(1 day, 12 hours ago)
Lords Chamber
Baroness Lloyd of Effra
That this House do not insist on its Amendment 1B to which the Commons have disagreed for their Reason 1C.
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Lloyd of Effra) (Lab)
My Lords, in moving Motion A, I will speak also to Motions C and C1. In this group, we will be debating the amendments relating to zero-hours contracts and seasonal work.
Amendment 1B, tabled by the noble Lord, Lord Fox, would require employers to write to workers at the end of each reference period, explaining their right to receive the guaranteed-hours offer and giving them the option to accept or decline. I take this opportunity once again to thank the noble Lord for his contribution throughout the Bill. We agree on many of the fundamentals relating to the security of work, and we have commonality in wanting to protect workers from precarious employment.
I recognise that the intent and sentiment behind the amendment is to ensure a balanced and practical approach, and I share the noble Lord’s desire for the Bill to work for businesses and workers alike. I look forward to further conversations with him on this matter and beyond, when we will continue our programme of consultation to ensure that the Bill’s measures are delivered effectively and proportionately for business.
However, the amendment as drafted would alter fundamental aspects of the Bill. We are building an economy based on fair competition between businesses, greater productivity in the workplace, job security for workers and a fair reward for hard work. We need to tackle exploitative zero-hours contracts that leave some staff unable to plan their working lives or manage their family finances, and the provisions in the Bill do that. We appreciate that some groups value the flexibility that zero-hour contracts can provide. Those workers will be able to decline a guaranteed-hours offer and remain on their existing arrangements if that works best for them. I hope noble Lords agree that ending exploitative zero-hours contracts and providing security for the workers who need it most is imperative.
Motion C relates to Amendment 48B, tabled by the noble Lord, Lord Sharpe of Epsom. The Government are fully aware that work in certain sectors fluctuates throughout the year, and we recognise the importance of those sectors. That is why consideration of seasonal work is built into the right to guaranteed-hours provisions. There are several ways in which an employer could approach seasonal demand. One approach would be to use annualised-hours contracts, which allow employers to vary the number of hours worked at different times of the year. Some businesses already use these contracts, ensuring that they can account for fluctuating demands in work when planning, while enabling workers to plan for household budgeting. Additionally, the Bill already allows guaranteed-hours offers to take the form of limited-term contracts where reasonable. The Bill also provides powers to address seasonal work through regulations, ensuring flexibility as needs evolve.
We will consult with employers, trade unions and stakeholders before making regulations. It is paramount that stakeholders are engaged with before we make these necessary decisions. Through the introduction of the new right to guaranteed hours, work will become more secure and predictable. It will leave workers in some of the most deprived areas less exposed to the hidden costs of insecure work, which can add up to as much as £50 a month for some, while strengthening the foundations that underpin a modern economy. I beg to move.
The Minister’s enthusiasm got the better of her but I had not actually put the Question that the amendments and reasons be now considered. I hope the House will take it that we did so do, even though we did not say it.
Motion A1 (as an amendment to Motion A)
My Lords, I shall speak to Motion C1—but before I do so, I say to the noble Lord, Lord Fox, that I am in complete agreement with the speech that he made on Motion A1. To recall the words that he used before, the Government were put on notice that they needed to come forward with a solution, but solution there is none. Requiring all businesses to offer guaranteed hours to every worker, including those who do not want them, imposes an unnecessary administrative burden, and one that falls, as my noble friend Lord Leigh of Hurley has just pointed out, particularly heavily on small businesses. It also sits uneasily with the Government’s stated intention to reduce the regulatory load on businesses by 25%. Should the noble Lord, Lord Fox, choose to test the opinion of the House, he will have our support.
On Motion C1, the Government have to recognise that seasonal work is fundamentally different in nature from permanent or year-round employment, and defining it clearly in statute will ensure that this Bill, as well as any future legislation, properly reflects the realities faced by seasonal industries. Seasonal businesses operate within narrow windows of opportunity; their labour needs rise sharply and predictably at various times of the year, then fall away again. Without a clear and credible definition, there is a risk of uncertainty both for employers trying to comply with the law and for workers trying to understand their rights.
