Monday 16th June 2025
(1 year, 3 months ago)
Lords ChamberEmployment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Watch Debate Amendment Paper: HL Bill 81-IX(Corrected)(b) Amendments for Committee (Supplementary to the Corrected Ninth Marshalled List) - (16 Jun 2025)
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I thank all noble Lords who contributed. I will pick up the points that the noble Baroness, Lady Verma, and the noble Lord, Lord Leigh, made about SMEs. Last Wednesday, I gave a speech at an event on the Commons Terrace to a group of SMEs. Most of them were B Corp companies. I think there were about 2,000 of them. I spoke to them about what we are doing with this Bill. I must say, the atmosphere in the room was actually very supportive. Every one of them said that they welcomed the Bill. In fact, some of them said they would do more than what the Bill is doing. So what the noble Lord, Lord Leigh, said about the Government not talking to SMEs is basically not true. We are in constant, regular conversations, whether it is me, Minister Jones or the Secretary of State; we have meetings, including with officials, with all kinds and sizes of business on a daily basis.
I thank the noble Lord, Lord Sharpe, for his amendments, which were spoken to by the noble Lord, Lord Hunt. The Bill provides that a number of clauses related to the repeal of the Trade Union Act 2016 will commence two months after Royal Assent. This includes clauses related to the notice and mandate period for industrial action, trade union political funds and simplification of industrial action notices, which the Government consulted publicly on from October to December last year. We have been clear about our intention to repeal the great majority of the Trade Union Act 2016—it was a manifesto commitment—which places unnecessary red tape on trade union activity that works against their core role of negotiation and dispute resolution.
More generally, the Bill provides for a number of provisions in Part 4 to come into force on or two months after Royal Assent, while other provisions can be commenced via regulations. These amendments would frustrate those intentions by allowing no part of Part 4, covering all of the provisions regarding trade unions and industrial action, to commence until a report following consultation on the effects of the provisions in Part 4 has been published. The further consultation suggested is not required, given that the Government regularly engaged with business, employers, members of the public and unions in advance of introducing the Bill.
The plan to make work pay was established in collaboration with businesses, trade unions and business organisations, and the Government continue to undertake comprehensive engagement. Furthermore, we have been continuing to provide many opportunities for everybody to input into the development of the Bill. For example, we ran a public consultation with all stakeholders—unions represented only 16% of the respondents on specific trade union-related measures in Part 4—from October to December last year. That was open to all to enable the consideration of their views. The Bill will, of course, continue to be subject to parliamentary scrutiny in the usual way, and we will also be conducting further public consultation.
Baroness Verma (Con)
Can the Minister tell me what percentage of the consultation was among BME businesses?
Lord Leong (Lab)
I thank the noble Baroness for her question. I do not have the figure, but I will find it out and write to her.
The Bill will, of course, continue to be subject to parliamentary scrutiny in the usual way. We will also be conducting further public consultation on certain parts of Part 4 where there is detail to be set out in secondary legislation or codes of practice. Further consultation of the kind envisaged by these amendments before Part 4 can come into force is therefore not required.
These amendments run counter to the Government’s manifesto commitments, as I said earlier. They seek to delay the commencement of essential parts of the Employment Rights Bill with no valid justification and would hinder the delivery of improved workers’ rights. I therefore ask the noble Lord, Lord Sharpe, to withdraw his amendment.
Lord Leigh of Hurley (Con)
Will the Minister clarify something? In relation to the jolly reception he went to on the Terrace where the delegates were rapturously applauding the introduction of the Bill—in fact, going further—did he say that they were all from B Corp companies, with all the ramifications that brings?
Lord Leong (Lab)
I would not say all, but most of them were members of B Corporations.
Baroness Noakes (Con)
Further to that point, will the Minister clarify whether he is talking about medium-sized companies, which might just about cope with the bureaucracy of being a B Corp, or about the vast majority of businesses in this country, which are small and micro companies? There is a big difference between companies with fewer than 50 employees, or fewer than 10 in the case of microcompanies, and those that run up to 250 employees. The issues are quite different.
Lord Leong (Lab)
I thank the noble Baroness for her question. I am very clear about micro-businesses, medium-sized businesses and small businesses. At the event I attended, we had everybody. Not all were B Corps. We had owner-run businesses, businesses with just one or two employees and medium-sized businesses as well.
Lord Hunt of Wirral (Con)
My Lords, I am disappointed that the Minister does not wish to engage in responding positively to this amendment. My noble friend Lady Coffey put it very much in context, and my noble friend Lady Verma stressed again the complexity of what we are talking about so far as small and medium-sized enterprises are concerned. My noble friends Lord Leigh of Hurley and Lady Noakes further put questions to the Minister, to which I do not think he has responded positively.
I say once again that I cannot see why the Government cannot accept this amendment. On trade union recognition, for instance, there has been no consultation at all. Yet this is a major change. It is the “etc” in Part 4 that I get worried about. Part 4 is described as:
“Trade unions and industrial action, etc”.
