Monday 16th June 2025
(1 year, 4 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)
Baroness Kramer (LD)
My Lords, Amendments 247, 248 and 250 would introduce further requirements in relation to trade union ballots, particularly concerning the risk of intimidation, the use of workplace locations and the information that unions must provide to members. While the intention to ensure that ballots are conducted fairly without pressure is understandable, I question whether these proposals are justified. They appear to introduce new procedural barriers for trade unions, with little evidence that safeguards are failing. There is a broader concern that measures of this kind may tilt the balance even further against workers attempting to organise and exercise their rights. I would be grateful if the Minister could set out whether these amendments are proportionate and necessary, and how they align with the broader approach to employment and industrial relations.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I thank the noble Lord, Lord Hunt of Wirral, for introducing these amendments tabled by his noble friend Lord Sharpe of Epsom. I thought that, with the contribution from the noble Lord, Lord Jackson of Peterborough, we were starting the history lessons a little early today—early in terms of this being the first group and in going back to the 1830s. I bend to no one in enjoying anecdotes about the Tolpuddle Martyrs, so I thank the noble Lord for his contribution, although I am not sure what it added to the debate.
Amendment 247, although well intentioned, is unnecessary. We all share the concerns outlined by the noble Lord, Lord Hunt of Wirral, about interference in balloting around industrial action. We understand that no worker takes a decision about voting for industrial action lightly—whether it is strike action or action short of a strike—and that they understand the consequences, because if action is voted for, they will be the ones who suffer directly by losing pay. We must ensure that when we talk about this, we talk about both sides of the ledger.
The amendment is well intentioned, but it is unnecessary, because Section 230 of the Trade Union and Labour Relations (Consolidation) Act 1992 already requires that every person entitled to vote in an industrial action ballot must be allowed to do so without union interference. Furthermore, recognition and de-recognition ballots under Schedule A1 are already subject to provisions prohibiting unfair practices whereby the Central Arbitration Committee can order that a ballot is re-run if an unfair practice claim is found to be well founded. To introduce a new voting method to statutory trade union ballots using Section 54 of the Employment Relations Act 2004, the Government must already consider that the new method would allow the ballot to meet the requirements under Section 54(12). Specifically, the Government must consider that those entitled to vote have an opportunity to do so, that votes are cast in secret and that the risk of any unfairness or malpractice is minimised. Therefore, safeguards are already provided for in Section 54(12)(c) that cover intimidation if it takes place in the workplace or elsewhere. The noble Lord’s amendment is therefore not required.
I thank my noble friend Lady O’Grady of Upper Holloway for reminding us of the outcome of the inquiry by Bruce Carr QC, as he was then, about the absence of intimidation within workplaces. It is important that we bear this in mind. The question was asked. It was tested by independent opinion and the proposition that underlies the spirit of these amendments was found to be wanting.
Amendment 248, also in the name of the noble Lord, Lord Sharpe of Epsom, would prevent the Secretary of State using the power in Section 54 to allow workplace balloting as a new means of voting in trade union ballots and elections. Unfortunately, the amendment fails to take into account the fact that workplace balloting is already an option for statutory trade union recognition and derecognition ballots. The existing legislation permits workplace ballots conducted by independent scrutineers appointed by the CAC. One wonders why this is deemed acceptable by the Front Bench opposite but other sorts of workplace balloting are not.
Furthermore, as I said earlier, any new voting methods introduced under Section 54 of the Employment Relations Act 2004 must enable a ballot to meet the requirements of Section 54(12). The Government are committed to updating our industrial relations framework and aligning it with modern working practices and technology. This includes allowing for modern and secure balloting for statutory trade union ballots.
Baroness Kramer (LD)
My Lords, I speak to Amendment 251C through to Amendment 252, in the name of the noble Lord, Lord Sharpe. These amendments would introduce a wide range of limitations to the new right not to suffer detriment for participating in protected industrial action. The amendments seek to define and restrict the scope of protection, introducing exclusions based on business continuity, public safety, union membership status and compliance with employer instructions. They propose new requirements around compensation, such as proof of financial loss, statutory severity bans and caps on awards.
Although I understand the desire to ensure clarity and prevent misuse of these protections, I am concerned that, taken together, these amendments risk hollowing out the underlying right. They would place significant hurdles in the way of workers seeking redress and could undermine confidence in the fairness and accessibility of the system. I would be grateful if the Minister could clarify whether the Government support this overall direction of travel and how they intend to ensure that the core principle of protection from unfair treatment during lawful industrial action is preserved in practice.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I thank the noble Baroness for her contribution, and I thank the noble Lord, Lord Sharpe of Epsom, for tabling these amendments. I ask noble Lords to bear with me as I respond to each of them.
I want to be clear about why this clause is required. Clause 73 inserts new Sections 236A to 236D into the Trade Union and Labour Relations (Consolidation) Act 1992. New Section 236A is required because the Supreme Court ruled in April 2024 that Section 146 of the 1992 Act is incompatible with Article 11 of the European Convention of Human Rights.
Amendments 251C, 251F, 251H and 251J are unnecessary as their purpose is already covered in existing legislation. In the case of Amendment 251C, Clause 73 already requires a ballot compliant with Section 226, as specified in Section 219(4) of the 1992 Act, and makes it clear that protection is limited to cases where the action is compliant. Furthermore, in the case of Amendment 251J, secondary action is already prohibited under Section 224 of the 1992 Act, and the new protection of Section 236A will not apply where the industrial action was unlawful secondary action.
With regard to Amendments 251F and 251H, Section 240 of the 1992 Act allows for criminal prosecution of those who intentionally and maliciously endanger life or cause serious injury to a person by going on strike. Furthermore, if an act of an employer is motivated primarily by health and safety concerns, not for the sole or main purpose of preventing or deterring the employee from taking protected industrial action or penalising them, they have a defence from detriment claims, and the tribunals will consider whether the employer’s act or failure to act constitutes detriment.
