Draft National Minimum Wage (Amendment) (No. 2) Regulations 2023

Justin Madders Excerpts

Tuesday 9th January 2024 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Ms Harris. Prynhawn da, and a happy new year to the rest of the Committee. I will say from the outset that we fully support the introduction of this instrument. We are glad to see that the Government have finally come through on the commitment made, I think, about two years ago in one of these Committee Rooms, during a debate with one of the Minister’s predecessors on a similar instrument.

As the Minister has already said in his helpful introduction, the regulations remove paragraph 3 from regulation 57 of the National Minimum Wage Regulations 2015. The paragraph contains provisions that exempt employers from having to pay the minimum wage to a worker who is

“not a member of that family, but is treated as such”.

As we know, such an exemption was introduced in 1999 to facilitate au pair placements, which allowed young people to spend some time in the UK learning about the culture and strengthening their language skills. Families would host an au pair and provide accommodation; in return, there would be some light housework, childcare, and typically education with the family about the au pair’s own culture. Given that the arrangement was primarily about a cultural exchange, it was deemed—I believe after quite a lot of evidence given to the Low Pay Commission—not appropriate for it to be covered by the national minimum wage. Obviously, those arrangements were entirely dependent on the parties entering them in good faith. I will go on to why there has been some difficulty with that.

As the Minister said, the Low Pay Commission has investigated the issue. Its annual report in 2021 found that the traditional model of au pairs did not really exist anymore. It said that as early as since 2008 there had been a dilution of the traditional tenets of the au pair model—many tended to work quite long hours; they were certainly doing more than just light housework and childcare. What really proved to be the death knell for the traditional au pair model were the post-Brexit immigration laws, which prevent au pairs, except those from a limited list of countries, from working in the UK. The Low Pay Commission concluded in its report that there is

“no viable route for au pairs to legally enter the UK”

and stated that even if EU countries were added to the youth mobility schemes, it is unlikely that the sector could compete with some of the other traditional areas for work such as hospitality and agricultural work.

It is pretty clear from the evidence that the exemption for domestic workers had outlasted its original purpose. Although it was clearly drafted with au pairs in mind, paragraph 3 is broader than that and fails to properly define the role of an au pair. That has allowed unscrupulous employers to use it as a loophole to exploit domestic workers and fail to pay them the wages they rightfully deserve, meaning they could force the claim that a domestic worker was treated as a member of the family and therefore must be exempt from the minimum wage. That is difficult for a worker to contest, given that their work is undertaken in a private setting. I will go on to speak in more detail about the difficulties that that brings, as well as the question of enforcement, which the Minister touched on.

This is all about exploitation, and such concerns are clearly outlined in the Low Pay Commission’s 2021 annual report. The chief recommendation made, and the reason we are here today, was that the exemption should be removed or at least amended to ensure that there would be no exemption for au pairs. The Government accepted that two years ago. At the time, the magic phrase “when parliamentary time allows” was used; as the Minister knows, that does not always mean that we end up with something. The Employment Bill is a good example of that. However, it is worth asking whether there is a reason why it has taken two years from making that promise to bring the regulations before us today, especially considering that there is political consensus on the matter and it is legally fairly straightforward.

I return briefly to the Low Pay Commission’s investigation, which produced an important number of findings about how the exemption is used—or, more accurately, abused. The most important factor touched on already is the demographic of the worker who is typically exploited. The Low Pay Commission found that the main affected group is made up of migrant domestic workers arriving in the UK on overseas domestic work visas, which allow them to stay for up to six months in a domestic setting. Since 2015, an employer of an overseas domestic work visa applicant must sign a statement that the work will not fall under the family worker exemption and therefore the worker will be paid the minimum wage. Unfortunately, that statement has not found its way into the minimum wage regulations and so employers were still relying on the exemption at tribunal.

The Low Pay Commission found numerous cases at tribunal where the exemption, having previously not made any appearance, was suddenly relied on by the employer to get rid of any sanction—even though a statement would have presumably been signed at some point, as part of the visa application, confirming that the exemption did not apply. We can all see that that is a pretty cynical manipulation of the law. I want to emphasise, however, that to even get to tribunal stage takes a great deal of confidence from the employee, as well has having the know-how and legal knowledge to identify a breach of the law.