There is so much here that has not been consulted on. I agree with the Minister that there has been some consultation, but have the Government really listened to the results of that consultation? Why have they not consulted more widely, particularly on trade union recognition? I think this is an aspect to which we will have to return on Report. In the meantime, I beg leave to withdraw the amendment.
Lord Stoneham of Droxford (LD)
My Lords, my noble friend Lord Goddard is disappointed that he is unable to speak on this group this evening. Given the multiple groups of amendments concerning the fair work agency, we will restrict our comments to this group. The Department for Business and Trade has set out the rationale for the fair work agency, suggesting the current system of employment rights enforcement is fragmented and inefficient. We agree. This fragmentation causes confusion for both workers and employers and leaves many breaches, such as underpayments, unchallenged. The Bill aims to establish the fair work agency and will consolidate existing bodies responsible for enforcement, abolishing those authorities and transferring their functions.
However, there remains some uncertainty about the agency’s precise scope and responsibilities, how it will relate to existing organisations, the level of funding it will receive, how it will access and use data, and the mechanisms for compliance and oversight. Although the Bill includes data-sharing provisions and the Minister has highlighted further detail, these issues will be key in determining the agency's effectiveness.
On powers and oversight, many enforcement powers currently held by other bodies will be transferred to the fair work agency, including powers of entry. New powers, particularly in relation to HMRC, will also be introduced. Oversight of these powers is planned to be provided through independent policing standards authorities, but it is important that the limits to these powers are clear and that they are exercised proportionately.
Regarding resourcing, it is understood that around £600 million is currently allocated across the authorities being restructured into the new agency. I am sure that discussions with the Treasury on the appropriate level of funding are ongoing, but is the Minister confident that this figure will provide the resources needed to meet the scale of the agency’s mission?
Bringing enforcement functions together in the fair work agency should improve the Government’s ability to tackle labour market abuses, including serious issues such as modern slavery. It is also acknowledged that previously, fragmented responsibilities caused confusion, duplication and ineffective enforcement, so this consolidation aims to provide a clearer, stronger enforcement framework.
I will not speak at length on the amendments put forward by the noble Lord, Lord Carter, but what he said was very wise. He raised important questions about the advisory board’s composition and enforcement powers which deserve further consideration by the Minister and the Government. Given the wide-ranging powers the agency will have—from workplace inspections to civil penalties and criminal enforcement orders—it is only right that Parliament has a clear opportunity to scrutinise how these powers will be used in practice.
Before the agency becomes operational, there should be clarity around its remit, resourcing and relationship with other enforcement bodies, and around the structures of accountability that will apply. This is particularly important for small and medium-sized businesses, which often lack the internal capacity to navigate complex regulatory frameworks. Advance scrutiny and a clear published framework would offer reassurance to both workers and employers that the agency’s approach will be proportionate and well targeted. We would welcome the Minister’s further explanation of how the Government intend to maintain transparency and accountability, to ensure balanced representation on the advisory board, and to keep Parliament informed throughout the phased implementation of the fair work agency.
Finally, I seek clarity on the Government’s timeline for the agency’s full implementation and how they plan to keep Parliament updated on progress. These are significant institutional changes and deserve close attention. I look forward to the Minister’s response.
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 am grateful to all noble Lords who have tabled amendments in this group, all of which pertain to the governance of the fair work agency and its relationship with government. While I appreciate and respect the spirit in which they have been made, I must set out why the Government do not believe they are necessary or appropriate.
Amendment 263ZA in the name of the noble Lord, Lord Sharpe, has good intentions; however, in practice, it introduces unnecessary rigidity into a system that already works effectively. Currently, enforcement officers undergo extensive training; for example, HMRC officers complete an 18-month programme that equips them with the skills and knowledge they need. This is a robust and proven process. There is no evidence that adding a legislative requirement for qualifications would improve outcomes. Moreover, this amendment would reduce flexibility. It would impose a legal burden that could hinder recruitment, especially when enforcement needs evolve rapidly. Finally, it is important to note that Clause 87(6) already gives the Secretary of State the power to specify which powers an officer may exercise in the appointment. This ensures appropriate oversight and safeguards without the need for additional legislation.
Similarly, Amendment 263ZB, also tabled by the noble Lord, Lord Sharpe, is, in practice, unnecessary and creates duplication. The powers granted under the Bill already require enforcement officers to provide written notices such as a notice of underpayment. These are not optional; they are embedded in the operational framework. Moreover, current enforcement bodies such as the Employment Agency Standards Inspectorate already maintain detailed records of inspections. Officers also operate with a strong emphasis on consent and co-operation, often arranging visits in advance and documenting their findings thoroughly. Introducing a statutory requirement for additional reporting and oversight risks creating administrative burdens without adding meaningful value. It could divert resources away from enforcement and into bureaucracy. This amendment seeks to legislate what is already standard practice; it is not needed in the Bill, and I urge noble Lords to reject it.