Amendments 251D and 252 seek to prejudge a full and open consultation on this issue by setting out circumstances in which the detriment protection will not apply. We will prescribe detriments in secondary legislation only once we have conducted a comprehensive consultation seeking views across the public, including those of workers, employers, trade unions and all other stakeholders.
With reference to Amendment 252, that protection from prescribed detriment applies only where the sole or main purpose of subjecting the worker to detriment is to prevent, deter or penalise the worker from taking protected industrial action; for example, if a worker is subjected to detriment solely or mainly because they have harassed or bullied non-striking workers, the protection will not apply. I can be clear that criminal law will continue to apply to pickets.
Amendment 251E would be an unnecessary limitation on the protections from detriment. The prohibitions that new Section 236A places on an employer are clear: the sole or main purpose of the action must be to deter or penalise industrial action, which would not apply in the case of genuine maintenance of critical operations. Amendment 251G would be an unreasonable restriction to apply to detriment protections. Non-union members have the right to participate in official protected industrial action and, where that is the case, must be afforded the same protections from detriment as union members.
Amendments 251L and 251N would place a burden on individuals to prove that they had suffered financial or economic loss as a result of detriment, and would limit the circumstances where they were eligible for compensation. These hurdles and limits would potentially deter them from engaging in industrial action, limiting compliance with the Supreme Court ruling and Article 11.
Amendments 251M and 251P seek to restrict compensation with regard to business deeds. I want to be clear that an employer’s action or failure to act in relation to prescribed detriments will be a legal obligation that cannot be breached proportionately, and there is no legitimate business interest defence for seeking to deter or penalise an employee for taking protected industrial action.
Amendment 251K seeks to establish bands of detriment severity of “minor”, “serious” and “extreme”, and would require the Secretary of State to specify maximum compensation limits for each, which tribunals would have to comply with. New Section 236D is already clear that employment tribunals must have regard to any loss sustained by a claimant that is attributable to the actions of, or failures to take action by, an employer. Therefore, tribunals will award compensation based on what the tribunal considers to be just and equitable and will be able to proportionately determine the amount of compensation, taking into account all the relevant circumstances. I hope I have reassured the noble Lord. I therefore ask him to withdraw Amendment 251C.
Lord Sharpe of Epsom (Con)
I am very grateful to the Minister for his very comprehensive answer, and also to the noble Baroness, Lady Kramer, for her comments. I will have to read Hansard very carefully, because there is quite a lot of detail in the Minister’s answer, but I will say that for months we have listened to Ministers speak at considerable length about the urgent need to address bad actors in our workplaces. On a number of occasions, they have painted fairly vivid pictures of unscrupulous employers who exploit workers, flout employment law and engage in practices that undermine good industrial relations. However, having been presented with clear evidence of equally concerning bad actors within the trade union movement, the Government’s response has been, in effect, to stay silent. I repeated those Unite comments, and I will repeat them again here, that
“the employer is routinely treated as a target to be defeated not a friend to be convinced”.
To use a word that came up in the last group, that is not “constructive” or collaborative; that is very hostile in intent.
Without going into enormous detail, Amendment 251L, for example, would require proof of actual financial loss, which is a basic principle that would prevent speculative claims. I do not see how that would deter anyone with a legitimate claim from engaging in industrial relations, so how would their Article 11 rights be infringed, as I believe the Minister outlined?
We will have to come back to these amendments because, as I say, there was a good deal of detail in there. Once again, the Minister is relying on the mythical consultation; I would like to know when that consultation on these aspects of these amendments will take place. Of course, that also calls into question when he expects all this to be implemented—a subject to which I am quite sure we will return on a number of occasions this evening. But for now, I beg leave to withdraw.
Lord Hunt of Wirral (Con)
My Lords, I thank the noble Lord, Lord Prentis of Leeds, for describing this amendment to us. It is simple and easy to understand but founded on a very difficult and testing industrial dispute. Looking back over my time as a parliamentarian, I often found that facts get distorted, beliefs underpinned and positions entrenched. The last thing that should ever happen is an overt change in the law. I do not believe that is necessary. Let me explain why.
The Minister should not support this amendment, which, as the noble Lord, Lord Prentis, explained, seeks to extend Section 145A of the Trade Union and Labour Relations (Consolidation) Act 1992 to cover the exclusion or omission of a worker from an offer on grounds related to trade union membership or activity. While the noble Lord presented this amendment as a measure to strengthen workers’ rights and reinforce freedom of association, in reality, on reflection, as he virtually admitted when he introduced it, it is poorly drafted, conceptually flawed, legally confusing and potentially deeply damaging to the legitimate and practical functioning of workplace relations.
At its core, the amendment misunderstands the balance that needs to be struck between protecting the rights of trade union members and preserving the autonomy of employers to make operational decisions in good faith. The current law already provides robust protections against unlawful inducements that seek to undermine collective bargaining. I recall, because I was in government at the time, that Sections 145A and 145B were carefully crafted to target deliberate attempts by employers to bypass or undermine collective agreements. This amendment goes significantly beyond that, seeking to introduce for the first time in statute a wholly ambiguous and legally unstable concept—exclusion from an offer—without providing any meaningful guidance or definition as to what such exclusion means, how it is to be assessed and in what contexts it is to be deemed unlawful.
An offer, by its very nature, is made on the basis of specific criteria—sometimes economic, sometimes strategic and sometimes tied to an individual’s performance or to business need. To say that a worker has a right not to be omitted from any offer and to link any such omission to trade union membership or activity would place an intolerable burden on employers. It would open the door to speculative claims and second-guessing of decisions that may have been made for entirely legitimate and neutral reasons, relying on an inference of motive in the absence of solid evidence. Effectively, it demands that employers should treat all workers identically in every instance of any offer—whether it is financial, procedural or preferential—or face litigation and the reversal of the burden of proof. Let me explain.
