Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

What makes this contradiction so egregious is that it fails the people the Government claim to care about: the members, the workers, the staff, the women in hostile offices, and the whistleblowers. How right my noble friend is to call these clauses into question. I look forward to hearing the Government’s response.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I thank all those who have contributed to this debate, and I thank the noble Baroness, Lady Coffey, for giving me the opportunity to speak to these clauses and, I hope, to reassure her. Let me point out why they are important provisions that must stand part of the Bill.

The theme these clauses all share is that they remove some of the unnecessary bureaucratic burdens placed on trade unions as a result of the Trade Union Act 2016. This includes removing powers placed on the certification officer which have never been used since their introduction. Your Lordships’ House will be aware that the Government’s manifesto committed to repealing the 2016 Act, and these clauses deliver on that. They will enable trade unions to focus more of their time and efforts on delivering in the interests of their members.

Clause 76 seeks to reverse the effect of Section 7 of the Trade Union Act 2016. It will remove the additional reporting requirements imposed on trade unions for their annual returns to the certification officer concerning details of industrial action taken during the reporting period. I can assure noble Lords that trade unions will still be required to submit an annual return to the certification officer, but the amount of information they will have to include will be reduced. In addition, unions will continue to be required to provide information in those annual returns relating to their governance and finances, including the management of their political funds, as they have done for many years.

Clause 78 will remove the power of the certification officer to enforce certain requirements relating to trade unions’ annual returns. However, the certification officer will still hold enforcement powers for the other remaining annual return requirements—that is, those not removed by Clauses 76 and 77, for example in relation to a union’s financial affairs and governance. Clause 79 will repeal the certification officer’s enhanced investigatory powers, which include an ability to compel trade unions to produce documents, the power for inspectors to launch investigations, and the related power of enforcement.

The reason why Clause 79 is introduced is that the enhanced powers created by the 2016 Act are simply not necessary. No evidence of regulatory failure existed at the time of the 2016 Act, and the statutory obligations that existed prior to that Act regarding trade union finances, governance and reporting requirements were found to be sufficient. In addition, the Certification Officer has never used the additional powers since their introduction. Removing the Certification Officer’s enhanced investigatory powers is part of the Government’s commitment to reset industrial relations and ensure that employers, unions and the Government work together in co-operation and through negotiation.

In the examples that the noble Baroness gave, the Certification Officer—as I think she admitted—acted with complete propriety and authority. I assure her that unions continue to be hugely respectful of the power and authority of the Certification Officer. I also assure her that the Certification Officer’s role is partly to ensure that the rights of workers are properly protected. I really do not recognise the noble Baroness’s analogy with Animal Farm. Our repeal does not affect the ability of a trade union member to complain to the Certification Officer about an election and have that investigated.

Similarly, Clause 80 will remove certain powers of the Certification Officer to investigate trade unions proactively without first having received a complaint from a member of that trade union. Trade unions are voluntary organisations run by and for their members. We are returning the Certification Officer’s role to one where the Certification Officer adjudicates where the Certificate Officer receives members’ complaints in relation to a union. I assure the noble Lord, Lord Hunt, that members will not be shy about complaining if they feel that an injustice has been done within the conduct of their union. However, the Certification Officer will retain the power to investigate a union’s financial affairs. The Certification Officer’s powers have been in place for many years and were brought in prior to the Trade Union Act 2016.

Clause 81 will reverse Section 19 of the Trade Union Act 2016 to remove the Certification Officer’s ability to impose financial penalties on trade unions. I can tell noble Lords that the Certification Officer has not imposed a single financial penalty to date. However, the Certification Officer will retain the power to issue enforcement orders following the changes made by Clause 81, and if those orders are not complied with the the union could be found in contempt of court.

Clause 82 will remove the Secretary of State’s power to make regulations that require the Certification Officer to impose a levy on employers’ associations and trade unions. It was resisted by employers’ associations and unions when it was introduced. The levy impedes on the rights of voluntary association and has attracted criticism from the International Labour Organization. The ILO was concerned that the levy could negatively impact on the rights of workers to organise and bargain collectively and reduce the financial capacity of trade unions to carry out such collective bargaining on behalf of their members. The Government believe that we should interfere as little as possible in the activities of social partners, which are, as I say, voluntary associations.