We on these Benches have spoken to many seasonal businesses, large and small, and they remain concerned about the potential impact of the Bill and the absence of a framework that recognises the specific characteristics of seasonal labour. If the Government are not prepared to accept this amendment, we will test the opinion of the House.
Baroness Lloyd of Effra (Lab)
My Lords, I thank noble Lords who have contributed to the debate today. Let me start by recapping the reason for this measure.
There is a moral case to press ahead with ending exploitative zero-hour contracts. We aim to rebalance the scales so that all the risk associated with insecure work is not placed on workers. By our doing so, work will become more secure and predictable, saving workers in some of the most deprived areas up to £600 in lost income, strengthening the foundations that underpin a modern economy and increasing productivity, rather than the obverse.
On business engagement, we have indeed engaged with businesses and consulted them, both directly and through federations that represent a large number— hundreds and thousands—of small businesses. We will continue to do so as we implement all the measures in the Bill. We are committed to full and comprehensive consultation with businesses big and small and will arrange focus sessions with SMEs specifically to look at the practical implementation, understand any challenges and make sure that we give the right guidance.
I want to reflect on the point about business regulation and the 25% target. We have established a baseline for the administrative burden; the 25% target is about ensuring that regulation is proportionate and efficient and works for business. It is not about blocking regulation that is needed to deliver the Government’s priorities. We want to implement the Bill in a way that delivers the intent as efficiently as possible. For example, the fair work agency will consolidate the functions of the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and the Director of Labour Market Enforcement into a single body, so we are reforming as we go ahead with all these measures, and we believe that, fundamentally, this is about balance.
The noble Lord, Lord Hunt, raised the issue of seasonality. Let me reassure noble Lords that the Government are fully conscious of the need to take account of fluctuations in seasonal demand, while ensuring that workers are not left holding all the risk. Under the Bill, there are several ways that an employer could approach seasonal demand while upholding the new rights, depending on circumstances. I set out some of those in my opening speech, but they could be limited-term contracts or guaranteed hours in various ways, such as an annualised hours contract. We think it is important to continue to consult on seasonality.
On growth, we have seen huge progress in foreign direct investment and trade agreements. We are very keen to continue to promote the economic prospects of the country, which is fundamental to improving the productivity of the labour market. In conclusion, I thank noble Lords for their contributions today and I look forward to further discussions on these issues.
Before the Minister sits down, she said that she had consulted representative bodies of industry and commerce, by which I assume she means the FSB, the IoD and the CBI. Can she give us a flavour of those conversations, and identify any organisation that has given wholehearted support to the Bill?
Baroness Lloyd of Effra (Lab)
Of course, we have had many discussions and there have been amendments during the passage of the Bill as a result of some of the consultation we have had with all social partners. We made amendments to the Bill on Report in respect of fire and rehire and the school support staff negotiating body—all sorts of changes or amendments have been made through the consultation process. We have also set out a clear plan for implementation, so that each milestone is there and there is a consultation before that, so that all businesses, large and small, can have the right amount of time to prepare and to get the guidance they need to implement these measures.
Lord Fox (LD)
My Lords, I thank the Minister for her response. I very much welcome the objective that she set out of reducing red tape. I remind her that the Bill contains 170 statutory instruments. In my experience, every statutory instrument leads to at least one regulation, so perhaps when next she stands up, she can commit to retiring at least one regulation, if not two, for each one that the statutory instruments bring in on the tail of the Bill, if indeed it ever becomes an Act.
The Minister also talked about a moral duty in respect of zero hours. I share that moral duty. Nothing in Motion A1 resiles from that moral duty, and on that basis, I would like to test the will of the House.
Lord Collins of Highbury
That this House do not insist on its Amendments 23 and 106 to 120, to which the Commons have disagreed; and do agree with the Commons in their Amendments 120C, 120D and 120E in lieu of Lords Amendments 23 and 106 to 120.