The amendment proposes that in any case brought under the new Section 145A(1A), it will fall to the employer to demonstrate the grounds upon which the worker was excluded. That is a fundamental reversal of the ordinary legal principle that a claimant must prove their case. It turns routine management discretion into presumed unlawful conduct unless proven otherwise. Such a reversal may be appropriate in narrow cases where discrimination is clearly alleged and supported by a pattern of conduct, but to write it into statute so broadly and in such general terms is not only disproportionate, it is potentially destructive to employer-employee trust and clarity. No employer, however well intentioned, will be able to manage negotiations or individual agreements with confidence under such a regime.
Furthermore, the amendment also risks creating legal confusion by overlapping with other provisions already in place to protect against victimisation or unfair treatment. Section 146 already protects against detriment related to trade union activities. Section 145A already prohibits inducements that would bypass collective bargaining. If the goal is to ensure fair treatment of trade union members, the proper route is through targeted enforcement of those provisions, not through the introduction of vague and speculative new rights that overlap and conflict with existing law.
The amendment is also unbalanced in its approach. It fails to consider that there are many reasons why an individual might not be included in an offer that are entirely unconnected to trade union status. It might be on account of their role, their location, the timing of their employment or performance-based factors. Yet under the proposed amendment, a worker could simply allege that their omission was because of trade union membership or activity, and the burden would shift entirely to the employer to justify its actions. That is not just an invitation to abuse; it is a structural distortion of fairness in employment law.
It must also be acknowledged that this amendment could have chilling effects on legitimate collective bargaining. Employers may feel compelled to make across-the-board offers rather than engaging in more flexible, targeted negotiations that take into account differences in role, responsibility or need. That could undermine not only business efficiency but also the ability of unions themselves to secure advantageous outcomes for specific groups of members. The very act of negotiating special terms for one group might now trigger complaints from others, citing this amendment as grounds for a claim of exclusion.
In conclusion, let me be absolutely clear: freedom of association is a vital right and must be protected. I do not believe, however, it would be served by new laws that are unclear, that burden employers without cause or that generate more confusion than clarity. This amendment—despite its rhetorical appeal to equality and fairness—will in practice be a blunt and imprecise instrument, increasing litigation, reducing operational flexibility and contributing little, if anything, to the genuine promotion of union rights. I hope the Minister will agree with that.
Lord Leong (Lab)
I thank the noble Lord, Lord Hunt, for his lengthy contribution. All he had to say was, “I do not support the amendment”. I thank and appreciate my noble friend Lord Prentis of Leeds for tabling Amendment 253A, which sets out that workers have a right not to be omitted from an offer by their employer because, among other reasons, they are trade union members. This amendment has been laid in response to a particular matter regarding the housing association Livv Housing Group, which last year reportedly made a pay offer to only those members of its workforce who confirmed that they were not trade union members. I am pleased that this matter has now been positively resolved in the workplace, as set out by noble friend.
Lord Leong (Lab)
My Lords, I thank the noble Baroness, Lady Coffey, for her contribution and I will endeavour to respond to her amendments. However, I will not respond to Amendment 256, because it is not in this group; it is in group 6.
I respectfully disagree with the noble Baroness, Lady Lawlor. Trade unions do not cause chaos in this country. They are fighting for the better pay of their members. This Bill will update the UK’s outdated employment laws and turn the page on an economy blighted by insecurity, poor productivity and low pay. We will raise the floor on workplace rights to deliver a stronger, fairer and brighter future for the world of work in the UK.
I agree with the noble Baroness, Lady Noakes, that we must be conscious of how the reforms will impact SMEs, and I will come back to that later.
I thank the noble Lord, Lord Sharpe of Epsom, for tabling Amendments 254 and 255, and the noble Lord, Lord Fox, for Amendment 258, moved by the noble Baroness, Lady Kramer. On Amendments 254 and 255, our impact assessment of the repeal of the strikes Act was published on 21 October 2024 and is available for all to read. I remind all noble Lords that repealing the Strikes (Minimum Service Levels) Act 2023 is a manifesto commitment. The Act received Royal Assent in July 2023, but, since then, 2.7 million working days were lost to strikes in 2023—up from 2.5 million in 2022. Therefore, the Act has not proved to be effective, even though it has had a short lifespan. It has not prevented a single day of industrial action but has contributed to industrial unrest. Before the Strikes (Minimum Service Levels) Act 2023, most industrial action was consulted on, and voluntary agreements were put in place for minimum service levels in the interests of security. The system worked perfectly, so I do not see why this Act should be in place. There is nothing new to add to that assessment.
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 thank all those who have contributed to this debate, and I thank the noble Baroness, Lady Coffey, for giving me the opportunity to speak to these clauses and, I hope, to reassure her. Let me point out why they are important provisions that must stand part of the Bill.
The theme these clauses all share is that they remove some of the unnecessary bureaucratic burdens placed on trade unions as a result of the Trade Union Act 2016. This includes removing powers placed on the certification officer which have never been used since their introduction. Your Lordships’ House will be aware that the Government’s manifesto committed to repealing the 2016 Act, and these clauses deliver on that. They will enable trade unions to focus more of their time and efforts on delivering in the interests of their members.
Clause 76 seeks to reverse the effect of Section 7 of the Trade Union Act 2016. It will remove the additional reporting requirements imposed on trade unions for their annual returns to the certification officer concerning details of industrial action taken during the reporting period. I can assure noble Lords that trade unions will still be required to submit an annual return to the certification officer, but the amount of information they will have to include will be reduced. In addition, unions will continue to be required to provide information in those annual returns relating to their governance and finances, including the management of their political funds, as they have done for many years.
Clause 78 will remove the power of the certification officer to enforce certain requirements relating to trade unions’ annual returns. However, the certification officer will still hold enforcement powers for the other remaining annual return requirements—that is, those not removed by Clauses 76 and 77, for example in relation to a union’s financial affairs and governance. Clause 79 will repeal the certification officer’s enhanced investigatory powers, which include an ability to compel trade unions to produce documents, the power for inspectors to launch investigations, and the related power of enforcement.
