Employment Rights Bill
Wednesday 18th June 2025
(2 days, 2 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-X(a) Amendments for Committee (Supplementary to the Tenth Marshalled List) - (17 Jun 2025)
Lord Hunt of Wirral
“with the three-year period resetting three months after any general election.”Member’s explanatory statement
This amendment seeks to ensure that a new government would not be held to the labour market enforcement strategy of a predecessor government for up to three years.
Lord Hunt of Wirral (Con)
My Lords, in moving Amendment 271ZZA, I will also speak to Amendments 274 and 278, standing in my name.
Clause 91 requires the Secretary of State to set out a plan for enforcing labour market legislation over a three-year period. However, as currently drafted, Clause 91 lacks the flexibility necessary to reflect changes in government and political leadership. As the Minister will be aware, Clause 91(1) places a statutory duty on the Secretary of State to publish a labour market enforcement strategy
“before the beginning of each relevant three-year period”.
Subsection (6) then defines those periods as
“beginning with the next 1 April after the day on which this section comes into force”
and every successive three years thereafter. At first glance, that may seem entirely sensible, but let me explain why it creates a democratic and practical problem that our amendment seeks to fix.
Suppose, for example, this Bill passes this year, in 2025. Under Clause 91(6)(a), the first strategy would need to be published before 1 April 2026 and it would then run until March 2029. Now, imagine a general election takes place in 2027—entirely plausible, perhaps even probable. That would mean that a new Government taking office in 2027 would be bound by a strategy formulated and published by a previous Administration, with potentially very different political priorities, until well into 2029. I suggest to the Government that this is neither democratic nor desirable.
Labour market enforcement is not a neutral administrative matter. It involves clear policy choices about which sectors to prioritise, what level of inspection and enforcement to undertake, what approach to take with non-compliant employers, and how to engage with trade unions, businesses, regulators and workers. These are not technocratic decisions. These are matters of political judgment. They ought to reflect the democratic mandate of the day.
Our amendment is, therefore, straightforward. It would insert into Clause 91(6) a provision that the relevant three-year period should reset three months after any general election. This would provide any new incoming Government with a short period—not an immediate obligation—in which to consult the advisory board and prepare a revised strategy, only if they wish to do so. It would not force a change of strategy; it would simply enable one at a more appropriate and timely moment.
Amendments 274 and 278 together seek to inject evidence, accountability and proportionality into the Government’s proposal to establish a single labour market enforcement body under this legislation. These are not abstract or procedural concerns; they speak directly to the credibility of this legislation and the consequences it will have for workers, businesses and the rule of law in the labour market. We are therefore being asked to approve a significant structural reform—the consolidation of multiple specialist enforcement agencies into a single, central body—without a clear estimate of how much it is all going to cost and without a rigorous analysis of whether it will improve enforcement outcomes.
The idea that such sweeping institutional change could proceed without a public, detailed cost-benefit analysis should give us all pause for thought. The creation of a new enforcement authority is not merely a matter of administrative reorganisation; it involves physical premises, staff transfers, IT infrastructure, the legal realignment of enforcement powers, data-sharing agreements, and the re-establishment of everything, from complaints mechanisms to enforcement protocols.
All of this will come at considerable financial and operational cost, yet no such cost has been published, nor can it be debated. It is absent. This is particularly concerning given that we have seen similar government reforms in other domains—such as the establishment and eventual dismantling of the UK Border Agency—go badly awry, not for lack of ambition but for lack of foresight and planning. An effective enforcement agency cannot simply be declared into being. It has to be built carefully, deliberately and on the basis of hard evidence.
That is why Amendment 274 requires the Secretary of State to lay before Parliament a detailed cost assessment. We understand that the Government’s broader agenda includes a desire to reduce inefficiency and waste in the public sector. That is a principle all sides of this Committee would support. We would not, and I hope the Minister would not, wish to see the creation of another bloated agency duplicating functions and budgets and wasting taxpayers’ money under the guise of reform. Without clear planning, the risk is precisely that a new bureaucracy, with vague lines of accountability, an unclear mandate and spiralling costs fails to deliver better outcomes for workers and businesses.
Baroness Lawlor (Con)
I support the lead amendment in this group in the name of my noble friend Lord Sharpe of Epsom to exempt a new Government, for up to three years, from the labour market enforcement strategy of their predecessor for the reasons set out so ably by my noble friend Lord Hunt. I also support Amendments 274 and 278 for a new clause after Clause 140 to review the effectiveness of enforcement and compliance with relevant labour market requirements as in Part 1 of Schedule 7 before the new agency is set up and for the costing of such a new body before it is set up.
The new fair work agency proposed by the Bill to bring together existing functions of enforcement is unknown territory. Today, to enforce a limited number of employment rights, official powers are used by four different agencies: the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, HMRC and the Health and Safety Executive. The proposed new fair work agency bundles these—and new responsibilities under the Bill—into a single, untried and untested body. In general employers are quite familiar with HMRC and HSE, which provide advice as well as having enforcement functions. At the moment, we have the benefit of experienced bodies with whom employers are familiar and an ability by each body to be precise and knowledgeable about the subject on which it is an enforcement officer. We also have the advantage of different horses for different courses. Now, the plan is to move to an unknown, inexperienced entity with all the start-up costs that entails and without the precision focus which the present bodies have, because what is proposed is a one-size-fits-all model.
The enforcement of the laws will be differently framed with different aims by the current bodies. GLAA will have a different focus to that of HMRC, although some of the functions may overlap. I therefore suggest, in the interest of the taxpayer, that there is a need for a costing of the new body before it is set up and for a review of the effectiveness of the outcomes of present arrangements for enforcement and compliance to see how they stack up. This should be done before any steps are taken to put in place a new body. For these reasons, I heartily support Amendments 274 and 278.
Lord Jackson of Peterborough (Con)
My Lords, I wish to speak on the issue of the labour market enforcement strategy in support of Amendment 274 to which I have appended my name and to build on the excellent remarks of my noble friend Lord Hunt of Wirral and the specific points raised by my noble friend Lady Lawlor. For transparency, I declare that I have been a member of the Chartered Institute of Personnel and Development for more than 20 years. The CIPD estimates that the People Skills HR support service which it has mooted, working with ACAS, would cost about £13 million under the new regime when this Bill becomes an Act. We already know, following on from my noble friend’s comments, that the cumulative cost of the existing bodies doing similar work, with analogous workstreams, is about £40 million.
Amendment 274 is important because in this country we have a strange anomaly. Unusually for an advanced country, we generally do not put the architecture of scrutiny and oversight in primary legislation. I want to know how this agency is going to be accountable in terms of the costs, who it employs, its policies et cetera. No doubt the Minister will say, “Well, once it becomes an Act, there will be what was the Business Select Committee, or there might be the National Audit Office, or there might be the Public Accounts Committee”. But we are being asked to sign a blank cheque for this without knowing how precisely this agency is going to operate and, most fundamentally, at what cost. We have not seen a detailed impact assessment focusing on the work of this body. On that basis, I ask the Minister specifically how he sees the process of accountability working and whether there will be any work by his department, and Ministers more generally, to work out what the costs are likely to be.
I accept at face value that this Government are committed to reducing the regulatory burden, particularly on small and medium-sized enterprises. I am sure the noble Lord, Lord Leong, will bend the Minister’s ear on that, having come from the background that he came from as a champion of small businesses from the Labour side. It is therefore not unreasonable for us to ask what the cost will be and how we will be able to hold this agency to account once it is established.
Baroness Coffey (Con)
My Lords, Amendments 277 and 328, which I expect the noble Lord, Lord Goddard of Stockport, to speak to shortly, are an interesting element. Amendment 277 talks about the review of the fair work agency. Considering that a number of questions have come up about this, that is a fair assessment, given that there is still a considerable amount of consultation to be done. Amendment 328 would basically strip out the commencement of any part of the Act until that review has been done and
“a Minister of the Crown has tabled a motion in both Houses of Parliament for debate … and the review has been approved by a resolution”—
not just regulations.
The reason I say this is that I continue to assert that some of the powers here are going to be novel. Even if the Equality Act 2006 may give powers to the EHRC, it has never used them to institute legal proceedings, only as an intervener or for judicial review, rather than taking on individual cases; I am conscious that there is a consultation there. The amendment from the Liberal Democrats is an interesting way to think about how we are looking at the details of what the new agency is going to do.
Lord Goddard of Stockport (LD)
My Lords, before I begin my comments about the various amendments, I have news from afar. Councillor Fox—sorry, not councillor; that is going back a bit. My noble friend Lord Fox wants to pass on his thanks to Members of the House from all sides who have sent best wishes for a speedy recovery. I signed his card today from the Lib Dem group with the sentiment, “Don’t hurry back. I fully enjoy sitting until midnight doing the employment Bill on your behalf”—which I think, with my noble friend’s irony, he will get. His amendments would require detailed review of the fair work agency’s remit, funding powers and accountability structures, and parliamentary overview before commencement.
We are fairly neutral on Amendments 271ZZA, 274 and 278 from the noble Lord, Lord Sharpe, which aim at transparency and reviews. They are broadly procedural, but I have some sympathy with the noble Lord’s three-year review, which could be quite sensible. He explains those two amendments with clarity and brings out the blindingly obvious—the lack of cost and the lack of understanding of how this thing will be set up and work in reality.
I intend to ask the Minister some direct questions as well as supporting my noble friend Lord Fox’s amendments regarding the implementation plan, the opportunity for scrutiny and further consultation. First, I turn to what the noble Baroness, Lady Coffey, has been talking about, the fair work agency. We debated its creation and power across several earlier groups and I will not labour that point today, but I want to speak clearly in support of Amendments 277 and 328 tabled by my noble friend Lord Fox, and again place on record my regret that he is not able to be with us today. These amendments are central to establishing a credible and accountable agency. Amendment 277 would require a full review of the agency’s remit, powers, funding and relationship with other enforcement bodies, and would be subject to review, as the noble Lord has said. Amendment 328 would link the commencement of the Act to that process.
Lord in Waiting/Government Whip (Lord Katz) (Lab)
My Lords, I thank the noble Lords, Lord Sharpe of Epsom and—in absentia—Lord Fox, for tabling Amendments 271ZZA, 274, 277, 278 and 328. Before I go any further, I think we all join the noble Lord, Lord Goddard, certainly from our Benches, in wishing the noble Lord, Lord Fox, the very best and speediest of recoveries. We hope to see him back in his place at the earliest opportunity.
I will speak first to Amendment 271ZZA moved by the noble Lord, Lord Sharpe of Epsom. This amendment is unnecessary, as Clause 91(3) provides full discretion for the Secretary of State to revise the labour market enforcement strategy at any time, including following a general election. That means that a new Government are not locked in. They can act swiftly, decisively and in line with their mandate. Were the party opposite to win power again sometime in the distant future, however difficult that is to imagine, its hands would not be tied by these proposals.
Of course, businesses, workers and enforcement bodies all benefit from clarity, consistency and strategic continuity. Automatically scrapping an enforcement strategy, just as the Government are finding their feet, risks creating exactly the kind of disruption we should be avoiding. To reassure the noble Lord, Lord Hunt of Wirral, the Bill is about strengthening our ability to tackle non-compliance and exploitation in the labour market, including, in the very worst cases, the scourge of modern slavery. The intention and mandate of the fair work agency are to catch the bad actors, not to trip up the good guys. This amendment risks instability rather than accountability.
Turning to Amendments 274, 277, 278 and 328 tabled by the noble Lords, Lord Sharpe of Epsom and Lord Fox, I want to be absolutely clear that the Government are committed to effective, transparent enforcement of workers’ rights. The creation of the fair work agency is a major step forward and we want to get it right, but these amendments are wholly unnecessary, duplicating myriad reports and recommendations over several years. By our count, there have been 33 government reports and strategies about the effectiveness of labour market enforcement over the past nine years. One could argue that this subject has been reported and scrutinised to death. The Director of Labour Market Enforcement produces an annual report and strategy that reviews the effectiveness of the labour market enforcement system. These documents are available in the Library of the House.
Additionally, our impact assessment for establishing the fair work agency sets out the current running costs of the enforcement bodies and initial estimates of set-up costs for the agency. I also refer noble Lords to reviews published by previous Administrations, including the Taylor review, which assessed the labour market enforcement system and found it wanting.
Ongoing oversight of employment rights enforcement is provided for in Clauses 91 and 92. They require the Secretary of State to publish a three-year labour market enforcement strategy and annual reports, which must be laid before Parliament and the Northern Ireland Assembly. To address the question of the noble Lord, Lord Jackson of Peterborough, they will be subject to parliamentary scrutiny in the usual way, which could well involve scrutiny by a Select Committee in the other place.
While the Bill does not explicitly require that the enforcement strategy and annual report address the agency’s funding, I can confirm to the Committee—and to the noble Lord, Lord Jackson, in particular—that the annual report will indeed include an assessment of the fair work agency’s budget and how this has been spent.
Turning to Amendment 328, establishing the fair work agency is not and should not be contingent on its reporting. I remind all noble Lords, particularly the noble Baroness, Lady Lawlor, that this was not only a Labour Party manifesto commitment; it was the policy of all the major parties at the general election to introduce a single enforcement body in some shape or form.
Baroness Lawlor (Con)
Just because one side of the House or the other—or, indeed, both—brought it in does not necessarily mean it is the right policy. Does the Minister not agree that, if we have a chance to review some of the weaknesses in inherited policy, it is a very good time to do it? The 2017 Taylor review, on which some of the then Government’s policy was based, focused particularly on the most vulnerable workers and certain categories. It was not a very wide focus.
Lord Katz (Lab)
We have had a fair amount of scrutiny of the wider proposal, rather than the Bill’s specific fair work agency proposals. As I said, over the past nine years since 2016, there have been 33 different strategies and reports, including—but certainly not limited to—the Taylor report. This is not an area that has not been considered and scrutinised to some degree. I also say to the noble Baroness that the Single Enforcement Body—as it was called by the previous Administration—was the policy of successive Conservative- led and Conservative Administrations. I am not going to intrude on the great policy disagreements on that side of the House. We feel it important to establish the fair work agency and to ensure that we have strong enforcement of labour market regulations. I therefore ask the noble Lord to withdraw Amendment 271ZZA.
Lord Hunt of Wirral (Con)
My Lords, this has been a very significant debate, because I believe it is the first time I have heard from the Government Front Bench an acceptance that the Opposition will eventually take over government again. He and I may disagree on when this will happen—of course we disagree: I just happen to believe that it is going to happen at the next general election. That is why these amendments are so important.
I also want to say how much we miss the noble Lord, Lord Fox. I was very disturbed indeed to hear about his unfortunate accident, but I am very pleased to hear that he may shortly be with us. I hope that, by speeding up the process to Report in July, he will still be able to be with us, because he has always brought a note of common sense—despite coming from the Liberal Democrat Benches. Now I am upsetting everyone. All I want to say to the noble Lord, Lord Goddard of Stockport, is that he has been a marvellous substitute, if one can say that. His pragmatic approach to the Bill has been enormously valuable, but we do miss the noble Lord, Lord Fox.
