Monday 19th May 2025
(1 day, 18 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-IV(Corrected)(a) Amendments for Committee (Supplementary to the Fourth Corrected Marshalled List) - (19 May 2025)
Lord Hunt of Wirral (Con)
“Employer duties on harassment: impact assessment(1) The Secretary of State must carry out an assessment of the likely impact of sections 19 to 22 of this Act on employers.(2) The assessment must report on the extent to which the prevalence of third-party harassment makes the case for measures in sections 19 to 22 and—(a) include an assessment of the impact of sections 19 to 22 on free speech;(b) include an assessment of the likely costs to employers of sections 19 to 22;(c) include—(i) an assessment of which occupations might be at particular risk of third-party harassment through no fault of the employer, and(ii) proposals for mitigations that can be put in place for employers employing people in such occupations.(3) The Secretary of State must lay a report setting out the findings of the assessment before Parliament.”Member's explanatory statement
This new clause requires the Secretary of State to assess the impact of the provisions of Clauses 19 to 22.
Lord Hunt of Wirral (Con)
My Lords, Amendment 97 stands in my name and that of my noble friend Lord Sharpe of Epsom. I am delighted that my noble friend Lord Jackson of Peterborough and the noble Baroness, Lady Fox of Buckley, have also signed this amendment.
As we look back over the debates we have had on Clauses 19, 20, 21 and 22, we quickly reach the conclusion—as the Minister said in winding up the last debate—that there is a great deal of misunderstanding about the effect of these clauses. That is because the Government’s impact assessment is simply not fit for purpose. This proposed new clause would require the Secretary of State to assess the impact of the provisions of Clauses 19 to 22.
In many ways, I am only repeating what I have said on several other occasions throughout the passage of the Bill: there has not been enough homework done on the impact of the various clauses. That is particularly true in relation to the clauses concerning the requirement for employers not to permit the harassment of their employees by third parties.
I say to the noble Lord, Lord Fox, that my noble friends Lord Young of Acton and Lady Noakes have not exhibited synthetic rage but genuine concern. They have raised a number of important and serious concerns about the clauses as drafted. Yet the Minister, although I was hoping she might, failed to commit to undertaking a comprehensive and robust impact assessment. That is just not good enough.
In fact, on all three of the standard criteria used to evaluate regulatory proposals—rationale for intervention, identification of options and justification for the preferred way forward—the Regulatory Policy Committee has given a red rating to the Government. That should be deeply concerning to all of us in this Committee.
The Government are, of course, absolutely right that harassment in the workplace is unacceptable. That is a point on which there is strong consensus right across the Committee, and rightly so. Many noble Lords have spoken powerfully and persuasively on this matter during our debates, including many, very eloquently, on the Government Benches. Given that, it is all the more baffling that the Government should have taken such a lacklustre and superficial approach to the impact assessment for these specific clauses.
The assessment surely needs to provide a much more rigorous analysis of the risks. There is, for example, no mention at all of the very risks and impacts that led to the Worker Protection (Amendment of Equality Act 2010) Act 2023 being amended during its passage through Parliament. That legislation originally included provisions around third-party harassment, which were dropped after those serious concerns were raised, particularly in relation to freedom of speech and the cost burdens on employers. Surely no justification is offered here for ignoring those previous conclusions.
Lord Jackson of Peterborough (Con)
My Lords, I rise to support the amendment ably and comprehensively moved by my noble friend Lord Hunt of Wirral, which would, as he explained, insert a new clause. It is an eminently sensible amendment. The noble Lord, Lord Fox, described the arguments put by this side in the previous debate as straw man arguments. He was like Don Quixote tilting at windmills, because his claim that they were straw man arguments was comprehensively eviscerated by my noble friend Lord Young of Acton. They were substantive arguments and substantive concerns, notwithstanding the noble Lord’s comments and those of noble Lords on the Government’s side.
Clause 20 could be described as a hologram or a chimaera because it does not provide very much in the way of detail about the practical ramifications and impacts of this clause on businesses, particularly smaller businesses. The amendment is very sensible. In section 10 of the cost-benefit analysis in the Employment Rights Bill: Economic Analysis that the Government published last October, one is hard pressed to see any detailed empirical evidence from reputable economists or other academics which would sustain the likely costings that the Government have prayed in aid in favour of this part of the Bill. We are told that the universal cost of the Bill to business will be a very speculative £5 billion, but the source of that figure is not very clear; in fact, it is quite opaque. I do not believe that figure. For a number of reasons, the data is suspect, which is why we need the proper impact assessment so persuasively argued for by my noble friend on the Front Bench. We have not had a proper analysis of the detail in a risk assessment of section 10 of the cost-benefit analysis.
We also have not had a proper consultation process on the Bill. We have not had the opportunity to look at the likely impacts that flow from this clause. I say at the outset that, like my noble friend Lord Young of Acton, I am a proud member of the Free Speech Union, which has made a similar case about consultation.
We also do not know anything about the opportunity cost. Not everyone is an economist, but opportunity cost is what may have happened if this Bill had not come along. I suspect that employers, including smaller employers, would have taken on more staff, had there not been the encumbrances in this clause. In other words, they will be risk averse: they will not wish to run the risk of taking people on, given the litigation and vexatious claims which may well arise from this clause.
The figure the Government have put forward for the number of employment tribunals does not stand up to scrutiny, given the pressure that this will put on the tribunals themselves, as well as the other courts that will be responsible for adjudicating on this litigation. Indeed, as my noble friend said, this will exacerbate the already very significant problem of backlogs in the employment tribunals.
I turn to the kernel of this amendment. If I take the Minister and, indeed, the noble Baroness, Lady Carberry, who supported her from the government Benches, at their word, I do not know why they would not wish to support the free speech caveat in this amendment. Although they have not properly identified what harassment is—they have not defined it—they are going after people who are committing acts of harassment. They are not seeking to stifle or curtail free speech.
Baroness Chakrabarti (Lab)
I am grateful to the noble Lord for giving way. I would suggest that the so-called “free speech caveat” is Section 6 of the Human Rights Act, which requires all public authorities, including courts and tribunals, to interpret all other legislation in a way that is compatible with convention rights, including—for the purposes of the present debate, as I understand the noble Lord’s concerns—Article 10 of the convention on human rights.
Lord Jackson of Peterborough (Con)
I defer to the noble Baroness’s expertise on human rights legislation, but we are considering this specific, bespoke legislation. There will not necessarily be a read-across between that and—
Lord Jackson of Peterborough (Con)
Well, the noble Baroness will not be present at every employment tribunal and hear and adjudicate every case. As my noble friend Lord Young of Acton has said, there is a significant threat of inadvertent issues arising from this legislation, which, as my noble friend Lady Cash has said, is very poorly drafted. As subsection 2(a) of the proposed new clause sets out, it is important to look through the prism of free speech at Clauses 19 to 22.
It is also important to look at the likely costs to employers. This is the central point of my remarks: we do not know what those costs will be. It is certainly appropriate that Ministers be required to tell Parliament what the ramifications are in terms of cost. This is a Government who are committed to growth and to supporting businesses in all their endeavours. Therefore, it would be sensible to consider a review of how these issues impact on businesses.
On proposals for mitigations, there have been no ideas, no protocols, no concordats, and no policies put in place to give any guidance to smaller businesses—I am not necessarily referring to the smallest micro-businesses—to cope with the problems deliberately arising because this Labour Government have chosen to put these encumbrances and burdens on businesses. They are not giving any support to businesses to help cope with this. The costs will fall on the shareholders, on the businesses, and ultimately on the workforce—and it will cost jobs. For that reason, I support the amendment. It does not detract from the important commitment to protect ordinary working people, who deserve to be able to go to work without being bullied, harassed or treated unfairly or egregiously. We all agree with that, on which there is a consensus. It would not detract from that to make an amendment that would provide extra protections against people who are vexatious or malicious, or who cause difficulties in the long run, for no apparent reason. It is a sensible amendment that would protect business and would also protect the workforce.