The reason why Clause 79 is introduced is that the enhanced powers created by the 2016 Act are simply not necessary. No evidence of regulatory failure existed at the time of the 2016 Act, and the statutory obligations that existed prior to that Act regarding trade union finances, governance and reporting requirements were found to be sufficient. In addition, the Certification Officer has never used the additional powers since their introduction. Removing the Certification Officer’s enhanced investigatory powers is part of the Government’s commitment to reset industrial relations and ensure that employers, unions and the Government work together in co-operation and through negotiation.
In the examples that the noble Baroness gave, the Certification Officer—as I think she admitted—acted with complete propriety and authority. I assure her that unions continue to be hugely respectful of the power and authority of the Certification Officer. I also assure her that the Certification Officer’s role is partly to ensure that the rights of workers are properly protected. I really do not recognise the noble Baroness’s analogy with Animal Farm. Our repeal does not affect the ability of a trade union member to complain to the Certification Officer about an election and have that investigated.
Similarly, Clause 80 will remove certain powers of the Certification Officer to investigate trade unions proactively without first having received a complaint from a member of that trade union. Trade unions are voluntary organisations run by and for their members. We are returning the Certification Officer’s role to one where the Certification Officer adjudicates where the Certificate Officer receives members’ complaints in relation to a union. I assure the noble Lord, Lord Hunt, that members will not be shy about complaining if they feel that an injustice has been done within the conduct of their union. However, the Certification Officer will retain the power to investigate a union’s financial affairs. The Certification Officer’s powers have been in place for many years and were brought in prior to the Trade Union Act 2016.
Clause 81 will reverse Section 19 of the Trade Union Act 2016 to remove the Certification Officer’s ability to impose financial penalties on trade unions. I can tell noble Lords that the Certification Officer has not imposed a single financial penalty to date. However, the Certification Officer will retain the power to issue enforcement orders following the changes made by Clause 81, and if those orders are not complied with the the union could be found in contempt of court.
Clause 82 will remove the Secretary of State’s power to make regulations that require the Certification Officer to impose a levy on employers’ associations and trade unions. It was resisted by employers’ associations and unions when it was introduced. The levy impedes on the rights of voluntary association and has attracted criticism from the International Labour Organization. The ILO was concerned that the levy could negatively impact on the rights of workers to organise and bargain collectively and reduce the financial capacity of trade unions to carry out such collective bargaining on behalf of their members. The Government believe that we should interfere as little as possible in the activities of social partners, which are, as I say, voluntary associations.
Clause 83 will reverse changes made by Section 21 of the Trade Union Act 2016 so that the right of appeal against decisions of the Certification Officer to the Employment Appeal Tribunal is only on a question of law, as opposed to being on questions of fact as well as law. That returns the appeal process to the position before the Trade Union Act 2016, where appeals against the Certification Officer’s decisions were on points of law only. It also aligns with many other enforcement bodies on employment law. For example, appeals against the decisions of employment tribunals are considered only on points of law, not points of fact.
I hope that that explanation has been helpful and therefore that Clauses 76, 78, 79, 80, 81, 82 and 83 stand part of the Bill.
Lord Fuller (Con)
My Lords, this nation must earn its place in the world, and, regrettably, we are losing to some of our industrial competitors, particularly in energy-intensive industries such as steel, aluminium and so on. We must live by our wits, and that means increasingly leaning on highly skilled, knowledge-based employment in an economy that values strong intellectual property rights, the rule of contract and property rights themselves. That requires an economy with flexibility and agility.
Earlier today, along with other noble Lords, I sat on the Home-based Working Committee. We are seeing firsthand how the world of work is changing, not just in the way that we go to work but in the way that we sometimes work from home. The entire technological underpinning of our economy is changing too. We have not yet seen the end of artificial intelligence and what it might do to low-skilled, somewhat transactional arrangements.
It does not help the economy, and by extension those who work in it, if all participating employers and unions do not recognise that we have a duty to move with the times. We cannot put a wall around our economy and create some high-cost walled garden as the rest of the world trades its way to prosperity, leaving us behind. I strongly support Amendment 256 and want to give more power to the officer who, more than anyone, can cajole and encourage workers’ representatives to recognise the world as it is, rather than the world as they might wish it to be.
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the noble Lord, Lord Sharpe, for tabling Amendment 256. We fully recognise the importance of supporting growth and international competitiveness across our economy, and we will of course continue to pursue policies that will deliver on our economic ambition. However, we do not consider this duty to be appropriate for the certification officer.
The certification officer is not a traditional regulator; they are an independent quasi-judicial officeholder. Their core functions are to oversee regulatory compliance fairly and impartially and to ensure trade unions and employers’ associations adhere to statutory requirements in relation to their finances and governance. This includes investigating complaints, maintaining accurate registers and ensuring that democratic processes are upheld. Imposing a duty to promote growth and competitiveness would cut across this role. It risks introducing competing priorities, blurring legal clarity and ultimately undermining confidence in the CO’s neutrality. We cannot require the certification officer both to conduct their judicial and regulatory functions and to deliver economic outcomes. The certification officer has no role in relation to the international competitiveness of the United Kingdom economy or its growth in the medium to long term.
As noble Lords will know, this Government have been active in requiring a number of regulators to apply a growth duty. Those bodies to which the growth duty currently applies are purely regulators—regulators that set strategies and make decisions that significantly affect the type, scale and location of economic activity in important sectors. The decisions regulators take can set the parameters for economic activity across the economy, and, of course, we recognise that; but the certification officer does not have this responsibility or power. We share the noble Lord’s commitment to economic growth, but it must be pursued in the right way. Furthermore, requiring the certification officer to follow a growth duty would not be practicable, and there is no evidence that imposing such a duty would have any meaningful impact on the UK’s growth or international competitiveness. It would be like asking a court to consider cases based on their impact on economic growth rather than on the evidence of the case.
For those reasons, I must ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 256.