I thank my noble friend Lady Lawlor, who is quite right: we are moving into unknown territory. Although the Minister might remind us that the Conservative Government were committed to looking at stepping in this direction, we are still moving into unknown territory and, as my noble friend Lord Jackson of Peterborough pointed out, the CIPD cost estimates are really worrying. I do not think the Minister properly addressed his key question on the whole issue of accountability.
However, here we are. I am surprised that the Government have rejected Amendment 271ZZA. It is a reasonable and pragmatic amendment that simply recognises the basic democratic principle that a new Administration should have the ability to review and, if necessary, revise a labour market enforcement strategy to reflect new economic realities and public priorities. Despite the amendment to which he referred—which is at the margin—the Government have always insisted that a labour market enforcement strategy must run its full term without reset, regardless of elections or changes in government. But why should a new Government be bound by a strategic direction set by their predecessor? That is not consistent with the democratic mandate bestowed on any incoming Government. Surely it is neither logical nor democratic to compel a newly elected Government to implement a strategy they did not design, especially in a labour market that is dynamic and constantly evolving.
Economic landscapes can shift dramatically within short periods, whether due to international events, technological change or domestic challenges. Flexibility to adjust enforcement priorities accordingly is essential. It is not only a question of governance, but of ensuring that enforcement remains effective and responsive to current labour market conditions. The Government have already recognised the importance of periodic review and the resetting of the labour market enforcement strategy every three years, as set out in Clause 91. If I am not mistaken, that periodicity is built into the framework precisely to ensure that the strategy remains relevant and responsive.
The main feature of this debate has been the cogent arguments put forward by the noble Lord, Lord Goddard of Stockport. His insights, and those of my noble friend Lady Coffey, highlight the pressing need for a substantive independent review of the proposed fair work agency. While the promise of increased efficiency in enforcement is welcome, we must remember that there are intentions and then there are results. We must understand how such efficiency will be achieved and at what cost, what other alternatives were considered, and why they were rejected.
To date, the Government have not committed to publishing any specific details about the establishment of the fair work agency—details that are crucial for proper scrutiny. We lack clarity on the expected costs of this new body, the standards by which compliance will be measured and the criteria that will guide enforcement decisions. Without that transparency, it is difficult to assess whether the creation of this body will represent genuine progress or simply add another layer of bureaucracy, which, as the noble Lord, Lord Goddard of Stockport, stressed, will impinge on smaller businesses in particular.
There remains much to discuss and questions to be answered about the fair work agency. Unfortunately, I find myself unconvinced by the Government’s arguments against the amendments proposed by myself and the noble Lord, Lord Goddard of Stockport. Our proposals are not about obstruction but about ensuring proper oversight, accountability and flexibility in this important area of labour market governance. I am sure that we, and the Liberal Democrats, will return to these issues on Report, but for now, I beg leave to withdraw the amendment.
Lord Sharpe of Epsom
Member’s explanatory statement
This amendment seeks to ensure that any ‘fishing expedition’ actions of enforcement officers enabled by subclause (a) are limited to the most serious breaches, thereby preventing a broad expansion of an enforcement officer’s ability to enter business premises to include entering at any point to check on minor matters.
Lord Sharpe of Epsom (Con)
My Lords, in moving Amendment 271ZB I will speak also to Amendments 271ZBA, 271ZD and 273LA in my name. Amendment 271ZB ensures that the powers being granted to enforcement officers under this part of the Bill are used proportionately and only in response to the most serious breaches of labour market law. Without this amendment or something very much like it, we risk handing enforcement officers sweeping powers to enter business premises with very little constraint.
As currently drafted, Clause 94(1)(a) grants enforcement officers the authority to “enter any premises” for “any enforcement purpose”. That is an extraordinarily broad power. This amendment would limit such warrantless powers of entry to those paragraphs of Schedule 7 that deal with the most serious forms of labour market abuse, namely child labour offences, the failure to pay the minimum wage, unlawful deductions from wages and exploitation through forced labour. These are the areas where strong enforcement action is absolutely justified.
However, is it appropriate that the same powers—entry without warrant or consent—could be used to check whether someone forgot to keep a copy of an employment agency contract on file or perhaps miscalculated a payslip by a few pounds? We must not lose sight of the bigger picture. The vast majority of employers want to comply with the law; they invest time and money in doing so. However, if we allow overly broad enforcement powers, we risk creating an atmosphere of distrust, regulatory overreach and disproportionate intrusion, particularly into smaller businesses which may not have the resources to constantly defend themselves against investigatory overkill. The Government say they want better enforcement, and so do we, but good enforcement is not the same as unchecked enforcement.
Turning to Amendment 271ZBA, as currently drafted, Clause 95 restricts the power to enter dwellings to those occasions where a warrant is issued by a justice. This is a well-established and necessary safeguard, reflecting the heightened privacy interests we attach to a person’s home, but there is a conspicuous gap in the safeguards applying to entry into non-dwelling premises, such as business premises, offices or other places of work.
Clause 94 grants enforcement officers wide powers to enter any premises for enforcement purposes, without the same explicit requirement for a warrant or judicial authorisation, unless it is a dwelling covered by Clause 95. This gap means that, unlike the protections for residential premises, business premises can be entered and searched by enforcement officers without prior judicial approval. This is a significant and unwarranted imbalance. The intrusion into a business, especially a small or medium enterprise, is a serious matter. Entry and seizure powers can disrupt operations, damage reputations and create an atmosphere of suspicion.
That is all quite apart from the rather sinister nature of this power. For many small businesses, their premises are their livelihoods. The difference between a home and a business may be one of degree, but the right to protection from arbitrary state intrusion should be similarly robust. Judicial oversight ensures that these powers are used only when there is a legitimate and evidenced basis for entry, and it prevents abuse or overreach.
The requirement for a magistrate to authorise a warrant is a safeguard that protects due process, proportionality and the rule of law, and is of course very well established. It requires that enforcement officers demonstrate reasonable grounds and the necessity for the warrant. That is not a bureaucratic hurdle; it is just a check that balances the state’s legitimate enforcement interests with individual and business rights.
On Amendment 271ZD, as it stands, the appeal process focuses primarily on the accuracy of the sums claimed or the penalties imposed. It is essential that underpayments and penalties are correctly calculated and justified, but this narrow scope overlooks a critical element: the manner in which enforcement powers are exercised.
Enforcement officers hold significant authority when issuing notices, including entry, inspection and seizure powers. However, these powers must be exercised lawfully, proportionately and with respect for those affected. This amendment allows tribunals to consider whether enforcement officers have acted beyond their legal authority or used their powers excessively or unfairly. It further empowers tribunals to cancel or vary notices where misconduct or disproportionate enforcement is found and to award compensation as appropriate. This is not only a matter of protecting businesses and individuals from overreach but is vital to maintain public confidence in the enforcement regime. When enforcement is perceived as fair, transparent and accountable, compliance will improve and the number of disputes will reduce.
On Amendment 273LA, at this stage, the Bill does not define who enforcement officers are in any detail—we started this discussion on Monday—nor does it set any clear limits on the powers they may exercise when carrying out their functions. This lack of clarity is deeply concerning, especially given the serious nature of the enforcement powers being proposed, which include entry, inspection and seizure of documents and property. It is vital to establish unequivocally that enforcement officers, who are not police offices and do not have the training or mandate of the police, must not be allowed to use physical force or authorise others to do so. The use of force is an extreme measure that can be justified only in very specific and regulated circumstances, and generally only by trained law enforcement personnel. The amendment simply ensures that enforcement officers cannot resort to physical coercion, which is not appropriate for officials tasked with regulatory enforcement in the labour market. That is a matter of basic human rights and dignity. It is also a safeguard for businesses and individuals who may otherwise be subject to intimidation or physical harm.
I have absolutely no doubt that Ministers on the Government Front Bench have no interest in physical coercion being a part of these powers. In that case, they should accept this amendment because, if they do not, the implication is clear: they accept that physical coercion is acceptable. I do not believe that is what they want and I beg to move.
Baroness Lawlor (Con)
My Lords, I support the amendments in the name of my noble friend Lord Sharpe. I declare an interest as a director of a very small business—a think tank.
As an employer, the idea that we have no warrant or judicial oversight of an enforcement officer’s intrusive visit to a business to seize or take copies of documents and to check up is intrusive on the time and output of the business. It is also an infringement of a business freedom to conduct the business to the best ability of those in the office or the business.
Both clauses in fact contain very intrusive proposals. As my noble friend pointed out, one of the things that is deeply worrying about them is we do not know who the enforcement officers will be or exactly what their powers will be. We have seen, even with the best trained police force in the world, the Metropolitan Police and local police forces, a certain amount of over-zealousness in pursuing certain types of crime. Therefore, with an untrained and unknown quantity and with such powers, we need very clear limitations, and we need to focus on the most serious crimes and those outlined in these amendments. For those reasons, I support both the amendments in the name of my noble friend.
Lord Katz (Lab)
My Lords, I thank the noble Lord, Lord Sharpe of Epsom, for tabling amendments relating to the fair work agency’s powers. Clause 94 introduces a single power to enter business premises and inspect workplaces. The noble Lord’s Amendment 271ZB would limit this power to such an extent that effective enforcement of the legislation, including the national minimum wage, would be extremely difficult. We are not amalgamating labour market enforcement into one single agency to diminish its effectiveness. This amendment would, in effect, prohibit the site visits that most minimum wage investigations rely on and bring an end to a system of state enforcement that has worked well for 25 years. The result would likely be an increase in claims to the employment tribunal. Given the noble Lord’s concern about employment tribunal capacity, I urge him to withdraw his amendment.
I turn to Amendment 271ZBA. While powers of entry are generally exercised on a consensual basis, in some situations it is critical that officers are able to carry out their duties quickly, particularly if they suspect that giving advance notice could give rogue employers time to destroy or tamper with evidence. None the less, in response to the concerns raised by both the noble Lord, Lord Sharpe, and the noble Baroness, Lady Lawlor, an officer will not enter a premises if a person is not present but will instead notify the person to rearrange a time to enter the premises. As the noble Lord, Lord Sharpe, mentioned, a warrant could be issued by a justice only if they are satisfied that there are reasonable grounds for entry, and judicial oversight ensures that warrants are granted only when appropriate, protecting businesses from unwarranted inspections while enabling legitimate investigations.
Clause 128 and Schedule 8 were added to the Bill to put in place appropriate safeguards relating to the execution of warrants. As I said, this approach will continue under Part 5 of the Bill, but with additional safeguards, such as needing a warrant before exercising powers to enter a dwelling. Extending this warrant requirement further to include all business premises would be a disproportionate and retrograde step in enforcement terms. It would introduce additional powers and bureaucracy, and create an unnecessary burden on the warrant system.
Amendment 271ZD is unnecessary. There are already extensive safeguards in the Bill around the use of investigatory and enforcement powers. These safeguards are designed to ensure that the use of enforcement powers is lawful and proportionate. In addition, enforcement officers are highly trained and carry out investigations under a strict code of conduct.
Clause 107 largely carries over the existing appeal grounds from the notice of underpayment regime contained in the National Minimum Wage Act 1998, which, as I said, has been functioning successfully for over 25 years. In fact, I recall debates in previous days of Committee around the effectiveness of minimum wage enforcement and the fact that not enough rogue employers have been named and shamed. The process as it stands is well known and understood by businesses and individuals. Changes risk adding confusion and uncertainty, leading to additional complexity and litigation.
Amendment 273LA would constitute a drastic downgrade in labour exploitation enforcement. The Gangmasters and Labour Abuse Authority can and must occasionally use force under PACE powers to rescue victims of modern slavery and tackle serious labour exploitation. Indeed, it is through the use of those powers that we saw two modern slavery convictions and 13 slavery and trafficking risk and prevention orders in the last reporting year of 2023-24. To reassure the noble Lord, Lord Sharpe, as is currently the case, the use of PACE powers will be strictly limited to a small number of officers, as set out in their letters of appointment, and subject to stringent IOPC oversight functions and complaints and misconduct procedures.
I am sure the whole Committee will agree that we must tackle the scourge of modern slavery. The Bill is designed to strengthen employment rights in a clear, coherent and enforceable way. Unnecessary additions or alterations, however well-meaning, could compromise that aim. On that basis, I ask the noble Lord, Lord Sharpe of Epsom, to withdraw his amendment.
Lord Carter of Haslemere (CB)
My Lords, I think the Minister explained that the reasons against requiring a warrant to be issued by a magistrate included the fact that an employer might destroy documents that were the purpose of the need to enter the premises. In those circumstances, why could the clause not say that, if the enforcement officer can show the magistrate reasonable cause to have concerns about the destruction of a document, they could apply on an ex parte basis for the search warrant? That would mean there would not be that risk of the destruction of documents in advance.
Lord Katz (Lab)
The noble Lord raises an interesting point, though I fear straying into legal territory, which I am not adequately briefed to comment on. I will write to him with further detail on the specific example he set out.
Lord Sharpe of Epsom (Con)
My Lords, I am very grateful to the noble Lord, Lord Carter of Haslemere, for his intervention, because I was about to raise a similar point. It has been a long time since, as a policeman, I applied for a warrant, but we did not routinely notify the intended recipient of our visit that we were about to do it. I do not buy the argument that that would see an awful lot of documents destroyed or anything that they might have been pre-warned being removed from the premises—they would not know. I do not see why it should be different for enforcement officers and the police, who obviously are, in some cases, investigating much more serious crimes.
On the use of force arguments that the noble Lord, Lord Katz, deployed, surely the point is that these powers are being extended and, yet again, we are relying on future guidelines, comments or statements that will be written into their terms of employment. I simply do not believe that that is enough. The public deserve the reassurance of having this in the Bill or, at the very least, clarified in a Dispatch Box Statement.
As we bring this debate to a close—my noble friend Lady Lawlor, I think, homed in on this point—the fundamental concern that underpins all these amendments is that the Government have not yet provided a clear definition of who the enforcement officers will be, what precise powers they will hold, and what training or accountability measures will govern their conduct. The absence of clarity is not a minor oversight; it is a significant gap that leaves businesses and individuals vulnerable to potential overreach and misuse of authority. Enforcement officers will be vested with extraordinary powers of entry, inspection and seizure, but we have no clear picture of the safeguards that will be put in place to prevent abuse.
These amendments are not about obstructing enforcement or denying the Government the tools that they need to tackle serious breaches of labour market law; on the contrary, we recognise the importance of robust enforcement. However, enforcement must be lawful, proportionate and accompanied by proper oversight and accountability, or it will risk losing public trust.
We have sought to introduce reasonable limits on when and how enforcement—
Baroness Lawlor (Con)
Does my noble friend agree that, in addition to the problems he has raised, there is a very great danger of vexatious claims being made without evidence, and of disproportionate actions and intrusions taking place as a result?
Lord Sharpe of Epsom (Con)
I absolutely agree with my noble friend; that is one of the reasons that we are seeking more clarity in the Bill. As I said, without transparency, accountability and a clear definition of what the powers will be—they are unarguably vague —all those concerns remain. It is disappointing that the Government have not fully recognised the risks inherent in the broad powers envisaged by the Bill. We argue that the Government should, at a very minimum, provide clear guidance on these roles and responsibilities and on the limits of enforcement officers. This subject is so important that I think we will have to return to it. For now, I beg leave to withdraw my amendment.
