Employment Rights Bill

Lord Sharpe of Epsom Excerpts

3rd reading
Wednesday 3rd September 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, I rise, I hope for the last time, as temporary spokesperson for the Liberal Democrats, as my noble friend Lord Fox’s spectre has arrived behind me—and he is a sight to behold.

I begin by thanking various Ministers—the noble Lord, Lord Leong, and the noble Baronesses, Lady Jones and Lady Smith, to name but three of many—for the time and patience given to me and our team. They always made time and effort to help me understand not only the process but the logic and reasoning behind the objectives of the Bill, and I genuinely thank them for it. I also thank our political adviser Adam Bull, who had the almost impossible task of turning a helpful Back-Bencher supporting my noble friend Lord Fox and his team into an overnight Front-Bench spokesperson leading our group following my noble friend’s accident. I have no idea how he pulled it off, but somehow he convinced me it was possible and we gave it our best shot, along with my noble friends Lord Palmer, Lord Clement-Jones and Lady Kramer, attempting to be reasonable and proportionate throughout the passage of the Bill.

We on these Benches broadly support the Bill and have said on many occasions that it was long overdue, and we acknowledge the Government’s mandate for this legislation. However, we believe that it could and should be refined to work better for workers and for industry, and urge the Government not to disregard the changes that have been proposed, passed and sent back to the other House without extensive consideration and consultation.

[Lord Sharpe of Epsom (Con)]

My Lords, I also express my gratitude to noble Lords on all sides of the House for their excellent contributions throughout our deliberations on this Bill. Their expertise, knowledge and careful scrutiny have been invaluable. I also thank the Ministers for the briefings and meetings, and indeed for the extensive correspondence by letter, that they provided during the course of these proceedings. I also thank the Bill team and the Ministers’ private offices. Further, I place on record my thanks to the Public Bill Office for its diligent work on amendments and to all the staff in your Lordships’ House who, as the Minister said, enabled our debates to continue sometimes late into the night with such professionalism. I also extend my thanks to our researchers on these Benches, Abid and Henry, who have been fantastic throughout.

We take a slightly different view as to the Bill. We think it is a terrible Bill. It is terrible for workers, businesses—particularly small businesses—and the economy as a whole. There is no support from anywhere in the business community for this legislation. The Office for Budget Responsibility has made it clear that the worst is yet to come. Unemployment has risen every single month under this Government. The latest figures show that the rate is now set to reach 5%, which is the highest since the pandemic. That is not a blip—it is a trend. It is the direct result of misguided economic choices, and if this Bill proceeds, the situation will only deteriorate further.

The Chancellor has deepened the difficulties. Long-term borrowing costs have surged to their highest levels since 1998, undermining stability and confidence. The spending plans are incoherent; when set alongside the provisions of this Bill, the picture is nothing short of a looming economic disaster.

The Bill imposes nothing new except new costs and burdens on business. A recent survey conducted by Peninsula, the UK’s largest HR and employment law consultancy, revealed that 68% of respondents believe that this legislation will have a negative impact on business. More than half expressed concern about the increased likelihood of tribunal claims—an inevitability under these provisions, with so-called day one rights and the ill-thought-out restrictions on workplace culture. Even the Government’s own impact assessment confirms those risks.

The noble Lord, Lord Katz, confirmed by letter that the Government are funding provision for some 33,900 tribunal sitting days, yet the backlog already exceeds 50,000 cases. It does not take a genius to calculate that it would take a year and a half simply to clear the existing caseload before even beginning to address the new claims that will inevitably arise as a result of this legislation. Indeed, the Government’s own impact assessment accepts that the introduction of the so-called day one dismissal rights will increase claims by around 15%. So, while I commend the Government’s actions in recruiting new judges, the Bill still piles more pressure on to a system that is already creaking, creating delay and uncertainty for employers and employees alike. My noble friend Lord Young of Acton tells me that the Free Speech Union has a belief discrimination case before the employment tribunal that has been given a hearing date of July 2027.

One cannot help but observe that the Bill appears designed less to support workers or employers and more to resuscitate the relevance of trade unions. We have already seen the damaging consequences of the Government’s approach in the handling of the junior doctors’ dispute. By also reducing the threshold for workplace recognition to potentially as little as 2%, they are preparing the ground for a surge in unionisation, leaving small businesses, many of which have no experience of dealing with unions, completely unprepared.