Lord Sharpe of Epsom (Con)
My Lords, I thank the Minister for her answer, but I have to say that I am unpersuaded. The gist of it was that the certification officer does not have either the responsibility or the power, but by definition this amendment would deliver both those things. I completely agree with my noble friend Lady Noakes, and I shall take her suggestions on board and have a careful look at this. I do not believe that this amendment and the suggestions she made are mutually exclusive; in fact, if anything, they are very complementary. I thank my noble friend Lord Fuller for his comments, which, frankly, were just an expression of complete common sense.
I express my disappointment at the Government’s rejecting this amendment. I think it reveals more about the Government’s true priorities, frankly, than all the rhetoric about growth that we have heard. The Government are absolutely right to identify growth as a priority, but they will not find it in this Bill. In fact, there is nothing in the Bill that will bring any growth. I challenge the Minister to identify a single provision in these hundreds of pages that will increase productivity, enhance competitiveness or create jobs. The Government’s own impact assessment suggests the same: it is a document notably silent on growth benefits, while cataloguing increasing costs and regulatory burdens.
If the Minister is genuinely confident that the Bill will support growth, and if she truly believes that the expanded trade union protections and enhanced worker rights will somehow boost economic performance, I am surprised and somewhat mystified that she will not accept this amendment. The argument was that the certification officer is not a traditional regulator, but they still have a regulatory function, so I do not really see what difference that makes, frankly. What could be the objection to requiring the certification officer to consider growth when discharging functions under a Bill the Government claim supports growth? If these provisions truly advance economic competitiveness, a growth duty should be welcomed as a validation of the Government’s approach.
I could go on, but I do not see the point. The Government have rejected a genuine opportunity to demonstrate that their growth rhetoric has substance. The amendment would have required no fundamental changes to their approach, simply consideration of the economic impact when implementing trade union provisions. It would have aligned trade union regulation with best practice across government, while preserving all the work protections the Government claim to champion. The fact that they cannot even accept a modest requirement demonstrates that the commitment to growth is hollow rhetoric. It is designed to disguise an agenda focused more on trade union empowerment, regardless of economic consequences. How very disappointing for our great nation. I beg leave to withdraw the amendment.
Baroness Jones of Whitchurch (Lab)
I thank the noble Baroness, Lady Coffey, for tabling Amendment 257A. I am happy to explain to the noble Baroness that this amendment is not appropriate.
As the noble Baroness knows, trade unions are already required by existing legislation to ballot their members before commencing any industrial action. Union executives are therefore required to obtain a mandate from their members to negotiate with their employer on their behalf before industrial action can commence. We believe that union executives, as representatives of their members, are best placed to judge whether an offer is acceptable and in the best interests of the union members before deciding whether to ballot their members. Balloting members is a considerable financial and administrative challenge and repeated ballots could cause an unnecessary burden—as well as confusing members as to what was being proposed and the likelihood of a higher offer.
Amendment 257A would also remove the power of union executives to negotiate on behalf of their members for a deal that they consider will deliver before balloting members on an offer. This is one of the main reasons that members join a union: they delegate to those negotiators to get the best deal for them. The negotiators will have done a great deal of detailed research on economic indicators, what is happening in their market, on the knowledge of the financial stability of the business, and so on. They will take a very wide range of factors into account into that bargaining process. This is why, quite often, negotiations take time, because all those factors have to be discussed in some detail in a way that an individual member would not be able to do.
Furthermore, the amendment has no safeguards to prevent gaming. Were we to accept it, there are risks that employers could submit multiple derisory offers to unions in order to interfere with the industrial action ballot mandate by forcing the union to constantly re-ballot members on derisory offers at the cost of the union. As the noble Baroness said, balloting on small increases would be ridiculous, but this is exactly what her amendment would require.
We consider, therefore, that existing legislation is effective. As union representatives are elected by their members to represent them, union executives should have the discretion as to whether they put an offer by an employer to their membership. If a union executive believes an offer is acceptable, they should be free to put that offer to their membership and make that judgment at the time.
We think the noble Baroness’s amendment is unnecessary; the current system works well, and it brings great benefits to individual members. I therefore ask the noble Baroness, Lady Coffey, to withdraw her amendment.
Baroness Coffey (Con)
I thank the Minister for her reply. She will be aware that I am a Back-Bencher and I do not have hundreds of civil servants crafting the perfect amendment and saying when to discuss these sorts of issues.
I am conscious that through the Bill, the mandate will be extended to 12 months. There is, therefore, the potential for handing over considerable power that is delegated to negotiators. I fear there will be situations that develop that can have economic consequences on workers when there are spats that not everybody wants to be involved in. I recognise all the other changes the Government are making in digitising the operations of the trade unions, and that is why I thought it was worth discussing at this point.
This has been a very useful debate. I thank my noble friends Lord Fuller and Lord Hunt for their support and consideration—and their experience, particularly that of my noble friend Lord Fuller. Having taken all this into account, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom (Con)
My Lords, I thank my noble friend Lady Coffey for her amendments; they are measured, necessary and principled amendments to Clause 85, which rightly restore a degree of parliamentary scrutiny that had been quietly eroded in the original draft of the Bill. As we stated at Second Reading, there are 173 delegated powers in the Bill, which is unacceptable—not just to those the legislation will impact, but to the House.
In the Minister’s contributions on similar legislation in the past, she expressed her strong reservations about the use of delegated powers. I recall well her interventions, which were made with clarity and conviction, as she tabled amendments recommended by the Delegated Powers and Regulatory Reform Committee. But we now find ourselves considering a clause that does precisely what she once warned against because it carves out certain sensitive and constitutionally significant areas and exposes them only to selective scrutiny.
The original version of Clause 85 created a two-tier system. Some regulations would require affirmative approval from this House, while others—no less consequential—would not. This piecemeal approach to oversight is not only undesirable but unnecessary. Regulations made under Section 293 of the Trade Union and Labour Relations (Consolidation) Act are not merely technical: they pertain to fundamental matters, such as the rights of trade unions, the balance of power between employers and employees, and the protections afforded to those who take lawful industrial action. It is therefore only right and proper that all regulations made under this section should be subject to the affirmative resolution procedure: they should be laid before and approved by both Houses of Parliament.