Lord Jackson of Peterborough (Con)
I will speak to the significant number of amendments in this group in my name. This is quite an interesting cornucopia of amendments, a number of which are, in essence, probing amendments. The very nature of the work we are undertaking is to look at the minutiae of the Bill and to see it through the prism of how it impacts on small businesses. It is very important, when we consider the fair work agency’s powers, that we look at the Bill’s real-world ramifications and consequences.
Although some of the amendments may seem somewhat obscure, I think they are nevertheless quite compelling and worthy of the Minister’s attention. In addition, the Clause 95 stand part notice is in my name; I will come to that shortly. I also have a more substantive amendment near the end of the group on a duty on the UK border agency and the new enforcement agency, the fair work agency, to collaborate or co-operate.
I begin by considering the clause stand part notice. I remind noble Lords that, ostensibly, Clause 95 circumscribes the powers available in respect of using a warrant to enter a dwelling. On the face of it, the clause looks pretty innocuous, but I do not think it should be in the Bill because its wording is quite loose and opaque. I have serious concerns about the use of permissive, wide-ranging powers, particularly in subsection (3)(b), which says
“that it is not practicable to communicate with any person entitled to grant access to the documents or equipment”.
Further, paragraph (d) says
“that the purpose of entry may be frustrated or seriously prejudiced unless an enforcement officer arriving at the dwelling can secure immediate entry to it”.
I would like to interrogate the Minister’s perception and interpretation of these powers. For the avoidance of doubt, I think that the question of whether this clause should stand part of the Bill is worthy of our consideration. Although, of course, it was not considered by the statutory instruments committee—the name of which escapes me—to be a particularly egregious example of permissive or Henry VIII powers, I nevertheless think that it could be misconstrued.
I will now consider the other amendments in my name. Amendment 273A would require the Secretary of State to have “an evidential basis” for believing that a labour market offence is being or has been committed in order to request an LME undertaking, as opposed to requiring merely that the Secretary of State “believes” this to be the case. This amendment is important because what I am attempting to define more clearly the limits of the powers being conferred—in other words, to make it explicit that there has to be a firm evidential basis for exercising those powers. We do not want a situation in which the Secretary of State may do as he wishes as long as he pleads that he believed an offence was being committed.
I am not a lawyer, but I make reference to powers being conferred on a Minister based on subjective jurisdictional criteria. Let us look at—I am sure that the Minister will be advised of this—Customs and Excise Commissioners v Cure & Deeley Ltd 1962, in which it was found that Parliament would never presume on courts adopting a particular approach to statutory construction, especially when it comes to the subtleties of administrative law. I think that this reasonable and rational amendment would tighten up the wording.
Moving on, Amendment 273B would mean that the Secretary of State could impose a prohibition, restriction or requirement as an LME undertaking only where they considered it “proportionate” as well as “just and reasonable”. The test of proportionality is, of course, at the heart of adjudication and the justice system; it is the bread and butter of administrative decision-making, especially in respect of our human rights regime. It is good practice to have statute clear in order to direct Ministers to undertake the kind of judgments which the legal framework will impose on them anyway, and which otherwise will have to be communicated by the production of additional guidance material. That is the basis for that amendment.
Amendment 273C would reduce the maximum period for which an LME measure can have effect from two years to one year. This is a practical amendment, because there is no obvious reason why any necessary measures cannot be imposed and changes expedited within 12 months. It is better, for one thing, that a business falling foul of standards should be made to get its house in order quickly and to be compliant with any LME measure within a reasonable space of time. We are talking not about a month but about 12 months; I think that is a reasonable reduction from two years. It is also better for the economy, public expenditure and Civil Service efficiency to have a shorter timescale.
Amendment 273 would require the Secretary of State to bring the end of the LME measures to the attention of “all” other persons likely to be interested in the matter, rather than “any” such persons, and the subject of the measures. This is clearly straightforward. If you are in a business, you will have multiple partners, directors or people with a significant interest in the business. Therefore, to avoid bureaucratic mistakes and errors, I think it is fair to involve as many people as practicable.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch)
My Lords, I am sorry to interrupt. I am trying to follow the noble Lord’s arguments, but I think Amendment 273 is in a different group.
Lord Jackson of Peterborough (Con)
I am grateful to the Minister for giving me the opportunity to clarify where I am: it is Amendment 273D. My apologies if I have not been clear enough.
This amendment would make a small clarifying adjustment: where the text currently says that the Secretary of State must take whatever steps she or he considers appropriate to bring the end of LME measures to the attention of
“any other persons likely to be interested in the matter”—
that is, other than the subject of the measures—it would use the words “all other persons”. It is important for business certainty, good faith and, indeed, fairness that all those who are affected or likely to be affected by a quite significant measure are kept properly informed about it. Otherwise, we may see messy episodes unfold where there is a misunderstanding or extra, hidden penalties imposed on businesses in the form of the costs of informing the other people affected by the LME measure that it has, for instance, come to an end.
Amendment 273E to Clause 119 would require notice of LMEs against a partnership to be given to “all partners”, rather than just “any partner”. This does not reflect what running a business with multiple partners is like, perhaps in multiple locations or running multiple business units as partners, whether it is an accountancy firm, solicitors or others—I know that there is a different regime for solicitors. It is not sensible to advise only one partner of a significant infraction or issue arising from an LME. If you want businesses to co-operate in ameliorating the issues identified in the LME, you would really need—I admit, at some modest cost—to advise all the partners. You need also to cultivate good faith in order to make the changes necessary arising from the LME.
Furthermore, it is possible that the courts will decide that notice has been given as a matter of law in circumstances where the one partner who was theoretically served it had not actually seen it and was not subjectively aware of it. Better, then, to require that all partners be given notice to ensure that businesses are genuinely aware of the ramifications and the LME decisions.
I am mindful of the time, so I will move with greater alacrity. Amendment 273F would increase the proposed burden of proof for court orders of LME measures from balance of probabilities to beyond reasonable doubt. There is reason to fear that a future Government will use the provision of Clause 117(3), which empowers the Secretary of State to create new kinds of LME measures by regulation, to create measures which go beyond regulation and become punitive, in which case the criminal proof standard will be appropriate. More generally, good faith between businesses and government, which aids compliance, will be better cultivated if they are required to comply with LME measures only in cases where there has been a clear violation.
Baroness Coffey (Con)
My Lords, I support several of the amendments tabled by my noble friend. The stand part notice in my name on Clause 134 is also in this group. We are getting into an interesting bit, in a legal sense, about what information is being gathered and how it can be used. I was somewhat struck by this. I found Clause 130 interesting in that, quite surprisingly, no evidence that has been provided relating to the information can be used in a criminal prosecution, apart from that which is directly related to perjury. That made me wonder how this works.
I want to probe why HMRC is—apart from the intelligence services, which I completely understand—singled out in Clause 134 as a body for which extra permission has to be given before its information can be disclosed to all these other different parties. That does not apply for information about the national minimum wage. I remind the Committee that HMRC is a non-ministerial department, so no Minister can be involved in directing HMRC in any way whatever. That is why it surprises me that it is felt that extra permission is needed. I would love to hear further from the Minister on that.
To turn to other amendments in this group, Amendment 273PB is an important one. I appreciate that there are further amendments later about the wider aspects of immigration, but in recognising that this new body will take over from the gangmaster authority on the extension of the Modern Slavery Act, it makes perfect sense that it should be proactively working—not just on cases that “may” be disclosed—with the Government’s agency that is responsible for tackling illegal immigration and all the impacts that come as a consequence of it. I support my noble friend Lord Jackson of Peterborough in that regard.
I have a cheeky point to make about Amendment 273N. For reasons of procedural purposes, my noble friend does not believe that Schedule 9 should be allowed because it contains Henry VIII powers. However, the Minister has already amended, or at least debated, Schedule 9 during the passage of the Bill. I am quite struck that the Low Pay Commission is one of the bodies to which information may be disclosed in relation to Clauses 113 and 114. I am not aware that it is an enforcement body; I thought that it was, in effect, a research body that comes up with recommendations about the minimum wage and so on.
I also noticed that under “Other persons”, Scottish Ministers have for some reason been left out of the equation and may need to be added. Recognising that Part 5 applies to Scotland as well and that Welsh Ministers will receive information, I am surprised that Scottish Ministers are not there.
To make a broader point, we will of course start to see a lot more co-ordination, even with local government. It might be something for Ministers to share with their colleagues. We need to start thinking about combined authorities and also mayoralties—the Greater London Authority is accounted for, but others are not. The intention of this is, I think, to allow more co-ordinated efforts to try to stop abuse of employment law, including issues relating to modern slavery. I am afraid that, for once, I disagree with my noble friend on this occasion. The Government desperately need to be able to amend the bodies under Schedule 9. My main point was probing, particularly on HMRC.
Lord Hunt of Wirral (Con)
My Lords, I will speak to Amendments 271ZC and 273BA but I first thank my noble friends Lord Jackson of Peterborough and Lady Coffey for their amendments. My noble friend Lord Jackson began by describing his amendments as a “cornucopia”. I was always told that a cornucopia was a goat’s horn overflowing with flowers, fruit and corn. A better definition than the one he used would be “an abundant supply of good things”, which opened the opportunity for the Minister to justify the unjustifiable. We all look forward to hearing from her.
Amendment 271ZC seeks to avoid governmental overreach by excluding holiday pay from notices of underpayment, given that the existing legal framework provides adequate remedy for individuals seeking to enforce their rights in this matter.
Amendment 273BA seeks to ensure that labour market enforcement undertakings are requested only when there is a public interest in doing so. This amendment provides an essential layer of protection against the risk of regulatory overreach and against the misuse of powers that could otherwise affect individuals and businesses unfairly. Clause 117 gives the Secretary of State considerable discretion to impose conditions on people or businesses suspected of labour market offences. That discretion already includes subjective tests of what is just and what is reasonable. Who defines what is reasonable? Who ensures that decisions are being made not just fairly but in service of the broader public good? By requiring measures to be in the public interest, as this amendment does, we would root enforcement action in its proper purpose: protecting workers, upholding lawful employment practices and maintaining public confidence in our regulatory system.
This amendment would strengthen the legitimacy of LME undertakings. It would ensure that measures are not only lawful and proportionate but meaningful, and that they serve society as a whole, whether it is tackling exploitation, improving transparency or deterring repeat offences. I believe the public interest must be front and centre. Without this safeguard, we risk opening the door to punitive, reputational or performative measures that may be justified in form but not in principle. This amendment would give Parliament, and more importantly the people affected, the confidence that LME undertakings will be guided by public value, not political expediency or administrative convenience. I urge the Government to support this amendment.
As I mentioned, I also support the amendments tabled by my noble friend Lord Jackson of Peterborough. His proposed changes to the wording of the legislation, particularly in relation to enforcement powers, are both thoughtful and necessary. By raising the evidential threshold from a simple belief to one requiring an evidential basis, and by increasing the standard of proof for courts from “the balance of probabilities” to “beyond reasonable doubt”, these amendments would introduce essential safeguards. They do not undermine the policy intention of the Bill to tackle labour market offences effectively. Rather, they ensure that enforcement actions are firmly grounded in evidence, and that the rights of employers and individuals are protected from potential overreach or misuse of power. In short, my noble friend’s amendments help strike the critical balance between robust enforcement and fairness, which I believe is vital for maintaining public confidence in the system.
Amendment 273PB, tabled by my noble friend Lord Jackson of Peterborough, is an incredibly important amendment. We live in a world where migration patterns are increasingly complex and the risks associated with illegal immigration, visa overstays and exploitation in our labour market are growing. At the same time, threats to our national security have become more sophisticated, requiring a co-ordinated and agile response across multiple agencies.
Baroness Jones of Whitchurch (Lab)
My Lords I thank noble Lords who have spoken. I am responding to the noble Lords, Lord Sharpe, Lord Hunt and Lord Jackson, and the noble Baroness, Lady Coffey, who have tabled amendments on the powers of the fair work agency and oppose Clauses 95 and 134.
I accept the point made by the noble Lord, Lord Jackson, that some of his amendments are probing amendments. I will attempt to respond to each in turn. Forgive me if I repeat some points that my noble friend Lord Katz made in the previous debate, which covered similar ground. I think we covered some of this ground in debates on a previous day. I can assure the noble Lord, Lord Hunt, that I have no need to justify the unjustifiable in my response.
I will speak first to the fair work agency’s investigatory powers and address the opposition of the noble Lord, Lord Jackson, to Clause 95. I listened to the noble Lord, but investigatory powers are common to all regulators. The fair work agency’s powers are based on those set out for existing enforcement bodies in the Employment Agencies Act 1973, the National Minimum Wage Act 1998 and the Gangmasters (Licensing) Act 2004. Employment rights enforcement agencies have had power to enter premises used as dwellings since their inception. For example, HMRC’s minimum wage inspectors can and do regularly visit business premises used as dwellings to gather evidence. It is right that officers should be able to gather evidence from such premises. Businesses operating from premises used as dwellings is nothing new. Pubs, for example, often have flats above the public area where the business’s documentation is kept.
Today, more and more businesses operate from home. Current law makes no distinction for dwellings. This Government believe in stronger safeguards for such powers. That is why Clause 95 introduces a new requirement for a warrant to enter dwellings. Together with the additional safeguards in Clause 128 and Schedule 8, this clause strikes the right balance between protecting the privacy and rights of individuals and allowing the fair work agency to go about its job of enforcing labour market legislation. I hope that I have reassured noble Lords on this point, and that noble Lords can agree that Clause 95 should stand part of the Bill.
The noble Lord, Lord Jackson, also addressed his amendments to Clause 128. I recognise the intent behind these amendments, but there are already extensive safeguards around the use of investigatory powers in Part 5, including the new requirement for a warrant when entering a dwelling. Clause 128 is a sensible provision that sets out that any enforcement officer has the right to execute a warrant and, as long as the enforcement officer is present, they can be accompanied by an authorised person or persons if they deem it relevant to the investigation—for example, an IT specialist.
Turning to Amendment 271ZC from the noble Lord, Lord Sharpe, enforcement of holiday pay is a key part of the fair work agency’s remit. Large numbers of workers are missing out on their statutory right to paid annual leave. The Trade Union Congress estimates that 2 million people lose around £3 billion per year by not receiving holiday pay to which they are entitled. We recognise that this disproportionately affects the lowest-paid workers. The fair work agency will not be able to meaningfully support workers to recover the holiday pay they are owed if it cannot issue notices of underpayment. This is a power that is already available in the national minimum wage enforcement regime, which has been successful in ensuring that workers receive the arrears that they are owed. Therefore, I must respectfully resist this amendment.