Turning to Amendment 263C, the Bill already provides limitations on what powers officers can exercise through letters of appointment. I appreciate the noble Lord’s desire to ensure that enforcement officers exercise powers in a way that minimises disruption and harm to individuals and businesses, particularly as they will be extensive powers. This includes their powers to enter premises to determine whether there has been non-compliance. However, while these powers are by nature disruptive, they will be required to be exercised proportionately and reasonably, and, where possible, officers will carry out their duties on a consensual basis. In practice, this means officers will correspond with a business in advance to arrange a reasonable time and date before they visit, and they will also generally enter during business hours.
It is also worth noting that we are setting up the fair work agency as an executive agency of the Department for Business and Trade. Enforcement officers will therefore be civil servants who are subject to the usual standards of public life and will be required to operate in line with the Civil Service Code. The fair work agency will take a balanced approach to carrying out its role. This is in everyone’s interests.
Baroness Verma (Con)
I want to ask the Minister a question. It may be that I have missed the answer, although I have tried really hard to listen to every word that she has said. If a business wants to appeal against a decision by an enforcement officer, where does it seek that appeal?
Baroness Jones of Whitchurch (Lab)
I did cover that, but now I have forgotten what my answer was. I will write to the noble Baroness, but I think it was in my earlier contribution.
I reiterate on the small business question that businesses that comply with their obligations should not see any increased burden from enforcement activity. The fair work agency will target only the minority of employers engaged in illegal practices, so including specific carve-outs could create loopholes that bad actors might exploit. In fact, businesses of all sizes stand to benefit from a fairer labour market where exploitative practices are actively addressed as this will create a level playing field for all.
Let us not forget that we are creating the fair work agency to deliver an upgrade to the enforcement of workers’ rights. If we created a carve-out for businesses based purely on size, we would be creating a two-tier system for enforcement. This is unfair for workers and businesses.
Amendment 268 risks compromising the balanced representation of the advisory board. The current drafting has been carefully chosen to reflect the social partnership model that has served the Low Pay Commission and ACAS well for many years. The noble Lord, Lord Sharpe, asked on behalf of his noble friend Lord Holmes whether representatives of labour market standards would be on the advisory board. The Secretary of State will appoint individuals if they are considered to be independent experts. That recruitment and selection process will include a thorough assessment of the applicant’s qualifications, experience and potential conflicts of interest.
Vulnerable workers have been waiting for the fair work agency for years. It will deliver the worker protection enforcement authority that was proposed in the Liberal Democrat 2024 manifesto and the single enforcement body that was the policy of successive Conservative-led Administrations. It now forms a key plank of the plan to make work pay, a key manifesto pledge upon which this Government was elected. Bringing together the fragmented labour market enforcement landscape has been a policy aim for successive Governments. We cannot let this critical policy be delayed any more. I therefore ask the noble Lord to withdraw Amendment 263ZA.
Lord Carter of Haslemere (CB)
I am very grateful for what the Minister said in response to my amendments. I think she said that the framework document will state that enforcement officers will have complete operational independence from Ministers, which is reassuring to know. Presumably, therefore, it would be possible for the terms of appointment of enforcement officers under Clause 87(6) to state the same thing. Clause 87(6) states that:
“A person appointed under this section may exercise any powers of an enforcement officer to the extent specified in the appointment”.
There is another perfect place in which to reassert that they are operationally independent of the Secretary of State.
Baroness Jones of Whitchurch (Lab)
I said earlier in my contribution that the letters of appointment made to these people will spell out their duties. Obviously, their relationship to the Secretary of State will be spelled out in the letter of appointment. I have said several times now that they will be operationally independent, so that could be a key message in those letters of appointment.
Lord Sharpe of Epsom (Con)
I am very grateful to the Minister for her extensive answer and to my noble friends Lady Noakes and Lady Coffey, the noble Lords, Lord Carter of Haslemere, Lord Londesborough and Lord Stoneham, for their contributions to this short but very interesting debate.
As we come to the end of our discussion on these amendments to the Employment Rights Bill, I express my thanks to noble Lords who have contributed with such clarity and conviction and my disappointment with the Government’s response. Amendment 269, tabled by my noble friend Lady Noakes, fits very neatly with the requirement on the Secretary of State to produce annual reports under Clause 92. The Secretary of State has a duty to consult the advisory board, so I simply cannot understand why the Government would reject the idea of just combining the two and getting on with it. Equally, I do not understand why they would not want to take the suggestions of my noble friend Lady Coffey to tighten up the requirement. Nothing under those terms for the advisory board or the reports that need to be produced by the Secretary of State require a great deal of external information.
We have tabled amendments that are measured, constructive and rooted in principle. We have not sought to gut the Bill or to frustrate its aim of enforcing fair and lawful treatment in the labour market. On the contrary, we have sought to strengthen it and to ensure that the powers that it grants are effective and accountable, that enforcement is robust and fair and that ordinary businesses, especially small and micro enterprises, are not crushed under the weight of uncertainty, disproportionate penalties or faceless bureaucracy.
The noble Lord, Lord Carter, made excellent points about accountability. Enforcement is about not just force but legitimacy. It is about trust, and trust is only sustained when those who wield power are subject to oversight, transparency and to reasonable limits. That is not red tape. It is just a democratic principle. That is why we ask for qualifications and training to be made a prerequisite for enforcement officers, an obvious step given the serious powers that they will be entrusted with.