My Lords, I beg to move Motion B and I will also speak to Motions E, E1, F and F1. In this group, we are debating amendments relating to unfair dismissal, trade union industrial action, ballots and political funds. These are areas clearly linked to our manifesto commitments, which the Government have an electoral mandate to deliver. I thank all Members of the House for their engagement on these areas throughout the passage of the Bill. We have listened carefully to the concerns raised and in response, wherever possible, we are offering amendments in lieu that we believe strike a fair and workable compromise to the amendments made to the Bill. It may not be the rabbit that the noble Lord, Lord Fox, expected, but I would like to make it clear to the House that none of the amendments tabled by the Government will compromise the fundamental principles of the Bill, nor their intended impact, which is, I repeat, a commitment made in our manifesto.
On Motion B, relating to Amendments 120C, 120D and 120E tabled by the Government in the other place, we remain committed to delivering unfair dismissal protections, ensuring that around 9 million employees who have worked for their employer for less than two years are protected from being arbitrarily fired—that is the principle we are addressing. The Government have listened to stakeholders and tabled an amendment in lieu in the other place which ensures that the Government consult on key aspects of the framework. This will ensure that there is direct input from both employers and employees, enabling businesses to shape the legislation and ensure that it is practical and proportional.
To reiterate what was said in the other place, day-one protection from unfair dismissal will not remove the ability of businesses to dismiss people who cannot do their job or pass a probation period, but it will tackle cases of unfair dismissal in which hard-working employees are sacked without good reason. That is what this Bill is about. A six-month qualifying period threshold still leaves employees exposed to arbitrarily being fired during the early months of their new job.
As we have said from the start, the implementation of day-one unfair dismissal rights will be done with a light touch. There is a power in the Bill to modify the test when employers can fairly dismiss employees during the statutory probationary period for specific reasons related to performance and suitability. The Government will consult on our approach to ensure it has maximum flexibility so that the new framework works effectively for employers and employees in terms of the cost of its implementation and operation.
Motion F and Amendment 62C, tabled by the Government in the other place, relate to the 50% turnout threshold for industrial action ballots. As the period of disruption between 2022 and 2024 has shown, unnecessary red tape on union activity works against the core negotiation and dispute resolution that we all seek. Bureaucratic hurdles do not prevent strike action; they only make it harder for unions to engage in the bargaining that settles disputes—and that is our commitment in this Bill in terms of ensuring the promotion of growth. The repeal of the 50% turnout threshold also aligns union democracy with other democratic processes, such as parliamentary votes and local elections, and we should not forget that.
Leave out from “House” to end and insert “do insist on its Amendments 23 and 106 to 120, and do disagree with the Commons in their Amendments 120C, 120D and 120E.”
My Lords, I am very grateful to the Minister for outlining the government amendments and for the noble Lords opposite’s willingness to meet. But to say that the amendments that have been offered are inadequate would be something of an understatement. In essence, they oblige the Secretary of State, before making regulations, to
“consult such persons as the Secretary of State considers appropriate”.
Who might those persons be? That really is the extent of the amendment. We already know that, so far, government consultations with business on this Bill have been desultory at best. I do not believe that the amendment even qualifies as a bunny, never mind a rabbit.
The chorus of disapproval for this proposed legislation has now been joined by Labour’s most successful ever Prime Minister, Sir Tony Blair. As my noble friend Lord Leigh of Hurley pointed out—and to expand on my noble friend’s remarks—in its report Tony Blair’s institute said:
“At present, employees gain protection from unfair dismissal only after two years—one of the longest qualifying periods in the OECD. The bill would move to the opposite extreme, granting such rights immediately. This would raise employment costs by increasing the legal and procedural risks attached to every new hire and discourage firms from recruiting—a concern already raised by some of the UK’s largest business groups, which have urged the government to amend the bill”.