The Low Pay Commission report noted that it is typical for contracts in this setting not to make any reference to the exemption, or for the employer not to inform the employee of the exemption up front. Another important characteristic of such a group of workers is that typically most were women doing the job to send money back home. It is noted that that means they are often highly vulnerable,

“hidden in private homes without access to their own networks and with language barriers.”

That is one of the reasons why the appeal tribunal rulings were successful, saying that the exemption should be disapplied. There is now an established precedent for the removal of the exemption as a matter of case law. However, the Anti-Trafficking and Labour Exploitation Unit, which advocated for the worker whose case was successfully defended in the appeal court, still believed there was a need for further clarification. That is why we are here today.

We know what courage it takes to challenge an employer who is in the wrong in ordinary circumstances. It is a big step to take an employer to an employment tribunal, but to do so when the employer provides the roof over one’s head, and when the employer may be the only person one knows in the country, takes extraordinary bravery. I am therefore concerned that, although the regulations are a positive step forward, closing the loophole will not altogether remove the exploitation. There is still a risk, and it is clear to anyone who has read the Low Pay Commission’s findings that there will be continuing challenges in this area.

We all recognise that anyone employed in domestic work is inherently vulnerable. Their work is not just their job and their income; it is also their accommodation. The vulnerability is exacerbated by the fact that most people coming in on the visas were here for six months, so they often had only one employment option and would find it very difficult to find work in another household. Given that, and given the fact that, under the conditions of the visa, they are not allowed to take work other than as a domestic worker in a private household, the Low Pay Commission quite clearly stated that they might feel trapped in their employment and fearful of the consequences of raising concerns.

The combination of that fundamental vulnerability with the fact that many such workers will simply not possess the language skills, knowledge or network to enforce their legal rights is quite worrying. It is a combination that the Low Pay Commission found to have negative consequences. It found that most workers reported being underpaid, often well below the minimum wage; working additional hours for which they did not get additional pay; or simply being treated as being on call throughout the entire day. There were even instances of more serious abuse, including physical abuse and being prevented from leaving the house. Case studies have shown the levels of exploitation that some workers face. I will read a short extract from one, which is about a woman the report calls Imelda:

“She didn’t know any of the rules in the UK and so was initially happy with payment of £400 per month. She worked from 6am to 12 midnight, doing the cooking, laundry and cleaning. She was not allowed to speak to another Filipino or to leave the house. Her contract says she should be paid £1400 per month, but this was not enforced; she was told to sign the contract even though she didn’t understand it. She was afraid to leave the house and become undocumented.”

That encapsulates the real problems that can be faced: the lack of understanding of the law; the exploitation of the language barrier; the long, gruelling hours; the control that the employer exerts over the worker’s life; and the threat of becoming undocumented.

There is no doubt that removing the exemption will help by both disincentivising employers from underpaying their staff and making it easier for domestic workers to be compensated. The change will work only if those workers are aware of their rights and have the wherewithal and confidence to report. The evidence I have quoted from migrant domestic workers strongly suggests that that is not a given; in fact, it is quite a significant challenge. Clearly, the individual in the case I quoted, Imelda, did not know her rights or her ability to raise a flag; she did not have the confidence to leave the house, let alone talk to an outside body. It stands to reason that, alongside the introduction of the regulations, there should at the very least be an information campaign to ensure that migrant domestic workers are aware of the laws and how to report any breaches that they might face. Rights without any proper enforcement are no help to people at all.

My challenge to the Minister is this: how can we expect this instrument to work if migrant domestic workers are unaware of the law or where to report? The instrument is all about enforcement, which can happen only if the individual is empowered or if the body that regulates the sector brings claims on behalf of workers. It is concerning that the explanatory memorandum says nothing, really, about how to monitor the success or otherwise of the regulations. The Minister talked about the HMRC investigations unit, but the Low Pay Commission had concerns about the capacity to do very detailed investigations into domestic working situations, which of course mean people being able to get through the door in the first place.