Clause 83 will reverse changes made by Section 21 of the Trade Union Act 2016 so that the right of appeal against decisions of the Certification Officer to the Employment Appeal Tribunal is only on a question of law, as opposed to being on questions of fact as well as law. That returns the appeal process to the position before the Trade Union Act 2016, where appeals against the Certification Officer’s decisions were on points of law only. It also aligns with many other enforcement bodies on employment law. For example, appeals against the decisions of employment tribunals are considered only on points of law, not points of fact.

I hope that that explanation has been helpful and therefore that Clauses 76, 78, 79, 80, 81, 82 and 83 stand part of the Bill.

Clause 76 agreed.

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[Lord Fuller (Con)]

My Lords, this nation must earn its place in the world, and, regrettably, we are losing to some of our industrial competitors, particularly in energy-intensive industries such as steel, aluminium and so on. We must live by our wits, and that means increasingly leaning on highly skilled, knowledge-based employment in an economy that values strong intellectual property rights, the rule of contract and property rights themselves. That requires an economy with flexibility and agility.

Earlier today, along with other noble Lords, I sat on the Home-based Working Committee. We are seeing firsthand how the world of work is changing, not just in the way that we go to work but in the way that we sometimes work from home. The entire technological underpinning of our economy is changing too. We have not yet seen the end of artificial intelligence and what it might do to low-skilled, somewhat transactional arrangements.

It does not help the economy, and by extension those who work in it, if all participating employers and unions do not recognise that we have a duty to move with the times. We cannot put a wall around our economy and create some high-cost walled garden as the rest of the world trades its way to prosperity, leaving us behind. I strongly support Amendment 256 and want to give more power to the officer who, more than anyone, can cajole and encourage workers’ representatives to recognise the world as it is, rather than the world as they might wish it to be.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Lord, Lord Sharpe, for tabling Amendment 256. We fully recognise the importance of supporting growth and international competitiveness across our economy, and we will of course continue to pursue policies that will deliver on our economic ambition. However, we do not consider this duty to be appropriate for the certification officer.

The certification officer is not a traditional regulator; they are an independent quasi-judicial officeholder. Their core functions are to oversee regulatory compliance fairly and impartially and to ensure trade unions and employers’ associations adhere to statutory requirements in relation to their finances and governance. This includes investigating complaints, maintaining accurate registers and ensuring that democratic processes are upheld. Imposing a duty to promote growth and competitiveness would cut across this role. It risks introducing competing priorities, blurring legal clarity and ultimately undermining confidence in the CO’s neutrality. We cannot require the certification officer both to conduct their judicial and regulatory functions and to deliver economic outcomes. The certification officer has no role in relation to the international competitiveness of the United Kingdom economy or its growth in the medium to long term.

As noble Lords will know, this Government have been active in requiring a number of regulators to apply a growth duty. Those bodies to which the growth duty currently applies are purely regulators—regulators that set strategies and make decisions that significantly affect the type, scale and location of economic activity in important sectors. The decisions regulators take can set the parameters for economic activity across the economy, and, of course, we recognise that; but the certification officer does not have this responsibility or power. We share the noble Lord’s commitment to economic growth, but it must be pursued in the right way. Furthermore, requiring the certification officer to follow a growth duty would not be practicable, and there is no evidence that imposing such a duty would have any meaningful impact on the UK’s growth or international competitiveness. It would be like asking a court to consider cases based on their impact on economic growth rather than on the evidence of the case.

For those reasons, I must ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 256.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the Minister for her answer, but I have to say that I am unpersuaded. The gist of it was that the certification officer does not have either the responsibility or the power, but by definition this amendment would deliver both those things. I completely agree with my noble friend Lady Noakes, and I shall take her suggestions on board and have a careful look at this. I do not believe that this amendment and the suggestions she made are mutually exclusive; in fact, if anything, they are very complementary. I thank my noble friend Lord Fuller for his comments, which, frankly, were just an expression of complete common sense.

I express my disappointment at the Government’s rejecting this amendment. I think it reveals more about the Government’s true priorities, frankly, than all the rhetoric about growth that we have heard. The Government are absolutely right to identify growth as a priority, but they will not find it in this Bill. In fact, there is nothing in the Bill that will bring any growth. I challenge the Minister to identify a single provision in these hundreds of pages that will increase productivity, enhance competitiveness or create jobs. The Government’s own impact assessment suggests the same: it is a document notably silent on growth benefits, while cataloguing increasing costs and regulatory burdens.