Addressing the Government’s intention to introduce regulations allowing an initial probationary period, during which an employee could be dismissed under a light-touch process, the institute said that
“uncertainty over what rights apply during probation will do little to reassure employers nervous about taking on staff. Introducing a six-month qualifying period for unfair-dismissal protection, which is more typical among advanced economies including across much of Northern Europe and Australia, is more likely to balance fairness with flexibility”.
Meanwhile, billionaire Labour backer John Caudwell put it rather more succinctly. He said this will make Britain “less investable”. He continued:
“It’s not good for Britain, it’s not good for workers”.
Spot on.
To summarise, we have multiple business groups against this, and perhaps we should recap who they are: the Federation of Small Businesses, the CBI, the Institute of Directors, Make UK, the ADS Group, the British Retail Consortium, Care England, the Chartered Institute of Personnel and Development, Family Business UK, the Recruitment and Employment Confederation and UKHospitality. The British Chambers of Commerce contacted me after the last debate to explain that it would have signed the letter but had been too late.
Academia has added its voice to the chorus of disapproval. Professor Jonathan Haskel of Imperial College, and a former member of the Bank of England’s Monetary Policy Committee, said:
“Using the OECD index of employment regulation, there’s a negative relationship which is that more employment regulation means less intangible investment. My best prediction is that the employment rights bill is a rise in uncertainty for firms. The reason is that these employment rights are set out in broad outline in the bill but will then end up being interpreted by the courts”.
Those are all joined by the Government’s favourite think tank, as we discussed last time: the Resolution Foundation. Lest we forget, its former chief executive now sits in the Treasury. I have to say, looking at the Benches opposite, that they are also joined by quite a lot of Labour Peers, whose facial expressions the Minister cannot see.
The Government will of course say, “Business would say that, wouldn’t they?”, but that is to miss the point. These are the people who make hiring decisions, who decide whether to offshore because it is cheaper and causes them fewer HR headaches, whether to downsize, and whether to just close down completely, as we just heard so powerfully on the last group from my noble friend Lord Leigh of Hurley and his correspondent—I think it was Mr Dunham.
Remember that the impact assessment says the measure is likely to have a disproportionate impact on small and micro-businesses. Additionally, following the decision by the Government to double the conciliating period to 12 weeks for ACAS to resolve disputes, the Employment Lawyers Association has said:
“We are apolitical but the fact is that Parliament can pass all the reforming legislation it wants, but unless those laws can be enforced, with cases heard within a reasonable time, its laws are placed over the horizon, de facto out of sight to both workers and employers alike”.
These are the people who might be expected to benefit from the 10,500 increase in claims forecast to go before ACAS in the Government’s own impact assessment. Instead, they are expressing despair at the broken employment tribunal system.
As we saw last week, unemployment is rising and stands at almost 2 million, and it was reported yesterday that half the 170,000 jobs shed since Labour came to power are from the under-25s. Everyone who knows anything at all about wealth creation, about private sector hiring and about employment law says that the Bill will make it worse.
I need to refer back to the Tony Blair Institute, because it was very explicit about discouraging from hiring and I noticed that the Minister did not engage with that particular point in his introduction. This debate is about the people the party opposite claim to want to help. It is about a young person trying to find a job, a long-term unemployed person trying to rejoin the workforce, a woman wanting to return to work after having children, and somebody recovering from a long-term health issue getting back on their feet. The Bill should be about helping them; it is doing the complete opposite.
The last time we debated this, the Minister constructed a tortuous analogy and said that I and my party were on some sort of journey. If we are, our destination is common sense, and the Government need to listen to the wise voices on their own side and to join us.
On Motion F1, all I will do is quote what the Health Secretary said last week, that
“to be out on strike, setting back the NHS, because you don’t think we’re going fast enough, and because the leadership of your union are not honest enough that some of this change takes time, is extremely irresponsible. It is extremely unnecessary”.
He said that the BMA
“is no longer a professional association, and it is engaged in cartel-like behaviour”,
and that:
“The BMA’s leadership appear more interested in grandstanding and causing pain to patients than improving the lives of frontline resident doctors”.
Those are fairly damning words.