I turn now to the amendments to Clauses 116 to 121 inclusive, in the names of the noble Lords, Lord Jackson, Lord Sharpe and Lord Hunt, together with the amendments to Clauses 126 and 136. These pertain to the labour market enforcement undertakings and orders regime. Although these amendments touch on important aspects of the Bill, they either duplicate existing provisions and introduce unnecessary complexity, or risk undermining the careful balance that has already been struck in the drafting. The labour market enforcement regime was introduced by the 2015 to 2017 Conservative Government. Indeed, the noble Lord, Lord Jackson, at that time in the other place, voted in favour of this regime consistently during the passage of the Immigration Act 2016.
It is a regime that works and works well. It promotes a compliance-first approach, as employers are first encouraged to enter into voluntary undertakings to correct their behaviour. Only persistent or egregious offenders are issued with a compulsory order to stop. As of March 2024, there have been 140 labour market enforcement undertakings and just 14 labour market enforcement orders. These amendments seek to water down the regime and increase legal tests and administrative burdens for its use. By making the labour market enforcement regime more cumbersome and less effective, the fair work agency would have to resort more often to prosecution, which could be disproportionate and time-consuming for all concerned. The effects of these amendments would be to make enforcement more heavy-handed, less efficient and less focused on helping businesses to comply. This is not what businesses or workers want or need, and it is not what the fair work agency is about.
Lord Jackson of Peterborough (Con)
I hear what the Minister says, but surely she would agree that, if one looks at Amendment 273F, which moves from having “a balance of probabilities” to “beyond reasonable doubt”, if you are taking forward an LME infraction case beyond reasonable doubt, you are more likely to succeed, and the corollary of that is that you are not taking forward cases on which you have a paucity of evidence. So, with all due respect to the noble Baroness, I disagree. If you are bringing in proportionality and “beyond reasonable doubt”, you are going to have sharper cases that tackle the most egregious examples of infractions of the legislation and do not waste a lot of time—and consequently save the taxpayer money.
Baroness Jones of Whitchurch (Lab)
The evidence shows that the current wording is proportionate. There has not been a huge number of cases. Maybe we could argue about whether there should be more cases, but the fact that there has not been a huge number of cases is a reflection of that. What we do not want to do is set the barrier so high that we cannot take the cases that are necessary to deliver the changes and the better worker protection that we seek to achieve.
I turn to the noble Lord’s Amendment 273N. I agree that effective sharing of information and pooling of knowledge will be crucial to the success of the fair work agency. The list of bodies that the agency will be able to share information with is limited to those with a need for access, and safeguards are provided for. However, the power to update the list is necessary to ensure that the fair work agency can respond to future changes in the wider labour market and the regulatory landscape. It means that we can keep the list of bodies under review and remove bodies where the need to share information no longer applies. This is good data information governance.
The noble Baroness, Lady Coffey, asked about the Low Pay Commission being listed. The fair work agency will be able to share information with the bodies in Schedule 9 if it is for the purposes of a function of the body. This does not need to be about the enforcement functions. I also say to the noble Lord, Lord Jackson, that the Delegated Powers and Regulatory Reform Committee expressed no concern with this power in its report on the Bill.
On the opposition of the noble Baroness, Lady Coffey, to Clause 134, HMRC data is critical for investigating and enforcing various employment rights, not just the national minimum wage. However, I say to the noble Baroness that much of HMRC’s data is confidential, and it is therefore prudent to require an extra level of approval before this information is shared further.
Clause 134 restricts the sharing of confidential HMRC data without authorisation from HMRC commissioners. This will ensure that the fair work agency operates in line with the Commissioners for Revenue and Customs Act. This is a standard safeguard which is necessary to ensure responsible data sharing between HMRC and the fair work agency.
In relation to Amendment 273PB from the noble Lord, Lord Jackson, I reassure him that the Bill already gives the Secretary of State the power to share information with border authorities, such as the National Crime Agency and immigration officers. Rather than enhancing enforcement, the amendment risks introducing unnecessary complexity and diverting attention away from the fair work agency’s core task. The amendment’s intended effect can be achieved through the existing Bill drafting.
I turn to the noble Lord’s Amendment 273R to Clause 140. The ability to recover enforcement costs in relation to the time spent is a matter of fairness. Restricting the use of hourly rates would in practice force the fair work agency to adopt fixed fees. A fixed approach to cost recovery could mean that a small business ended up paying the same as a much larger organisation, regardless of the scale or complexity of the case, and that is not fair. This clause is an enabling power. Regulations made under it will be subject to the affirmative procedure. Parliament will be able to scrutinise and debate whether to adopt a fixed-fee or variable-fee regime at the point where the regime is proposed, and it is right that we afford that flexibility in design at this stage.
In conclusion, while I appreciate the intention behind the amendments, they either replicate what is already achieved by the Bill’s existing provisions or risk unsettling a framework that has already been carefully constructed. I therefore ask the noble Lord, Lord Sharpe, not to press Amendment 271ZC.
Lord Jackson of Peterborough (Con)
I thank the Minister for that comprehensive canter through my amendments. I defer to the poetic licence of my noble friend Lord Hunt of Wirral and accept that it is not a cornucopia, but my cup overfloweth nevertheless.
I appreciate the spirit in which the amendments were received. I was attempting to improve the Bill. Not for the first time, my noble friend Lord Hunt put it much more succinctly than I did in that, certainly with regard to proportionality and “beyond reasonable doubt”, notwithstanding the excellent drafting by officials, the amendments would have improved the Bill.
Member's explanatory statement
This amendment would enable an application for an order enforcing a requirement in a notice of underpayment to pay a sum to an individual to be made in Scotland to a summary sheriff (as well as to a sheriff).
Lord Sharpe of Epsom
Member's explanatory statement
This amendment requires the worker’s informed consent before the Secretary of State can initiate legal action, preserving individual autonomy and control over personal legal matters.
Lord Sharpe of Epsom (Con)
My Lords, in moving Amendment 271D, I shall speak also to Amendments 272ZZA, 272ZZB, 272ZZC, 272ZZD, 272ZZE, 272ZB, 272ZC, 272AA, 272AB and 272AC.
There is a troubling message throughout this legislation of the fundamental belief that third parties, whether they be unions or the state in Part 5, will make decisions on behalf of individuals rather than individuals being able to make decisions for themselves. The challenge with third parties making decisions is that they pay no price when they are wrong, and that is evidenced in this clause. Clause 113(6) states:
“The Secretary of State is not liable to any worker for anything done (or omitted to be done) in, or in connection with, the discharge or purported discharge of the Secretary of State’s functions by virtue of this section”.
That is an unacceptable subsection in this clause, hence my Amendment 272ZZE.
The reality is that workers whose claims are taken up or not taken up by the Secretary of State risk having their rights mishandled or ignored, yet, under the clause as drafted, they would have no recourse, remedy or ability to challenge that failure. We think that that sets a dangerous precedent, because we are granting power without responsibility. We would be creating a regime in which decisions that affect individuals’ livelihoods and legal rights can be made from behind a veil of immunity. That is neither just nor consistent with the principles of good governance. We need to be clear that, if a private employer or a trade union behaved with this level of impunity, we would not accept it, so why are we accepting it from the state?
The fundamental principle underlying Amendments 271D, 272ZZA, 272ZZB, 272ZZD and 272ZC is consent. Clause 113 currently allows the Secretary of State to initiate legal action in a worker’s name without requiring that worker’s consent. That is deeply problematic. Legal proceedings, particularly employment proceedings, can be deeply personal, reputationally sensitive and complicated. To bring such proceedings without the individual’s explicit and informed consent is a serious encroachment on personal autonomy. My Amendment 271D would insert a requirement that the worker must provide written consent before the Secretary of State may act on their behalf. That is not a mere administrative formality; it is the cornerstone of the individual’s control over their own legal affairs.
What if consent was not initially required or given but circumstances change? That is addressed in my Amendment 272ZZA, which would establish a clear opt-out mechanism. It would ensure that the worker is given notice before proceedings begin and is afforded 28 days to object. If they do, the case does not proceed. Surely this strikes a balance between the state’s interest in pursuing enforcement and the worker’s right to decide how their own case is handled. Legal action is not always welcome, even when it is justified. The consequences of litigation, especially in employment, can be damaging professionally and personally. Workers may prefer alternative dispute resolution.
However, consent and opt-out are not enough on their own. Even with consent, the state must be bound by a duty to act in the worker’s best interests. That is why I have proposed an amendment requiring that the Secretary of State should have regard to the worker’s stated objectives, the potential impact on their current and future employment, and the proportionality of taking legal action in the specific context. That is a safeguard to prevent well-meaning intervention becoming harmful or heavy-handed.
Then there is the matter of control. A worker may initially consent to the Secretary of State taking the lead but later wish to take back control of the proceedings, perhaps because they have secured private representation or circumstances have changed. My Amendment 272ZZD addresses this. It would ensure that the worker retains the right to reclaim their case and that the Secretary of State must accommodate that request. It affirms that ultimate control remains with the individual and not with the state.
Finally, my Amendment 272ZC would introduce a fundamental principle, that of subsidiarity. The state should not intervene unless there is absolutely no other viable route to justice. If the worker has representation or access to advice or union support, that route should be exhausted first. Legal action by the Secretary of State should be a last resort, not a first impulse.
These amendments are not intended to frustrate enforcement—far from it. They are designed to ensure that enforcement is fair, consensual and genuinely in the interest of the person whose rights are at stake. Workers are not passive subjects of policy; they are individuals with agency, judgment and a right to decide how they wish to pursue justice. We must ensure that the Bill does not cross the line from protection into paternalism.
I turn to Amendments 272AA and 272AC. Amendment 272AA simply calls for an annual report—nothing excessive, just a basic record of how often these powers have been used, what types of claims have been pursued, the outcomes and any costs or awards recovered. This is a common-sense transparency measure. If the state is litigating on behalf of private individuals, we should, at the very least, be keeping track of how that power is being exercised and with what effect.
Amendment 272AB, however, is the more pressing amendment because it would place a sunset clause on the power, causing it to expire at the end of the next Parliament unless it is actively renewed. It would also require an independent review to assess whether this power has delivered real value for workers, for justice and for public money, because the truth is we simply do not know if this clause is necessary. We do not know if workers even want the state litigating on their behalf; we do not know if the outcomes justify the costs; and we certainly do not know if this is the most effective way to improve enforcement. If this power is to remain, Parliament should be given clear evidence that it works and works better than the alternatives.
Finally, Amendment 272ZB would introduce a simple but important safeguard: a public interest test before the Secretary of State can bring proceedings on a worker’s behalf. Without this, we risk allowing the state to pursue claims that may be frivolous, politically motivated or unnecessary, potentially at public expense and also to the detriment of both workers and employers. Litigation should not be used to make a point; it should be used to deliver justice where it truly matters. This amendment would ensure that such powers are exercised responsibly and proportionately, and only where there is a clear public benefit. I beg to move.
Baroness Coffey (Con)
My Lords, I oppose the Question that Clause 113 stand part of the Bill. I raised this in Second Reading, and I appreciate the discussions that have taken place with officials and the Minister since, but I genuinely believe these are novel powers.
I appreciate that we are perhaps just not going to agree today on how far the Equality Act 2006 goes, but when I tabled Questions to the Minister, they were passed to the EHRC. The commission said that, since it had received those powers—I think it was commenced in 2007—no powers had been used to initiate legal proceedings that were not judicial review or as an intervener. It gave me the distinct impression that it did not necessarily believe that it should be initiating legal proceedings in this regard. It has its own policy and that is under consultation. However, it does beg the question, given some of the other consultations that the Government have initiated, whether they will in future seek to take over any such duties or powers that the EHRC has in a variety of legal proceedings, because the EHRC is not using powers that the Government think it has. However, I think that is still really a matter of debate.
Building on the amendments that have been tabled by my noble friends on the Front Bench, I think this is an odd situation. I appreciate we have discussed elements of Clause 113 before; indeed, the other day we debated my noble friend Lady Noakes’s sensible amendment that this should be in the public interest. It would be helpful to understand from Ministers what they see will happen as a consequence of this. Where are we getting to? What is going on?
I have deliberately degrouped some parts of this discussion on Clause 114—about the money side—but it is useful to understand that, for the purposes of this clause, this is not just about people who are working; it is about people who do not have a job with the person they are seeking to take to court. We had a debate some time ago about why that could be, and we got into a debate about what sort of special privileges there might be. Nevertheless, this seems quite an extraordinary shift in the capability of the Government, first, to initiate these proceedings anyway and, secondly, to do so when the worker involved does not intend to do so. That is why, I appreciate, the legal wording really restricts any inclusion of the worker at a future date, which specifically seems to be ruled out in various provisions in the clause, except in Clause 113(5), which allows the worker to be brought in at an appeal stage. However, I am concerned more generally about this approach of a new agency.
Another element that really concerns me is subsection (6), which in essence provides:
“The Secretary of State is not liable to any worker for anything done (or omitted to be done)”.
I expect that is there to cover circumstances—we may have had a brief exchange on this already—in which the worker says, “You didn’t go after this bit or that bit”; it is kind of “Tough luck”. As it stands, it is not clear to me whether, if the worker is unhappy with the action taken, double jeopardy is allowed: will the worker be allowed to initiate separate claims against the employer, if they feel that the Secretary of State and the enforcement officers have admitted different things?
Overall, this clause is an unnecessary innovation. I am concerned about it, and I would be grateful for some broad examples of how it could be used in the future.
Lord Murray of Blidworth (Con)
My Lords, I support the amendments in this group in the name of my noble friend Lord Sharpe of Epsom. Looking at Clause 113, I am put in mind of the pre-exploration exhortation of Colonel Kurtz: “The horror! The horror!”. As an employment lawyer looking at this clause, I can say that it is a complete Horlicks. It is truly bizarre. Can the Minister say why this power is required? Who should decide whether the Secretary of State should intervene in a person’s right to bring proceedings? Why should that choice be taken away from them? If the Secretary of State decides to bring proceedings, how would the Secretary of State compel the person who did not want to bring proceedings to give evidence in their own claim that they are not bringing? Why would the judge decide that the claim should be allowed to succeed, in the absence of evidence from the person whose claim it is?
Then there is the question as to why the taxpayers of this country should bring proceedings in the name of somebody who does not want to bring them, possibly against a public sector employer who then has to pay to defend those proceedings to make an award of damages to a person who does not want to claim damages. All this is absolutely beyond belief.
Furthermore, I noticed that it is a discretion:
“the Secretary of State may, in place of the worker, bring proceedings about the matter in an employment tribunal under the enactment”,
which appears to relate to any enactment in the entire employment canon. There is no explanation as to the test the Secretary of State is going to apply in making that discretion. That exercise of discretion will plainly be subject to judicial review. If the Secretary of State chooses not to exercise their power, no doubt there will be satellite litigation in the High Court—brought by the unions, I suspect—as to why the Secretary of State has not chosen to bring a claim on behalf of somebody who they think should have had their claim brought by the Secretary of State. Applying the usual tests, I suppose it will be said that it was irrational not to bring the claim or it was in breach of some legitimate expectation that their claim would be brought. It seems to me that that whole delight now lies before the Committee as to whether there should be litigation on behalf of somebody who does not want to litigate.
This is simply an absurd and inverse world of mirrors that, frankly, Lewis Carroll in Through the Looking-Glass would not have believed was possible. The lunacy of it is notable in Clause 113(5), whereby a worker can appeal against the outcome in a claim when he did not even want to bring a claim. This is so badly thought out that it should clearly be withdrawn.