Lord Hendy (Lab)
Can the noble Lord indicate what he thinks the value of an impact assessment is that does not weigh the benefits that ensue from the legislation but only the costs?
Lord Jackson of Peterborough (Con)
I think that is a slightly odd question coming from the supporter of a Government who are not coming forward with either intangible or tangible benefits in monetisable ways. Were that in the impact assessment or the economic analysis of the Bill, I would defer to the noble Lord’s argument, but neither of them are there. Frankly, it is difficult for us to make a value judgment on the balance of obligations and responsibilities between the workforce and the employer when the data is not provided. I think the noble Lord has probably made my case. With that, I support the amendment from my noble friend on the Front Bench.
Baroness Lawlor (Con)
My Lords, I support my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral in proposing this impact assessment and thank my noble friend Lord Hunt for making the case so persuasively from the Front Bench. I shall simply pick up on a few points that were made in the amendment and his speech. The amendment asks for an impact assessment on free speech. Proposed new subsection (1) asks for an assessment of Sections 19 to 22 of this Act on employers. Proposed new subsection (2) says:
“The assessment must report on … the impact of sections 19 to 22 on free speech”
and include
“an assessment of the likely costs to employers”
of these sections, which must include types of occupations at risk and proposals for mitigations.
I want to comment on this amendment in the context of universities. I spoke earlier in Committee about the mitigations a university might take in its rules and in the checklist that it hands out to potential candidates for a place who want to come to that university to study and who are asked to abide by certain arrangements or rules. These rules will, if the employer and the university follow what they are required as trustees of a charity to follow, protect the costs: whatever endowment of funds the university has, it will have to follow caution. I have no doubt that undergraduates or graduate students coming in for postgraduate work will be asked to promise not to complain, or be overheard doing so, or speak ill of lecturer A, whose lectures they may not approve of, may think are no good or whatever, as happens in normal intercourse in a university.
One of the standard things you will hear as undergraduates leave the room is, “What a rotten lecture that was” or “Isn’t it interesting that such a subject didn’t touch on the kernel of the matter?” or whatever they think is important. This is the sort of education we want to impart. We want students to question and challenge. We want them to make the case against what they have heard and to think about it. To make an employer liable for a student doing what a university education should encourage—we encourage it at school too—seems to me silly. We should have an impact assessment of what will happen and what sort of steps a university will take to curtail that freedom to argue or to criticise an employee of the university. We should ask for an impact assessment. It would not be very difficult to consult universities and find out exactly how they would get around this potential liability as employers.
The same goes for mitigation and the costs which will be incurred. For example, take the costs to an institution such as a university of fighting a claim in an employment tribunal. The member of staff concerned, against whom the criticism has been made, will be on tenterhooks all the time. They may be distracted, may have to continue to give evidence to the employer, and so on, with a lot of back and forth. As for the employers, think of the staff costs, counsel charges, legal charges, administrative costs and committee costs they will incur, and the time that will be spent on that rather than on running their universities to do what they ought to do—to educate undergraduates and do research. This is the most moderate request for an impact assessment that I have heard. Noble Lords would be well advised to agree that we need an impact assessment, both on free speech and the likely costs—particularly the costs of going to a tribunal and waiting for all that period.
Baroness Fox of Buckley (Non-Afl)
My Lords, I, too, have my name on Amendment 97, which would introduce yet another impact assessment. I know that so many impact assessments have been proposed in relation to the Bill that it has become a bit of a cliché, but I am especially concerned that this one is taken seriously because the third-party harassment sections of the Bill are ill thought out in a way that could lead to unintended consequences.
One noble Lord a few moments ago asked why there was a desire for an impact assessment rather than thinking of the potential positives of the Bill. The response of the Government in relation to concerns about Clause 20, for example, which is to say that there is nothing to see here—no problem at all—is an insufficient way of responding to some quite detailed scrutiny that has been put forward. If there is any exaggeration of the potential problems, an impact assessment should be able to resolve that for us.
I will focus largely on Clause 20, looking first at its potential cost to employers. That is especially important given that the Minister’s counter to my remarks earlier was that Clause 20 will be good for business. The Government’s own assessment advises that the total economic impact of complying with Clause 20 will be under £10 million and will have negligible economic impact on businesses. That is irresponsible; some might go so far as to call it misinformation. For example, that assessment says that the cost of familiarisation with the Bill and its ramifications will be £30 per medium business and only £19 per small microbusiness. I am not sure where these woeful underestimates come from or what they are based on, but if noble Lords have never met an employment lawyer, I can assure them that that is an unlikely figure.
We need a serious cost-benefit analysis. Let us consider what this section of the Bill requires businesses to do. Employers must show that they have taken all reasonable steps; that sets a high threshold for preventive action, as we heard earlier. Let us think what that means. There are direct costs for the initial implementation of anti-harassment policies, including familiarisation with the new regulations and checking exactly what their legal liabilities will mean. As we have seen during this debate, it is not necessarily as clear as day what the Bill requires.
As we have been arguing, if you are a small microbusiness trying to concentrate on being a business and trying to grow bigger, having to study the Bill and work out what your liability will be could be quite time consuming, nerve-wracking and so on. They will have to seek out third-party and legal advice—no doubt, there will be lots of consultants queuing up—because, as responsible businesses, they will want to safeguard themselves from the financial risks of not complying. One of the main risks they will be trying to ensure they do not have to deal with is the possibility of employment tribunals.
In what seems like an entirely arbitrary figure, the Government predict that only 30 employment tribunals a year will come from these clauses. There is no explanation as to how the Government reached that figure, and it is certainly completely at odds with industry experts who expect that Clause 20 alone will see an increase in employment tribunals of 15%—in other words, an additional 14,750 cases a year. As we heard earlier in a different context, already in 2023-24, employment tribunal courts received 97,000 cases, up from 86,000 the year before. That is an increase of nearly 13%. More and more people are forced into employment tribunals for a variety of reasons.
This Bill threatens to create even more cases—an unknown figure because it is a new provision. The Government are saying that it will be only 30 a year, but that is just making it up. There is, at least, an attempt in this amendment to try to work it out. According to the chambers of commerce, the cost of one employment tribunal is, on average, about £8,500, and if a claimant is successful, there is no financial limit to the compensation in a harassment case. Imagine you are a business worried about what is going to happen: this clause will lead to risk-averse and overcautious behaviour, not detailed in the Bill, to try to avoid being held liable. Some of us fear that this is what this kind of over-regulatory, precautionary approach will lead to.
Businesses will not be able to be slipshod about their potential liability. Smaller SMEs and microbusinesses —often with no dedicated HR or EDI offices—will need to think about employing new staff dedicated to protecting them from claims and giving them advice. The idea of a whole new generation of HR and EDI staff roles in every business in the country is frightening enough, but, anyway, it has nothing to do with their core businesses. Let us also note that the average salary of an EDI officer in the UK is £42,084.
I want also to stress why an impact assessment must include which occupations might be at particular risk of third-party harassment claims through no fault of the employer and the impact, specifically, on free speech. These parts of the amendment are very important because we were asked earlier in a different group why there had been a focus on hospitality, sport and universities. There may be other sectors but, in a way, this is an assessment to see which sectors would be affected. It also asks for an impact assessment on free speech. As we have heard, the Government simply deny that there will be any impact in relation to free speech. I disagree, but let us scrutinise it.
The noble Baroness, Lady Chakrabarti, made the point that we should not worry about free speech because it is protected by the convention on human rights. She cited a number of clauses. It is true that, on paper, none of us should be worried about free speech; our free speech in this country is fully protected. And yet, daily—I stress, daily—there are more and more instances, as the noble Baroness, Lady Deech, who is not in her place, indicated earlier, in which free speech is under stress in this country. More and more people are walking on eggshells and are, in many instances, getting sacked or disciplined for speaking their minds in workplaces, so I am not convinced by “Nothing to see here, don’t worry about it, all is well”.