My noble friend’s amendment achieves this. It does so with economy of language, but with significant constitutional consequence. It removes the artificial distinction introduced by subsection (5), and instead applies a uniform standard of scrutiny to the entirety of Section 293.
Since the Government took office, many of us across these Benches have expressed concern about the growing use of skeleton Bills, Henry VIII clauses and broad enabling powers that allow Ministers to legislate without adequate consultation or scrutiny. This amendment is a quiet but firm step in the other direction back towards balance, principle and the proper functioning of Parliament.
Again, I thank my noble friend for tabling her amendment, and I hope the Government will not merely accept it but embrace it to show their commitment to transparency and to the constitutional propriety of this House.
Lord Leong (Lab)
My Lords, I thank the noble Lord, Lord Sharpe, for his contribution. I remember standing before him during the PRaM Bill and we discussed this very matter. Some of this negative resolution is required because not only does it save parliamentary time but it is technical. Anyway, I thank the noble Baroness, Lady Coffey, for tabling Amendments 257B and 257C, which would make all the powers under Clause 56 subject to the affirmative procedure, as well as existing regulation-making powers that are currently covered by the negative procedure, by virtue of current Section 293 of the Trade Union and Labour Relations (Consolidation) Act 1992.
It is worth noting that most of the access regulations are already subject to the affirmative procedure. Indeed, as the noble Lord, Lord Sharpe, mentioned, only four of the 12 delegated powers are subject to the negative procedure. Given the technical nature of those delegated powers, and to save parliamentary time, the Government are of the position that making them subject to the affirmative procedure would not be appropriate.
Further to this, as mentioned in previous debates, all regulations under Clause 57 will be consulted on via public consultation, the outcome of which will be published for all to see. This is an important process, which will help ensure that our policy development is informed by the practical experience and needs of trade unions, businesses and stakeholders.
The noble Baroness, Lady Coffey, and the noble Lord, Lord Sharpe, will have noted in previous debates in this place that the Delegated Powers and Regulatory Reform Committee said that
“it is heartening that in a Bill with so many delegated powers”—
the noble Lord, Lord Sharpe, mentioned 173—it had
“only found four on which to raise concerns”.
Clause 56 was not one of those. Therefore, I ask that the noble Baroness, Lady Coffey, to withdraw Amendment 257B.
Baroness Coffey (Con)
My Lords, I thank my noble friend for his comments. Undoubtedly, in the last decade, this House has started to move to have far more under the affirmative procedure, so it gets a level of scrutiny, although I appreciate your Lordships’ House does not vote against them. That is how to make sure legislation is properly considered, recognising it will be put to debate, which is certainly not the case with many regulations considered in the negative way. With that, I beg to withdraw.
Lord Katz (Lab)
My Lords, I am grateful to the noble Lords, Lord Freyberg and Lord Clement-Jones, and the noble Viscount, Lord Colville of Culross, for tabling their amendments, all concerning the creative and cultural sectors. I am pleased to be having this debate on how this important sector is being supported by the Government and how workers within the sector will benefit from the Bill. I pay tribute particularly to the noble Lord, Lord Freyberg, for his excellent and long-standing work in this area. I think it is fair to say that he is a creative inspiration to us all in his endeavours to support this very important sector.
The Government share this passion and certainly understand the importance of this sector. I draw attention to the significant work that we are already doing to support it. These sectors—creative and cultural—are a vital source of growth. Creative industries are estimated to have contributed £124 billion in 2023, accounting for 5.2% of UK gross value added, and the cultural sector is estimated to have contributed some further £35 billion in the same year, accounting for 1.5% of UK GVA.
The creative industries and cultural sectors are a distinct part of the wider UK workforce, as the noble Lord, Lord Freyberg, explained. They have a significantly higher proportion of self-employed individuals, reflecting the sector’s entrepreneurial and freelance nature. In the latest published data, as of 2023 there were 2.4 million filled jobs in the creative industries and 666,000 filled jobs in the cultural sector. Of these jobs, nearly half, 49.6% in the cultural sector, were self-employed, and 27.9% in the creative industries, compared with 14.5% of UK jobs overall. This flexibility not only drives innovation but supports the more project-driven nature of the creative industries. However, we also know that freelancers’ creative careers, despite offering a more flexible and autonomous way of working, are often precarious and come with lower job security; many speakers in this debate spoke to that fact. I highlight the contribution made by the noble Baroness, Lady Bennett of Manor Castle, setting out the precarious nature of working in this sector.
I turn specifically to Amendment 259 in the name of the noble Lord, Lord Freyberg. Through the Bill we are introducing the school support staff negotiating body and introducing a framework for negotiating bodies in the social care sector to help tackle recruitment and retention issues there. The Government recognise that other sectors, such as the arts and culture sector, may well benefit from more formal frameworks for collective bargaining, and we intend to consider other sectors in due course. In the meantime, we want to encourage collective bargaining at the local level in these sectors. It is the Government’s intention that we should learn the lessons from this process in the social care sector first, before considering where it may be appropriate to introduce similar frameworks in other sectors.
I am struck at this point by the contribution from the noble Lord, Lord Londesborough. As he said, while the focus of these amendments is to discuss the nature of freelancing in the creative and cultural sectors, freelancers are self-employed but of course there are self-employed workers in many other sectors beyond. It is not a simple thing to analyse, that is for sure.
Regarding Amendments 284 and 288, also in the name of the noble Lord, Lord Freyberg, regarding impact assessments, as your Lordships’ Committee will be aware, we have already published a comprehensive set of impact assessments. This analysis is based on the best available evidence on the sectors likely to be affected by these measures, including the arts, entertainment and recreation industries. We recognise the importance of ensuring that the impacts of these policies on workers, businesses and the economy are considered, and that analysis is published outlining this. That is in section 17 of the summary impact assessment, which assesses the impact on all different sectors, including the creative industries. We already intend to publish further analysis, in the form of both an enactment impact assessment when the Bill secures Royal Assent and further assessments when we consult on proposed regulations to meet our better regulation requirements. We are also committed to consulting with businesses and workers ahead of setting out secondary legislation, including the sector mentioned in the amendment.