The Minister rejected my amendment introducing that notion, saying that it was not necessary because of Clause 87(6), just referred to by the noble Lord, Lord Carter. I note that Clause 87(3) says:
“In this Part ‘enforcement officer’ means a person appointed by the Secretary of State under this section”—
note that it says, “a person”, not necessarily “a qualified person”—whereas Clause 87(6), on which the Minister replied, says:
“A person appointed under this section may exercise any powers of an enforcement officer to the extent specified in the appointment”.
As the noble Lord, Lord Carter, informed us, there is no notion in there of independence, skills or anything else. That argument as to why our amendment is not necessary falls based on what is in the Bill.
Baroness Jones of Whitchurch (Lab)
Just before we move on, I wanted to clarify to the noble Baroness, Lady Verma, that I have now found the note in my speaking notes. I confirm that I did say that the fair work agency will have a clear and transparent complaints procedure modelled on the procedures of the current bodies, including the Gangmasters and Labour Abuse Authority.
Lord Hunt of Wirral (Con)
I always have tremendous respect for the noble Lord, Lord Davies of Brixton, in particular his knowledge of pensions, because he, like me, is an actuary. Whereas he is a true actuary, I am just an honorary fellow of the Institute and Faculty of Actuaries, so I always respect his views.
I am not sure there is very much I can say in intervening between him, his Secretary of State and the Minister. All I will say is that his amendments represent a shift from a consultative culture to a more legalistic and punitive model. That would be a shift at great cost. Like him, I believe that people are entitled to proper pensions and proper security. Like him, I fought on many occasions to ensure that that is an enforceable right.
I do not want to anticipate what the Minister will say, but we have to consider the employer’s perspective. We all want to see businesses offer generous, flexible benefit schemes—things such as pension contributions, healthcare and travel allowances—but if those are brought into tight regulatory definitions and packages, and enforcement frameworks, I worry that some employers might feel discouraged from offering them at all. I await the response of the Minister.
Lord Leong (Lab)
My Lords, I thank the noble Lord, Lord Hunt, for his contribution, and my noble friend Lord Davies of Brixton for tabling Amendments 264, 265 and 324.
I respect my noble friend’s concern for upholding rights relating to pensions. The power in Part 2 of Schedule 7 would allow us to extend the fair work agency’s remit to cover enforcement of pensions legislation in the future, but it would not be appropriate to make this expansion to the fair work agency’s remit at this time. Changing how pensions are enforced would be a significant undertaking, requiring careful consideration, consultation and planning, not least regarding how the fair work agency would interact with the current Pensions Regulator. Therefore, I must respectfully resist these amendments.
Amendment 324, also in the name of my noble friend Lord Davies of Brixton, seeks to ensure that pension arrangements are covered by the definition of remuneration. While I understand my noble friend’s concern here, this amendment is not necessary and its introduction would have far-reaching implications across the Bill. While pension arrangements are already covered by some of the provisions in the Bill, it brings forward issues around sectoral collective arrangements, which I am sure my noble friend would not want to frustrate. So while I appreciate the intentions of my noble friend Lord Davies of Brixton, I respectfully ask him to withdraw Amendment 264.
Lord Davies of Brixton (Lab)
I thank my noble friend the Minister for his remarks. I am unpersuaded but, at this stage, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friend Lady Coffey for her amendment in this group and for her introduction. I will speak to Amendments 266 and 267 in my name. These amendments are not presented in opposition to the spirit or general objectives of the Bill. Indeed, we fully support the aims of enforcing employment rights and ensuring that bad employers do not undercut fair ones. These amendments respond to a real and serious concern about the breadth of the power that the Bill currently gives to Ministers—a power that, if left unchecked, would allow a future Government to expand the remit of the fair work agency with far-reaching consequences but only the most minimal parliamentary oversight.
Paragraph 35 of Schedule 7 allows the Secretary of State to add to the list of enactments that fall under the enforcement remit of the fair work agency by way of regulations. That list, set out in Part 1 of Schedule 7, includes a range of statutory rights covering pay, working time, sick pay and protections against exploitation. The current drafting allows for the addition of any enactment that relates to employees, workers, employers or trade unions. That is an extraordinarily broad formulation. It would allow the Secretary of State to bring into the fair work agency’s scope virtually any area of employment or labour law, potentially even those governing union recognition, industrial action or collective bargaining, by secondary legislation and with no meaningful boundary in statute.
Amendment 266 seeks to address this by narrowing the scope of this delegated power. It would limit the types of enactments that can be added to those that relate to hours, pay or holidays. These are, after all, the core minimum terms and conditions of the employment relationship. They are well understood, capable of objective enforcement and already subject to statutory minima in other parts of the Bill. They also reflect the matters over which the recognised trade unions typically have statutory bargaining rights. There is, therefore, a clear and principled rationale for limiting the fair work agency’s enforcement jurisdiction to these domains.
