Hansard recalls that I described the Bill as

“a complete Horlicks … truly bizarre”

and

“absolutely beyond belief”.—[Official Report, 18/6/25; col. 2048.]

I am amazed at my moderation. Nothing I have heard since addresses my concerns. As ably outlined by the noble Lord, Lord Carter of Haslemere, whose amendment I entirely agree with, this clause allows the Secretary of State to bring a complaint to an employment tribunal without the consent of the complainant. Have these people ever been to an employment tribunal? This is absurd.

Is it proposed, in the event that the claimant has the temerity to disagree with the Secretary of State’s assessment that they have a valid claim, to witness summons the claimant, on pain of arrest, if they do not come and give evidence in support of their claim? If, when there, they have the temerity to give evidence against the claim brought by the Secretary of State on their unwilling behalf, will the Secretary of State apply to the judge to treat their witness as hostile, thus permitting the former to cross-examine the latter on the basis that they really were badly treated by their employer? This is palpable nonsense. This clause cannot stand part of the Bill.

I also draw the House’s attention to the fact that, as raised by the noble Lord, Lord Carter of Haslemere, the wording of the clause is an exercise in discretion and is therefore subject to judicial review. There can therefore be a judicial review of both the decision to bring proceedings on the part of the unwilling claimant and of the decision not to bring proceedings. This is going to be marvellous for those of us who are both at the employment Bar and the public law Bar. There will be endless litigation, all at public expense on every side. This is absurd. I invite the House to remove this clause from the Bill as swiftly as possible.

[Lord Pannick (CB)]

My Lords, I cannot match the peculiar tones of the noble Lord, Lord Murray, but I do agree with the thrust of his remarks. Noble Lords often oppose clauses in government Bills; sometimes noble Lords are alarmed by such clauses, but, very occasionally, it is appropriate to say that a clause in a government Bill is simply bonkers—a technical term, but appropriate in this context. That is the appropriate term in respect of a proposal that the Secretary of State should be given power to

“bring proceedings … in an employment tribunal”,

in place of the worker who has the employment right, where

“it appears to the Secretary of State that the worker is not going to bring proceedings”.

This is a quite astonishing provision, for all the reasons given by the noble Lord, Lord Carter, the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Murray, in particular because the Bill does not require the Secretary of State even to consult the worker whose rights they are going to pursue, far less to obtain the worker’s consent.

Of course, the worker may have good reason not to want to bring proceedings. Not everyone wishes to spend more time with their lawyers. Not everyone wishes to have the finer details of their conduct picked over in public by lawyers for the employer and to be the subject of a public judgment. I declare my interest as a practising barrister, occasionally in employment law cases. I spend much of my time advising clients in all areas of the law that litigation is not necessarily the answer to their problem. The idea that the Secretary of State should decide whether to bring proceedings, and not the worker themselves, could appeal only to those who believe in a state that is ever expanding to take more and more responsibility for areas of life.

--- Later in debate ---

[Lord Pannick (CB)]

Is it really appropriate for a Secretary of State to insist that the circumstances relating to an individual are publicly exposed—subject to cross-examination, subject to a public judgment—when the individual whose private rights are the subject of those proceedings wishes, no doubt for good reason, that they not be so exposed? Is it really appropriate?

[Lord Marks of Henley-on-Thames (LD)]

I venture to suggest that in some circumstances it might be, but I add an important point, which is that my party has been involved in discussions with the Government about the protection of such a worker.

[Lord Marks of Henley-on-Thames (LD)]

There is nothing secret about any such discussions. They relate to anonymity for such a worker and the restrictions on publicity that might protect such a worker from exactly the dangers and difficulties that the noble Lord, Lord Pannick, suggests and envisages. But the Secretary of State might, in a given case, take the view that an issue of law or principle was involved, with wider ramifications going beyond that particular case, and that the public interest required the issue to be determined. With respect to all the arguments that have been put by those who have spoken before me, I am not sure that any of those arguments met that possibility, certainly not in the way in which the noble Lord, Lord Murray, expressed it. Even the moderate tones of the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Garnier, a colleague of mine, failed to deal comprehensively with that suggestion.

[Lord Pannick (CB)]

This is a very important matter. Surely the answer to his concern that the individual case may raise wider, broader issues is that it is absolutely inevitable in those circumstances that there will be other affected workers, one of whom no doubt will bring proceedings. We do not need the Secretary of State to bring proceedings in those circumstances. It is inconceivable.

[Lord Marks of Henley-on-Thames (LD)]

There might be others. Then again, there might not. I quite accept that a Secretary of State would have to weigh up very carefully the competing considerations in favour of the public interest in having a point determined against the private interest of the worker concerned in not being involved in any way in litigation. Of course, the worker concerned does not have to be involved; proceedings are brought—this is a point I will come on to in a moment—as if he were involved, but the point may need determination in any case.