On Amendments 285 and 331 in the name of the noble Lord, Lord Freyberg, we recognise the importance of preserving and supporting the financial sustainability of cultural organisations, including small and independent cultural organisations. However, we want to avoid uncertainty or even unintended negative consequences for cultural workers. We welcome views on the ways that cultural organisations experiencing financial hardship can be supported, including the types of advice that they may require on employment practices. More generally, the Government will continue to work with the creative and cultural sector to understand how this legislation can work with it in its context, while strengthening legal protections for employers. But again, this must not lead to uncertainty or negative consequences for the workforce, which we believe staged implementation, for example, would create. I think the noble Lord, Lord Freyberg, will know that both DBT and DCMS have been engaging with sector organisations, including UK Theatre, to have productive conversations to support this sector in understanding and adapting to the new legislation, while considering what additional support we could give to this sector in particular.
Finally, I address Amendments 286 and 287 tabled by the noble Lord, Lord Freyberg, and Amendments 301 and 302 in the name of the noble Lord, Lord Clement-Jones, regarding freelancers. Freelancers may benefit from the reforms to trade union legislation and improvements in the enforcement system, including the regulation of umbrella companies. We have also committed to additional measures to strengthen protections for the self-employed. The noble Earl, Lord Clancarty, rightly raised issues facing those who are self-employed, such as action to tackle late payments. We have already announced a package of measures to tackle late payments to small businesses and the self-employed, including a new fair payment code, upcoming legislation requiring large companies to include payment performance in their annual reports and an upcoming consultation on potential measures to go further. Other measures to strengthen protections for the self-employed include the right to a written contract, an extension of health and safety, and blacklisting protections.
On health and safety, my noble friend Lady Caine of Kentish Town raised the honourable campaigning work of the Mark Milsome Foundation, in a speech that showed both passion and insight in this area. It is essential that employers in the creative industries do not use—or rather, abuse—the multifarious employment statuses of those working in the sector to evade their responsibilities, particularly when it comes to health and safety. As the noble Baroness, Lady Bennett, said, it can indeed be a matter of life and death.
I am pleased that my noble friend Lady Caine acknowledges that this Bill may not be the most appropriate vehicle for the changes that she wishes to secure and that secondary legislation or amendments to the Health and Safety at Work etc. Act would perhaps be more appropriate. However, I am happy to take this back to colleagues in DBT and DCMS.
As has been noted, the creative industries have a high proportion of freelance workers, who are crucial to the sector’s success. To respond to the noble Lord, Lord Clement-Jones, and others, the sector is working to address the recommendations of the Good Work Review, a deep dive into the working practices in the creative industries, which highlighted freelancers’ job quality as a particular concern. My colleagues in the Department for Digital, Culture, Media & Sport are working with industry to understand government’s role in any solutions that are developed. I and my DCMS colleagues will be happy to continue discussing how best to support freelancers, and the creative industries more widely. It is with this in mind, and the Government’s unwavering support for the creative industries, performing arts and entertainment sectors, that I ask the noble Lord, Lord Freyberg, to withdraw Amendment 259.
Lord Clement-Jones (LD)
My Lords, the Minister has noticed the strength of feeling across the House in terms of support for some of the freelance amendments. I very much appreciate what the noble Lord, Lord Sharpe of Epsom, said earlier. However, across the Benches there is very strong support for further protection for freelancers. Will one of the options in the Good Work Review, which the Minister referred to, be the appointment of a freelance commissioner—with all the other aspects that I have mentioned in terms of definition and duties?
Lord Katz (Lab)
I was certainly happy to reflect that there was cross-party agreement on this. I am unable to recall the exact terms of the Good Work Review here, so I undertake to write to the noble Lord with some more detail if that is acceptable.
Lord Clement-Jones (LD)
Perhaps the Minister could add another bell or whistle to what he has just said. Will he undertake to meet those with a strong interest in the protection of freelancers on a cross-party basis, to have discussions, before Report?
Lord Katz (Lab)
I am always happy to meet with noble Lords on these important matters.
Lord Freyberg (CB)
My Lords, I thank the Minister for his very helpful answer and all noble Lords who have taken part in today’s very interesting and in-depth discussion that I think we have all valued and benefited from.
I will make a couple of observations. The noble Earl, Lord Clancarty, made a very powerful point about the lack of government representation from freelancers when he said there was not then and there is not now any clear channel between freelancers and government. I do agree with the points made by many noble Lords about this. The noble Lord, Lord Clement-Jones, talked about having a freelance commissioner for advocacy and driving change. We need more work on this, because it is not clear that freelancers are getting the type of direction that the Government need to give on this.
I was struck by the very powerful speech by the noble Baroness, Lady Caine, on the concerns about health and safety in the film industry. Again, a freelance commissioner would be able to look at this in more detail and drive that through. There does not seem to be the same powerful advocate without that, so I hope the Minister will consider how to strengthen that. The noble Lord, Lord Londesborough, made a powerful speech about the number of freelancers who are going to come into this area; therefore, not to have them represented in this Bill is an oversight.
When I was anticipating what the Minister would say, I had various things down: asking for a carve-out, asking for special treatment for one sector, phased implementation is a slippery slope, oversight already exists through Arts Council England and DCMS, there is not enough evidence to justify these changes and we already have a Minister for Culture. However, as others have rightly said, this is not about a carve-out or an exemption, it is about adaption. The creative workforce is structurally different, highly freelance, project-based and often dependent on public and charitable funding. Our amendments aim to ensure that employment rights can be applied fairly and effectively in this context.
Baroness Lawlor (Con)
My Lords, I support my noble friend Lord Sharpe’s amendment to ask for an impact assessment that details the number of days lost to strikes in the 12 months since the Act was passed and in the previous 12 months. He spoke about the repeal of elements of the 2016 Act and about the ONS statistics.