We put forward this amendment on the grounds that it is both reasonable and proportionate. It would still allow Ministers to respond to emerging issues in labour markets, such as new forms of pay abuse or evasion of working time rules. It would, however, prevent this power being used to draw the FWA into controversial or contested areas of employment law, or into territory where individual enforcement through tribunals is more appropriate than systemic enforcement by a regulator. It would preserve the coherence of the agency’s function and protect against mission creep over time.
We anticipate that Ministers will argue that this amendment is too prescriptive and does not allow sufficient flexibility to bring in related rights that may not neatly fall into the categories of pay, hours or holidays, but that are none the less important for fair work—for example, information rights, certain protections from detriment or emerging contractual abuses not yet addressed by current law. The Government may say that drawing such hard lines in primary legislation is undesirable and that a degree of discretion is necessary for effective future-proofing.
If the Government do not accept Amendment 266 on the grounds that it is too narrow, it follows that the strength of Amendment 267 becomes even more essential. This amendment would require that any regulations made under paragraph 35 be subject not merely to the affirmative resolution procedure but to the super-affirmative resolution procedure, which I know the noble Baroness, Lady Jones, is fond of, as defined in Section 18 of the Legislative and Regulatory Reform Act 2006.
The super-affirmative procedure is not some theoretical or obscure mechanism. It exists precisely for circumstances such as this, where Parliament grants the Executive a broad power to amend the application of primary legislation by secondary means. The procedure ensures that Parliament is properly consulted, that draft regulations are subject to scrutiny before they are laid and that there is an opportunity for representations to be made, considered and reflected in the final statutory instrument.
The two amendments offer a choice. If the Government agree with us that the power to amend Schedule 7 should be tightly confined, they can accept Amendment 266. If they prefer to retain flexibility, they must accept that that comes with the responsibility of subjecting that power to a higher standard of parliamentary scrutiny, in which case Amendment 267 is the minimum safeguard necessary. What would be constitutionally unacceptable is for the Government to reject both amendments, leaving in place a broad and undefined power exercisable by ordinary affirmative resolution. That would be to hand the Executive a blank cheque over the shape and scope of labour-market enforcement in this country, without adequate safeguards in place.
To conclude, I urge the Government to consider carefully the implications of paragraph 35 as currently drafted. It is not enough to say that Ministers do not intend to use this power in a wide-ranging or politically contentious way. We are legislating not just for the current Secretary of State but for future ones, too. If the Government want discretion, Parliament must have oversight, and if they want latitude, we must have safeguards. The amendments give the Government the opportunity to make a choice: define the limits of this power clearly or accept the heightened scrutiny that wide powers properly demand.
Lord Leong (Lab)
My Lords, I thank the noble Baroness, Lady Coffey, for tabling Amendment 264ZA, which concerns the fair work agency’s remit. I also thank the noble Lord, Lord Sharpe of Epsom, for Amendments 266 and 267, which seek to alter the delegated powers in Part 2 of Schedule 7.
Amendment 264ZA would seriously restrict the fair work agency’s ability to tackle labour exploitation of a more serious nature where the threshold does not meet the requirement under the Modern Slavery Act. There are no other enforcement provisions in the Bill that would cover this scenario. Currently, a number of Gangmasters and Labour Abuse Authority investigations have to be abandoned when the modern slavery threshold is not met. Since 2023, 104 cases have been dropped. That is bad for labour abuse victims and for taxpayers.
We are adding elements of the Fraud Act to the fair work agency’s remit precisely to address this issue. It will allow the fair work agency to investigate cases of financial fraud by abuse of position. That has specifically been included within the Bill following extensive discussions with stakeholders, including the Gangmasters and Labour Abuse Authority and the Home Office. Removing the Fraud Act offences from the fair work agency’s scope would truly limit the agency’s effectiveness, and I must therefore respectfully resist this amendment.
Amendment 266, tabled by the noble Lord, Lord Sharpe, would drastically narrow the scope of the power. This would undermine the very purpose of the fair work agency, which is to simplify and consolidate the enforcement of labour market legislation. The fair work agency will be greater than the sum of its parts as its remit is further expanded. This will relieve pressure on a struggling employment tribunal system, which I have heard many times from noble Lords across the aisle.
The power to expand the fair work agency’s remit has appropriate safeguards and limitations. Any expansion of its scope will be informed by the advice from the agency’s tripartite advisory board, and with consideration of the overall enforcement strategy. Furthermore, any changes to the remit will be through affirmative-resolution regulations that will be laid before Parliament and, where relevant, will require the consent of the relevant Northern Ireland department. This power is crucial to the long-term flexibility of the fair work agency. By enabling the remit to expand over time, it can respond to developments in the labour market. If we were to restrict the power to such a narrow range of issues, we would be tying our own hands.
Amendment 267, also in the name of the noble Lord, Lord Sharpe of Epsom, would require that a super-affirmative resolution procedure be used when the Secretary of State exercises the delegated power in Part 2 of Schedule 7. In my almost three years in this House when the party opposite was in government, I never heard them bring any super-affirmative resolution in any of the Bills they brought before this House, so I do not understand the sudden change of heart.
