The Deputy Prime Minister (Angela Rayner)

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I beg to move, That the Bill be now read a Second time.

I declare that I am a lifelong proud trade union member—[Hon. Members: “Hear, hear.] When the Government took office and I took this job, we promised the biggest upgrade to workers’ rights in a generation, nothing less than a new deal for working people. We said that we would introduce a Bill to deliver that within 100 days, and we have fulfilled the promise we made to the British public. Let us be clear: too many working people have had to wait too long for change.

Over decades, the good, secure jobs that our parents and grandparents could build a life on were replaced by low-paid and insecure work. Wages flatlined, in-work poverty grew, growth was strangled and the Tories left behind a battered economy that served no one. Today, this Labour Government, led by working people for working people, will start to turn the tide.

First, I want to note the reasoned amendment. Our reforms are ambitious—they have to be to bring real change. But we have engaged extensively and will continue to do so. Today we are publishing a package of consultations on strengthening statutory sick pay, zero-hours contracts, industrial relations, collective redundancy and fire and rehire. As the impact assessment we have published today shows, the Bill is a pro-growth Bill.

This landmark Bill—pro-growth, pro-business and pro-worker—will extend the employment protections given by the best British companies to millions more workers.

Angela Rayner

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The impact assessment also makes it clear that the Bill will have a positive impact on growth. More than 10 million workers, in every corner of this country, will benefit from Labour’s plan, and the money in their pockets will go back into the economy and support businesses, in particular those on high streets.

Across the business spectrum, from giants like Sainsbury’s and Octopus Energy to small and medium-sized companies like Richer Sounds, successful firms already know that strong employee rights mean strong growth opportunities. The Secretary of State for Business and Trade and I have just been to the Co-op in County Durham to see how it retains valuable talent, boosts profits, and powers ahead with enlightened policies that support good working lives for its staff. The Bill will bring all businesses on board.

Angela Rayner

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We have already been working with businesses while bringing forward the Bill, and we will continue to do that through the consultations. We have recognised probation periods, for example, but we do not think that people should not have rights two years into their employment.

We are listening, but I say to Conservative Members, who promised employment Bill after employment Bill and then never delivered them, that the people of this country deserve secure fairness at work, and this Labour Government will deliver it. Almost 9 million employees will benefit from protection against unfair dismissal from day one, 1.7 million will benefit from new policies on flexible working, and up to 2 million will receive a right to bereavement leave. Thousands of pregnant women and mothers will benefit from new maternity protections, and tens of thousands of fathers and partners will be brought into the scope of paternity leave. We will deliver a genuine living wage that matches the cost of living.

In total, more than 10 million people will benefit from Labour’s plan in every corner of this country, so if you are in casual work, unable to rely on guaranteed hours, this Labour Government are delivering for you. If you are working hard on low pay and struggling to make ends meet, this Government are delivering for you. This is a Government back in the service of working people.

Angela Rayner

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The Conservatives had 14 years to support the working people of this—[Interruption.]

Angela Rayner

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Will the hon. Member listen to my response? I gave way to him. For 14 years, the Tories promised employment Bills and an industrial strategy, and in 14 years they delivered the highest cost of living for the working people of this country. It will be this Labour Government who deliver for them.

This is a Government back in the service of working people, building an economy fit for the future and making work pay. For the first time ever, we have instructed the Low Pay Commission to take account of the cost of living when setting the minimum wage, because everyone deserves a proper living wage for a proper day’s work. We have already moved to protect 4 million self-employed workers from late payments with the new fair payment code, and we have already encouraged employers not to use the ineffective and failed minimum service laws, which did not stop a single day of industrial action while in force, before we repeal them for good. That is a bold start, but we are going further. The UK labour market is not delivering for workers or businesses, and it holds back the UK economy. We know that things have to change. The Bill marks a momentous opportunity to chart a new route to growth—one built from the bottom up and the middle out—alongside the £63 billion of investment into the UK that was announced last week. Higher growth, higher wages and higher productivity—a new partnership between workers and business.