Baroness Lawlor (Con)
My Lords, I follow my noble friends by supporting the amendments tabled by my noble friend Lord Sharpe and voicing very strong opposition to Clause 113. I could not believe it when I read this clause. I could not believe that a third party—the Secretary of State—could bring proceedings on my behalf to a tribunal if I did not want proceedings brought. Nor did I think that subsection (6) was worthy of any government Bill. One could go through the whole of this clause and find something very wrong with it on many grounds.
There are many reasons why a worker may not want to proceed with a claim. He or she may not wish to bring proceedings because of the hassle involved, the delay, the stress to themselves and their family in waiting for the tribunal—which can never hear a claim quickly—the potential impact on his or her reputation, or a perfectly natural desire by an employee to settle things amicably with their employer. There are many individual reasons: family reasons, personal reasons and professional reasons. What right have we to give the Secretary of State powers to override that basic individual liberty in order to bring a case which someone may not want to be brought?
One can only wonder why such a clause is there—that the Secretary of State can bring proceedings, presumably, against a worker’s will or inclination. We can only assume that this may be due to workplace political pressures exercised by others in the workplace, perhaps by union members who want these cases brought as test cases and for the taxpayers to pay, or by others who have the ear of government.
This is a very sectional Bill in the interest of one vested interest group. I have said it before during proceedings, but it is not for the Government of this country in a parliamentary democracy to sectionalise the law in favour of one interest group or another. Clause 113 is particularly dangerous, and I support my noble friends’ amendments to it. I hope the Government will not proceed with it.
Lord Carter of Haslemere (CB)
My Lords, I support the comments made, particularly those of the noble Lord, Lord Murray. This is an extraordinary clause; I am not aware of anything else on the statute book like it.
My practical question to the Minister is: if the Secretary of State takes it upon himself or herself to go to court on a worker’s behalf, and the worker is strongly against that, what will that do to the relationship between the worker and the employer? It could absolutely devastate that relationship, because the employer will greatly resent the fact that the Secretary of State is taking proceedings on behalf of the worker, even if the worker has said that they do not want those proceedings brought. This is not good for industrial relations at all.
I really urge the Government to rethink this. What are its practical implications? How will it work in practice if the worker is against it? Will they be called as a witness by the Secretary of State, if necessary? Will they then be a hostile witness? It is all a complete and utter mess, I am afraid. I was not planning to speak on this, but this is an extraordinary clause and I urge Ministers to drop it completely.
Lord Jackson of Peterborough (Con)
My Lords, I was happy to sign the clause stand part notice with my noble friend Lady Coffey. I am thinking of the words of Zhou Enlai, I think, who, considering the French Revolution, said, “What did they mean by that?” I look at this clause and think, “What do they mean by this?” Maybe the Minister will open the trinket box at the end of this process and let us into the secret of this bizarre, perverse clause, but I really cannot see the point of it.
I am mindful of the fact that we are surrounded by very accomplished lawyers, so I will not get too much into law, but lawyers and others will be aware that Magna Carta—1215; I know the noble Lord, Lord Katz, likes a history lesson occasionally in Committee—resiled from the arbitrary power of the state. It is an arbitrary power of the state for it to insert itself into civil litigation without any real methodological basis, any timeline or, as my noble friend Lord Murray of Blidworth so rightly said, any tests being met. That is very odd.
Perhaps the Minister will enlighten us as to the rationale. The clause is novel. It is completely perverse and unheard of, to be quite honest, because it will engender a disputatious regime, more litigation and more disputes in the workplace. It will have a deleterious effect on business, commerce and profitability, and on how businesses are run. What tests will the Minister use? How likely is it that these powers will be used and at what likely cost? Is there any impact assessment or opportunity cost as to the use of these powers?
Why does subsection (2) leave agricultural workers out of the process? There may be a specific sectoral reason for that, but that is a reasonable question to ask. Why are they not swept up in these powers? Why are their rights not circumscribed to not get involved in civil litigation in respect of employment?
Finally, the most bonkers part of a truly epically bonkers clause is subsection (7). It is so crazy that it could have been written by the Liberal Democrats, but it would be unkind to make such an observation. My noble friend Lady Coffey has already made the point that you do not even have to be a worker to have the Secretary of State impose themselves into your potential litigation on a matter; you can be someone seeking employment as a worker. Presumably, anyone who is of working age can be affected by this clause. Subsection (7) also states that a worker is defined more widely as an individual who is a worker for the purposes of Part 4A of the Employment Rights Act 1996.
I really do not understand the rationale for or the logic behind this clause. The Minister is clearly aware of the great disquiet that it gives rise to, and I hope she answers the specific points made, not least by the noble Lord, Lord Carter of Haslemere. It takes something for a noble Lord of his experience in the law to say that this is the most perverse and strangest clause he has seen in a piece of primary legislation. On that basis, I hope the Minister will respond to that and answer those specific points that noble Lords, in particular the noble Lord, Lord Carter of Haslemere, have raised.
Lord Ashcombe (Con)
My Lords, I support my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral in some of the amendments in this group, and my noble friends Lady Coffey and Lord Jackson of Peterborough in their opposition to Clause 113, which I must describe—much as the noble Lord, Lord Carter of Haslemere, did—as quite extraordinary. It is extraordinary because it grants the Secretary of State exceptional powers—namely, the ability to initiate proceedings before an employment tribunal on behalf of a worker without that worker’s consent or even their knowledge. How can this be right? If a worker has chosen not to pursue a claim, whatever their reasons, how can the state reasonably step in and proceed in their name? Unlike my noble friend Lord Murray of Blidworth, I am no lawyer, but I think this demonstrates the need for Amendment 271D.
Consent is a fundamental principle in so many aspects of law and life, yet here it appears to be disregarded. Amendment 272ZZA at the very least seeks to restore some balance by ensuring that the worker in question is given the opportunity to consent or decline. If consent is not given, the matter should go no further: all bets should be off. I find it puzzling that those on the Benches opposite consider it appropriate to have the ability to disclose personal data, whether legally privileged or not, without the written consent of the individual concerned. It is not typically something permitted in other circumstances. It is not fair, and we are about fairness in this House.
Baroness Jones of Whitchurch (Lab)
My Lords, I begin by saying what a pleasure it was to be chaired by the noble Baroness, Lady Fookes, who is celebrating 55 years of public service today. I congratulate her.
Back to the not-so-inspiring business: I am responding to the noble Lord, Lord Sharpe of Epsom, on his amendments relating to civil proceedings and the noble Lord, Lord Jackson of Peterborough, and the noble Baroness, Lady Coffey, for giving notice of their opposition to Clause 113. The Government are committed to ensuring a fair playing field for all employees and businesses. This includes enabling the fair work agency to challenge breaches of employment rights and labour abuse where individuals may not be able to pursue this for themselves or where these cases are not suitable for other enforcement routes.
I am sorry to hear that some noble Lords cannot envisage the circumstance in which these powers might be necessary but, as we rehearsed on a previous group of amendments, many vulnerable workers, especially migrant workers, are reluctant or unable to bring their case to the tribunal to enforce their employment rights. Rogue employers exploit this, break employment law and get away with it. That is unfair for the majority of businesses that do right by their staff. It is unfair for the vulnerable workers involved in being denied their rights. It is unfair for British workers who are denied work opportunities due to illegal practices undercutting them. That is why, in the plan to make work pay, which was a manifesto commitment, we set out that the fair work agency will have the power to bring civil proceedings to uphold employment rights. 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.
I say to the noble Baroness, Lady Coffey, and the noble Lord, Lord Carter, that these provisions on civil proceedings are modelled on the Equality Act 2006, which allows the Equality and Human Rights Commission to institute legal proceedings that are connected to the commission’s functions. This includes bringing proceedings for breaches of the European Convention on Human Rights and assisting individuals who are party to proceedings related to the Equality Act 2010.
Baroness Jones of Whitchurch (Lab)
If the noble Lord lets me finish this point, I may answer his question.
The Employment and Human Rights Commission does not need consent for this and has issued proceedings in its own name before. When acting as an intervenor, the EHRC has also previously received court approval to take over conduct of an appeal on behalf of an appellant when the appellant decided to withdraw from the legal proceedings. This was done with the consent of the Supreme Court in the case of MS (Pakistan) v Secretary of State for the Home Department. I give way.
Lord Murray of Blidworth (Con)
I am grateful to the Minister for reaching the end of that paragraph. She agrees that the power for the EHRC to intervene in proceedings is not a power to take over and institute proceedings if people do not want to. Instead, it is a power to intervene and carry on proceedings in the event that somebody wants to withdraw. That is not based on any statutory provision; this is still extremely novel. I am sure that the Minister will agree that there is no statutory precedent for the kind of power that the Government want to take in Clause 113.
Baroness Jones of Whitchurch (Lab)
As the noble Lord has more legal expertise than me, I am happy to write to him on that point because it is an important point that we need to clarify. Of course, these are relatively new powers that we are taking on board, and we are taking them for very good reasons. I am sorry that noble Lords opposite do not see the case for this, because, certainly, an awful lot of workers are being exploited out there. At the moment, they do not have the power to speak for themselves in the way that many others who are better informed can do.
While I respect the intention of the noble Lord, Lord Sharpe, behind some of his amendments, I must state they are unnecessary. Some of the provisions of the amendments are already provided for, either within the existing drafting of the specific clauses or in other clauses of the Bill. Regarding Amendments 271D, 272ZZA and 272ZZD, as I mentioned on Monday, normal practice would be for the Secretary of State to bring proceedings with a worker’s consent and involvement. However, in the worst cases of serious exploitation and intimidation, workers may fear the repercussions that they may face from their employer should they be de-anonymised. By allowing the Secretary of State to take a case forward without consent, it would be harder for employers to attribute blame to individual employees. Therefore, limiting this power in the way that these amendments seek to do could prevent the Secretary of State pursuing serious breaches in some of the most egregious cases.
Amendment 272ZZB is an unnecessary amendment. Legally privileged material and confidential information is already protected under the Data Protection Act, as well as under usual legal rules and principles that apply to proceedings.
On Amendment 272ZZC, normal public law principles already take account of all considerations referenced in this amendment, including the best interests of a worker. This is therefore another unnecessary amendment.
Amendment 272ZZE is yet another unnecessary amendment. Clause 113(6) does not provide a blanket exclusion from all liability, and it is self-evident that the Secretary of State would be held accountable if they undertook actions that were unlawful. This is a basic principle of the rule of law.
On Amendment 272ZC, it is clearly in the interests of enforcement authorities and all parties that the most effective and proportionate means of enforcement is chosen. The Bill already provides that civil proceedings cannot be initiated where a notice of underpayment has been given. It would be inappropriate to impose hurdles on the fair work agency’s use of its powers; it should be able to decide how best it will use this and its other powers to enforce labour market legislation in each case.
On Amendment 272AA, Clause 92 already provides for the fair work agency to prepare and publish an annual report, which we would expect to cover all of its activities. It is simply not necessary to require individual reports on individual powers.
We strongly resist Amendment 272AB. Ultimately, the business of the next Parliament should be for that Parliament to decide and not for us to dictate now.
Briefly on Amendment 272AC, only officers with appropriate knowledge and training will carry out these powers. Clause 87(6) already clearly provides that a person can exercise the powers of an enforcement officer only to the extent specified in their appointment by the Secretary of State. This amendment would duplicate that existing provision.
To summarise, Clause 113, together with Clauses 114 and 115, delivers a manifesto commitment. It provides a new power that will enable fair work agency enforcement officers to bring proceedings to an employment tribunal in place of a worker. It is designed to address situations where a worker has a legal right to bring a claim but, for various reasons, including fear of retaliation, lack of awareness or language barriers, they are unable to do so. This clause enhances the state’s ability to support the most vulnerable workers in accessing justice and will be particularly valuable in cases involving labour exploitation or breaches of minimum employment standards.
It will bring broader benefits. The fair work agency will be able to bring multiple complaints simultaneously. This will save time and costs for workers and employers alike. It has the potential to reduce the burden on the employment tribunal system over current practices, where most claims are brought individually.
Importantly, the clause is tightly drawn. The fair work agency’s tribunal proceedings will follow the same process as if they were brought by workers. This includes a requirement for ACAS consultation. Additionally, the power cannot be used in cases where a notice of underpayment has been issued under Section 100. This ensures that there is no duplication of enforcement mechanisms. Both the Secretary of State and the worker can appeal a decision, recognising that both parties have a legitimate interest in the outcome. The clause includes safeguards to ensure that the Secretary of State cannot be held liable to the worker for how they exercise this power, reflecting the discretionary and strategic nature of enforcement.
This clause forms a crucial part of the fair work agency’s toolkit, enhances the effectiveness of labour market enforcement and delivers a manifesto commitment upon which Members in the other place were elected. It should stand part of the Bill.
Lord Jackson of Peterborough (Con)
I am listening very carefully to the Minister, and she did not address either of my specific points. Given that she is saying that this rather strange clause is to defend the interests of new migrants and black and minority-ethnic folk, many of whom work in agriculture, particularly in the east of England and other parts of the UK, why is there a carve-out for agricultural workers? The Minister did not answer my question on why that happened. Secondly, can I press her on my specific point on why de facto unemployed people fall under the purview of subsection (7) of this clause, allowing the Secretary of State to insert state apparatus into their litigation, when they are not even in gainful employment?
Baroness Jones of Whitchurch (Lab)
I thank the noble Lord. My apologies; I should have answered both of those questions. On the issue of agricultural workers, I do not know the answer, so I will write to the noble Lord. On his question about why subsection (7) covers people who are not yet employed, the clause was worded in that way to capture whistleblowers and was amended to widen it to include zero-hours contract workers. I hope that answers the noble Lord’s questions.
Baroness Verma (Con)
I am slightly confused. This seems to be quite a heavy-handed way of capturing workers who may have difficulties understanding their rights. Instead of being so heavy-handed about the whole approach and making it look like a two-tier system is being created, in which migrant workers in particular are focused on, maybe we can look at how we can inform both employers and employees about their rights, without taking such an approach. The people we are trying to protect will most definitely not be protected by this.
Baroness Jones of Whitchurch (Lab)
Although I did talk about migrant workers as an example, this is meant to capture all vulnerable workers and all workers who are exposed to unfair practices or intimidation—which happens rather more than noble Lords opposite like to acknowledge.
In conclusion, the civil proceedings powers within the Bill align with our manifesto commitment—
Baroness Coffey (Con)
The Minister explained subsection (7)(a)(i) of this clause with regards to zero-hours contracts. In subsection (7)(a)(ii), I am struggling to understand how an individual
“seeking to be employed by a person as a worker”
could be a whistleblower. I would be grateful to understand that better, but I am happy for the Minister to write.
Baroness Jones of Whitchurch (Lab)
On that point of clarification, I will write to the noble Baroness.