I think I have covered the point about the public interest, which I suspect is the argument that we will hear from the Government. Nevertheless, and on a point that the noble Lord, Lord Carter, made, in a case where Section 113 is invoked, I suggest that it would be utterly wrong for such a worker to be exposed to risk by the Secretary of State proceeding with such a case. I have dealt with the point about anonymity and circumscribing publicity, and I suggest that this must be addressed before this clause becomes law.

[Lord Marks of Henley-on-Thames (LD)]

Such protections as would be afforded would depend on the individual case and on such measures as the tribunal thought appropriate; they might indeed include anonymity or witness protection in an extreme case. I do not believe that that is likely, but I do believe that the right of the worker to some sort of privacy, in a case in which he positively did not want to be identified, would have to be protected.

Going on to my point about the risk in costs, I suggest that it would be simply unconscionable if the decision of the Secretary of the State to take proceedings could expose the worker to a risk in costs. There is no protection in the Bill for a worker on this point; indeed, in subsections (3) and (6) in particular, there is the clear suggestion that there would be a risk in costs for an unwilling worker claimant. Specifically, subsection (3) would provide that, if the Secretary of State brings such proceedings, they are

“to be proceeded with as if they had been brought by the worker”,

and that needs to be addressed. As the noble Lord, Lord Carter, pointed out, subsection (6) will provide that:

“The Secretary of State is not liable to any worker for anything done (or omitted to be done) in, or in connection with, the discharge or purported discharge of the Secretary of State’s functions by virtue of this section”.


That, in my submission, renders the worker vulnerable to an order in costs and there ought to be an indemnity against any such order. I accept that there is not one; the question is therefore whether that can be addressed by the Government. It is not a question that leads to a stand part decision that the clause should be left out of the Bill altogether.

We would of course hope that no employment tribunal would make a costs order against a worker in such circumstances, but this House should not proceed on the basis of hope alone; the possibility remains, particularly if the tribunal were to take a dim view of the worker’s conduct. That, we should remember, may be exactly the conduct that sensibly dissuaded the worker from launching proceedings in the first place.

I invite the Government to bring forward an amendment, hopefully by agreement at Third Reading, whereby protection from this risk in costs could be given to a worker, either by way of indemnity by the Secretary of State or by a prohibition on a costs order. I also urge the Government to look at the other protections that the worker might have. Alternatively, the Government might consider giving solid assurances to meet this point. I give way to the noble Lord.

[Lord Pannick (CB)]

Can I ask for the noble Lord’s assistance? He mentioned that, according to subsection (3),

“the proceedings are to be proceeded with as if they had been brought by the worker”.

Does he think that that means that if the worker decides to withdraw the proceedings, they are to be treated as withdrawn?

[Lord Marks of Henley-on-Thames (LD)]

The noble Lord has plainly given the Government solid pause for thought on that point, because of course any proceedings before a tribunal of first instance can be withdrawn by the litigants. The litigants in this case would be the Secretary of State and the other party—presumably the employer. If subsection (3) is given the interpretation that the noble Lord, Lord Pannick, suggests might be given to it, the worker would be treated as the litigant. That is a difficult point for the courts to resolve. It is a point that at Third Reading the Government really must resolve, and that I entirely accept.

Employment Rights Bill

Lord Pannick Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 10th December 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I am going to speak, in mercifully brief terms, about SMEs, but I will spare noble Lords the history of SMEs in the UK from 1910 to 2026.

My point, in relation to Motions B and B1, is that lifting the cap on unfair dismissal without warning and at this very late stage fundamentally undermines the claims of careful consultation with employers. My email inbox, like those of many others in this place, is awash with anger and indignation from SMEs in particular. The question they keep asking is: how can we trust this Government, coming as this does after punitive and disproportionate hits on employers’ national insurance contributions and inflation-busting increases in the minimum wage, who are sneaking in this clause on uncapped compensation? SMEs will not be persuaded by the data we have heard in this debate on medians and modes. Frankly, we are creating yet more uncertainty, piling up the risks of employing new staff and fuelling unemployment that much further. It is anti-entrepreneurial, anti-enterprise and, I fear, a job destroyer. In my view, it has no place in a free, growth-driven economy.

[Lord Pannick (CB)]

My Lords, there is one short point that the House should bear in mind in relation to Motion B1. There is already no cap on the award of compensation in employment tribunals for race discrimination, sex discrimination and disability discrimination cases. The House may therefore think that the concerns that have been expressed about the impact of the removal of the cap are perhaps rather exaggerated.

[Baroness Lloyd of Effra (Lab)]

My Lords, I thank all noble Lords for their contributions today. This continues the robust discussion that we have had throughout the passage of the Bill.

I come first to some of the constitutional points, or those that go to the way that we do business. As I outlined in my opening speech, the tripartite talks and the amendments resulting from them were context- and Bill-specific. They were really a demonstration of the way in which we listened very clearly to the views expressed in this House through many exchanges, which led to a very productive tripartite discussion. However, they are very context- and Bill-specific. The noble Lords, Lord Vaux and Lord Cromwell, will be familiar with discussions with the Leader of the House on how she and other Members would like to conduct business more regularly.