Angela Rayner

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I agree with the hon. Member and thank her for her work in that area. We must ensure that workplaces have a good culture that does not tolerate any form of harassment, including sexual harassment, because that is bad for business as well.

The major achievement of parts 1 and 2 of the Bill will be to strengthen rights for working people. That is personal for me: I started my working life as a carer on casual terms, not knowing if there would be a pay cheque next month. The fear of not being able to provide for my young family, and of losing everything, stuck with me. Now that I am at the Cabinet table, I am determined to deliver for the millions of people in the position that I was once in, and to bring all companies up to the standard of the best when it comes to workers’ rights. The Bill is a recognition and celebration of the many employers that are already implementing such measures and, in many cases, go much further.

Angela Rayner

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I agree, and can confirm to the House that the Bill will finally end the exploitative zero-hours contract. Up to 2.4 million workers will finally have the right to a contract that reflects the number of hours that they work.

For too long, working people have been subject to the shocking practice of fire and rehire. Often, even the threat of fire and rehire means that people voluntarily agree to lower pay and reduced terms and conditions. Our Bill will end those bullying tactics for good, putting an end to fire and rehire and to fire and replace, unless employers can prove that they face financial difficulties that threaten the survival of their business and that changing the employee’s contract was unavoidable. After years of campaigning, working people finally have a Government who listen. No longer will working people face the scourge of fire and rehire.

Angela Rayner

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I agree with my hon. Friend. The previous Government promised to do something about the practice but failed to do anything.

Angela Rayner

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I agree with the right hon. Gentleman on the importance of small and medium-sized businesses, which do a fantastic job and contribute widely to our economy. That is why we have engaged with small and medium-sized enterprises. Many of them understand that if there is clarity around what we are doing and if we consult like we did with probation periods, then we are working with them. But many of them also recognise that the scourge of insecure, low-paid work in this country at the moment is holding Britain’s economy back. That is what we are going to change.

Angela Rayner

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I agree with my hon. Friend. When the previous Labour Government brought in the national minimum wage they had the same sort of arguments made at them, but what we actually saw was that the minimum wage lifted millions of people out of poverty. It will be this Labour Government who can stand proudly and say that we stood up for the workers, and for those good employers in our country that are doing the right thing by protecting and looking after their employees.

Angela Rayner

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I agree with my hon. Friend. The Bill is pro-worker and pro-business; that is the context in which the Bill has come to fruition. We have been consulting wide and long on the measures, and we believe they strike the right balance to get our economy working across the board, so that people can contribute and feel that their contribution is valued as part of the UK economy.

The Bill also delivers a once-in-a-generation upgrade of the rights of our proud seafarers. Never again will any company be able to get away scot-free with exploiting a loophole to sack employees without notice. No longer will our seas be the byword for a race to the bottom on standards.

The next step in our package to transform the rights of working people is on unfair dismissal. At present, employees must wait two years for basic protections against unfair dismissal, so it is not surprising that they can be loath to change jobs and restart the clock. That is not right. It deprives people of promotion opportunities and pay rises, and it limits businesses’ ability to recruit. Under the Bill, employees will not have to wait years for protection from unfair dismissal. Instead, they will receive it from day one. Those measures alone will benefit close to 9 million people.

Angela Rayner

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I do not know what the hon. Member is getting at. Maybe he is getting at the former Conservative Transport Secretary, who referred to them as pirates of the high seas or weasels—I do not know. I have just said clearly to all businesses in the UK that I want to work with them to ensure that we value their employees. Many of them are onboard: they recognise that it is good for business, good for growth and good for their employees.

Kit Malthouse (North West Hampshire) (Con)

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I draw attention to my entry in the Register of Members’ Financial Interests.

In relation to the point raised by my right hon. Friend the Member for South West Wiltshire (Dr Murrison), I understand that the right hon. Lady believes she is fulfilling a manifesto commitment, and we have to respect that. However, I hope she recognises that while these regulations will apply across the whole of the economy, the dynamics within small businesses and—in particular—microbusinesses are very different from those within large businesses. For example, if a business only has four employees and all four apply for flexible working, as the Bill provides for, it becomes not just a logistical and administrative nightmare but a personal nightmare for the person who is trying to run that business. I hope that as the Bill progresses, the right hon. Lady will look at what has been a customary carve-out for small businesses and consider whether that might be appropriate for specific measures.