According to the Government’s own analysis, the full-time basic pay of resident doctors is expected to reach £54,300. This is where the farce becomes almost theatrical, because recently we heard that the Treasury considers that anyone earning above £45,000 a year is not a working person.
It appears that the Government have achieved something truly novel. They are actively creating a category of “non-working people”—not my phrase but the Chancellor’s own definition—and then showering them with no-strings-attached pay rises. Meanwhile, the BMA, emboldened by these spineless handouts, continues to abuse its influence, holding our NHS hostage while the Government wave through concessions without so much as a performance requirement or reform condition attached. The 50% threshold is not some sort of draconian barrier but a bare minimum, a line of defence against precisely this kind of chaos. Removing it will only accelerate the downward spiral that the Government have set in motion with their desperate, unconditional giveaways. The union bosses, entirely predictably, have now turned on them the moment it suited their agenda. I beg to move.
My Lords, I cannot resist telling the House the following. Immediately after secretarial college, I had a job for a fortnight. On the last day, my employer said to me, “What are you really wanting to do?”, and I said, “Be a barrister”. He replied, “Thank goodness. You would never make a career as a secretary”.
We have had many days of debate in Committee and on Report, so I want to bring matters to a conclusion. Our changes will not prevent fair dismissal. The Government will ensure that employers can operate a statutory probationary period to assess new hires. That is exactly what will be in the Bill and what we will consult on. We are committed to consulting on the light-touch approach to the probationary period, and we have made that clear at each stage of the Bill.
Our reforms to the labour market are critical for growth, because low productivity is our biggest problem in this country. How do we ensure that we motivate good employers? I have correspondence from think tanks, such as the Tony Blair Institute, on protecting workers from unfair dismissal from day one of employment. They say that employers could respond to this by improving their people management—a vital ingredient to productivity—which could boost labour productivity. This must be one of the benefits that comes from job mobility. These are issues that we discussed in Committee, so I do not want to go on.
The noble and right reverend Lord, Lord Sentamu, raised the issue of convictions. I have repeatedly said that, currently, having a spent conviction is not a proper ground on which someone can be dismissed, unless it is from one of the roles listed in the Rehabilitation of Offenders Act 1974. The two-year qualifying period applies, making it an unfair dismissal claim in those circumstances, which is what the Conservatives have put.
I appreciate, as I said to the noble Lord opposite before, that the Conservatives have been on a journey from day-one rights to six months, 12 months and two years—and they are now back to six months. I urge them to think about going that one step further. Most employment law has been subject to those statutory instruments and codes of practice, because we do need to respond to them. It is incredibly complicated, and we cannot simply put it in the Bill.
The impact assessment is there. If nothing else happens then of course there will be a danger, but the point I am making is that this is about creating a fairer and better workforce, where we encourage employers to set the best practice so that we have a situation where productivity is increased. What are we afraid of? I believe that no one in this Chamber supports unfair dismissal. We are talking about is ensuring that everyone who is employed can have that basic human right. Therefore, it is absolutely important.
The whole point—I will repeat what I said to the noble Lord, Lord Sharpe—is that, as we have said from the start, the implementation will be done with a light touch. There will be a power in the Bill to modify the test for when employers can fairly dismiss employees during the statutory probationary period. In response to all the issues that noble Lords raised in Committee and on Report—such as whether we are getting rid of the probationary period or, as the noble and learned Baroness, Lady Butler-Sloss, asked, whether we are inhibiting employers—the answer is no; we just want it done properly and fairly. That is not an unreasonable demand in this modern age.
I say to the noble Lord, Lord Sharpe, that there has indeed been a burden on the tribunal system because of unfair dismissals, as we have seen the cost of that. We recognise the volume of cases going to both ACAS and the employment tribunal, and the Government will extend the ACAS early conciliation time from six weeks to 12 weeks from 1 December, to allow it to manage and deal with the demand for early conciliation services. DPT is also providing additional financing immediately to recruit 29 additional conciliators, ensuring that ACAS can deal with that. Therefore, we are responding to those issues.