Earlier, the noble Baroness—
Baroness Chakrabarti (Lab)
I am grateful to the noble Baroness; I will be brief. I want just to respond to her point, because she referred to what I said earlier. I am not trying to suggest that there are not challenges and there is not, on occasion, over-policing of people’s freedom of expression. Believe it or not, I probably read the same newspapers as the noble Baroness. I was trying, perhaps inadequately, to make the point to the noble Lord earlier that we have overarching legislation in the Human Rights Act which guarantees free speech and does so in a way that is legally and constitutionally stronger than any amendment noble Lords could pass to the current Employment Rights Bill. If that is not working, then we need to enforce it better. I am just suggesting that, as a matter of law, we have the protection for free speech; we just need to enforce it.
Baroness Fox of Buckley (Non-Afl)
I am all for enhancing in any way the free speech duties required by the law, and I am happy to talk to the noble Baroness in a moment about how we can do that.
Earlier, the Minister said that the Government were on the side of workers and not the abusers, and she got a lot of, “Hear, hears!”. I would like to point out that the people who are worried about these clauses are not on the side of the abusers against the workers. That characterisation is not particularly helpful in a Committee in which we are trying, in good faith, to understand the implications of this set of clauses. Imagine that you are an employer and you hear these proposals; you will think, “Oh, my God, if I don’t completely over-comply, I’m going to be accused, demonised, as on the side of abusers, not on the side of my employees”.
It is therefore very important that this impact assessment is done to reassure those of us who are worried. If the Government feel that we are over-worrying, then a detailed impact assessment, which we have not had for these clauses, would help to reassure us properly, with facts and evidence, rather than assertion and soundbites.
Baroness Verma (Con)
My Lords, I have a brief point to make about the impact on minority businesses, which may need extra assistance, and to ask whether the cost has been taken into account in an impact assessment. If it has not, I highly recommend that the Minister consider the many thousands of businesses across the country which will have to comply. If there is not a fully programmed impact assessment incorporating all those businesses, she will undoubtedly find that a lot of them will come out on the wrong side of implementation.
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.
Baroness Kramer
“Non-disclosure agreements: harassment(1) The Secretary of State must, within six months of the day on which this Act is passed, make changes by regulations made by statutory instrument to ensure that an agreement to which this section applies is void, or may not be entered into, insofar as it purports to preclude the worker from making a relevant disclosure.(2) This section applies to any agreement between a worker and the worker’s employer (whether a worker’s contract or not), including—(a) any proceedings for breach of contract,(b) a non-disclosure agreement, or(c) a non-disparagement agreement.(3) Regulations made under this section must―(a) not prevent a worker from being granted confidentiality protections associated with a settlement agreement, but only if those protections are made at the worker’s request and not the employer’s;(b) replicate the protections offered to workers by section 1 of the Higher Education (Freedom of Speech) Act 2023, with respect to non-disclosure agreements and harassment, but must apply those protections to all workers;(c) ensure a worker can access independent legal advice, including on alternative forms of confidentiality agreements;(d) ensure any confidentiality agreement can only be of a limited duration;(e) require any agreement to be in plain English;(f) not permit a confidentiality agreement to be made in a situation that would —(i) give rise to any risk of harassment to a third party in the future, or(ii) pose any danger to public interest. (4) For the purposes of this section—“harassment” means any act of harassment as defined by section 26 of the Equality Act 2010;“relevant disclosure” means any disclosure of information which, in the reasonable belief of the worker making the disclosure, shows that harassment has been committed, is being committed or is likely to be committed, by a fellow worker or a client of the employer.(5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”Member's explanatory statement
This new clause would require the Secretary of State to make regulations to void any non-disclosure agreement insofar as it prevents the worker from making a disclosure about harassment (including sexual harassment), with relevant exceptions at the worker’s request.
Baroness Kramer
My Lords, I am privileged to speak first on this group of amendments, which is an opportunity I enjoy just by the luck of the numbering. I acknowledge the intense campaigning done by others in this House over many years—many of them will be speaking later in this group of amendments. I also express the apologies of the noble Lord, Lord Wills, who had intended to speak on a number of amendments that are in his name in this group. He has been called away by caring duties which he could not avoid. I am afraid that I will be taking a little more time than usual to speak, because I am attempting, as it were, to channel his comments on the amendments that sit with him as the lead name.
This group focuses on a series of amendments on speaking out. I will start with Amendment 98, which is not just in my name but in the names of the noble Baronesses, Lady Goudie and Lady Jones of Moulsecoomb, who have both worked tirelessly on these issues. A similar amendment was supported widely in the Commons. It focuses on preventing the use of non-disclosure agreements, known in the UK as confidentiality agreements, to silence people subject to or speaking out on harassment as defined under the Equality Act. However, it does allow confidentiality agreements where the person speaking out wishes to protect their anonymity, and that is important.
The amendment requires that the regulations replicate the protections under Section 1 of the Higher Education (Freedom of Speech) Act 2023. In other words, it is a protection that currently exists for a limited few, and we know that it works in law. A driving force behind this amendment has been Zelda Perkins, who, with extraordinary courage in 1998, exposed Harvey Weinstein. She is the co-founder of Can’t Buy My Silence, and that organisation’s petition for action on NDAs has over 70,000 signatures.
If the Minister says we cannot consider such an amendment without a consultation process, I will remind her that there have been numerous consultations by BEIS and the EHRC; it has even been addressed by the Treasury Committee. Ireland and 27 US states already have such legislation. If she looks at the many examples of the use of NDAs to silence abused women that were cited in that Commons debate on this Bill, she will realise that the need for action is urgent.
Amendment 101 in the name of the noble Baroness, Lady Kennedy of The Shaws, and Amendment 101C in the name of the noble Baroness, Lady Goudie, cover similar territory with some differences, and I am sure they will speak to them. Amendment 101A in the name of the noble Baroness, Lady Morrissey, includes a clause providing for some degree of legal aid, recognising that legal costs are a major obstacle for harassment victims. I have added my name to all those amendments, but what we really want is for the Government to bring forward an effective amendment. I will say to the Government that I predict that this Bill will not leave this House without a substantive version of these various amendments in place.
Amendment 281, in the names of the noble Baronesses, Lady Chakrabarti and Lady Jones of Moulsecoomb, would effectively ban NDAs that cover up illegal conduct. It highlights a very real issue. People accept financial assessments with NDAs attached because their lives have been destroyed by retaliation for daring to speak out. The NDA itself basically says that, if they speak out again, they must repay the settlement with interest added. The NDA does not provide an exemption for speaking to a regulator or investigator, and nor is there any protection or exemption in statute. The only protection that tells a woman or man who speaks out that they can speak freely to a regulator despite having signed an NDA is in case law. Remember: many of the people who have spoken out are very vulnerable. They find that case law feels weak, they do not trust it and they remain silent. That is a situation that we must end.
I will move on to Amendments 125, 126 and 147 in the name of the noble Lord, Lord Wills. They look much more broadly at the issues of whistleblowing and seek to change some of the most egregiously inadequate features of the existing Public Interest Disclosure Act—I have added my name. The last Government initiated a review of the whistleblowing framework covering many of these issues, but it has never been published. I ask the Minister: will she publish it now?
PIDA—that is the short form—sits within employment law. It identifies certain prescribed people to whom a whistleblower can confidentially disclose information, but when a whistleblower is exposed, as often happens, PIDA uses the employment tribunal as its mechanism to protect whistleblowers. That protection is available only for whistleblowers who are also workers.
Amendment 126 seeks to expand the definition of a worker to include self-employed contractors, sub-postmasters, the judiciary, non-execs, trustees, trade union reps and job applicants. I suspect that most people in this House have been unaware of how many people are not covered by the current whistleblowing framework. This improvement can stretch the definition only so far because PIDA is an employment law, so clients, suppliers, relatives and associates—I could go on—will still not be covered, but some improvement is better than none.