This amendment is unnecessary. The Bill provides for appropriate parliamentary scrutiny as use of this power will be subject to the affirmative resolution procedure. I also highlight that the recent report by the Delegated Powers and Regulatory Reform Committee did not raise any concern with this power as currently drafted. The additional scrutiny this amendment calls for would place unneeded burdens on parliamentary time, which is currently stretched. With this point in mind, I ask the noble Baroness to withdraw Amendment 264ZA.
Baroness Coffey (Con)
I thank the Minister for that comprehensive response to my amendment. To be candid, if that had been in the Bill’s Explanatory Notes, it might have made life easier. As the Minister knows, the creation of this fair work agency, with the novel powers it is going to have, is one of the reasons why my noble friends on the Front Bench have been pushing for the super-affirmative procedure. We will briefly get into a bit more discussion about the advisory board, but it is those elements—recognising the novel powers—that we are concerned about. With that, I withdraw my amendment.
Member’s explanatory statement
This amendment is consequential on the definition of “worker” being inserted into Part 5 by my amendment of clause 148 at page 147, line 9.
Baroness Jones of Whitchurch (Lab)
My Lords, I beg to move Government Amendment 264A, and will speak to Government Amendments 265A, 271A, 272A, 273M, 273P, 273S, 279A, 279B, 279C, 279D, 279E, 279F and 279G. I thank all noble Lords who attended the all-Peers briefing on these amendments that I gave on 8 May. As was explained at that time, the amendments aim to make the creation of the fair work agency effective, including by ensuring a smooth transition from the current arrangements, and they are not new policy.
Without the correct information-sharing gateways, the fair work agency will not be able to do its job; Clause 132 is vital to making sure that it can. Government Amendment 273M makes a minor drafting change to Clause 132(3). Specifically, it clarifies that information obtained by the fair work agency in connection with an enforcement or civil proceedings function under Part 5 of the Bill can be used for other functions under Part 5. This change ensures that the benefits of bringing together responsibility for enforcing a range of rights are fully realised.
Government Amendment 273P adds the Security Industry Authority to the list of persons in Schedule 9. This will enable the fair work agency enforcement officers to disclose information obtained under the enforcement functions in Part 5 of the Bill with the Security Industry Authority, where that information relates to its statutory functions. Any disclosure will be subject to other restrictions in the Bill and existing safeguards. For example, a disclosure will not be authorised under Clause 132 if it would constitute a breach of data protection legislation or is otherwise prohibited by certain provisions of the Investigatory Powers Act 2016.
Government Amendment 279A clarifies that the information captured by the definition of “HMRC information” in Clause 134 will be subject to appropriate safeguards regarding onward disclosure where specified conditions are met. This will ensure that there will be continuity as we set up the fair work agency and that all information is handled with the appropriate sensitivities.
Government Amendment 271A is a minor technical amendment to Clause 111. It sets out that where a liable party has failed to comply with the requirement in a notice of underpayment to repay arrears to an individual, the fair work agency can make an application to court for an order. Sub-paragraph (6) defines “a court” for the purposes of this section. This amendment clarifies that summary sheriffs can also have jurisdiction to hear these applications in Scotland.
Baroness Jones of Whitchurch (Lab)
My Lords, I agree with the noble Lord that in good legislative processes it is not ideal to have technical amendments at this stage. However, it is better to identify them now rather than later in the process, and we have bent over backwards to engage Peers to explain why they are necessary. In a previous role on the Opposition Benches, I spent a lot of time in secondary legislation sessions correcting technical issues that should have been identified in primary legislation by the previous Government, but that debate may be for another day. In the meantime, of course we aspire to better legislative processes in future, and I agree with the noble Lord. I beg to move.
Member's explanatory statement
This amendment is consequential on the definition of “worker” being inserted into Part 5 by my amendment of clause 148 at page 147, line 9.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friend Lady Coffey for her amendments that comprise this group, and I speak in support of them. They bring much needed clarity and constitutional discipline to the question of to whom the Secretary of State may delegate important public functions.
Clause 89, as drafted, grants the Secretary of State, as my noble friend has explained, broad discretion to delegate enforcement and other key responsibilities to a public authority. However, the current definition of that term is overly expansive. It could include not only departments under direct ministerial control, but also non-ministerial departments and other bodies with a degree of operational independence from the Government, which raises fundamental issues of accountability.
If enforcement powers, which could be potentially intrusive and far-reaching, are to be delegated, they should be exercised by those within the direct chain of ministerial responsibility. They are civil servants who operate under the authority of Ministers and who are, in turn, accountable to Parliament. Amendment 267ZA, therefore, rightly confines the scope of Clause 89 to public authorities that are comprised of civil servants and are not non-ministerial departments. That would ensure such functions are not handed to bodies that lack clear ministerial oversight or democratic accountability.
Amendment 267AA serves as a necessary consequential safeguard because it ensures that any legal substitution of the Secretary of State with another authority in the eyes of the statute is similarly limited to such core public bodies. Without this clarification, we risk a situation where statutory references to ministerial powers are extended, potentially without scrutiny, to entities with a more ambiguous constitutional status. This is not about casting aspersions on the competence or integrity of non-ministerial departments. Many do good work, but they are deliberately designed to operate at arm's length from Ministers. They should not be the recipients of powers that the public rightly expects to be exercised under ministerial responsibility.