At the very least, we should be keeping track of the numbers of individuals reporting underpayments in such situations. We could ask the Low Pay Commission to review the effectiveness of the instrument in a few years’ time; the magnitude of the problem demands at least that. I wonder whether the Minister can give us some detail in his response about what steps will be taken to monitor the effectiveness of this instrument and the ongoing abuses in the system.

Let me conclude by confirming that we support this instrument. We believe it will have some effect in closing the loophole that has been allowed to continue for too long. Employers should not be exploiting their workforce, and we should not be allowing them to use legal technicalities to do so. But the measures alone will not deal with all the issues that the Low Pay Commission has identified. The Government need to consider how they will monitor this sector and ensure that migrant domestic workers are aware of their rights and able to freely enforce them.

The missing piece here is enforcement. We know that at present enforcement is not possible unless people have their rights and have the know-how and confidence to exercise them. The Low Pay Commission found that many domestic workers do not have those. To make this instrument a success, that definitely needs to be addressed.

--- Later in debate ---

[Kevin Hollinrake]

I thank hon. Members for their valuable contributions to the debate. I think all contributions focused on enforcement, quite understandably. As I said earlier, legislation without implementation is rather a waste of time, so let me say exactly what we are doing. As the shadow Minister and the SNP spokesperson said, it is quite a daunting thing to challenge one’s employer, especially in this kind of environment. As I said in my remarks to my right hon. Friend the Member for North West Cambridgeshire, these complaints can be made to Acas online or on the phone, or anonymously to HMRC, so they do not necessarily risk that relationship—although in some circumstances it would be pretty clear who had tipped off the agencies.

In terms of information campaigns, I agree, and that is what we are planning to do. We will work with Acas, which will update its guidance. The Government website will also be updated with guidance. However, that is not necessarily the place where everybody is going to look—we are also working with the au pair and domestic worker agencies, for example, to make sure that they are fully aware of responsibilities in this area. We are also working closely with charities that support vulnerable workers in this kind of space.

[Justin Madders]

I have a suggestion that might help the Minister. Is it worth talking to the Home Office about information that goes through when visas are processed?

[Kevin Hollinrake]

That is a challenge I am very happy to take on, and advice I am very happy to take up. We work very closely with our colleagues in the Home Office. As the hon. Gentleman may have noticed, some officials are here so I am sure that is what we will do.

The hon. Gentleman also rightly mentioned capacity. He will be aware that over the last seven years we have doubled capacity on enforcement in HMRC—it is now £27.8 million. That comes in two areas: a promotion campaign, which is upstream work with employers to make sure that they are aware of their responsibilities, and enforcement, which includes very significant levels of potential fines. We have found that the most effective deterrent is the naming and shaming work we do on employers that are breaching the national minimum wage regulations. That is something we are very keen to do, and are doing, more often. Furthermore, employers are required to keep records for six years, which feeds into the point made by my right hon. Friend the Member for North West Cambridgeshire. If there is an anonymous tip-off and HMRC investigate, it is much easier for them to make sure that the rules have been followed.

The legislation will ensure that all work is treated fairly and end the misuse of the exemption to exploit workers, particularly migrant women. I would like to conclude by once again extending my thanks to the Low Pay Commission. Thanks to its independent and expert advice on this national minimum wage exemption, we can ensure that the right balance is struck between the needs of workers, affordability for business, and the wider impact on the economy. I put on the record my thanks to Bryan Sanderson, who has been the chair of the Low Pay Commission for some time. We worked very closely with him. He is now moving on to pastures new, but he has done a brilliant job leading that commission. I thank the commission for its recommendations on the 2024 rates, which will give a record cash increase to the national living wage and end hourly low pay for those aged 21 and over. I commend the regulations to the House.

Question put and agreed to.

Draft Equality Act 2010 (Amendment) Regulations 2023

Justin Madders Excerpts

Wednesday 6th December 2023 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I will not detain the Committee too long, Mr Hollobone, because, like you, I am keen to hear what other hon. Members have to say. It is a pleasure to see you in the Chair this morning, and I am grateful to the Minister for her introduction.