When a whistleblower is covered by PIDA and becomes a victim of retaliation because of their whistleblowing, they can take a case to the employment tribunal. However, in tribunal, the whistleblower must prove to a very high standard that they received detriment because of their whistleblowing. That is why 96% of whistleblowers acknowledged by the tribunal as whistleblowers still lose their cases or are forced to settle and sign an NDA. To win, they have to produce evidence such as an email trail, which is usually wiped clean, or a manager involved in their dismissal who will testify definitively. Amendment 125 reverses that burden of proof and says, “If you are a whistleblower, it should be assumed by the tribunal that you have been fired because of your whistleblowing, unless the employer can demonstrate otherwise”.
Lastly, on the amendments from the noble Lord, Lord Wills, I address Amendment 147, which requires an employer to take reasonable steps to investigate information disclosed by whistleblowers. This follows on from the amendment from the noble Baroness, Lady Morrissey, in an earlier group. There are some brilliant companies and agencies that will leap on a piece of information and check it out seriously. Usually, however, the wagons are circled to protect a reputation and sometimes profits. Every survey of whistleblowers shows that their number one concern, even above their own well-being, is investigation.
I turn now to Amendment 130, which is in my name and attempts to deal with every one of these issues and many more by setting up an office of the whistleblower that would sit alongside PIDA. The language has been developed by legal practitioners in the field under the umbrella of WhistleblowersUK, to whom I owe much for its hard work and insight. Protect, a well-known civic society group, supports the OWB concept, which I also very much appreciate.
Such an office would provide a hub for the many spokes of regulators and informants’ agencies. It would protect and support whistleblowers, oversee whistleblowing processes and enforce compliance with standards. It could safely be used by whistleblowers to make disclosures. If whistleblowers are subject to retaliation, including dismissal or blacklisting, it could bring action. It could prevent the wrongful exercise of NDAs, make sure that disclosures are investigated and deal with complex issues such as reward schemes, which I believe some noble Lords intend to speak on.
I really do not have time to make the case for this because I am covering so much ground, but we know from the USA that offices of the whistleblower have an enviable track record of cracking down on wrongdoing: they deter crime, which is crucial, and they more than pay for themselves.
Whistleblowers tell regulators and investigators where in the haystack the needle is buried, and they provide the critical evidence. Many regulators and investigative agencies are now on board with the idea of an office of the whistleblower. I admit that it does not belong in this Bill, which is why I am limiting my comments, but it would be complementary to it.
I have heard some people say that if a whistleblower belongs to a union, they are protected when they whistleblow, and in an employment tribunal. Sadly, the protection is very limited, and it is not the union’s fault. First, a trade union rep is not a prescribed person—they can be required to disclose any information they have been given. Secondly, while a union member has access to insurance, which indemnifies against the cost of legal services in a case before the employment tribunal, the insurance company can and does refuse to pay where it believes the likelihood of a win is less than 51%.
Baroness Kennedy of The Shaws (Lab)
My Lords, I will speak to Amendment 101 in my name, in which I am joined, as we have heard, by the noble Baroness, Lady Kramer, but also by the noble Baroness, Lady O’Grady, who, of course, was the leader of the TUC, and by the noble Baroness, Lady Morrissey, from the world of finance and business. Many people in this Committee are going to support some way of dealing with the misuse of non-disclosure agreements.
I make it clear that there is no suggestion here of banning NDAs generally. There is a role for NDAs—people leaving employment should not be able to take with them the secrets of the company or its client list, for example. What we are talking about is the misuse of non-disclosure agreements to silence complainants, particularly women complaining of sexual harassment and abusive conduct by employers, supervisors, the boss, fellow workers or the client of an employer. I remind the Committee that since NDAs came into existence, complainants have been coerced into signing such an agreement on bringing a complaint in the workplace. Often, it is a way of waving people out and into non-employment in that workplace.
I emphasise that the amendment would not ban all NDAs. It is not preventing the use of NDAs in such proper cases as I have mentioned. But if the complainant requests a non-disclosure agreement because that is what, let us say, she would like to have, the amendment requires that she be offered independent legal advice. I am very supportive of the suggestion made by the noble Baroness, Lady Morrissey, that there be some way in which that might be funded, certainly in the corporate world, by the employer. We may be able to talk through in this Committee how provision might be made for the employee to be given that kind of independent advice, separate from the lawyers for the firm.
The independent advice has to involve advising on more than just a non-disclosure agreement but also on all the other alternatives that might be available to a worker who has experienced harassment, sexual harassment, abusive conduct or bullying. There has to be full consent if the exemption is going to work. In general, what we are calling for is that a non-disclosure agreement should not be used to silence complainants. I make that simple and clear. I cannot understand why that would be resisted by a progressive Government seeking to create good workplaces.
This amendment lists persons whom a worker may be allowed to speak to. I advised Zelda Perkins, who was just mentioned by the noble Baroness, Lady Kramer. She had signed a non-disclosure agreement all those many years ago relating to Harvey Weinstein, because of something that had been done not to her but to her coworker. She was encouraged to sign it and she and the coworker, who had been seriously abused, were ushered out of Miramax with a payment. They were in their early 20s at the time and accepted the settlement, knowing no better. In the years that followed, they often felt deeply regretful about the way in which that happened and that they were put in the hands of lawyers chosen by the employer. They signed non-disclosure agreements which said they could not speak to their doctor or to any lawyer or therapist, and that they could not take support from any other source.
That is why my Amendment 101 mentions the kind of people one ought to be allowed to turn to and confide in. People need to be able to do that. Non-disclosures should not prevent people taking support from a family member, spiritual counsellor, community elder or the many other people I have listed.
This amendment deals with one of the problems that takes place. The reason why Zelda Perkins eventually breached her non-disclosure agreement and spoke out—with great fear, because she thought she would then be sued by Miramax—was the public interest that arose at the time. She wanted to support the many other women who had stepped forward and were being disbelieved, because she could explain that she had been subjected to that kind of pressure when she was speaking to the abuse that had been experienced by her colleague at work. She ended up fearful and took legal advice because she was worried that she would be sued for speaking out.
That is why we are asking that non-disclosure agreements should not be misused in this way to silence women. I have had the experience over the last few years of chairing inquiries in a number of different circumstances. One of the shocking things that comes to light is the frequency with which non-disclosure agreements are used for this purpose and the number of times that these agreements are used basically to usher somebody out of the business. The person with power, who is more senior in the organisation, gets away with it and there is no way of remedying it.
Non-disclosure agreements and their misuse should be addressed in the Bill. I urge the Government to do so. I hope that, at the end of all this, we will be able to come together with the Government to find an amalgamation of the number of somewhat similar amendments here to really deliver justice for women in the workplace.
Baroness Jones of Moulsecoomb (GP)
My Lords, I will speak to several amendments in this group that I have signed, which are all very good.
Non-disclosure agreements can be exceptionally toxic and corrosive, because they can be used to cover up wrongdoing by an employer. It is a very dangerous game. They are not simply a contractual arrangement between two willing parties; the employer’s wrongdoing could affect other employees as well, so their effect is much wider than on the employee who is party to the agreement. I very much support Amendments 98 and 101, and I hope that—as the noble Baroness, Lady Kennedy, says—we can find common agreement on them. The noble Baroness, Lady Kramer, did a very thorough skate-through of all of this, so I will mention only three of the amendments that I have signed.
I feel very strongly about this. Whistleblowers save public money and expose bad practice. They should be celebrated, yet they are treated as traitors by professions, public services and corporations. Amendment 147 would turn that around by placing a duty to investigate on those organisations. My own experience of a whistleblower was when a police officer came forward and told me about the domestic extremist database that I was on. Thousands of other people were on that database as well, including journalists, MPs—such as Caroline Lucas—and local councillors. There were all sorts of people on it, but the two things we all had in common were that none of us had committed a criminal act of any kind and that we had all said things that challenged the status quo. That was enough to get us on to that domestic extremist database.