The BMA strike ballot was under the conditions that the noble Lord talked about, but that has not stopped the dispute. What will stop it is having proper negotiations, and that is what the Health Minister is focused on ensuring happens. Legislating to somehow undermine ballots is not the answer. We want to ensure that unions are representative and that their ballots are too. We want to ensure that they have a modern way of balloting, to ensure that we increase participation. That will be the key to future fair and open collective bargaining.
I turn to the amendment from the noble Lord, Lord Burns, on political funds. He knows—I have incredibly strongly made this point to him—that a trade union is not a company and is not offering services. It is a democratic body. There are collective decisions. If a trade union makes a resolution at its conference to support X or Y policy, that is the collective decision. People can opt out of that collective decision by leaving the trade union—and many do. If a union starts spouting things that are not representative of its members, then the members will walk. It is not compulsory to be a member of a trade union. However, it is a collective body making collective decisions.
The noble Lord said, “We want to avoid pendulum swings”. I admire the work that he did on his committee, which ensured that there was a soft landing for a decision made by the then Government in 2016 to break a consensus that had been in existence from 1945. We are trying to return to that consensus, in order to recognise that trade unions are an important part of our democracy. I have said before that the most important ingredient of a healthy democracy is a vibrant civil society. We all need to be challenged, and that is what this is about—collective decisions.
Whether the noble Lord thinks so or not, the fact is that his current amendment basically maintains the processes of 2016. I have engaged in discussions with him. I think most trade union leaders recognise that the world has changed. When I first joined a trade union, in the early 1970s, it required us to write a letter. The only information about contracting out was contained in the rulebook. Not many people read the rulebook. We now have online facilities—email—and the possibility of someone exercising their right to opt out. Of course, the reasons for opting out are not just political; they can be religious. That has been part of the consensus since 1945.
My Lords, I am grateful to the Minister for his response, but he has yet again failed to answer the noble and right reverend Lord, Lord Sentamu. We know that you cannot use a spent conviction as a reason for a dismissal, and that is entirely appropriate. The point is that there will not be anybody with a spent conviction in work, because no one will employ them. That is what the noble and right reverend Lord was asking, and yet again the Government have failed to answer what is a very straightforward question. They also failed entirely to address the excellent speech of the noble Lord, Lord Vaux, highlighting the difficulties young people are likely to face, and indeed are facing in the current workplace, because of this Bill.
I am afraid that the answers have not alleviated our concerns on these Benches. We entirely agree with the noble Lord, Lord Burns. It is not just the noble Lord who is obsessed with this; I think the whole House is. If he wishes to press his Motion, we will support him, but, in the meantime, I commend Motion B1 to the House.
Baroness Lloyd of Effra
That this House do not insist on its Amendment 48B to which the Commons have disagreed for their Reason 48C.
Baroness Lloyd of Effra (Lab)
My Lords, I have already spoken to Motion C. I beg to move.
Motion C1 (as an amendment to Motion C)
Leave out from “House” to end and insert “do insist on its Amendment 48B.”
Lord Leong
That this House do not insist on its Amendments 60B and 60C, to which the Commons have disagreed; and do agree with the Commons in their Amendments 60D and 60E in lieu of Lords Amendments 60B and 60C.
Lord Collins of Highbury
That this House do not insist on its Amendments 61 and 72, to which the Commons have disagreed; and do agree with the Commons in their Amendment 72C in lieu of Lords Amendments 61 and 72.
My Lords, I have already spoken to Motion E, and I beg to move.
Motion E1 (as an amendment to Motion E)
Lord Collins of Highbury
That this House do not insist on its Amendment 62, to which the Commons have disagreed; and do agree with the Commons in their Amendment 62C in lieu of Lords Amendment 62.
My Lords, I have already spoken to Motion F. I beg to move.
Motion F1 (as an amendment to Motion F)
Leave out from “House” to end and insert “do insist on its Amendment 62, and do disagree with the Commons in their Amendment 62C.”