The Opposition consider these draft regulations to be uncontroversial. We are satisfied that, as the Minister said, they do not constitute a change of policy approach. This is, though, just one of a flurry of sets of draft regulations being laid before the House by the Government in an effort to safeguard important protections derived from EU case law and ensure that they are retained before the end of the month. As we pointed out during the passage of the Retained EU Law (Revocation and Reform) Act 2023, retaining important principles from the interpretation of retained EU law is just as important as actually retaining pieces of EU legislation. Without the restatement of certain interpretative effects, many important rights derived from the EU could be in jeopardy from 1 January 2024.

The protections being restated today underline why this process is so important and our workers cannot lose the rights that are being reasserted in these regulations. As we have heard, they are massively important to women—protecting them through and after pregnancy, against pay inequality, and from discrimination. They are also crucial in providing people who have disabilities with protection against discrimination. These vital protections need to be retained. I agree with the Minister that it is also important that we give people and the law certainty by restating these principles. However, the fact that we are getting round to restating them only a matter of weeks before they could have disappeared is a little concerning. It presents some questions about the Government’s wider approach to identifying which bits of important case law they wish to retain and then pass, through regulations, on to our statute book.

The most obvious question is how the identification process actually operates. Following the litany of failures with the original legislation, culminating in the fiasco of thousands of hitherto unknown pieces of retained EU law appearing on the dashboard, we know that there are sometimes problems in identifying exactly where EU law impacts on domestic law. Can the Minister tell us what measures the Government are taking to ensure that important decisions in terms of interpretative effects of retained EU law are being taken? Do the Government have an equivalent to the dashboard that was introduced for identifying statutory instruments for European Union judgments that have an impact on domestic law? What about actually restating these judgments in law? We have seen numerous draft regulations in recent months. Therefore, it is sometimes hard to keep up with exactly where we are up to with retained EU law. Would it not be sensible to have, in a manner similar to the dashboard, a central record of which changes have been made and where restatement is taking place, so that not just hon. Members but businesses and, indeed, individuals who would be benefiting from the restatement of rights can know exactly where they stand?

It is also worth asking what advice has been received from Government lawyers about the impact of restating certain bits of law and, most importantly, what criteria are being used to determine which judgments will be retained. How does one decide which ones will be kept and which ones will fall off the cliff at the end of the year? There is nothing controversial in what is being restated today, although there was a change of stance on the single source equal pay protections. We welcome the Government’s U-turn on that, but we need to know exactly what the thought processes were to reach that point.

Turning to the content of the regulations, as we heard, regulation 2 reproduces the effects of retained EU law regarding discrimination related to pregnancy, maternity and breastfeeding. Among other protections, it restates important principles such as rights for women to make claims for direct sex discrimination at work on the grounds of breastfeeding. It also protects women against unfavourable treatment due to pregnancy or a related illness that occurs during the protected period.

As we heard, regulation 3 will ensure that those without a protected characteristic who suffer from a disadvantage, together with persons with the protected characteristic as a result of a discriminatory provision, criterion or practice, can continue to bring a claim. Regulation 4 updates the recent decisions in relation to protection from discrimination in access to employment.

Regulation 5 is probably the most important one in terms of Government policy decisions because that has reproduced the effect of the single source principle. In case Members are not aware, that principle sets the standard for a body that is in a position to ensure equal treatment between employees in respect of such terms. In practical terms, that means that tribunals and courts can continue to compare the pay of men and women who work for an enterprise or organisation that can control the terms under which they are employed, including pay, even though they may technically be working for different employers. That will hopefully send a clear message to employers that outsourcing obligations in respect of equal pay for men and women is not an acceptable response to the question of equality.

As we heard, regulation 6 relates to maintaining the interpretation of disability. We should be mindful that just because these laws are being restated and we are content that there is no detrimental change in the legal outlook, it does not mean that the battle for equality is over. The earnings gap between disabled and non-disabled people has increased. It is over half a century since the Equal Pay Act 1970 was introduced and we are still to reach pay equality. The most important element of the debate today is not necessarily what is being restated because we are in agreement with that, but what regulations are being made in a way that ensures that all the protections will be retained. What is the thought process that leads us to that? Can we be confident that we have everything covered?