Lord Leong (Lab)
My Lords, I thank the noble Baroness, Lady Coffey, for Amendment 266A, 267ZA, 267AA and 267AB.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Lords, Lord Sharpe and Lord Jackson, and the noble Baroness, Lady Noakes, for tabling their amendments. This Government are committed to ensuring a fair playing field for all employees and businesses. This is why the Secretary of State will have the power to bring proceedings in place of a worker: it will mean that all employers are held to the same standards.
Amendments 267A, 271B, 271C and 272ZA have been tabled by the noble Lord, Lord Sharpe of Epsom. While I appreciate the noble Lord’s intentions behind them—seeking fairness, clarity and accountability—I believe that they undermine those objectives. I have major concerns about Amendment 267A. A fundamental principle of the fair work agency is that it will have operational independence. As we have debated, the Secretary of State’s involvement will be at strategic level only. This amendment would undo all that; it would explicitly make any use of the civil proceedings powers dependent on a political decision. This goes against the whole thrust of what we have been debating up to now, and we therefore cannot support the amendment.
Amendment 271B would exclude legislation, such as on family leave, unfair dismissals or redundancies, from the scope of this power. These issues can have a substantial impact on people’s working lives and they are part of the employment package. It is right that the fair work agency has the discretion to support enforcement in these areas and to ensure that employees get what they are entitled to.
Amendment 271C is unnecessary. The Bill already builds in appropriate safeguards to prevent cases being relitigated. In considering whether a worker will bring proceedings, the Secretary of State will have to consider whether a worker has already contacted ACAS. If they have, it would serve as a strong indicator that they are contemplating proceedings. Therefore, where a settlement is being discussed, or has already been reached through ACAS, it is highly unlikely that the Secretary of State would pursue a claim. This amendment would create a rigid prohibition that may have unintended consequences. The Government would be restricted from acting where new evidence shows that a settlement was reached under duress.
On Amendment 272ZA, tabled by the noble Lord, Lord Sharpe of Epsom, the Bill already makes it clear that any reference to a worker in proceedings brought by the Secretary of State should be read as including the Secretary of State. In practice, this means that, while it is for the tribunal to decide whether or not to award costs, a costs order could be made only in respect of a party to the case. This would be the Secretary of State, where they are the party that has brought this case. Therefore, this makes this amendment unnecessary.
On Amendment 272, tabled by the noble Baroness, Lady Noakes, in the worst cases of serious exploitation and intimidation, a worker may want to bring proceedings but fear the repercussions they may face from the employer should they be de-anonymised. Allowing the Secretary of State to take a case forward without consent would make it harder for employers to attribute blame to individual employees and also ensure that action could be taken against exploitation. Ultimately, I agree with the noble Baroness that this will take place only in exceptional circumstances, not least because it is more difficult to argue a case without the assistance of the worker. Nevertheless, where there is a breach of employment rights, there should be consequences. The fair work agency will decide the most appropriate route of enforcement, and it is important that in the most serious cases we allow this power as an option.
Finally, on the Amendments to Clause 114 from the noble Lord, Lord Jackson, the existing drafting of Clause 114 states:
“The Secretary of State may assist a person”.
This drafting was carefully thought through and is deliberately broad and inclusive. It includes both natural and legal persons, so it already covers both employers and their legal advisers. This amendment does not alter the substance of the clause, but merely restates what is already covered and therefore risks introducing confusion.
On the noble Lord’s Amendment 272C, Clause 114 has been carefully monitored against the provisions found in Section 28 of the Equality Act 2006, which also provides for any other form of assistance. This language has been used to ensure flexibility and inclusivity in the types of support that may be provided. This is neither novel nor excessive and is limited to assistance in the context of civil proceedings. To narrow the clause in the way this amendment does would compromise its effectiveness and undermine its accessibility. On that basis, I hope noble Lords will not pursue their amendments and I ask the noble Lord, Lord Sharpe, to withdraw his Amendment 267A.
Lord Hunt of Wirral (Con)
My Lords, I thank my noble friend Lady Noakes for providing an important guardrail: the idea that the Secretary of State has to pass a public interest test. I do not think the Minister gave us a direct answer to that suggestion. So far as my noble friends Lady Coffey and Lord Jackson of Peterborough are concerned, there are huge concerns about the way this will affect small businesses in particular. Again, I do not think the Minister addressed that particular point. I regret the fact that the Minister has not acknowledged the importance of these significant gaps in the Bill.
It is concerning that the challenges inherent in delegating the Secretary of State’s enforcement functions to others who may lack the necessary competence or accountability are not being fully recognised at the present time. How does such delegation genuinely serve the interests of workers if it risks inconsistent decision-making and a lack of clear responsibility?