Angela Rayner

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Some of the measures in the Bill do recognise the difference between large employers and smaller ones, but we also have to ensure fairness and clarity of purpose in this country, and I think this Bill strikes the right balance. As I have said to other hon. Members who have raised issues regarding small and medium businesses, we are working with those businesses. We have already listened regarding probation periods: the Bill now creates a new statutory probation period so that employers and employees can check whether a job is a good fit. If it turns out not to be right, the Bill allows for a new lighter-touch standard of fairness for employers to meet when they dismiss someone, so I think we are striking the right balance. We have worked very hard on this piece of legislation. If workers are dismissed unfairly, everyone deserves the right to protection, however long they have been in post. With Labour, they will have that right.

Turning to statutory sick pay, no one should feel forced to struggle through work when they are not well. Our view is simple: everyone should be entitled to sick pay from the first day that they are sick, regardless of their earnings, yet 1.3 million employees are currently excluded because they do not earn enough. That means that lower earners, including carers, go to work when ill because they cannot afford not to do so, risking infecting the vulnerable, the elderly, and others with whom they come into contact. No one should want that. Under this Bill, all employees will be entitled to sick pay however much they earn, and that sick pay will be paid from their first day of being ill.

Angela Rayner

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I have already given way to the right hon. Member, and there are so many other Members who want to speak.

This Government know that the current system does not support working families. We said that we would make flexible working the default, and the Bill will do just that. Flexible working makes workers happier, and we know that businesses that offer it benefit from bigger, better and more diverse recruitment pools. At the same time, we recognise that not all workplaces can accommodate all flexible working requests, so businesses will be able to negotiate or reject unworkable requests as long as that rejection is reasonable.

Angela Rayner

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There will be statutory guidance, but of course, it would depend on the various different circumstances. We saw during the covid pandemic that people were able to be incredibly flexible in their work. It is with that mindset that I ask employees and employers to look at how they deliver services, because far too much talent goes out of our economy because of inflexibility. Employers should think about how much talent they can retain in their business by keeping people in work; many of the good employers already know that, and offer way more flexibility than we are suggesting in our Bill.

The current parental leave system is also outdated, which is not right. Under the Bill, fathers and partners will be able to give notice of their intention to take paternity leave and unpaid parental leave from their first day in a new job. New mums also lack the protection they deserve. We know that the Conservative party’s solution is to go back to the dark ages and scrap maternity pay altogether; if the Conservatives had their way, as a single mum, I would have been left with nothing. It was a Labour Government who introduced the maternity allowance as the number of mothers in the workforce grew, and while the Conservative party—out of step with modern Britain—cannot wait to get rid of it, I say that we will never, ever stop defending it.

Angela Rayner

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I thank my hon. Friend for making that really important point. This is the start of a process. There are a number of consultations, such as for the self-employed and on a single category of worker, and they will continue, because some of these things are more complex than what we can deliver in this Bill. But I say to my hon. Friend and to other Members: please come to this in the spirit of what we want, which is to improve working people’s lives. As I have said, many employers already go above and beyond what we are saying in this Bill. I hope we can start to celebrate those employers who do so and to spread that across the economy.

Angela Rayner

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I thank my hon. Friend for making that important point. We all agree across the House that families play an important role, that businesses can help to support families, whatever size or shape they are, and that we must go much further to make that happen.

The Bill goes further by making it unlawful to dismiss pregnant women, mothers on maternity leave and mothers who return to work during a six-month period after they return, except in certain specific circumstances. For women in work, we will not stop there. Eight out of 10 menopausal women are in work. For most, there is no support. When workplaces fail to support women, we fail in our moral duty to treat people equally, and employers lose out on talent and skills. On pay, too, we are failing women. The national gender pay gap still stands at over 14% and is not narrowing fast enough, so we will be requiring action plans for large employers to address the pay gap and support women during the menopause.