Monitoring the effectiveness of the process is crucial to understanding whether the Government’s objectives have been achieved. That is an important process, and possibly the Chair of the European Scrutiny Committee, the hon. Member for Stone, will have some thoughts on the Government’s approach more generally. We need to be able to understand what the Government’s principles are and then judge whether they are delivering them in practice.

I would imagine that the Department has dedicated large amounts of resource to identifying the particular elements of law that need to be retained, but we cannot be absolutely sure that everything has been picked up. Let us be clear: if something does slip through the net, the consequences could be serious for potentially millions of workers. It is important that we are clear on how the process operates and what monitoring is going on to ensure that all important elements of retained EU law will stay in place.

Ultimately, we believe that the regulations are a positive step that draws cross-party consensus. We still believe that there is more to be understood about the Government’s approach to retained EU law. We have no insight into how we have actually got here today; we just see a patchwork of instruments being presented. It does not fill us with confidence that the Government have a clear strategy or plan for how to approach EU law. We believe that the publication of a strategy on the matter is overdue, and that would approve accountability in this place. When the Minister responds, I hope that she can outline the principles that are being adopted when considering which elements of retained EU law to keep. That would give us all a useful guide about whether the Government have actually got a coherent approach to this, and whether they are actually sticking to it.

Statutory Parental Bereavement Leave and Pay

Justin Madders Excerpts

Wednesday 6th December 2023 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the chair, Mr Sharma, and it has been a pleasure to listen to this debate, because it has shown the best of Parliament. People have brought their personal awful experiences to the fore to try to bring about change for the better for everyone. I certainly congratulate the hon. Member for Broxtowe (Darren Henry), first on securing the debate, but also on his tireless and passionate campaigning in this area. We heard how his conversations with his constituent Aaron about the tragic loss of his wife set him on this path. As the hon. Member for Stafford (Theo Clarke) said, it does not seem right that he was not entitled to any leave in those awful circumstances. That succinctly puts into words where most Members are on this issue. I pay tribute to the hon. Member for Stafford for her leadership and courage in this area, and to the hon. Member for North Ayrshire and Arran (Patricia Gibson), who has been a tireless campaigner on the issue, bringing her own experiences to the fore.

I return to the tragic story of the constituent of the hon. Member for Broxtowe. We extend our deepest sympathies to Aaron and his family. What the hon. Member said today and in his previous interventions has brought the issue to the fore. While he has not been successful in the private Member’s Bill ballot, we have had positive indications that my hon. Friend the Member for Ogmore (Chris Elmore) will bring forward a similar Bill. I encourage the Minister to meet my hon. Friend in due course—I am sure he will—to ensure that we can get the Bill over the line.

As has been acknowledged, the circumstances in which Aaron found himself are thankfully very uncommon. The number of mothers who sadly passed away within 42 days of giving birth between 2019 and 2021 was 261, but that is 261 is too many. It goes without saying that each and every death is a tragedy, and I put on record our sincere condolences to all families who have faced those extremely difficult circumstances and that unimaginable heartbreak.

It is apposite to take this opportunity to look at the UK’s comparative maternal mortality rate. Recently published research found that the UK had a maternal mortality rate many times higher than some of its European counterparts, and it performed second-worst in a study of eight European countries. Those figures are clearly concerning, but I appreciate that that is not for the Minister to address; it is more a matter for his counterpart in the Department of Health and Social Care. In many respects, national comparisons do not get across just how difficult it is for people like Aaron who face this devastating situation. However, the fact that they can fall through the cracks in the way that we heard today shows that there are deeper problems with the protections afforded to workers in this country. In that example, the gaps are evident.

