Wednesday 18th June 2025
(1 day, 22 hours ago)
Lords ChamberEmployment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Amendment Paper: HL Bill 81-X(a) Amendments for Committee (Supplementary to the Tenth Marshalled List) - (17 Jun 2025)
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 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 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.
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 (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.
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.
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.