Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024

Baroness Jones of Whitchurch Excerpts

Monday 18th November 2024 Grand Committee

Moved by

[Baroness Jones of Whitchurch]

That the Grand Committee do consider the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024.

[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, this order will allow the tribunal to apply an uplift to the amount that can be awarded where employers do not meet their collective consultation obligations when dismissing employees. The tribunal will be able to apply this uplift where an employer has unreasonably failed to comply with the code of practice on dismissal and re-engagement in cases where the code applies. A tribunal will be able to increase any award made in relation to affected employees by up to 25%, which will increase the deterrent effect of the code and strengthen protections for employees.

I will now set out how this is achieved through the order. A protective award is an award which can be made by an employment tribunal when an employer does not meet its collective consultation obligations. These obligations currently apply where an employer is proposing to dismiss 20 or more of employees within any 90-day period at a single establishment. Schedule A2 to the Trade Union and Labour Relations (Consolidation) Act 1992 Act sets out the list of claims for which an employment tribunal can make a 25% adjustment to compensation if one of the parties has unreasonably failed to comply with a relevant code of practice.

The code of practice on dismissal and re-engagement will be a relevant code of practice for this purpose. The change will mean that where an employment tribunal is making a protective award in a case where the code applies and it appears to the tribunal that the employer has unreasonably failed to comply with the code, the tribunal may increase that award by up to 25%, increasing the deterrent effect of the code. This is a fair and proportionate measure that will give the tribunal greater discretion to take individual behaviours into account when making an award.

Last year, the previous Government published the code and, alongside it, laid a previous version of this statutory instrument. However, it timed out in the pre-election period. This Government are committed to going much further and have brought forward the Employment Rights Bill within our first 100 days in government to put an end to unscrupulous fire-and-rehire practices that have no place in a modern labour market. In the meantime, before the Employment Rights Bill completes its passage and comes into force and to avoid disruption for workplaces, we decided to continue with the previous Government’s code of practice, which came into force earlier in the summer. This is also why we are re-laying this legislation. It will come into force in January 2025, subject to it being debated and approved in both Houses. It will at least provide an additional level of protection for workers as a stepping stone to the much-needed reforms set out in our plan to make work pay.

I move on to the Government’s ambitions to deliver the biggest upgrade to workers’ rights in a generation. The Employment Rights Bill is the first phase of delivering our plan to make work pay, supporting employers, workers and unions to get Britain moving forward. The Bill will support the Government’s mission to increase productivity and create the right conditions for long-term sustainable, inclusive and secure economic growth by giving the British public the work, wages, prosperity, security, dignity and living standards that everyone in Britain needs and deserves. In the Employment Rights Bill, this Government are bringing forward a measure that will end unscrupulous fire-and-rehire tactics that leave workers at the mercy of bullying threats. Employers will be able to use the practice only where they genuinely have no alternative or where they are in financial difficulties that threaten their business. This means that employers will be able to use the practice where necessary to save jobs and prevent redundancies.

Additionally, in the Employment Rights Bill, we are strengthening collective redundancy rights and protections. This will ensure that the right to collective redundancy consultation is determined by the number of people impacted across the business, rather than in one workplace. This will ensure that employers must always collectively consult when proposing to make 20 or more employees redundant. This measure additionally amends notification requirements so that employers have to notify the Government when they are proposing to make 20 or more employees redundant, regardless of whether the redundancies are taking place in one establishment.

--- Later in debate ---

[The Earl of Effingham (Con)]

My Lords, as noble Lords will know, this order—the Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024—was originally laid by the previous Conservative Government. It is short, so I will keep my remarks brief.

This order will increase the protective award for non-compliance with collective consultation requirements, meaning that where an employer has unreasonably failed to comply with a relevant code of practice an employment tribunal making a protective award may increase the employee’s award by up to 25%. Conversely, where an employee has failed to comply with the relevant code, their award may be decreased by 25%. The policy context for this is to prevent fire and rehire, which attracted significant media attention during the Covid-19 pandemic. This order will ensure that employers take all reasonable steps to explore alternatives to dismissal and re-engagement and that they do not use this as a threat or pressure tactic when implementing changes to employment contracts.

His Majesty’s Official Opposition welcome this statutory instrument. We hope that it will improve working practices in the United Kingdom, particularly for those who find themselves in vulnerable or precarious employment situations and need all the help they can get.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful for the noble Earl’s support for these amendments to the Trade Union and Labour Relations (Consolidation) Act 1992. As I have said, this order will add the protective award for non-compliance with collective consultation requirements to Schedule A2 to the 1992 Act. This will mean that, when a protective award is made against an employer for failing to comply with their collective consultation requirements, the employment tribunal may increase the protective award by up to 25% if the employer unreasonably fails to comply with the code of practice on dismissal and re-engagement.

As I said, the Government are committed to ending unscrupulous fire-and-rehire practices through the employment Bill; we will of course return to debate that in more detail. In the meantime, I commend this order to the Committee.

Motion agreed.