I will address some of the points made. Again, coming back to the nature of it all, these were discussions between business representative organisations, trade unions and the Government. Specifically on the question of the minutes, there are Civil Service contemporaneous notes of the meetings, but they have not been shared with participants or more widely. We think that it would be impolite and inappropriate to share the meeting notes without the agreement of those who attended the meetings. The Government’s statement and update on the Employment Rights Bill, released on 27 November, and the subsequent Written Ministerial Statement laid in both Houses provide the public summary and conclusion of that meeting. Although it was a slightly different process, we laid that Written Ministerial Statement as soon as we could to give as much clarity as possible to the House on the developments that were happening, which were, as I said before, in response to concerns raised here.

On the question of lifting or removing, that is indeed something that I have also given some thought to. The word “lift”—lifting embargoes; lifting bans—is used very commonly in that manner to mean “remove”. When asked this question in the other place, my colleague, Minister Dearden, confirmed the outcomes of the negotiations and said

“I was in the room as part of the negotiations … I can confirm that the compensation cap was discussed and agreed in the room”.—[Official Report, Commons, 8/12/25; col. 94.]

I was not in the room and I therefore give weight to the comments that she made on that.

To address the comments and interventions made by the noble Lord, Lord Vaux, and my noble friend Lord Barber, this is, in total, a pragmatic way forward. The opposition amendment would not enable us to move forward because it would remove the cap and replace it with the report. It is not something that can be encompassed, and we should continue with the package as negotiated; it is not consistent with the agreement that was reached and which we have brought to your Lordships and encapsulated in the Bill. I just underline that it is not something that we can accept.

Points have been made about the actual substance of the cap. The noble Lord who spoke just before me made the extremely pertinent point that there are already areas of the law that have uncapped areas, and we do not think that removing the cap will mean that compensatory awards will necessarily increase in the way that others have set out. Tribunals have well-established ways of calculating the compensation that might be awarded for particular types of losses resulting from unfair dismissal. As the figures cited today show, those methodologies lead to awards that are, on average, under £7,000. Employment tribunals will continue to focus on claimants’ actual losses when determining awards. I think that some of the fears are unwarranted but, in any case, we will publish the impact assessment and we will engage with business organisations continuously. The last month has shown how productive it can be to engage with business organisations and trade unions together to advance all the measures here. I think that I have dealt with all the points made by Members on the cap.

I come on to the political funds and the question of whether it is an active choice or whether we are trying to restrict people from making an active choice as to whether to contribute to a political fund. When joining a trade union, new members are taking an active choice to voluntarily join a collective organisation that has decided, via a democratic ballot of members, to establish a political fund. We do not see these as two distinct decisions—a decision to join a democratic organisation that has a political fund and a decision to opt in to a political fund—but one active decision. I remind noble Lords that all we are proposing to do is to restore the position as it was for 70 years—I will perhaps not give quite as much detail as my noble friend—before the Trade Union Act 2016 came into force. This simplifies the political funds process to ensure that a balance is struck between protecting trade unions from administrative burdens and ensuring that members continue to have a choice on whether they wish to contribute to a political fund.

Crucially, we agree with the noble Lord, Lord Burns, that members who, for whatever reason, choose not to contribute, should and will be able to do so easily and without detriment, and can exercise that right to opt out of contributing. We will continue to require trade unions to make new members aware of their right to opt out of the political fund. The unions will have to explain to members on the application form that opting out will not affect other aspects of their membership and they will not face any disadvantage. Members will be able to easily inform unions of their decision to opt in or out, including by post, email, completion of electronic form or by any other electronic means.

I was asked about the guidance or regulations in this area. The Secretary of State will be under a duty to issue the guidance within three months of the relevant section coming into force. This guidance will set out expectations as to how quickly unions should action opt-out notifications and will state that unions should, as a matter of best practice, give effect to opt-out notices at the earliest feasible opportunity. This will help to ensure that unions action the opt-out notices promptly. As I stated earlier—I can commit to this again—the guidance will also be clear that opting out must be properly available and practically possible for members who wish to exercise that right. We want to make sure that members are able to opt out in that way, and the guidance will be clear on how that is effected. On the question of the rebate, that will be effected at the earliest time possible once the opt-out notice has been given.

On the question of ballot thresholds, I noticed the attempt to recontextualise the recent year’s industrial action, but the fact is that a threshold of 50% has not led to less industrial action. All strike action recently has taken place with a turnout of more than the 50% threshold, so we do not think that this will inhibit good industrial relations. In fact, we think that the 50% level is unnecessary. It is inhibiting the democratic right of union members and unions to demonstrate their will. It does not take place in other areas—for example, local government or parliamentary elections. Therefore, we do not think it should continue. However, to reiterate, we will not repeal the 50% threshold until we have assessed the impact of e-balloting. The Secretary of State will have to have regard to the impact of that, and he will lay a Statement explaining what the effect of e-balloting is before the 50% threshold is rescinded.

To conclude, we now want to move forward with purpose, guided by our manifesto commitment to work constructively with stakeholders.