As we have heard, at present the only right to statutory bereavement leave is for parents who have lost children up to the age of 18; in those circumstances, they are entitled to two weeks of leave. Leave is a day one right, but the entitlement to pay is conditional on having been in employment for at least 26 weeks and having earned at least £123 over eight weeks. Paternity leave and paternity pay have similar requirements, and sometimes a person can have been in a job for 26 weeks before they are entitled to any support at all. Shared parental leave and pay provisions do not really help people in Aaron’s situation. Not only is there a time restriction on access to them, but income requirements can differ for a mother and a partner. Frankly, the system is very complicated, and I am afraid that the evidence is that that has discouraged families from taking up shared parental leave. It was introduced with the aim of enabling more equal parenting, but the latest figures show that only 2.8% of partners decide to take it up, so we need to do better on it.

That is why we want paternity pay, paternity leave, maternity leave and shared parental leave to become day one rights. Then those facing the tragic circumstances that Aaron faced would not risk falling through the legislative cracks, on top of facing personal tragedy and an extremely difficult situation.

Many good employers already choose to go beyond their statutory requirements, but it is clear that many do not. That is why the law needs to step in. This debate has highlighted an injustice, and it seems to me that everyone is of the same view—that this needs to be put right. It is clearly unacceptable that individuals facing some of the most tragic and difficult circumstances are allowed to fall through the cracks in this way. It would be helpful to hear from the Minister on what the Government propose to do about that. Can he inform the House of any research undertaken into the issue?

It would be interesting to know, if a figure is available, exactly how many parents in Aaron’s situation would be supported by the legislation we are talking about. That would clearly help with an assessment of the costs involved. I know the Minister has discussed the matter previously with the hon. Member for Broxtowe, but I wonder whether he has had an opportunity to consider draft legislation. I appreciate that we are not always able to get a definitive answer from Ministers on private Members’ Bills, but will the Government support the proposal of my hon. Friend the Member for Ogmore? That would clearly be a welcome step forward. We have heard a compelling argument for reform today, so it is about time we got on and delivered it.

Draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

Justin Madders Excerpts

Tuesday 5th December 2023 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Mr Efford. It is just over a year since we were in these rooms for the Committee stage of what became the Retained EU Law (Revocation and Reform) Act 2023. For those who were not lucky enough to attend those debates—my hon. Friend the Member for Walthamstow was a regular attender—we discussed at length the potential for EU-derived protections to be removed or watered down. During the Committee and on Report, we tabled numerous amendments to seek to protect UK workers from the loss of key EU-derived rights, but we were told that the amendments were not necessary. Indeed, the then Minister for Industry and Investment Security, who led that Bill through Committee—the hon. Member for Wealden (Ms Ghani)—said:

“The Government have no intention of abandoning our strong record on workers’ rights, having raised domestic standards over recent years to make them some of the highest in the world.”––[Official Report, Retained EU Law (Revocation and Reform) Public Bill Committee, 22 November 2022; c. 144.]

These regulations show us that things have not quite turned out like that. As much as the Government might assert that the draft regulations do not constitute a reduction in workers’ overall level of entitlement and protection, we think that the overall effects will see some workers left with fewer entitlements and protections, with many being out of pocket to the tune of hundreds of millions of pounds as a result of the regulations.

There is no doubt that the regulations will have a negative impact, in particular, on irregular and part-year workers, as well as having the potential to impact on the EU-UK trade and co-operation agreement, which contains a non-regression clause on workers’ rights. The Minister said when he opened this debate that he was confident that the regulations complied with the TCA, but will he tell us what discussions he has had with his EU counterparts about these proposals and whether he has received legal advice to confirm that the regulations do not constitute a regression that is actionable under the TCA?

Although we have serious reservations about the impact of the draft regulations, we will not oppose their passing due to the inclusion of some important protections that are being restated from retained EU law. Workers cannot risk losing those protections and we must not put them in jeopardy.

I start with the restated elements. We are encouraged that important principles from the working time regulations and its associated case law will be restated into British law. The right to carry over annual leave when an employee has been unable to take it due to being on maternity or sick leave, and in situations where an employer has failed to inform them of their right to take it, are important principles that need retaining.

Taken in isolation, those protections are undoubtedly welcome, but they are part of a wider package that contains controversial elements that we would never support. That is why it is disappointing that we will not be able to vote on individual elements of the package but will vote on the whole lot. Although we welcome the Government’s U-turn on the original Bill that removed the threat of the automatic sunset on all regulations, there is still a cliff edge on the interpretative effects of retained EU law, and that is coming rapidly into sight.