I cannot imagine how much it cost. The police were tracking all of us and keeping details of what we were doing, such as when I spoke in Trafalgar Square or went on a cycle ride. All these things about me were kept on that database—what an absolute waste of police time and taxpayer money for pointless spying. I put everything out on social media, so they could have just followed me there. Ex-spy cop Peter Francis blew the whistle on how the special demonstration squad was spying on the noble Baroness, Lady Lawrence, when she and her husband were campaigning to get justice for their dead son.
Whistleblowers need reassurance that they will be taken seriously, and giving the company or organisation they work for a duty to investigate would provide that. It would also combine with the Government’s new duty of candour to help change the culture of many organisations. I know the Minister is keen to speed up the Bill’s progress, and I do not think that this side of the Chamber is helping in any way, but the current laws are outdated and inadequate, so rather than spending ages examining the whole subject, it would be good just to adopt the very modest Amendment 147.
Amendment 126 would ensure that those whistle-blowers left out by the existing framework finally receive legal protection. The last 25 years have seen a massive rise in self-employment and subcontracting. There are now many more people in workplaces who may spot wrongdoing or risks who have no legal remedy if they blow the whistle. The Post Office Horizon scandal saw hundreds of sub-postmasters wrongly accused and sometimes imprisoned for fraud and false accounting. Lots of people knew that the Horizon system was going wrong from very early on, but the sub-postmasters did not have the legal protection to blow the whistle.
This amendment also grants whistleblowers strong protection from blacklisting when applying for work. At present, only job applicants in the NHS are protected from discrimination as whistleblowers. We encourage those NHS workers to speak up because it saves lives, but we allow workers in the building industry to be blacklisted for raising health and safety concerns that would stop deaths on dangerous sites. Some of those in the building trade had to emigrate to find a job; this amendment would have helped protect them. I understand the Government saying that they need to consult first, but a lot of that legwork was carried out by the previous Government. It seems ridiculous not to publish that whistleblower framework immediately so that we can make change happen faster.
Amendment 281 seeks to make express provision for court discretion to void non-disclosure clauses in employment contracts. The growth of the use of non-disclosure agreements is a big concern. Recent allegations that gagging clauses contributed to the cover-up of decades of sexual abuse by former Harrods owner Mohamed Al Fayed have once again led to calls to ban them here in the UK. Last September, the BBC revealed that five women claimed that the billionaire Mohamed Al Fayed raped them while they were working at Harrods department store. We have already heard that, as others were, they were forced into signing an NDA to prevent their speaking out. These agreements, as I described them earlier, can be corrosive, toxic and immensely damaging to the individuals who sign them and then regret doing so.
This is a really important group. I hope the Minister can meet some of us to discuss a way forward to incorporate some of the sense of these amendments into the Bill.
Baroness Morrissey (Con)
My Lords, it is telling that so many amendments have been tabled from across the Committee for discussion. Amendments 98, 101, 101A and 101C all aim to restrict the use of non-disclosure agreements in sexual harassment cases. There has already been considerable debate in the other place on this as well, led by Louise Haigh MP. I hope and believe that the strength of feeling and the rationale behind it are encouraging the Minister to consider tabling the Government’s own amendment to the Bill. The Bill provides such a wonderful opportunity to address a practice that has gone on for far too long, as others have talked about. Of course, this is not an academic issue. It has a real cost and causes real detriment to people’s lives and, of course, to their careers.
I speak in support of all these amendments and have added my name specifically to the one tabled by the noble Baroness, Lady Kennedy of The Shaws, because it sets out clear limitations on the silence that has, to date, been able to be bought through NDAs, while enabling workers to request an NDA, since that can help them move on with their lives, but under only certain conditions, including receiving “independent legal advice”. I want to clarify my additional Amendment 101A, which seeks to strengthen this provision by requiring employers to contribute to legal fees. We know that fees put many women off seeking advice: it seems very daunting, and then they have to pay for it at seemingly unlimited cost. I note that Ireland, which has been mentioned by the noble Baroness, Lady Kramer, has already adopted this practice of allowing NDAs for sexual harassment cases only in what are described as “excepted circumstances”. In those cases, employers are required to cover the employee’s reasonable legal costs.
I have suggested quite a specific figure, although I stress that it is the principle rather than any specific amount that is important. I note that I came up with that figure after consulting lawyers specialising in these matters. The key is that such costs would be borne only by those employers that have reason to enter into such agreements. Firms with good cultures that do not have sexual harassment cases will not need to enter into NDAs. They will have nothing to pay—another incentive to encourage companies to prevent harassment occurring in the first place.
As has been mentioned by others, those of us who have tabled our various amendments and supported the views of others will be very pleased to consolidate our suggestions into one amendment that is simple and workable, and will achieve the goal of limiting the use of NDAs so that they are not misused but used to help victims move on. I look forward to hearing the Minister’s thoughts and again urge the Government to use this opportunity to finally end a practice that has gone on far too long and been completely unchecked.
We all know about the #MeToo scandal and the causes célèbres, but until the noble Baroness, Lady Kennedy of The Shaws, talked about her experience as chair of inquiries and explained that the ones we hear about are, effectively, the tip of the iceberg, I would have said that we do not actually know much about the scale of the problem. No data is reported at present on the use of NDAs for sexual harassment and, of course, the nature of these agreements means that there are no revelations about the underlying issues. From personal experience, I have heard from women working in finance who sometimes use a third party to tell me their story because they are keen to see something done about it. I can only surmise that there must be many more in other sectors who do not come forward.
My final conclusion is: enough is enough. I urge the Government to seize the opportunity afforded by the Bill to restrict this misuse of NDAs.
Baroness Goudie (Lab)
My Lords, I support Amendments 98, 101 and 101A, and Amendment 101C, which is in my name. Also, I support my noble friends Lady O’Grady, Lady Kennedy and Lady Chakrabarti, and the noble Baronesses, Lady Morrissey and Lady Kramer, and the work they have done on these issues over the years. I thank Members of the other place for their support, including the meeting they called for us with Zelda Perkins last week, which was really helpful, and the organisations outside that have written to us all over a long period asking for support on this issue.
These amendments are all about harassment, which, surely, we are all against. If not, it is about time we were. Harassment includes sexual harassment and, surely, we are all very concerned about sexual harassment. It is obvious that we cannot combat sexual harassment effectively, which is what is required, if it is hidden from the light of day by being covered up by, or on behalf of, the perpetrator. We know that perpetrators get away and get jobs in other places. It is pernicious that all too often it is covered up and deliberately hidden from sight by so-called non-disclosure agreements. The title does not sound as objectionable as cover-up agreements, but that is precisely what they are. They are cover-up agreements, in intention and effect. They impose a positive obligation not to disclose what should otherwise be disclosed. They are pernicious, and bad apples in character. They perpetuate harassment. You can get away with harassment if you can secure a non-disclosure agreement by paying a bribe. Nothing could be more anti-social. Nothing represents a more toxic workplace culture or better ensures its continuation. Whistleblowers are silenced. If a disclosure is relevant, it should be disclosed—that is, a disclosure about harassment that has been committed, is being committed or is likely to be committed. They are all highly relevant exposures, which would thereby avoid harassment.
This is about ethical standards and workplace misconduct—indeed, gross misconduct. It is not about protecting confidential business information. I say that because that is important. We understand those non-disclosure agreements. This is about sexual harassment. On one hand, transparency and freedom of expression are virtues. On the other, confidentiality, privacy and the protection of personal data are virtues. There can be tensions between legitimate considerations that may tug in different directions. Balances have to be struck but—and it is a big “but”—that may not work well when one party is more powerful than the other. In the case of, for example, Harvey Weinstein, there may also be an important public interest in a disclosure. Non-disclosure agreements need to be properly regulated and not permitted to continue in the way they have and to have their chilling effects. This is especially so when the disclosure ban arises in the context of an employee and employer and/or relates to harassment, bullying or discrimination, including, importantly, sexual harassment, and intellectual property rights and competition considerations are not engaged. It is time to act to prevent the misuse and abuse of NDAs, which should not continue. It has continued for too long. I very much hope that the Minister will meet a group of us to see how we can consolidate a small amendment to the Bill that would strengthen it greatly.