If the Minister is genuinely confident that the Bill will support growth, and if she truly believes that the expanded trade union protections and enhanced worker rights will somehow boost economic performance, I am surprised and somewhat mystified that she will not accept this amendment. The argument was that the certification officer is not a traditional regulator, but they still have a regulatory function, so I do not really see what difference that makes, frankly. What could be the objection to requiring the certification officer to consider growth when discharging functions under a Bill the Government claim supports growth? If these provisions truly advance economic competitiveness, a growth duty should be welcomed as a validation of the Government’s approach.

I could go on, but I do not see the point. The Government have rejected a genuine opportunity to demonstrate that their growth rhetoric has substance. The amendment would have required no fundamental changes to their approach, simply consideration of the economic impact when implementing trade union provisions. It would have aligned trade union regulation with best practice across government, while preserving all the work protections the Government claim to champion. The fact that they cannot even accept a modest requirement demonstrates that the commitment to growth is hollow rhetoric. It is designed to disguise an agenda focused more on trade union empowerment, regardless of economic consequences. How very disappointing for our great nation. I beg leave to withdraw the amendment.

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For these reasons, I urge the Minister to accept the amendment tabled by my noble friend.

[Baroness Jones of Whitchurch (Lab)]

I thank the noble Baroness, Lady Coffey, for tabling Amendment 257A. I am happy to explain to the noble Baroness that this amendment is not appropriate.

As the noble Baroness knows, trade unions are already required by existing legislation to ballot their members before commencing any industrial action. Union executives are therefore required to obtain a mandate from their members to negotiate with their employer on their behalf before industrial action can commence. We believe that union executives, as representatives of their members, are best placed to judge whether an offer is acceptable and in the best interests of the union members before deciding whether to ballot their members. Balloting members is a considerable financial and administrative challenge and repeated ballots could cause an unnecessary burden—as well as confusing members as to what was being proposed and the likelihood of a higher offer.

Amendment 257A would also remove the power of union executives to negotiate on behalf of their members for a deal that they consider will deliver before balloting members on an offer. This is one of the main reasons that members join a union: they delegate to those negotiators to get the best deal for them. The negotiators will have done a great deal of detailed research on economic indicators, what is happening in their market, on the knowledge of the financial stability of the business, and so on. They will take a very wide range of factors into account into that bargaining process. This is why, quite often, negotiations take time, because all those factors have to be discussed in some detail in a way that an individual member would not be able to do.

Furthermore, the amendment has no safeguards to prevent gaming. Were we to accept it, there are risks that employers could submit multiple derisory offers to unions in order to interfere with the industrial action ballot mandate by forcing the union to constantly re-ballot members on derisory offers at the cost of the union. As the noble Baroness said, balloting on small increases would be ridiculous, but this is exactly what her amendment would require.

We consider, therefore, that existing legislation is effective. As union representatives are elected by their members to represent them, union executives should have the discretion as to whether they put an offer by an employer to their membership. If a union executive believes an offer is acceptable, they should be free to put that offer to their membership and make that judgment at the time.

We think the noble Baroness’s amendment is unnecessary; the current system works well, and it brings great benefits to individual members. I therefore ask the noble Baroness, Lady Coffey, to withdraw her amendment.

[Baroness Coffey (Con)]

I thank the Minister for her reply. She will be aware that I am a Back-Bencher and I do not have hundreds of civil servants crafting the perfect amendment and saying when to discuss these sorts of issues.

I am conscious that through the Bill, the mandate will be extended to 12 months. There is, therefore, the potential for handing over considerable power that is delegated to negotiators. I fear there will be situations that develop that can have economic consequences on workers when there are spats that not everybody wants to be involved in. I recognise all the other changes the Government are making in digitising the operations of the trade unions, and that is why I thought it was worth discussing at this point.

This has been a very useful debate. I thank my noble friends Lord Fuller and Lord Hunt for their support and consideration—and their experience, particularly that of my noble friend Lord Fuller. Having taken all this into account, I beg leave to withdraw the amendment.