It is a sad reality that women often find the workplace uncomfortable and unsafe. Sexual harassment at work can destroy confidence and ruin careers. We will do everything in our power to tackle it. The Bill will strengthen the duty on employers to prevent sexual harassment of employees, and it will strengthen protections for whistleblowers by making it explicit that if they do the right thing and speak up about sexual harassment, the law will protect them.

Through this Bill, the party of maternity pay and of the Equal Pay Act 1970 will introduce the next generation of rights for working women. Central to all these reforms is our belief that all employers should always support their employees. The best ones already do.

Angela Rayner

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I thank my hon. Friend for his intervention. That is why we have moved at pace. The previous Government promised an employment Bill to protect workers and they did not deliver. Within our first 100 days, we are delivering this employment Bill.

Losing a loved one is among the hardest things for any of us. That is why in this Bill we are setting a clear standard for businesses, giving employees the right to bereavement leave. Taken together, these new rights for working people—sick pay when they need it, an end to exploitative zero-hours contracts and to fire and rehire, bereavement leave, expanded entitlements, paternity leave and new protections for women in work—represent the biggest upgrade for working people in a generation, but we are not stopping there.

Angela Rayner

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My hon. Friend makes a very important point. We want the culture to change as well. We have had a race to the bottom where workers have not been protected, and we have seen the biggest wave of strike action because of the previous Government.

We want employers and trade unions to come together to grow our economy. The employers and the unions are up for that challenge, because we know that the world of work is fairer and more productive when working people can come together to negotiate fair pay and decent conditions. That is why we are reinstating the school support staff negotiating body in recognition of the vital role that support staff play in the workforce and in young people’s education.

As a former carer, I have said from day one that in this place I will champion carers and the complex, high-quality and professional work that they do. I am so proud to say that after 14 years, their extraordinary, life-saving contribution to our community will no longer be devalued by low pay and lack of career progression. For the first time, thanks to this Labour Government, there will be a historic fair pay agreement process in the adult social care sector, with a new body empowered to negotiate pay and conditions and ensure that training and a career structure are in place. At last, care will be rightly regarded as a multi-skilled profession and carers will be confident that they have the respect and income that they deserve for looking after our vulnerable loved ones and helping to manage the pressures on the NHS and in social care.

Angela Rayner

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My hon. Friend makes a very important point. The disparity in the terms and conditions for care workers actually impedes recruitment: we are seeing huge numbers of vacancies in the care sector. Through the fair pay agreement, I want to see carers being treated with fairness for the valuable contribution they make. They are also key to tackling the challenges we face in our NHS.

Angela Rayner

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We have already written to the Low Pay Commission, as I have set out, and we want to go further through the fair pay agreement to make sure that carers are recognised for the valuable role they play. Care workers are not just people who do the shopping or call in for 15 minutes; they handle complex needs in the community and look after some of our most vulnerable loved ones. They should get the recognition they deserve, and that is why we are taking these measures.

We know the valuable contribution that trade unions make. That is why we are resetting industrial relations. The Conservatives presided over strike Britain with their scorched earth approach to strikes. First, we are repealing the Strikes (Minimum Service Levels) Act 2023. Anyone with a brain could see that that legislation would do two things: increase tensions and fail to prevent a single day of industrial action. We said so at the time, and what happened? The rail dispute cost our economy over £1 billion. The law has failed and has no reason to stay on the statute book.

We are also repealing nearly every part of the flawed Trade Union Act 2016, which tried to smother trade unions in form filling and red tape and prevent them from doing their job. We will go further by strengthening the voice of working people by making it easier for trade unions to get recognised, giving them the right of access to workplaces and making sure that they have enough time to represent their members. When the rights of working people are flouted, a new fair work agency will be empowered to investigate. Today we are also launching a consultation on modernising trade union laws so that they are fit for the modern workplace and our modern economy.

In under 100 days, we have put together a transformative package that marks a new era for working people. We know that the Conservatives will oppose this every step of the way. We know because they have history, just as they opposed Labour’s minimum wage and now, shamefully, want to take us back to the dark ages when women were denied maternity pay. It is clear that they are out of step with modern Britain.