We should be mindful of the darker history that accompanies union power. In the 1970s and 1980s, communities were torn apart by the toxic culture of so-called scabbing. Workers who chose, for reasons of conscience or necessity, to cross a picket line were branded as traitors and subjected to intimidation and ostracism. That tyranny of the minority silenced individual choice and left lasting scars on families, workplaces and entire towns. It is precisely that environment which this Bill risks rekindling, where the decision of a small fraction can dictate the livelihoods of the many and where those who simply wish to work are punished for it. One can only admire the courage of the union barons opposite for their own act of scabbing today in crossing the PCS picket line to be here.

At the same time, the Government’s own impact assessment is clear that the central economic challenge is productivity, yet what Ministers fail to acknowledge is that poor productivity is overwhelmingly found in the public sector, where entrenched union practices have eroded efficiency and soured industrial relations. Instead of addressing that, the Government now seek to import those very problems into the private sector through this legislation. That will undermine competitiveness, discourage investment and damage growth.

The Bill also takes a regressive step with regard to political funds. The Government propose that contributions to a union’s political fund should once again be made on an opt-out basis rather than an opt-in. This undermines the principle of genuine consent. It also raises serious questions of accountability and transparency. I note that the certification officer requires unions to disclose payments above a de minimis threshold of £2,000, and that many unions are already making only two or three such payments a year. Those transactions, one assumes, are recorded in their internal accounts, so it should be no more than a simple matter of cut and paste to include them in the statutory return. Why, then, was this described by the Minister in her exchange with my noble friend Lord Leigh of Hurley as a “notable administrative requirement”? Is this to be the His Majesty’s Government’s standard position on disclosure requirements for other organisations in future?

Reference has been made to practices prior to 2016, when opacity prevailed. Yet rather than strengthening transparency, the Government seem intent on encouraging concealment. That is an approach that stands in stark contrast to the regime applied to companies, which must provide full disclosure of political donations. Ministers argue that members can access the information through the usual democratic means of a voluntary organisation, but there is in truth no such process. There is no requirement for unions to provide this information to their members at all. If the Government are serious about transparency, they should be insisting on openness, not enabling the reverse.

I feel that I should also inform the House that, for reasons best known to itself, an organisation called the General Federation of Trades Unions has invited me to various events at the Trades Union Congress conference. The programme contains, among other things, a session on what is described as “Employment Rights Bill #2”. Some might say that such a Bill would administer the coup de grâce after the firing squad of this Bill. It also features a session entitled, “¡Viva La Solidaridad! Stand with Latin America Against Trump”. I confess that I laughed when I read that. That is not serious politics; that is infantile and pathetic. If the TUC truly wished to offer international lessons, it might instead examine the havoc that socialist leaders and their trade union counterparts have wreaked on Latin American economies, particularly where solidarity has too often meant shared poverty, collapsing currencies and vanishing investment. We on these Benches are rightly focused on the future of British businesses and their employees, and the TUC should do the same.

I would also like to highlight Clause 30, concerning the right to be accompanied, which was tabled by the noble Lord, Lord Palmer of Childs Hill.

[Lord Fox (LD)]

The noble Lord, Lord Sharpe, has reminded me of what I have been missing while I was in a hospital bed in agony. Can I remind him that the Companion says:

“Any remarks should be brief and should not … reopen debates at previous stages of the bill”?

[Lord Sharpe of Epsom (Con)]

I am delighted that the noble Lord, Lord Fox, is back in his place. It is always a pleasure to be on the receiving end of his wit and repartee. He will be very pleased to know that I am winding up. Also, I am complimenting one of his colleagues—he ought to have waited.

Clause 30, tabled by the noble Lord, Lord Palmer of Childs Hill, was agreed on Report with cross-party support. Like other noble Lords across the House, we urge the Government to keep this provision in the Bill. It offers greater choice and protection for workers. To remove it would be a backward step that would disproportionately harm vulnerable groups, including disabled workers, young people and members of some ethnic minorities. That would be anti employment rights. I trust that Ministers will not seek to undo it.

For all its faults, I am glad that we have been able to make some improvements to this Bill as it leaves your Lordships’ House: retaining the 50% threshold for strike ballots to protect workplace democracy; introducing a right to request guaranteed hours; and ensuring clarity by setting out a clear probationary period and reference period for workplace dismissals, giving employers the certainty that they need. We hope that the Government will consider these amendments carefully in the other place and even take this opportunity to rethink the entirety of the Bill.