In conclusion, the civil proceedings powers within the Bill align with our manifesto commitment to strengthen enforcement and improve outcomes for workers through a fairer, more accessible system. We need to let the fair work agency operate with the tools it needs, guided by the statute but not constricted by inflexible restrictions or ministerial bottlenecks. I therefore ask the noble Lord, Lord Sharpe, to withdraw Amendment 271D.
Lord Sharpe of Epsom (Con)
My Lords, I thank the Minister for her reply. She will not be surprised to know that I am afraid I did not buy any of those arguments.
I am extremely grateful to my noble friends Lady Coffey, Lady Lawlor, Lord Jackson, Lord Ashcombe and Lady Verma for their interventions; they all made extremely good points. I will return to the points raised by the noble Lords, Lord Carter of Haslemere and Lord Murray of Blidworth, in a second.
We have just heard this clause described variously as “beyond belief”, “especially bonkers”, “an utter mess”, “quite extraordinary” and “perverse and unheard of”. Do you know what? It is all of those things. This has been an extraordinary debate, and so many interesting points have been made that it is hard to sum up. However, there is one point that was brought to my attention by the noble Lord, Lord Sandhurst, who was sitting next to me at the time. He pointed out that this clause might be in contravention of Article 8 of the European Convention on Human Rights: the right to respect for private and family life. This needs to be explored, and it is important for the Minister to take account of, because, under Section 19(1)(a) of the Human Rights Act 1998, she has to sign on the front of this Bill that it is compatible with the rights under that convention.
I will read the relevant article, so it is on the record:
“Everyone has the right to respect for his private and family life, his home and his correspondence … There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others”.
I do not expect the Minister to answer this now, but I would be very grateful if she could at least allude to the legal advice that she was given before she signed the Bill to confirm that it did not contravene Article 8.
I appreciate that government legal advice is rarely published, but, having had some experience of government lawyers and their risk-averse nature, I would be very surprised if they had considered this in its entirety. I would be grateful if the Minister would come back to that issue, perhaps in the letter to my noble friend Lord Murray of Blidworth. This is clearly one of the subjects to which we will have to return, because, as both the noble Lord, Lord Carter, and my noble friend Lord Murray have explained, this is extraordinary and positively Kafkaesque.
I will leave the last words to my noble friend Lord Murray of Blidworth, who pointed out that we could end up in a state where we have litigation about litigation on behalf of someone who does not want to litigate. That is frankly absurd. For now, I beg leave to withdraw my amendment.
Before I sit down, I congratulate the noble Baroness, Lady Fookes, on her 55 years of public service. I believe that she was first elected on 18 June 1970 to represent Merton and Morden—many congratulations.
The Deputy Chairman of Committees (Baroness Fookes) (Con)
That is most kind, but we must not be diverted from the business in hand. Is it your Lordships’ pleasure that this amendment be withdrawn?
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 Coffey
“(1A) This section only applies to an individual, not a trade union or a person acting on behalf of a trading union, seeking to take action against an employer.”
Baroness Coffey (Con)
My Lords, in moving my Amendment 272BA, I will speak also to Amendments 272D to 272L and to oppose Clause 114 standing part of the Bill. With Amendments 272J to 272L, I will consider parts of Clause 115.
I have looked at the Labour Party’s manifesto plan, Make Work Pay. In a previous debate, we talked about enforcement, but no reference was made to this being done without the consent of the worker involved. The manifesto is silent on providing funds, so I thought it was worth debating why we are having this, who it will go to and what amount of money we are considering. Consequently, I have proposed a number of amendments. They were actually tabled before we had the debate on Monday in which covered elements of this. At that time, I noted the response of the Minister, who said that the word “person” used in this legislation—I am not a litigator but a legislator, and I continue to learn about some of these matters—could also include an employer, which I also somewhat address in aspects of some of these amendments.
One of my questions is: who will this benefit? My reason for putting forward Amendment 272BA is to try to make it explicit that we are not talking about money going off to a trade union, which might provide legal advice or legal assistance. When we discussed it the other day, we never got to the bottom of what “any other … assistance” may be. I appreciate that that might be a catch-all, but it would be helpful to get some examples of what Clause 114(2)(c) would cover.
When we get into this—I appreciate that the noble Lord, Lord Fox, has tabled an amendment about legal aid in a later group—it is important to ask: where is this really going? The EHRC has some similar powers to finance proceedings. When I asked the EHRC to set out the amount of money, it said that, as of last month, there were four live cases and that, since April 2020—five years ago—it had spent £1.2 million on this sort of provision. Recognising that the EHRC can already provide assistance on aspects of discrimination and the like, I wanted to try to explore, in this clause stand part debate, what the Government were signing themselves up to and, as I pointed out, to whom it would go.
Amendment 272D is intended to be a probing amendment to examine how much an individual could claim—whether for advice or for representation—and to consider how often people might be turning to the fund that the Government seek to put forward. Should we cap that? How many times can somebody go to get basically free advice? I do not know who would even provide it. We could well consider that it should be provided by only the government legal service, under the auspices of the Attorney-General. I cannot imagine that that is what the Government are thinking, but it would be useful to understand who they think will deliver this and how.
Part of the role of the single enforcement body was supposed to be a place for anyone to go to get advice for free. So I am trying to understand what further is in this. By the way, the Government’s intention— I think it is in their manifesto and other papers they have developed—is that employers can go to the new fair work agency to get advice on how this all works and what they should do as employers. So I am interested to understand where else this could be.
Turning to Amendment 272E, I am conscious that—as was rightly pointed out to me a few weeks ago by, I think, the noble Baroness, Lady O’Grady of Upper Holloway—Clause 114(2) says “may provide”, rather than “must”, so it will not become a right to get this money. But it would be fair for statutory guidance to be developed and published—ideally, as quickly as possible—on the result of this subsection coming into effect. Candidly, if people anticipate that extra funding will be available, it is important that they understand what expectation they should genuinely have.
In Amendment 272F, I am trying to address the situation that just came up in the debate on Clause 113. I find it hard to understand how we can be in a situation where, having taken over a case, it would go against the sense of natural justice that the worker themselves would then not be able to make representations to the tribunal, or indeed to other courts, to help consider why it has been taken over, when they did not want such action to do. I felt that it was important that, frankly, the Government should pay for that. For me, that felt like a sense of natural justice in that regard.
Amendment 272G concerns something I have raised before, but I wanted to specifically address it. I find it astonishing that the Government are opening up this fund for people to get advice—which, I assume, they cannot get from the fair work agency—but they will not be allowed to use it towards mediation. The answer given in previous debates was, “Well, people can just go to ACAS”. That is right, they can—and ACAS is free. However, while it is free for early conciliation, it is not free for more advanced mediation.
Baroness Noakes (Con)
My Lords, in this group of amendments, I have the stand part notice for Clause 114. I support the several amendments in this group in the name of my noble friend Lady Coffey, many of which are probing amendments to try to find out more about this clause. I could find no clear rationale that the Government have given for Clause 114, in the sense of providing a rationale for the state—that is to say, taxpayers—funding the legal and other costs of civil proceedings in employment matters cases.
The scope of Clause 114 is huge. Not only does it cover the whole of employment, trade union and labour relations law, but the intended recipients seem to be unlimited. My noble friend Lady Coffey referred to the use of “person”. Subsection (1) refers to
“a person who is or may become party to civil proceedings”,
which covers a huge number of persons, and there does not seem to be any clear target for this clause. Of course, as we have heard, the funding can also extend to litigation involving non-employment matters, which seems extraordinary to me. All of this adds up to Clause 114 being very wide.
We already have in the UK a system for providing support for people in legal cases. It is called legal aid. It costs the taxpayer around £2 billion a year, nearly half of which is for civil litigation. That already has rules for employment tribunal support, where there is no funding for legal representation but there may be funding for advice on preparing cases. Successive Governments have had to make hard choices about what will be funded by legal aid in order to keep the cost of it within reasonable bounds for taxpayers as a whole but, now, with Clause 114, the business department is going to undermine that completely by taking powers to fund legal cases completely outside of the structures and limits that have been created for the legal aid system. The Government are again showing that they are, at heart, a two-tier Government, with unlimited legal aid by the backdoor for some favoured employment cases but tough eligibility criteria and financial limits for everybody else.
I now turn to the costings, which my noble friend Lady Coffey mentioned briefly. I could not find out what Clause 114 is going to cost. There is a limited amount of information in the paperwork that surrounds the Bill on the estimate of the overall costs for the fair work agency but, as far as I could find, there is no reference to how much the implementation of this proposal to fund legal costs will be within that totality. So my question to the Minister is really quite simple: what are the Government’s estimates of what Clause 114 will cost?
Going beyond that into the underlying assumptions, how many cases do the Government expect to bankroll every year? Will the Government support only cases with a better than average chance of success, or will they also fund no-hopers? What is the average cost of the cases that they think they will fund using the powers under Clause 114? What are their assumptions about cost recovery? I would have expected to find all these things analysed in detail somewhere in the papers, but I could not find anything. I hope the Minister will be able to answer these specific questions, and maybe also explain the lack of analysis in the documentation that the Government have prepared surrounding the Bill so far.
As I said earlier, I support my noble friend Lady Coffey’s amendments in this group, and I will listen carefully to what the Minister says in response to those amendments and, indeed, on Clause 114 standing part overall. My view is that, in the absence of good justification and a good understanding of the costs of Clause 114, it should not stand part of the Bill.
Lord Jackson of Peterborough (Con)
My Lords, I commend my noble friends’ excellent speeches on this clause. I press the Minister on what the Explanatory Notes say about subsection (4), because we have talked about the concept of persons and what that actually means. My noble friend spoke earlier about ministerial powers and the lack of information on costs, which should have been in a proper and more detailed impact assessment but is not. It is not in any supporting material, including the Labour Party manifesto for the general election. Presumably, the Minister will say that such information about the form and function of the clause will be developed in secondary legislation.
The sentence in the Explanatory Notes about subsection (4) is extraordinary, because it touches on what is potentially ultra vires and will certainly, I think, be subject to litigation or judicial review. Given that this is an Employment Rights Bill about labour relations and employment, it says:
“Subsection (4) makes provision for situations where proceedings relate partly to employment or trade union law … and partly to other matters”.
I just do not understand what those other matters can be. This is an employment law Bill. It is about labour relations and the relationships between employers, trade unions and a workforce. What other matters are within the bailiwick of Clause 114? I think we need to press the Minister on that, because we are being invited to give a blank cheque with taxpayers’ money to something that is very opaque, we do not understand, is not costed and is not detailed. On that basis, the Minister should address those specific issues.
Lord Hunt of Wirral (Con)
My Lords, I thank my noble friends Lady Coffey, Lady Noakes and Lord Jackson of Peterborough for some penetrating questions about the power to provide legal assistance as set out in Clause 114. First, I would like the Minister to share with us what discussions have been held with the Lord Chancellor and the Secretary of State for Justice. A number of the points made by my noble friends relate to the fact that legal aid is already available in certain circumstances, so what is this all about and, as my noble friend Lady Coffey asked, who is this going to benefit?
Lord Katz (Lab)
I do not want to disappoint the noble Lord, but I am afraid he is stuck with me again. I thank the noble Baroness, Lady Coffey, for tabling amendments on legal assistance and the noble Baroness, Lady Noakes, for notifying us of her opposition to Clause 114 standing part of the Bill.
I will start with Amendment 272BA. To be fair, the noble Baroness, Lady Coffey, and others indicated that this has overlapped with not only previous discussions today but discussions of groups on previous days in Committee. As my noble friend Lady Jones said on Monday, the drafting of Clause 114
“was carefully thought through and is deliberately broad and inclusive”.—[Official Report, 16/6/25; col. 1883.]
It is only fair that it covers not just employees but employers and trade unions. To answer a specific question from the noble Baroness, Lady Coffey, about what other assistance could be provided, this could include help in understanding procedural requirements, preparing documents or accessing expert input. It is designed to be flexible and responsive to individual needs. Given this, we cannot support Amendment 272BA.
Amendment 272D would restrict the amount of support that could be offered to any individual through this power. It is not a reasonable measure. I understand that it is a probing amendment, as the noble Baroness, Lady Coffey, said, but the small amount proposed in the amendment would leave the power meaningless. As we have discussed, this would be, although it is not intended as such, tantamount to a wrecking proposal, because it is such a small amount. Obviously, as we have discussed, this is a manifesto commitment. The fair work agency should be able to decide how much support it can offer, without being constrained to random financial limits for no good reason.
Amendment 272E would create an additional process before the power can be used. Part 5 of the Bill already calls for the fair work agency to publish an annual strategy, as we discussed on an earlier group. Requiring yet another administrative document in this way would be burdensome and unnecessary, and I think we share across the Committee a desire to reduce bloated bureaucracy—a phrase that has already been used this afternoon.
Turning to Amendment 272F, the powers under Clause 114 will operate in tandem with those in Clause 113, but workers will not always want to be separately represented in proceedings brought by the fair work agency. They can be represented, but they do not have to be. Therefore, we cannot support this amendment.
Amendment 272G would mean that the fair work agency would duplicate ACAS’s existing responsibilities regarding dispute resolution. This power is not intended to be a replacement or a duplication of existing support. We cannot support this amendment, as it would complicate the enforcement landscape when we are trying with this Bill to simplify it.
Amendment 272H would limit the scope of this power. It would create situations where legal assistance would have to cease, even if proceedings continued, leading to unfairness. It could lead to people being unable to continue their cases, which could cover other matters such as discrimination, because support could no longer be offered. The fair work agency should be able to decide what is appropriate and fair in each case.
Amendment 272I would put an unnecessary burden on the Secretary of State to have insurance in place before being able to provide advice on a settlement agreement. To be fair to the noble Baroness, Lady Coffey, she sort of indicated uncertainty around this. To be clear, this amendment wholly contradicts established government practice. I refer her to paragraph 4.4 of Managing Public Money, which sets out that the Government should generally not take out commercial insurance and it is not good value for money.
To summarise on Clause 114, the legal system can be intimidating, particularly for vulnerable workers or those from marginalised backgrounds. To repeat what my noble friend Lady Jones said in the previous group, many vulnerable workers are reluctant or unable to bring their cases to tribunal to enforce their employment rights, and this has serious consequences. Rogue employers exploit this, breaking employment law, and get away with it. For instance, Citizens Advice suggests that high-paid workers are more likely to file a case with an employment tribunal than lower-paid individuals, despite the latter being more likely to have their rights infringed. As I said, this lets rogue employers off the hook, and that is unfair for the vast majority of businesses, which we all know do the right thing by their staff and want to. It is unfair for the vulnerable workers involved—to state the obvious—who are being denied their rights, and it is unfair for the rest of the workforce, who are denied work opportunities due to illegal practices undercutting them.
As was said in the last group, that is why, in the plan to make work pay—again, a manifesto commitment—we set out that the fair work agency will have powers to bring civil proceedings to uphold employment rights. The Bill will give the fair work agency the power to bring civil proceedings in the employment tribunal to uphold rights. This is a critical power, particularly for situations where a worker feels unable to bring proceedings themselves. But there are occasions where a person is able to bring proceedings in the tribunal or another court but needs assistance, or where the case has wider ramifications and the person concerned could benefit from the fair work agency’s expertise.