Baroness Chakrabarti (Lab)
There we go. We have had the adjudication. It was a very good speech. I am very grateful to my noble friend Lady Jones of Whitchurch. She demonstrated the patience of a saint in earlier, more contentious groups, if I can put it like that. If there needs to be further evidence of her patience, I was very grateful for the significant time that she and her Bill team and other experts gave me to discuss this issue and a later issue in the Bill.
Numerical accidents aside, I have to commend the noble Baroness, Lady Kramer, on her impeccable opening to the debate. I think we can all agree that it was a fabulous tour de force around the issues.
In contrast to the Bill as a whole or previous groups, there is some serious room for non-partisan and cross-partisan consensus in this area. I really do believe that, for reasons that ought to be self-evident from what we have heard from Members of the Committee already.
We have heard from noble Lords—actually, it may be a total accident but I think it has been noble Baronesses so far—and we know that there is a place for a certain type of non-disclosure agreement to protect commercial confidences and client lists, et cetera. We are trying to be more balanced and more forensic than that in this group, and we know why. We want to protect those things, to have a decent employment relationship and to have commerce and so on, but not to have the abuses. I suggest that the abuses have to go broader than harassment; that is why Amendment 281 in my name is drafted in terms of illegal activity more broadly. I will say more on that in a moment.
I support the thrust, the intention and the aspiration of all the amendments in the group. At this stage I consider them all probing amendments. Realistically, I suspect that what the Committee, or everyone who has spoken so far, wants is a government amendment, informed by these discussions, that we can all get behind. That is the way to do it, obviously.
I will speak in favour of Amendment 281, or of the drafting approach that I have taken, having listened to other Members of the Committee and tried to take on board their Second Reading speeches and their considerable work, over many years in some cases. I commend Amendment 281 because it aspires to some simplicity, some versatility, some breadth and the avoidance of unintended consequences.
For example, it is broader than harassment. The approach I have taken is based on my understanding of what the common-law position was anyway. Like everyone else in the Committee and beyond, I watched the scandals around Harvey Weinstein and #MeToo, et cetera. When they began to erupt—and, goodness me, do they not keep on coming?—my analysis, my view, was that these contractual agreements were all voidable in the public interest in any event. As a matter of common-law principle, they should all have been voidable in a court and therefore unenforceable in any event. The problem with relying on just my understanding of the common law is that it does not send a signal to the wicked employers—not all of them, but the ones who are wicked—nor give confidence to victims, whistleblowers and so on.
This is one of the areas where there is some value in putting some common-law principle clearly, succinctly and non-exhaustively on the face of a statute, to give confidence and clarity so that people know that abusive non-disclosure agreements—not the ones that we think are valuable, but abusive ones—which are being used to silence and cover up revelations of illegal activity, broadly, will not be enforceable in court, whether or not you have shelled out some money in the first place. That was what I attempted to do in the drafting approach that I chose with Amendment 281.
Members of the Committee who have come armed with the actual Marshalled List, which I know is a novel thing to do, will find Amendment 281 on page 114. The approach I have taken is to say that non-disclosure agreements are voidable. They are not automatically so, but they are voidable—that is, in those circumstances, unenforceable—if they prevent disclosure of conduct that may be contrary to law.
When a court is considering whether to void such an agreement—to make it unenforceable—there are certain factors that ought to be taken into account. The severity of the allegation of proven or admitted conduct, including the veracity of those allegations, would come up in an attempt by the former employer or current employer to enforce this agreement. The second factor is whether all parties to the contract were in receipt of independent legal advice. This means that an employer trying to construct one of these agreements and to get an employee to agree to it will have to realise that if that independent legal advice is not evidenced and not provided, later, the whole thing will be an expensive waste of time, because it is likely to be voided in the public interest by a court or tribunal. Therefore, they had better do what employers often do in standard consent agreements, which is pay for independent advice and have that witnessed.
Baroness O’Grady of Upper Holloway (Lab)
My Lords, it is a pleasure to follow my noble friend Lady Chakrabarti and to support Amendment 101 in the names of my noble friend Lady Kennedy and the noble Baronesses, Lady Kramer and Lady Morrissey. I think that many of us are speaking in support of all the amendments that are trying to achieve the same result, and it is a real tribute that the strength of support is so broad across the Committee.
I have warmly welcomed the whole Bill, including the Government’s commitment to ensuring that employers take reasonable steps to prevent sexual harassment. I thank the Minister for meeting with me to discuss the issue of non-disclosure agreements. My concern is that the Government’s current proposals to deal with the scandal of abusive non-disclosure agreements under whistleblowing legislation fall short of the fundamental principle, for me, that every victim/survivor should have the right to speak up and seek support.
The use of NDAs to cover up abuses of power, we all know, happens in every walk of life. This is not just about Westminster, the City of London, the media and entertainment industries, trade unions, the church or higher education. Let us not forget the all-male Presidents Club charity dinner for captains of industry at the Dorchester Hotel, and the 130 young women, paid £150 for a 10-hour shift, who were handed five-page non-disclosure agreements just moments before they went out to serve. According to a CIPD survey, one in five employers have used NDAs in cases of sexual harassment.
My worry is that the public interest test contained in whistleblowing legislation sets a very high bar for protected disclosure, and that most victims will remain silenced. What about, for example, if the perpetrator is not prominent in public, business or cultural life? Can the Minister confirm whether a disclosure by workers would meet the public interest test in those circumstances? Or what about one individual worker who is harassed and does not know whether other workers are at risk? Will that satisfy the criteria for public interest under whistleblowing law? Perhaps the Minister can also confirm whether government proposals cover only sexual harassment? Or do they also cover racism and all forms of harassment faced by those with protected characteristics under equality law? Will misconduct such as bullying on those grounds be included?
I thank the Minister for that meeting and for writing to me afterwards. I agree that there will be lessons to learn from new legislation in Ireland and elsewhere, but I cannot agree that that is a reason for holding back. If ever there was a case for going further and faster, then this is it. Women and all those suffering in silence have waited long enough.
The TUC—I should declare that I am a former general secretary—has long held a position that NDAs should not be used in any case of harassment, discrimination or victimisation. According to a report published this year, again by CIPD, nearly half of employers would support a ban on the use of NDAs, with only 18% opposing such a ban. Can’t Buy My Silence and other campaign groups enjoy huge public support. There is a broad cross-party consensus for action that unites both sides of industry.
Will the Minister reassure us today that the door is still open for the Government to strengthen the Bill along the lines proposed by my noble friend Lady Kennedy and, importantly, send a message to all those who have suffered alone and in silence, and to all those who, as a result of that silence, have been put at risk, that real change is on its way?
Lord Cromwell (CB)
My Lords, as the first boy to speak tonight, I want to say what a pleasure it is to follow such a powerful and persuasive group of speakers. I support all the amendments in this group.
I turn first to the NDA amendments. NDAs can be appropriate in sectors where intellectual property, commercial confidentiality or security issues apply. In fact, I should declare that I have recently signed one in a commercial context. These documents are typically pre-contract or part of terms of employment and signed up to by a worker at the start of their employment. Usually, they apply to everyone in a relevant area rather than being targeted at an individual.
By contrast, the NDAs these amendments address are very different; they generally arise during employment and act retrospectively—in other words, when something happens that should not have done.
I was always taught that you cannot contract out of the law: that an agreement or contract that enables or conceals something illegal is potentially itself illegal, and at least void and unenforceable. Under the Protection from Harassment Act 1997, harassment is a crime. Therefore, it seems to me that an NDA in respect of —as Amendment 101 points out—harassment, sexual misconduct, retaliation and discrimination or any other crime comes very close to trying to contract out of the law.