Moreover, the Bill fails to address the very real issue of claims that have already been settled. Employment tribunals are already struggling with an overwhelming backlog, and reopening settled cases would only exacerbate this problem. Surely, we have got to avoid a situation where the Secretary of State is empowered to reopen disputes that workers and employers believed were finally resolved. This not only causes unnecessary anxiety and uncertainty for all parties involved but threatens to damage the fragile trust and relations between employers and employees. If this Bill is to be truly effective and fair, it has got to acknowledge these realities: —ignoring them will only undermine the very goals it seeks to achieve. In the meantime, I beg leave to withdraw the amendment.
Baroness Jones of Whitchurch (Lab)
My Lords, I am grateful to all noble Lords for tabling these amendments. I will begin by addressing Amendments 267AC and 267BB, which relate to the chair of the advisory board. The Bill already provides for a strong and credible chair, and we are confident that appropriate appointments can be made under the current drafting. These amendments would significantly narrow the pool of qualified candidates and exclude highly capable candidates. There is no precedent for such restrictions among similar bodies.
For example, the current chair of the Equality and Human Rights Commission is the noble Baroness, Lady Falkner of Margravine. She brings deep expertise in public policy, regulation and public service to the role, but she is not a practising barrister. The focus should be on appointing the best candidate through a rigorous merit-based process, not restricting eligibility by profession. Moreover, there is no precedent for these amendments. Similar bodies, such as the Low Pay Commission and the Advisory, Conciliation and Arbitration Service, do not impose this level of restriction or require parliamentary approval. These models work precisely because they allow the Secretary of State to appoint individuals with diverse and complementary expertise. We fully support a strong, credible chair, but that is best achieved through a robust and flexible appointments process, not through rigid statutory constraints or exclusions.
On Amendments 267B and 267BA, tabled by the noble Lord, Lord Sharpe, and the noble Baroness, Lady Coffey, we have no objection in principle to a larger advisory board, but this should be balanced against an increased cost to the taxpayer. In practice, we anticipate there will be nine members of the board mirroring the make-up of the Low Pay Commission, which has operated successfully for 25 years. The current drafting provides flexibility so that the Secretary of State may appoint more than nine members, but it is unwise to lock a specific number into primary legislation without operational justification. The amendment would create a fixed number of advisory board members. Clause 90 already provides for what the amendment seeks to achieve.
Turning to Amendments 267C and 267D, these amendments risk compromising the balanced representation of the advisory board. The current drafting has been carefully chosen to reflect the social partnership model that has served the Low Pay Commission and ACAS well for so many years with a mixture of employer, union and independent representation. Amendments 267C and 267D also seek to broaden employee representation on the advisory board by reducing the emphasis on trade unions. Let me be clear: trade unions serve to protect and advance the interests of all workers, and they are best placed to represent workers’ interests on the advisory board. Moreover, the Secretary of State has broad discretion to appoint members with relevant expertise as independent experts. The Government are also committed to ongoing engagement with relevant stakeholders through a variety of formal and informal means, so the advisory board is only one part of the landscape.
This leads me on to Amendment 268A, also in the name of the noble Lord, Lord Sharpe. The independent experts are intended to bring deep subject matter expertise and a perspective not already captured by the other members of the advisory board. The existing drafting already protects against partiality, as an independent expert is a person who does not fall within the groups mentioned in Clause 94. The Bill already provides a sound and balanced framework for the board’s composition, one that is adaptable, proportionate and future-proof. I must therefore resist these amendments.
I must also respectfully resist Amendment 269, tabled by the noble Baroness, Lady Noakes, which risks undermining the very purpose of the advisory board. Transparency in governance is vital, and the Government share the commitment to ensuring appropriate parliamentary scrutiny. Placing a statutory duty on the advisory board to publish its advice could compromise that level of confidentiality and flexibility which we believe is essential for it to carry out its role effectively. Mandating a separate annual report also risks formalising what should remain a responsive advisory relationship, potentially limiting the board’s ability to offer genuine, timely and informal guidance on emerging issues.
Introducing even more reporting requirements would place a confusing and unnecessary reporting burden on enforcement teams, potentially diverting staff and resources away from front-line inspection and enforcement work, where they are most needed.
With this in mind, I therefore ask the noble Baroness to withdraw Amendment 267AC.
Lord Sharpe of Epsom (Con)
My noble friend Lady Coffey and I raised the increasing statistical irrelevance of the trade unions. I do not think the Minister addressed that point. She also seemed to write off the idea of the advisory board amendments that we proposed, on the basis that they would be expensive to the taxpayer. But Clause 90(6) says:
“The Secretary of State may pay such remuneration or allowances to members of the Board as the Secretary of State may determine”.
They could determine to pay nothing, presumably, so why would that be an expense to the taxpayer?
Baroness Jones of Whitchurch (Lab)
I thought I covered those points. As I said, we anticipate that the advisory board will have nine members, but we are building in some flexibility. We were trying to avoid locking a specific number into the primary legislation without any operational justification. I think that answers that point.
On the point about the unions, of course, if we stick with the social partnership model, they will be in a minority anyway. They will have the expertise and the knowledge to represent all employment issues on behalf of the workers.