We have until the end of this month to restate those interpretations because they will no longer apply from 1 January 2024; opposing the regulations outright would risk the loss of those protections.

First I will consider holiday pay, which appears to be most affected by the regulations. Perhaps the most controversial element of the changes is the introduction—reintroduction, should I say—of rolled up holiday pay, which was considered unlawful following the 2006 European Court of Justice decision Robinson-Steele v. RD Retail Services. That interpretation of the law has been replicated since in numerous courts in both the UK and the EU.

Rolled up holiday pay is when workers receive their holiday pay as it accrues as part of their normal wages. That means that a worker receives payment for leave but it does not mean that they are given an express right to take their leave. They are not paid for when they do take time off, so there is a perverse incentive not to take the time off and instead to accrue the holiday pay entitlement.

In practice—this is absolutely clear; there is no ambiguity about this—rolled up holiday pay can be a deterrent to taking time off work. We know how important time off and rest is to a worker’s health and wellbeing and how important it is to maintain healthy and safe workplaces. Indeed, the original directive had health and safety at its heart, recognising that daily, weekly and annual time off were essential for a worker’s wellbeing.

I do not think that ensuring that people have sufficient time off from work ought to be considered a controversial proposition, but the Government have now, in part at least, abandoned that principle. That begs the question of why they have decided to make the changes. It is not as if the consultation that they launched earlier this year showed a resounding support for the move; in fact, 45% of the respondents to the consultation were of the view that the changes should not be introduced. Only 12% registered their support. Given that there is so little support, why have the Government gone ahead and introduced the changes? I suggest that no problem is being solved—there is no overwhelming call for a particular problem to be fixed. This is an ideological move.

The ideological approach is especially true of the proposal in the regulations to place entirely in the employer’s hand whether to allow a conventional paid holiday or rolled up holiday pay for irregular and part-year workers. Why is that the employer’s rather than the worker’s decision? It is clear that the measure will exacerbate the disparity of power in many workplaces. Workers on low pay and who are vulnerable will more likely end up with sub-optimal annual leave arrangements, with very little real power to challenge them. They are also liable to be exploited by employers, who can use the added complexity around the role of holiday pay to make their remuneration less generous. There is a risk that including holiday pay as part of the hourly rate could be presented as an increase in wages or a reason to hold down pay. Owing to the complexity of the arrangement many may not realise that, in receiving rolled up holiday pay, their entitlement to paid time off is no longer there. Has the Minister considered those impacts—particularly given that the regulations also contain looser requirements for monitoring hours worked? What steps will be taken to ensure that low paid workers are protected from exploitation?

The other key change under the regulations is to make annual leave different in respect of the decision made in Harpur Trust v. Brazel, which the Minister mentioned, in 2021. That, by the way, was a UK Supreme Court decision, which secured the principle that all workers are entitled to a minimum of 5.6 weeks’ annual leave per year, to be paid at the ordinary rate of pay.

The Supreme Court specifically rejected the employer’s argument that the statutory minimum paid annual leave entitlement should be calculated on the basis of 12.07% of the annual hours worked. It reinforced the point that statutory minimum paid annual leave does not “accrue” through each annual leave year; rather, the 5.6 weeks’ leave exists to be taken when the worker requests it. It is clear that that decision did not please the Government as the draft regulations have clearly been designed to reverse the effect of the judgment. What is included in the regulations completely undermines a sovereign UK court’s decision—our own Supreme Court, not the European Court of Justice. What efforts will the Government make to assist workers who have difficulty in accessing their full holiday entitlement because of the way the new accrual system will work?

The worst aspect is probably that the Government appear to be focusing on effectively cutting holiday pay entitlement for some workers. The impact assessment calculates that workers could lose up to £248 million a year as a result of reducing the amount of paid holiday accrued by irregular hours and part-time workers. Described euphemistically in the impact assessment as a “transfer to employers” that is an astonishing and strange priority for the Government. We are talking about almost a quarter of a billion pounds a year in cash coming straight out of people’s pockets. Is the Minister proud that his Government are doing that during a cost of living crisis? Is that levelling up? Is that a benefit of Brexit?