Our plans mark a new way forward—a new deal for working people, making jobs more secure and family friendly, banning exploitative zero-hours contracts, supporting women in work at every stage in their life, a genuine living wage and sick pay for the lowest earners, further and faster action to close the gender pay gap, ensuring that rights are enforced and that trade unions are strengthened, repealing the anti-worker, anti-union laws, turning the page on industrial relations and ending fire and rehire, while giving working people the basic rights that they deserve from day one in the job. This is a landmark moment, delivered in under 100 days. This is a pro-business, pro-worker, pro-growth Bill and a pro-business, pro-worker, pro-growth Government. Today, after 14 years of failure, we are starting a new chapter and decisively delivering a better Britain for working people.

The Secretary of State for Business and Trade (Jonathan Reynolds)

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You are the shadow Business Secretary.

Kit Malthouse

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Alongside the many negatives relating to the Bill that my hon. Friend has laid out, does he recognise the strong possibility that, particularly in small and micro businesses, the legislation could inject quite significant resentment among the staff body itself? For example, just to amplify my previous point, if you have six members of staff and three of them apply for flexible working, that has an immediate impact on those who do not have flexible working. The ability of the business to offer flexible working to future workers is also reduced, which turns the whole thing into a massive negotiation between six or seven people. That could have a significant impact on morale and sense of fair play within businesses themselves.

The Secretary of State for Business and Trade (Jonathan Reynolds)

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I thank right hon. and hon. Members across the House for an informed debate on the Employment Rights Bill and the Government’s plan to make work pay. In closing, I declare to the House that I am a proud member of the Unite and USDAW trade unions. Even more proudly, I declare that I come from exactly the kind of working-class family that stands to gain from the measures.

As this is Second Reading, let us remember the history and context leading up to the debate. In recent times, work has changed a great deal. We have seen the impact of technology and the gig economy, and we have had working from home in the pandemic. Many things have changed what work is for many people. That has created a need to consider whether our employment laws are up to date.

Indeed, it was the Conservatives, under Boris Johnson, who first promised an employment Bill in their 2019 manifesto, but they did not deliver. The subsequent Queen’s Speech, after the 2019 election, included an employment Bill, but again the Conservatives did not deliver. In contrast, this Labour Government not only promised an employment Bill; we have delivered one, and in just 100 days. Meanwhile, it appears that some Conservative Members do not even support the existing provision of things like maternity pay, so there have been some differences in opinion between Members on opposite sides of the House today.

It is a proud day for the new Government, but it is a prouder day for Britain’s workers, many of whom can now look forward to a future with far greater security and stability than they have at present. Quite simply, good work and good wages are what this Labour Government were sent to this place to deliver, and that is exactly what this Bill is about.

I take pride in the fact that the new Government have worked closely with all parties in drawing up this legislation, acting pragmatically and listening at all times. The result is a Bill that will make a huge difference to the lives of millions of working people, while being proportionate, fair and reasonable in the asks it makes of business, recognising that the majority of businesses operating in the UK already do so to a higher standard than even this Bill would introduce.

We would not have known that from listening to the depressing speeches made by Conservative Members today. People would not know that Sainsbury’s already pays a living wage; that instead of zero-hours contacts, McDonald’s already offers contracts that provide guaranteed hours; that the Mace Group offers full trade union access to workers on construction sites; that Mars Wrigley offers equal parental leave; and that BT Group already has carer’s leave. Frankly, what we heard from the Conservatives today was binary, outdated and extremely depressing, but I was delighted to hear such significant support for the Bill from the Government Benches, and from all around the House.

Some Members raised specific points. I wish I had time to respond to all of them, but I want to acknowledge the tremendous maiden speeches we heard. The hon. Member for Leicester East (Shivani Raja) gave an incredibly gracious speech about her predecessors, in a very skilful way, which is not easy when she had to defeat several of them to get her place in the House. The hon. Member for Weald of Kent (Katie Lam) told an incredibly powerful family story, woven into a wonderful description of her constituency, and she extolled the romantic benefits of campaigning for the Labour party, which is something we can all get behind.