Part of the reason why we need an impact assessment on the number of days lost to strikes is because, as my noble friend said, we have no evidence. This Bill, in particular aspects of Part 4, is likely to increase the number of strike days. I say that because the main problem with many of these clauses is that they undermine the balance between the employer and the employee, which my noble friend Lord Fuller spoke about as both a public sector and private sector employer. They remove the arrangements on a number of accounts which allow for a balance to be struck between the interests of employer and employee, and for agreement to be reached.
The clauses also remove the inducements and encouragements to avoid industrial action. We spoke earlier about Clause 73, on protection against detriment for taking industrial action: new Section 236A gives workers the right not to be subject to detriment as a result of official and protected industrial action and stipulates that an employer may not take action, and may not refrain from an action, to prevent the employee engaging in legitimate industrial or protected action. Yet excluding the employer’s ability to give inducements to workers for not taking protected industrial action where others do, is in fact prohibiting actions by the employer to hold back or to encourage workers not to take such action. One example might be to offer a bonus or withhold some extra benefit.
There are very good reasons to avoid strikes, not least for the good of the whole economy and the good of this country. Employers and employees should be given a level playing field, and many of the measures taken by the previous Government since 2016 and before then, all of which are in the 1992 Act, allow for that level balance to be struck between both parties. But many of these measures will encourage industrial action, which is not to the good of workers, employers or to the country at large. An impact assessment would at least provide the evidence that the country so badly needs if we are to start putting pressure on the Government to restore the balance in this delicate arrangement between both parties.
Lord Leong (Lab)
My Lords, I thank the noble Lord, Lord Fuller, and the noble Baroness, Lady Lawlor, for their contributions. I will be brief; I do not want to stand between noble Lords and their dinner break.
I thank the noble Lord, Lord Sharpe of Epsom, for his Amendment 262. We have already debated impact assessments at great length and I will not repeat the same arguments. Any industrial action is regrettable and all parties have a duty to seek a resolution to such disputes. Failure to do so is basically a lack of management and leadership by all. We have also debated the repeal of the 2016 Act in previous debates. I will not mention that either. Furthermore, it is a manifesto commitment.
Despite its good intentions, the amendment would impose a review procedure that in effect repeats what the Government already intend to do. We recognise the importance of ensuring that the impacts of these policies on workers, business and the economy are considered, and that analysis assessing these impacts is published. Our impact assessment also outlines a plan for monitoring and evaluating the impact of the Bill and subsequent secondary legislation.
As noble Lords will see from the impact assessment, our Employment Rights Bill could have a positive direct impact on economic growth, helping to support the Government’s mission for growth and ensuring that we raise living standards across the country and create opportunities for all. The Bill is expected to benefit people in some of the most deprived areas of the country by saving them up to £600 in lost income from the hidden costs of insecure work.
To conclude, I reassure your Lordships that we already have robust plans in place to assess and review the Bill’s impacts, including on industrial action. My commitment in an earlier debate to meet noble Lords to discuss the impact assessment further still stands. I therefore ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 262.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lord, Lord Leong, for his answer, but I am, of course, disappointed. I must say to him that of course he could not repeat the argument about the impact assessment because it is manifestly inadequate and overreliant on the word “could”, which he just used again.
So it is with a sense of frustration that I close this debate on Amendment 262 because, let us be blunt, the Regulatory Policy Committee has already deemed the Government’s own analysis inadequate. It found that the assessment underpinning this Bill failed to consider important variables, lacked robust modelling of strike-related costs and omitted any real evaluation of how the repeal of the 2016 Act provisions might drive up the number of working days lost to industrial action. That is criticism born not of political bias but of technical expert judgment, but the Government persist in asserting that an independent stocktake of actual strike days would be superfluous.
During the Bill’s passage, no fewer than 160 government amendments were tabled on Report, some of the most consequential of which would fundamentally alter the trade union landscape: changes to ballot thresholds, as my noble friend Lord Fuller explained; adjustments to picketing rules; and alterations to facility time arrangements. Many came late, with scant time for meaningful consultation and no accompanying update to the impact assessment. In effect, we are being asked to sign off on a statute the final shape of which was revealed only in piecemeal fashion and for which no comprehensive evaluation has ever been produced. There is more flesh on the skeleton now, but it still makes for a pretty unsavoury sight.
The consequences of this are already evident. Businesses stand in limbo. They are unsure how to prepare—again, the lack of an implementation plan. HR directors, legal advisers and finance teams are all left guessing which rules will apply. If the Government can point to a single one who is not, could they please say so, because we have spoken to very many and cannot find a single one who is not left guessing? They require clarity, not uncertainty. They need to know, for instance, whether a union ballot will again require a 50% turnout, or whether the conduct of pickets will be governed by new or old prescriptions. In their absence, investment decisions are deferred, retention and, especially, recruitment strategies are on hold and the workforce, unsure of its rights and obligations, faces unnecessary anxiety.
To deny acceptance of this amendment is to deny the very notion that policy should be tested against outcomes and treats legislation as unchallengeable, rather than a living instrument whose impacts must be monitored, and it tells employers, workers and the public alike that we legislate in the dark. So I regret deeply that the Government have chosen to reject the amendment. Doing so signals a reluctance to subject themselves to the discipline of evidence, shirks the responsibility to measure the real-world consequences of their own handiwork, and turns a blind eye to the limbo in which businesses and the public languish. That is not acceptable. If the Government’s reforms truly will deliver better industrial relations, they should welcome the chance to prove it. If Ministers are as confident as they claim to be, let them fast-track the assessment. Let them demonstrate that strike days are falling, that workplaces are more harmonious and that public services are protected. For now, I beg leave to withdraw the amendment.
Lord Katz (Lab)
My Lords, I beg to move that the House resumes. We will then move on to consider two Foreign Office Statements taken in the other place. In recognition that the Statements have been combined, the usual channels have agreed that the usual time for consideration be extended by 20 minutes, with 40 minutes for Back-Bench questions in total. We will therefore not return to the Employment Rights Bill before 8.38 pm.