Lord Hunt of Wirral (Con)
My Lords, can the Minister remind us to what extent there has been consultation with the Secretary of State for Justice? Has the Lord Chancellor been involved in putting together this scheme, which is going to sit alongside legal aid, for which she is responsible? It would be really helpful if the Minister could make sure that the Government is joined-up in putting forward what is, in a way, as my noble friends have pointed out, quite a blank cheque, which has not properly been costed. Can he put us right on all this, please?
Lord Katz (Lab)
I am more than happy to. The noble Lord, Lord Hunt, anticipates the comments that I was just about to come to—but we can address the point now. The noble Lord, Lord Jackson of Peterborough, focused on this as well. This is not expanding legal aid. The power is intended to give the fair work agency a discretion to provide support in employment-related cases. It is not an alternative to legal aid and it will be used in specific cases. The Government will set out how and when the fair work agency will exercise its power in due course and will discuss this with a range of stakeholders. I reassure the noble Lord, Lord Hunt, we have regular conversations with the Ministry of Justice, including on the Bill’s implementation.
I return to what I was saying about the importance of ensuring that the power of legal advice is appropriately bounded. It cannot be used to fund dispute resolution facilities delivered through other routes. Importantly, the clause protects the integrity of the courts and tribunals by confirming that nothing in the clause overrides existing restrictions on representation imposed by legislation or judicial practice. This clause complements the fair work agency’s wider role in promoting access to justice and fair treatment in the workplace. It provides a vital lever for supporting individuals who might otherwise face legal barriers alone or for ensuring compliance with relevant law, and it delivers our manifesto commitment on which Members in the other House were elected.
The noble Baroness, Lady Noakes, asked about the costs. These will be set out in due course and will be discussed with a range of stakeholders, particularly employers, trade unions and employees.
Baroness Noakes (Con)
That was a rather surprising statement. Is the Minister saying that these costs are not included in the estimates that have already been given for the costs of the fair work agency, which were included in the various documents surrounding the Bill? He has just implied that it will be done later. It is rather extraordinary to produce a clause in a Bill without having a costing for it. Can I press him again on what the costs are, whether they are included in the existing estimates of costs for the fair work agency and, if not, when they will actually be made clear?
Lord Katz (Lab)
I thank the noble Baroness for that intervention. The costs are not factored in. As I said, they will be set out in due course, following discussions with a range of stakeholders. I hope that this has persuaded the noble Baroness that Clause 114 should stand part of the Bill.
I turn finally to the amendments on recovering costs for legal assistance. Regarding Amendment 272J, if an individual has received free legal assistance from the fair work agency, any cost award should be returned to where that assistance came from. To be clear, a cost award is separate from any other awards a tribunal may make in favour of an individual. This amendment will prevent the fair work agency recovering costs and could lead to situations whereby individuals receiving legal assistance could receive money for costs they had not incurred. I hope noble Lords will agree that this is completely unreasonable.
On Amendments 272K and 272L, removing the ability to provide for the appointment and expenditure incurred is unreasonable and could lead to uncertainty about what expenditure of the Secretary of State is recoverable. In addition, while Amendment 272L looks consequential to Amendment 272K, it would actually remove the requirement for regulations under Clause 115(5) to be subject to any parliamentary procedure. I am sure that this is not the intention of the noble Baroness, Lady Coffey. Needless to say, we oppose removing requirements of parliamentary procedures in this way.
In response to noble Baroness’s question on why the regulation for Clause 115(5) is negative, this follows precedent from the Equality Act. I indeed note and point out to the noble Baroness that the Delegated Powers and Regulatory Reform Committee has raised no concerns with the Government about this power.
The legal assistance powers within the Bill are necessary to deliver our manifesto commitment to strengthen enforcement and improve outcomes for workers through a fairer, more acceptable system. These amendments would hamper that goal and might even unintentionally limit access to justice. The current drafting has been carefully considered. It is both deliberate and necessary. I therefore ask the noble Baroness, Lady Coffey, to withdraw Amendment 272BA.
Baroness Noakes (Con)
In the case of the noble Lord’s response to this group of amendments, and the response to the previous group of amendments by the noble Baroness, Lady Jones, the Ministers have claimed that these clauses are covered by manifesto commitments. The Labour Party manifesto is not something I carry around in my handbag, but, from memory, I do not think it covered these particular clauses. What makes me so sure that this is the case is that these two clauses were introduced in the other place on Report. They were not part of the original Bill that was introduced. That means, inter alia, that they received no substantive examination or discussion whatever in the other place. More importantly, this suggests to me that they were not a part of the original package that can claim manifesto support. I think we will want to examine that extremely carefully. If the Minister has a response now, with a chapter and verse in the manifesto, I will be happy to look it up afterwards, but I think we find unconvincing this part of the Government’s defence of these clauses.
Lord Katz (Lab)
I do not have chapter and verse but a page number. Noble Lords can find it on page 16 of the Labour’s Plan to Make Work Pay document, which was part of our manifesto.
Lord Jackson of Peterborough (Con)
I must press the Minister. I have looked at the Labour’s Plan to Make Work Pay document and it does not make reference to de facto legal aid. It says:
“We will also consider measures to provide accessible and authoritative information for people on their employment status and what rights they are owed, tackling instances where some employers can use complexity to avoid legal obligations”.
That is very different to what the Minister has outlined to your Lordships’ House.
Lord Katz (Lab)
I do not want to extend the debate too much or do too much quoting across the Dispatch Box but, to counter that, Labour’s Plan to Make Work Pay talks about establishing a single enforcement body that
“will have the powers it needs to undertake targeted and proactive enforcement work and bring civil proceedings upholding employment rights”.
To a fair-minded person that is pretty clear.
Baroness Coffey (Con)
My Lords, this has been an exceptionally revealing debate on this group of amendments and the clause more broadly. I somewhat agree with the Minister on creating the ability to initiate legal proceedings—which, by the way, continues some of the work already being done by the existing authorities—but the Bill does not refer to being able to do that without the consent of the worker, which will surprise a lot of people, and absolutely does not make reference to the level of financing, which we have just discussed in relation to Clause 114.
Another point I noted is that, on Monday, the Minister, the noble Baroness, Lady Jones of Whitchurch, referred to “employees and employers”, but the Minister at the Dispatch Box today has been very clear that this is also about funding trade unions. As I said, this has been a revealing debate and one that, after I discuss it with my Front Bench, we may explore further on Report. With that, however, I beg leave to withdraw the amendment.
Lord Goddard of Stockport
“Legal aid in employment tribunals(1) The Secretary of State must, within six months of the day on which this Act is passed, lay before Parliament a report on the options for expanding the right to legal aid in employment tribunals.(2) The report under subsection (1) must consider—(a) the impact of employers’ compliance with measures contained within this Act, and(b) the impact on employees’ personal finances.”Member’s explanatory statement
This new clause would require the Secretary of State to report on the impact of expanding the right to legal aid in employment tribunals within 6 months of the passage of this Act.
Lord Goddard of Stockport (LD)
My Lords, for the sake of clarity, we on these Benches fully support the Government on expanding employment legal aid beyond discrimination cases to improve fairness and efficiency and also on the importance of maintaining the power of employment tribunals to ensure summary judgment, speed up proceedings and reduce unnecessary hearings. However, we have concerns over the existing backlog of employment tribunals, which we have debated several times on previous evenings, which is causing delays of up to two years and making the system very difficult to navigate.
I strongly support Amendment 273, tabled by my noble friend Lord Fox, which would
“require the Secretary of State to report on the impact of expanding the right to legal aid in employment tribunals within 6 months of the passage of this Act”.
This modest but important proposal recognises the reality facing too many claimants today. Legal aid in employment cases is currently restricted almost entirely to discrimination claims, leaving workers pursuing other serious issues such as unlawful deduction of wages, unfair dismissal and whistleblowing without any publicly funded legal support. These are not simple matters.
For claimants without legal training, navigating the tribunal process, understanding evidential requirements and articulating legal arguments can be incredibly challenging. This lack of access undermines both fairness and efficiency. If claims are poorly presented or inadequately understood, they are less likely to succeed and more likely to absorb more of the tribunal’s valuable time. Given the current backlog of employment tribunal cases in which claimants often wait for more than two years before their cases are heard, the process can feel effectively impossible to engage with. This amendment would, based on evidence, begin to build the case for change. I hope that the Minister will look on it constructively.
I also welcome my noble friend Lord Fox’s Amendment 323, which seeks to ensure that employment tribunals continue to have the power to make summary judgments in cases brought under this Act. Tribunals already use this mechanism to resolve matters early when one party has no reasonable prospect of success. It is an essential part of an efficient system that avoids unnecessary hearings and reduces pressure on the tribunal’s time. With the Bill creating new routes to claim and potentially increasing the volume of cases, the continued ability to make summary judgments in those procedures will be more important than ever. It provides certainty to respondents facing unmeritorious claims and reassures claimants that their cases will be dealt with proportionally and swiftly when they are clearly valid. I will be grateful if the Minister can confirm that this power will remain fully enforced under the new regimes and that guidance will reflect the continuing relevance of these points.
Lastly, I note that Amendments 279GA, 330ZA, 330D and 334A by the noble Lord, Lord Sharpe, are concerned with ensuring that the employment tribunal system has the capacity and resourcing to absorb these responsibilities. Those are legitimate concerns and considerations that the Minister should address. Tribunal delays are already a source of frustration for many users, and it is right that we consider how implementation will interact with the wider system. I urge caution, however, against any suggestions that reform must wait until conditions are perfect. A parallel process is needed, with sensible, targeted reform on one hand and sustained investment in the system on the other. I beg to move.
Baroness Coffey (Con)
My Lords, my Amendment 279GZA seeks to understand what “and, in certain cases” means in Clause 149. I would be grateful for an explanation. I looked extensively in Schedule 12 and saw only the insertion of a regulation to do with Northern Ireland. I would be grateful to understand that.
I am happy to support Amendment 323, which seems a sensible way of trying to ensure that justice is delivered effectively and people can still have fair access while also making sure that we make the best use of employment tribunal judges’ time.
Lord Sharpe of Epsom (Con)
My Lords, I am grateful to my noble friend Lady Coffey for introducing her amendment and also to the noble Lord, Lord Goddard, for speaking to the amendments of the noble Lord, Lord Fox, the first of which proposes a report on the expansion of legal aid in employment tribunals. It would not itself change entitlement but seeks to prompt a structured exploration of the options. Legal aid is, of course, a complex and often contested area, and this amendment simply calls for a government-led review that considers both employer compliance and the financial position of workers. It is reasonable to assess whether the current system adequately supports access to justice in employment disputes.
I have a question for the noble Lord, Lord Fox. I will discuss with him outside but, just to get it on the record, I am curious to know whether the “report on the options”, which he describes in subsection (1) of the proposed new clause in his lead amendment, extends to small and medium-sized employers as well. I am interested to know whether he thinks they should be included within that survey based on the fact that many of them will also suffer some financial hardship.
On the proposed new clause on summary judgments in employment tribunals in Amendment 323 by the noble Lord, Lord Fox, such a power could offer a means of reducing the burden on tribunals, improving efficiency and focusing resources on cases where the issues genuinely require full examination. In short, both amendments are interesting and I look forward to hearing the Minister’s response.
Baroness Jones of Whitchurch (Lab)
My Lords, I will first speak to Amendment 279H in my name, which increases the time limit for making a claim to an employment tribunal in relation to paid time off for employee representatives in consultations on certain changes to occupational and personal pension schemes from three months to six months. This would amend the employment tribunal time limit that is set out in the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006.
This amendment is essential to ensure consistency with the time limits for the majority of tribunal claims which are being amended to six months throughout the Bill. This is a technical amendment which brings the provisions on consultations on pension schemes in line with the other clauses in the Bill regarding the increase in time limits which have been set out.
Increasing tribunal time limits will provide employees and employers more time to resolve disputes internally or through the conciliation process as well as more time for employees to consider the merits of bringing a claim to an employment tribunal. Judges will continue to have the discretion to hear out-of-time claims on a case-by-case basis.
Amendment 279GZA from the noble Baroness, Lady Coffey, seeks to provide that the extension of employment tribunal time limits from three to six months does not apply in respect of industrial tribunals in Northern Ireland. We have worked closely with the Northern Ireland Executive to develop an approach to extending time limits which respects the Northern Ireland Assembly’s competence to legislate on devolved matters. Where time limits are in UK-wide legislation that extends to Northern Ireland and that relates to matters that are reserved, such as the National Minimum Wage Act 1998, this Bill amends the time limits for bringing a claim to the industrial tribunal in Northern Ireland. We will continue to work with the Executive to consider implementation and, if appropriate, these changes may come into force at different dates for Great Britain and Northern Ireland. The Bill does not amend time limits in legislation that extends to Northern Ireland and is transferred—that is, devolved powers.
On Amendments 273 and 323, I understand the motivation of the noble Lord, Lord Fox, in tabling his amendments, and I thank the noble Lord, Lord Goddard, for speaking to them so ably. In order for the reforms we are making through this Bill to be effective, it is vital that workers can enforce their employment rights. As noble Lords know, tribunals, including employment tribunals, are designed to be informal, accessible and low-cost means of accessing justice. I agree with the noble Lord, Lord Goddard, that the backlog of tribunal claims at the moment is unacceptable. We are taking steps to address that backlog in conjunction with the Ministry of Justice, and the fair work agency can also play a part in easing that load. We will be able to debate the measures that we are taking further in later groups.
However, I would like to reassure the noble Lord that legal aid is available, subject to means and merits tests, in relation to discrimination and breaches of the Equality Act 2010. Where an issue falls outside the scope of legal aid, funding may still be available through the exceptional case funding scheme. Of course, members of trade unions will receive advice and representation anyway as part of their membership.
Turning to the amendment of the noble Lord, Lord Fox, on employment tribunal summary judgments, I can reassure the noble Lord, Lord Goddard, that employment tribunals have a wide range of existing powers to address weak claims or responses, including strike-out and default judgments, to achieve the aims set out in this amendment. The strike-out rule in its framing and application is already similar to that of Rule 24 in the Civil Procedure Rules. It allows employment tribunals to strike out half or all of a claim or response, including where there is no reasonable prospect of success. I therefore ask the noble Lord, Lord Goddard, to withdraw Amendment 273.
Lord Goddard of Stockport (LD)
I thank all noble Lords—a small but perfectly formed band on this group—for their contributions to the debate. The contribution of the noble Lord, Lord Sharpe, was reasonably complimentary on my noble friend Lord Fox’s amendment, and when I speak to my noble friend, I will mention the point about small and medium-sized companies; there is some mileage in that, if we have further discussions. The noble Baroness, Lady Coffey, is fast becoming my buddy again for supporting in essence these amendments—to my certain knowledge, she has never called any of our proposals “bonkers”, so she gets an extra bonus point for that as well.
We support the Minister’s amendment, which brings clarity. For me, it shows an understanding that the Minister gets it; sometimes in these debates on the Floor of this Chamber, such as in the previous debate about litigation and whether it was known about by somebody, some people do not get it and you need to bring it back to the real world. Tribunals are very stressful for people and very complicated, so the simpler and more efficient we can make it, the better. But that does come with a price. I honestly think that, working together, we can deliver this Part with a degree of certainty, because all parties want this to happen. On this occasion, therefore, I am happy to withdraw the amendment.