I would broaden the definition, as the noble Baroness, Lady Chakrabarti, has done in her amendment, to void any NDAs that cover any form of illegality. Indeed, a wrongdoer requesting an NDA in such circumstances feels tantamount, to me, to an admission of guilt. NDAs being put forward by the powerful to protect themselves from publicity around a wrongdoing is, at the very best, contrary to the HR policies of any decent employer.
While these amendments seek to prevent the misuse of NDAs, they also provide—as others have spoken about—for workers themselves requesting an NDA. Consequently, NDAs do have a place with proper advice to both parties: what Amendment 101 calls “fully-informed consent”. In short, voiding NDAs that amount to an abuse of power while recognising that a worker may themselves seek an NDA feels like the right balance.
Finally on NDAs, to date there has been a superabundance of consultations and inquiries— as the noble Baroness, Lady Kramer, pointed out— into the misuse of NDAs from a very wide range of organisations. Now, and I hope the Minister will agree, we need action—no more discussions and consultations. We know what the problem is; we just need to sort it out. I therefore ask the Minister to confirm that the Government will either present or support a suitably consolidated amendment on Report, as others have requested.
I also support the amendments on whistleblowing. Amendment 125 would close what amounts to a loophole. On Amendment 126, something that has bedevilled whistleblowing for a very long time is the overly tight definition of who can be a whistleblower. The amendment is therefore a welcome step in expanding that category, though it does not go as far as it needs to, as the noble Baroness, Lady Kramer, has shared with us tonight.
Amendment 147 concerns the crucial point of a duty to investigate. Many companies—particularly larger ones—have on paper, somewhere in their files, a well-drafted policy intended to support whistleblowers. However, many people who become whistleblowers typically do not see themselves as such initially. Often, they are simply trying to point out where something is wrong and needs addressing. It is what happens next that turns them into a whistleblower.
The corporate reaction to highlighting problems or concerns is often viscerally and personally hostile. Such people are seen as troublemakers, snitches or even traitors. They are often, almost from the outset, isolated, stigmatised and persecuted. To deal with that reaction, there is a need, as Amendment 147— another great amendment—sets out, for an automatic duty to investigate properly, which means having well-delineated and well-understood processes recognising and incorporating whistleblowing that are actually followed in practice with action, and to pick up issues and deal with them constructively and, if possible, before they escalate into a whistleblowing incident.
On Amendment 130, an office of the whistleblower would have both a systemic role in improving and monitoring whistleblower treatment, standards and processes, and a much-needed personal role in supporting whistleblowers as individuals, as again the noble Baroness, Lady Kramer, so eloquently laid out.
I will touch quickly on two related points. First, investors have a role here, although they often get forgotten in these discussions. They have a clear interest in knowing what is going on inside organisations they are entrusting with their money. I know from talking to them that they support better engagement and using their considerable leverage to get matters improved. Secondly, in the UK we do not compensate or reward whistleblowers. Being a whistleblower is expensive, sometimes ruinously so. Legal bills, loss of income and being made completely unemployable often follow. Yet the UK attitude to date has been that doing the right thing should not be rewarded—as if it was somehow vulgar—or even the personal losses incurred recouped. That correlates with the lower reporting of problems in the UK compared with the US and other jurisdictions. This has changed a little recently, and both the current director of the Serious Fraud Office and his predecessor have spoken in public in favour of paying whistleblowers. The FCA has stated that it is not in principle against this—a very British statement—and HMRC and the CMA already give modest payments for information on, for example, tax fraud.
The UK needs to catch up. I hope that the role of investors and whistleblower compensation are things that we can come back to, but for now I support all the amendments in this group and I sincerely hope that the Minister will do the same.
Baroness Whitaker (Lab)
My Lords, it is a great pleasure to follow the noble Lord, Lord Cromwell. This group of amendments, in particular those dealing with non-disclosure agreements, deals with issues that are of cardinal importance in making workplaces safe for in particular but not only women. I support them and will speak briefly to Amendment 101 and others.
I cannot add to the comprehensive and telling introductions by my noble friends Lady Kennedy of The Shaws, Lady Chakrabarti and Lady O’Grady, the noble Baroness, Lady Kramer, and indeed all the others, but I will just remind the Committee of the fact that my experience of employment tribunals confirms the need for these amendments to the Bill. It is not only the high-profile cases that we hear about which are representative of the problem. I got to know of very many instances of women in low-paid, insecure work, often from minority-ethnic backgrounds or even disabled, who could not afford legal advice, which was addressed by the noble Baroness, Lady Morrissey.
When this issue was raised at Second Reading, my noble friend the Minister answered very positively, but I share the opinion that more must be done and I hope she will do it. If we can make our universities safer by banning NDAs in cases of sexual harassment, then the least we can do is to mirror those safeguards for employment.
Lord Lucas (Con)
My Lords, I very much agree with the noble Lord, Lord Cromwell. That a Lucas can agree with a Cromwell demonstrates the healing power of time—it has taken only 400 years.
I support the amendments in this group, particularly Amendment 101. I very much like the amendment from the noble Baroness, Lady Chakrabarti, because it would draw in what happened to my friend who went through the NDA process. I like Amendment 147 because, as the noble Lord, Lord Cromwell, said, this should all be about producing better behaviour. You want an incidence of bad behaviour to lead to better behaviour, not to disguise and cover-up. That ought to be the fundamental drive of the process.
To add a couple of sidelights, I am told it is very much current employment practice to ask, when taking a reference from a previous employer, whether an NDA has been signed. If the answer is yes, you take that employment no further—so NDAs can be really damaging things to sign. It is therefore important that someone signing one has achieved the fully informed consent that the noble Baroness, Lady Kennedy of The Shaws, referred to.
Another aspect of obscurity is in tribunal awards. I note, for instance, that tribunal awards that really criticise what has gone on in a school remain private. They never get sent to Ofsted. We ought to be using that tribunal process and what it has discovered to produce change. Where these things cannot be made public, as is often the case, they ought none the less to get into the system in a way which encourages better behaviour in future.
Lord Fox (LD)
My Lords, this has been an important debate. As the noble Baroness, Lady Goudie, said—I apologise if I have mispronounced her name—most if not all speakers have worked on these two important and connected issues for years. That has been reflected in the quality of the speeches we have heard. It also reflects the fact that progress has not been made. We need to make progress here.
The traditional approach from Ministers in situations such as this is to say, “These are important issues and we agree something needs to be done”, and then either “We need more consultation”, as my noble friend pointed out, or “This is not the right vehicle for these issues”. Those are the two excuses that will be given. The point on consultation has been well made by my noble friend and the noble Lord, Lord Cromwell. As for whether this is an appropriate vehicle, just look at this Bill. It is well over 300 pages and covers almost every aspect of employment. To say there is no room in this Bill—I am pre-empting what may or may not be said—would be wrong. There is more than enough space in this Bill to cover these issues.
As the noble Baroness, Lady Morrissey, said, this was debated in the Commons and my honourable friend Layla Moran also had an amendment on this issue, but the Bill came here without it. The safe way of making sure that this can survive contact with a very large majority at the other end is for the Minister to take this on and put it in the Bill on the Government’s behalf. We have heard a lot of excellent speeches from the Minister’s own Benches, as well as across the Floor. Clearly, we can all agree on both these issues. The Minister should stand up and say “We will take this on, work with all interested parties and produce two amendments for both of these issues” to address what has clearly been going on for too long without being resolved in legislation.
Lord Sharpe of Epsom (Con)
My Lords, I agree that this has been an extremely interesting debate. I thank all noble Baronesses—they are mostly Baronesses, with some noble Lords—for their contributions. In particular, the noble Baroness, Lady Kramer, deserves singling out for her very thought-provoking introduction to this group.