My hon. Friend the Member for Hyndburn (Sarah Smith) captured the glorious industrial heritage of her area in a way that was extremely relevant to today’s debate. My hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball) gave a speech that testified to the fact that politics can be a force for good, and it was wonderful to hear. My hon. Friend the Member for Blackpool North and Fleetwood (Lorraine Beavers) showed passion and commitment in every word she spoke; I cannot wait to hear more from her. My hon. Friend the Member for Dover and Deal (Mike Tapp) showed his commitment to public service, which has run throughout his entire life; again, it was a wonderful speech to listen to. My hon. Friend the Member for Airdrie and Shotts (Kenneth Stevenson) managed to draw a comparison between his constituency and ancient Rome, which was particularly skilful. His speech was funny, warm, authentic and passionate. Finally, my hon. Friend the Member for Hamilton and Clyde Valley (Imogen Walker), the MP for the area known for Robert Owen, made a wonderful and apt contribution to the debate, with a tribute to hard work and the rewards it can bring—again, it was wonderful to listen to.

Unfortunately, I must give the House some negative advice: to reject the reasoned amendment in the name of the new shadow Secretary of State, the hon. Member for Thirsk and Malton (Kevin Hollinrake). Quite frankly, lads, it is a bit of a mess, isn’t it, as motions go? It claims credit for measures the Conservatives once opposed, such as the minimum wage. It opposes the fair work agency, which they used to support. It claims that there will be more strikes, when they presided over a record number of days lost to strike action, and it shows even less self-awareness when it comes to the burdens on small businesses. Let us not forget who called the referendum on leaving the European Union, with no preparation for either result.

The serious point is this: the Conservative record was one of stagnant wages, low business investment and low productivity. Frankly, it was a record of failure. That is why we must act differently. The shadow Secretary of State claims that the Bill is rushed. Nothing could be further from the truth. The fact that the Bill is ready in 100 days is testament to the brilliance of the civil service and the resilience of the British model of government.

The impact assessment we have published shows that these measures will increase total employment costs by 0.4%, but we know that smaller businesses face proportionately greater up-front costs from regulatory changes. That is why we are working with them closely to make sure that these reforms, and the speed at which they are implemented, work for them. However, I want to be clear that we will not allow for the creation of a two-tier market where someone’s protection as a worker depends on the size of their employer. That would create an uneven playing field and exactly the kind of disincentive to grow that we saw too many of under the last Conservative Government.

The shadow Secretary of State also raised the question of vexatious claims under day one rights. The point he missed was that there are already some day one rights. Protection for whistleblowers is a day one right. Disability discrimination protection is a day one right. If his worry is vexatious claims, those could be brought under the existing system. I thought that was a major weakness in his argument.

We heard speeches paying tribute to what this Bill will do on parental leave. On fire and rehire, I pay tribute to my hon. Friend the Member for Middlesbrough and Thornaby East (Andy McDonald) for his work preparing these measures.

I will also say one more thing on impact assessments to set that 0.4% impact on the UK’s total pay bill in context. Last year, the UK’s total wage costs were £1.3 trillion. To draft a Bill that will have such an impact for so many workers, with a direct benefit transferred to low-paid workers, and to keep it as proportionate as that is, I believe, an achievement.

Finally, on zero-hours contracts, we are not taking away flexibility, but making flexibility two-way. We are ensuring that workers have the right to a contract that reflects the number of hours they regularly work, while allowing them to remain on a zero-hours contract if that is what they want. We are making sure that flexibility works in both directions. There is no reason why that should in any way adversely affect seasonal work compared with what we have at present.

To close, this is a proud day for this Labour Government. This is a change of direction. It is a change to a better and more productive culture of industrial relations in this country. In the case we are making as a new Government, we are not alone. Study after study shows the benefits of investing in the workforce, in better productivity, better resilience and more market dynamism. This Bill makes good on our promise to the British people to change their lives for the better, to deliver an economy that works for them, and to end the poor pay, poor working conditions and poor job security that have held too many people back for too long. For all those reasons, I proudly commend this Bill to the House.

Question put, That the amendment be made.