Member's explanatory statement
This amendment makes a minor drafting change.
“The Security Industry Authority.”Member's explanatory statement
This amendment would enable information obtained in connection with the exercise of enforcement functions under Part 5 of the Bill, or functions under or by virtue of clause 113 or 114 (powers in relation to civil proceedings), to be disclosed to the Security Industry Authority for the purposes of its functions.
Baroness Hamwee
“Restrictions on disclosure: immigration and nationality purpose(1) Nothing in sections 132 or 133 authorises information to which subsection (2) applies to be used for a purpose within section 40(1) of the UK Borders Act 2007.(2) This section applies to information disclosed to an enforcing authority— (a) regarding a person who has been the subject of labour abuse, for the purpose of that person requesting or receiving support or assistance, or(b) by a person who has been witness to labour abuse, for the purpose of evidence or other assistance in connection with an investigation into or a prosecution or other legal proceedings relating to that abuse.(3) Paragraph 4 of Schedule 2 to the Data Protection Act 2018 shall not apply to personal data to which subsection (2) applies.(4) In section 20 of the Immigration and Asylum Act 1999 after subsection (2B) insert—“(2C) This section does not apply to information to which section (Restrictions on disclosure: immigration and nationality purpose) of the Employment Rights Act 2025 applies.”(5) In this section “labour abuse” includes—(a) a labour market offence,(b) an offence under the Gangmasters (Licensing) Act 2004, and(c) an offence under the Modern Slavery Act 2015,in England, Wales, Scotland or Northern Ireland or a suspected or alleged offence.”Member’s explanatory statement
This new secure reporting Clause would prevent information disclosed about a victim or by a witness of labour abuse being used for a purpose within section 40(1) of the UK Borders Act 2007. This aims to help ensure that migrants with insecure status are able to equally benefit from the improvements in employment rights brought by this Bill.
Baroness Hamwee (LD)
My Lords, Amendment 273P is a real-world amendment, to echo my noble friend. I am very conscious that I have a single amendment to this Bill, that others have laboured into what is day 10, I think, and that noble Lords are waiting for the important discussion on the Casey review, so I will try to be almost telegraphic.
This amendment is about a firewall, with the objective of protecting workers who are in great need of protection, so it is squarely within the fair work agency’s client base, if you like. The firewall would restrict the disclosure for use for immigration purposes of information about someone who has suffered or witnessed labour abuse. That may sound counterintuitive: surely these are people about whom all the agencies of the state should have information. In the case of migrant workers, the situation is not so straightforward. It was during the passage of the Modern Slavery Act 2015 that I first heard about the conditions in which some overseas domestic workers existed—I use that term rather than “lived”. Slavery was the right term. A change in the rules was made, but it was minor and quite inadequate. Our law did not and does not protect them and all migrant workers as it should.
Migrant workers, not only overseas domestic workers, are particularly vulnerable to exploitation and abuse, not just because of the consequences if their existence comes to the attention of immigration authorities but because of their fear of the consequences. If you do not know your way around the system, you are on the wrong side of the power balance with an unscrupulous employer who can threaten that you will be detained or deported, or that you will have your children taken away, so you cannot take the risk of reporting abuse and exploitation to anyone in authority.
I understand that that fear is well founded. I am told by the sector that evidence indicates that data is often shared between labour market enforcement agencies, the police and immigration enforcement. They have no obligation to share, but they do. In a way, that is not surprising; they have their own jobs to do. I am not surprised, because I have a long history of opposition to paragraph 4 of Schedule 2 to the Data Protection Act, which allows that sharing—opposition with which someone who is now in a very high place in the current Government became associated and led the troops into the right Lobby.
The current situation has a widespread effect. It fosters mistrust of migrant communities, prevents the police and labour inspectors doing their jobs properly, and drives down conditions for all workers. Secure reporting has been implemented elsewhere, including in the Netherlands and in Spain, and I am pleased to say that Surrey Police has implemented a firewall and the Greater London Authority is undertaking a pilot. Had I more time, I would explain the detail.
Secure reporting mechanisms are badly needed in many sectors, such as agriculture, health, social care, cleaning and domestic work. Your immigration status should not mean that you should not have access to safe, decent working conditions and be protected against abuse and exploitation. I am grateful to the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate the Bishop of London, who have signed my amendment, as has my noble friend Lord Paddick. In turn, I have signed his two amendments in this group. They are probing amendments. They are hugely important because they seek to ensure that the fair work agency, which is not a legal entity but will be an agency of the Department for Business and Trade created administratively, can carry out all the powers and functions of the GLAA, or that somebody does, because what the GLAA is able to do in this area must not slip out of the legislative framework. I beg to move.
Lord Paddick (Non-Afl)
My Lords, I will speak to Amendments 279ZA and 279ZB, which are in my name and that of my friend, the noble Baroness, Lady Hamwee. Before I speak to them, I will say how much I support her Amendment 273PA.
My amendments are probing amendments, as the noble Baroness just said, to seek reassurances from the Minister that the fair work agency will have the capacity and focus to maintain the safeguards provided by the Modern Slavery Act that are currently undertaken by the Gangmasters and Labour Abuse Authority—the GLAA. I am grateful to Dame Sara Thornton, a former Independent Anti-Slavery Commissioner, and her colleagues at the University of Nottingham and Nottingham Trent University for highlighting these issues.
The GLAA has two important responsibilities under the Modern Slavery Act in this context: it is a first responder referring victims of modern slavery into the national referral mechanism, and it has a duty to notify the Secretary of State for the Home Department in cases where victims of modern slavery refuse to be referred, to ensure that the Home Office has a comprehensive understanding of the nature and extent of modern slavery and those affected by it. My understanding is that, under this Bill, the GLAA will be abolished and its responsibilities will be taken over by the fair work agency, but it is not clear from the legislation whether the GLAA’s first responder status and duty to notify will also be transferred, or whether amendments such as those proposed are necessary to ensure that those important responsibilities and duties are carried out by the fair work agency once the GLAA is abolished.
In addition, the GLAA is focused on protecting vulnerable and exploited workers and on illegal activities such as human trafficking, forced labour and illegal labour provision, whereas the fair work agency will have a much wider remit, including what is currently in HMRC’s national minimum wage unit and the Employment Agency Standards Inspectorate. Staff expertise in modern slavery may be lost, and if the fair work agency is not adequately resourced, the emphasis is likely to be on compliance rather than enforcement. By ensuring that the fair work agency has first responder status and a duty to notify, it is more likely to retain its level of expertise in modern slavery.
Under Section 43 of the Modern Slavery Act 2015, the GLAA has a duty to co-operate with the Independent Anti-Slavery Commissioner, enabling the commissioner to access unpublished information that assists in understanding and responding to modern slavery in the UK. Again, it is unclear whether the fair work agency will also have a statutory duty to co-operate with the Independent Anti-Slavery Commissioner in the same way as the GLAA, which it is replacing. The second amendment would make that duty explicit.
Can the Minister reassure the Committee that the focus on modern slavery is not being lost or diluted by the absorption of the Gangmasters and Labour Abuse Authority into the fair work agency, either through a lack of resources or a lack of expertise, and that the GLAA’s statutory responsibilities as a first responder, its duty to notify and its duty to co-operate with the Independent Anti-Slavery Commissioner will not be lost or diluted as a result of these changes? I look forward to the Minister’s response.
Baroness O'Grady of Upper Holloway (Lab)
My Lords, I support Amendment 273PA in the name of the noble Baroness, Lady Hamwee. I want to give an example of why this amendment is so important. Following a five-month freedom of information battle, the Bureau of Investigative Journalism was finally given access to 19 farm inspection reports produced by the Home Office between 2021 and 2022. Nearly half of the 845 seasonal migrant workers interviewed raised welfare issues including racism, wage theft and threats of being sent home. In nearly two-thirds of farms inspected, workers said that they were not always paid for the hours they spent at work, off sick or travelling, or that they faced pay deductions beyond the maximum allowed by law. Workers who complained were ignored or told they could leave the farm and go back to their home countries. One visa sponsor was recorded saying:
“Look, do you want to go home? Shush then”,
by workers protesting about working conditions.
A report by the Independent Chief Inspector of Borders and Immigration found that none of the allegations raised during these inspections was ever investigated by the Home Office. Workers understandably concluded that the Home Office was more interested in checking their immigration status than upholding their rights and dignity at work. The only way that the fair work agency can do its job of stamping out exploitation is to guarantee safe reporting. Only then can migrant workers speak out about exploitation at work without fear that it will result in a bad employer silencing them by removing their visa. Ultimately, as the noble Baroness, Lady Hamwee, said, the rights of all working people are only ever as strong as those of the most vulnerable workers. This amendment seeks safe reporting that will benefit workers and decent employers alike. I hope my noble friend the Minister can support it too.
Baroness Coffey (Con)
My Lords, I am conscious of the sentiments expressed here, but it would put the Government and the Secretary of State in a very difficult legal situation if they were to hold information that they were not allowed to pass on to relevant authorities within the rest of government. I hear what the noble Baronesses have said, but I do not know, with all the other rights that are starting to come through this Bill, why anyone should be afeared, especially when they are here on a legitimate visa as in the example to which the noble Baroness, Lady O’Grady of Upper Holloway, has just referred. I am conscious of some of the exploitation, but I believe that same sponsor was suspended from sponsoring any more visas. I was not aware of what the Home Office did or did not do, but restricting the Secretary of State from formally upholding the law is quite a worrying trend.
Lord Hunt of Wirral (Con)
My Lords, I thank the noble Baroness, Lady Hamwee, whom I had the honour to serve when she chaired the Home Affairs Select Committee. She has raised a number of key points, as has the noble Lord, Lord Paddick, and I thank the noble Baroness, Lady O’Grady of Upper Holloway, and my noble friend Lady Coffey for their speeches as well.
Let me make it absolutely clear: modern slavery remains one of the gravest human rights abuses of our time, and tackling it requires vigilance, clarity and effective enforcement. It is crucial that the agencies tasked with identifying and assisting survivors and with co-operating closely with the Independent Anti-Slavery Commissioner have clear mandates and necessary powers to act decisively. While the specific amendments before us seek to clarify the transfer of roles from the Gangmasters and Labour Abuse Authority to the fair work agency, the wider point is this.
Enforcement bodies must be both effective and well co-ordinated to respond to the complexities of modern slavery. Without this, vulnerable individuals risk slipping through the cracks, and the machinery of justice and protection loses its impact. Ensuring transparency about which bodies are responsible for what and guaranteeing that they are properly equipped underpins our broader commitment to eradicating modern slavery. It is not just about legal technicalities but about safeguarding human dignity and upholding fundamental rights.
Lord Katz (Lab)
I thank the noble Lord, Lord Paddick, for tabling Amendments 279ZA and 279ZB and the noble Baroness, Lady Hamwee, for her Amendment 273PA. I reflect that on an earlier group we heard from the noble Lord, Lord Jackson of Peterborough—whom I am glad to see now in his place—with his Amendment 273PB, so we have seen two ends of the spectrum in terms of an approach to information sharing and enforcement with modern slavery. One might speculate that perhaps we have, in a Goldilocks way, achieved the right balance with what we are proposing in the Bill. I hope noble Lords agree.
Turning to Amendment 279ZA and 279ZB, I understand that these are probing amendments and the noble Lord is seeking reassurances that the Gangmasters and Labour Abuse Authority’s vital work tackling labour abuse will continue under the fair work agency. Let me provide that reassurance very clearly now. Action on labour abuse and modern slavery will be core and central to the mission of the new fair work agency. I am happy to join in the sentiment set out by the noble Lord, Lord Hunt of Wirral. Modern slavery is a stain on our society as well as on our economy. We are determined as a Government to continue the work of previous Administrations in stamping it out. My noble friend Lady O’Grady of Upper Holloway set out very starkly for us why this continued exploitation needs our continued focus and vigilance.
All the Gangmasters and Labour Abuse Authority’s functions, including in relation to labour abuse, will transfer to the Secretary of State. Its vital work in this area will continue. We are also committed to ensuring that there is no disruption as we set up the fair work agency. The fair work agency will continue to work in close partnership with Eleanor Lyons, the Independent Anti-Slavery Commissioner, as the GLAA does now, to identify and disrupt patterns of exploitation across sectors such as agriculture, construction and adult social care. The Bill lays the foundation to build on that successful working relationship between the commissioner and the GLAA. Clause 132 and Schedule 9 together will enable the two-way sharing of information between them where this will help both fulfil their statutory functions. To address the questions from the noble Lord, Lord Paddick, the fair work agency will still have first responder status and a duty to notify.
Regarding Amendment 273PA in the name of the noble Baroness, Lady Hamwee, I appreciate the noble Baroness’s concerns but there is a need for information to be shared with the Home Office to help protect the public, including vulnerable migrants, from harm. The need for this was recognised by Parliament in the Immigration and Asylum Act 1999. Mechanisms already exist to support those of insecure immigration status who may be victims of abuse. The national referral mechanism is in place to ensure that individuals can be properly identified and supported, as mentioned by the noble Lord, Lord Paddick. The NRM is a framework for identifying and referring potential victims of modern slavery and ensuring they receive the appropriate support. The online process allows first responders to submit an NRM referral through a single online form, regardless of their location in the UK or whether the victim is an adult or a child. This provides a structured and compassionate route for potential victims of modern slavery to receive help without fear of immediate immigration consequences.
I am concerned that creating a legislative blocker to information sharing could have unintended consequences and make it harder for the vulnerable individuals concerned to get the help that they need and deserve. My department will continue to work with the Home Office to ensure that we strike the right balance between protecting vulnerable workers and maintaining the integrity of our immigration system. I therefore ask the noble Baroness, Lady Hamwee, to withdraw Amendment 273PA.
Baroness Hamwee (LD)
My Lords, I am grateful to the noble Baroness, Lady O’Grady. I was not surprised that she was able to produce that example; there are lots of examples.
I say to the noble Baroness, Lady Coffey, that there is data protection for a good reason. I cannot say that the current situation “breaches” it, as it is not illegal, but it does not observe that data protection.
The noble Lord, Lord Hunt, is of course right about human rights abuse. He used the important term “safeguarding”. Obviously, I am disappointed with the response from the Minister—I will have a good read of it. I think we might be returning to this issue in the next Home Office Bill that is coming to us—the noble Lord, Lord Hanson, has not reacted.
With regard to my noble friend Lord Paddick’s amendments, I still do not follow quite how the assurances can be implemented. I ask the Minister—though perhaps I shall go back to Dame Sara Thornton and the Rights Lab to be sure that I have not got it wrong—to write to my noble friend and me explaining just how those assurances work their way through in the legislation, because to have just the assurances without a statutory underpinning seems not to be enough.
Having said that, I beg leave to withdraw the amendment.
Member's explanatory statement
The effect of this amendment is that enforcement costs recovered by the Secretary of State under clause 140 will be payable into the Consolidated Fund.