As my noble friend Lord Hunt of Wirral pointed out in the previous group, every individual should feel safe and supported in their working environment. We recognise that NDAs have deviated from their original purpose, which was to protect trade secrets and intellectual property, as the noble Baronesses, Lady Kennedy of The Shaws and Lady Goudie, pointed out. They have been abused in some circumstances, particularly where they are used to silence the victims of misconduct, which includes sexual harassment.
However, we must also acknowledge there are some cases where NDAs may serve a legitimate purpose. Some individuals may wish to resolve disputes privately, without the need for public disclosure. It is important, therefore, that we do not take a blanket approach but instead consider the context in which NDAs are being used. Many of the amendments acknowledge those simple facts. Having said that, we also need to consider the wider impact that NDAs might have—for example, in cases of medical malpractice. How can society and the medical profession learn from mistakes that are not made public?
It is clear that further scrutiny of NDAs is essential. The potential for abuse cannot be ignored, and we must ensure that any agreement entered into is fully informed and entirely voluntary. I will briefly speak as a non-lawyer, because I was particularly taken by Amendment 281, in the name of the noble Baroness, Lady Chakrabarti. Like the noble Lord, Lord Cromwell, I was rather shocked that such an NDA might exist even under the current regime. How can one sign a legally binding document that prevents the disclosure of a breach of the law? With apologies to my noble friend Lord Hunt of Wirral, I say that only the legal profession could manage the perverse logic to invent such a thing.
As we have seen, particularly in the NHS, whistle-blowers are often the individuals who bravely speak out against wrongdoing, misconduct or unethical practices that might otherwise go unnoticed. Their courage in raising concerns is critical to maintaining trust and ensuring that the organisation remains committed to the highest ethical standards.
Both noble Baronesses, Lady Kramer and Baroness Jones of Moulsecoomb, referred to the NHS. I looked into this earlier, and in one high-profile case, the NHS spent over £4 million on legal action against a single whistleblower, including a £3.2 million compensation settlement. This sparked criticism from Professor Phil Banfield, the chairman of the British Medical Association, who argued that whistleblowing is often not welcomed by NHS management. He emphasised that NHS trusts and senior managers are more focused on protecting their reputations than addressing the concerns of whistleblowers or prioritising patient safety. That is clearly a very unacceptable state of affairs, and that example alone suggests that the Government should take these amendments extremely seriously.
I am sure that the Minister is about to stand up and offer to have further discussions on this subject. We will pre-empt her and volunteer to take part in those discussions. There is clearly much more work to be done in this area. I look forward to hearing the Minister’s remarks.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, I genuinely thank all noble Lords—they have mainly been noble Baronesses—who have taken part in this excellent debate, in which we have addressed some important, salient and highly concerning issues about the misuse of non-disclosure agreements. We have heard some very moving and completely unacceptable examples that have no place in the modern workplace.
I thank the noble Baroness, Lady Kramer, and my noble friends Lady Kennedy of The Shaws and Lady Goudie, for their Amendments 98, 101 and 101C, which seek to restrict the use of non-disclosure agreements that prevent workers disclosing certain misconduct. My noble friend Lady Kennedy’s amendment looks to apply this to a broader category of misconduct, including harassment, retaliation and discrimination. I also acknowledge that the amendments tabled by the noble Baroness, Lady Kramer, and my noble friend Lady Kennedy make it clear that workers should still be able to request confidentiality protections in agreements between a worker and employer, if they so choose. A number of noble Lords have reiterated that that is an important principle.
I also thank my noble friend Lady Chakrabarti for her Amendment 281, which makes express provision for a court to void an NDA in the public interest if it seeks to prevent the disclosure of illegal conduct by the employer. I agree with the noble Lord, Lord Sharpe, that my noble friend made a very compelling case on that issue.
I also thank the noble Baroness, Lady Morrissey, for Amendment 101A and her contribution today. Her amendment would void any provision in an NDA that prevents a worker making a disclosure about sexual harassment. However, it would allow NDAs in settlement agreements to stand where the victim of sexual harassment requests them and where they have received independent legal advice. I am also grateful to the noble Lord, Lord Cromwell, for his comments in support of that amendment.
Today’s debate on NDAs demonstrates the best elements of your Lordships’ House. Points have been well made by all noble Lords, and we have listened carefully to their arguments. I was grateful to have the opportunity to meet with a number of noble Lords in recent weeks to reaffirm the Government’s position on the misuse of NDAs and to understand the intention behind these amendments. Let me be clear: NDAs should never be used to silence victims of sexual harassment and other forms of misconduct in the workplace.
My noble friend Lady O’Grady asked whether the proposals extend beyond sexual harassment. The whistleblowing measures in the Bill cover only sexual harassment. However, the whistleblowing framework already covers disclosures about criminal offences, breaches of legal obligations and endangerment of health and safety. In many cases, harassment and discrimination in the workplace will fall within those categories.
While the Government agree that NDAs should not be misused by employers to conceal misconduct in the workplace, any restrictions on their use must be carefully considered to avoid unintended consequences. For example, confidentiality can allow employers and workers to resolve a dispute and move on without publicity and expensive legal proceedings. It is vital that we take the time to consider any impacts on a worker’s ability to choose the right outcome for themselves, including the option of an NDA.
Lord Lucas (Con)
My Lords, did I catch the sense that the Government are looking to see what changes they can make now—for instance, picking up on the point that the noble Baroness, Lady Chakrabarti, made about the virtue of making it clear that you cannot enforce hiding criminal acts through a non-disclosure agreement? I absolutely agree that this would be something that would work well. The importance of people taking truly independent advice seemed to me to be another example. If indeed that is the case, could she apply the same logic to the amendment from the noble Baroness, Lady Kidron?
Baroness Kennedy of The Shaws (Lab)
May I just add to that? My concern is that my noble friend Lady Chakrabarti is right that, in law, one should not use contractual agreements to avoid criminal processes. However, you do not have criminal processes unless you have a complainant, and often women do not want to go through that process. They would rather have a settlement, but they want to be in control—it is about giving power to the person who is at the receiving end of abusive conduct. That is why we are asking that these amendments be considered, so that, in the light of the Government’s great commitment to the protection of women and girls, women and girls in the workplace have the opportunity of saying, “I would like an agreement, but I want it on my terms” and may choose anonymity so that it does not remain the case, as happens now, that women then carry it forward—they are the ones who bear the burden of having to go public with a complaint. Often, it affects their employment possibilities in the future.
This is about women being in the driving seat when there is a complaint of bad behaviour in the workplace. That is why just having a bland thing saying, “This is criminal conduct, if somebody squeezes a woman’s breast in the workplace or keeps patting their behind and so forth” is not good enough. Women should be allowed to say, “I do not want this to continue. I want to remain in my job. I want protection for my employment, and I want it to be dealt with by way of an agreement where I am in the driving seat”.
Baroness Jones of Whitchurch (Lab)
My Lords, the answer to both noble Lords—and I think I said this during my response—is that the amendments are all raising really important issues. There is an issue about the breadth of the issues and the extent to which we need to legislate or perhaps amplify things that are already the law but are not understood to be the law. We have more work to do on this, but we are working at pace on it. We still have time before the Bill passes through your Lordship’s House, so I hope we can make some progress during that time.
Lord Sharpe of Epsom (Con)
I am sorry to intervene on the noble Baroness once more. Does that mean she intends to talk to interested Peers before Report?
Baroness Jones of Whitchurch (Lab)
I have already had one meeting and, as noble Lords will know, I seem to be in perpetual meeting mode. I certainly am very happy to carry on having those discussions.
Lord Cromwell (CB)
I would love to join such a meeting. I lost count of the number of times the Minister said “consider”. I hope we are going to do more than consider and are going to act. In addition, her long list of things that are already available just highlights that there is a whole piece of work to be done here about making people aware of what their rights are, what they can access and what is illegal. That, law or no law, is part of the process.
Baroness Kramer (LD)
My Lords, I thank the Minister both for the meeting that many of us had before Committee and for her response today. I hope I am not being overoptimistic, but I am reading some positivity in her comments that progress could take place before Report.