Overall, the regulations represent detrimental changes to the rights of irregular hours and part-year workers. One would expect, at the very least, the definitions of those workers to be tighter. However, several stakeholders have raised concerns that the definitions of irregular hours and part-year workers in proposed new regulation 15F are vague and will leave workers and employers uncertain about their rights. One stakeholder called them “a mess” that

“beg more questions than they answer”.

A worker is classified as working irregular hours in the regulations

“if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable.”

What “each pay period” means is not clear, and neither is the phrase “wholly or mostly variable”. Who can say whether they work wholly or mostly variable hours? Where is the tightness in that definition? What will the Minister do to ensure clarity about that?

On one reading, the regulations mean that every worker who periodically works paid overtime could be impacted by the changes. Such an interpretation would cause chaos. I hope that the Minister will clarify that in his closing speech. It is equally unclear whether regulations intend to restrict the definition to zero-hours contract workers or whether those on short-hours contracts, whereby a worker has a small number of guaranteed hours with variable work on top, will also be included.

What about those workers who have more than one contract with an employer or do variable hours for part of the year and fixed hours for another part? Will the Minister clarify their position before the regulations become law?

I am afraid that the definition of a part-year worker is not much clearer. I note that the proposed definition excludes workers with annual contracts who are not required to work for parts of the year when they are not paid. Do the regulations mean that the hundreds of thousands of term-time only staff who work for education employers and are paid a salary across 12 months, but for the 39 weeks that they work each year, will not be affected? Again, will the Minister clarify that in his closing remarks?

The draft regulations are inconsistent and appear at odds with existing requirements for the calculation of a week’s pay under the Employment Rights Act 1996. The side-effect of that is important because calculating a week’s pay is necessary for separate employment rights, such as statutory redundancy pay and maternity/paternity pay. The definitions may not be clear, but what is clear is that there will be a great deal of uncertainty. That will almost certainly require further litigation in the courts, which will come at a further cost to businesses and employees and add further strain to an already stretched court system.

The impact assessment suggests that there will be significant savings to business, but does not appear to consider the costs of satellite litigation while the mess is cleared up. If the savings from reducing reporting requirements will really be £1.2 billion a year, why on earth did not the Government take the opportunity to level up holiday pay so that the additional 1.6 weeks could be paid at the same potentially higher rate that the four weeks is paid at?

Even the simple act of equalising the way different elements of holiday entitlement are calculated could have saved businesses money because it would mean that they had to make fewer calculations. It would have guaranteed parity for everyone on all elements of their holiday pay. It would also have been consistent with what our courts said as recently as October, when the Supreme Court, in its judgment in Chief Constable of the Police Service of Northern Ireland v. Agnew and others, specifically held that all paid annual leave, from wherever it is derived, must be viewed as a composite whole and forms part of the same pot. Yet the regulations do the opposite. They not only override UK court decisions, but fail to take the opportunity to level up—something that the Government claim they wish to do for people throughout the country.

The change also ignores the Government’s consultation, which showed that 70% of respondents said that holiday pay should be paid at the same rate. The Minister said that the Government chose not to make that change in response to stakeholders’ concerns, but it is clear from the consultation responses that most stakeholders thought it was a good idea. Why did he take a different view?

Turning to changes to record keeping and the changes to TUPE. Under the current regulations employers must keep adequate records to show that the working time for all workers does not exceed 48 hours a week. Now, the regulations will say, in effect, “You can keep records if you like, but you don’t have to.” Making sure that employers keep these records is already an issue—the impact assessment found that 26% of businesses do not formally record the working hours of their workforce—and enforcement is so pitiful that the Health and Safety Commission records only one prosecution in respect to this since 2007, despite the labour force survey showing that, since 2012, the proportion of night workers working over eight hours per day has risen from 40% to 50%—again, beyond the legal maximum. It is clear that workers are not being adequately protected now, so it seems perverse in the extreme to weaken protections further by removing these reporting requirements.

The proposals also contradict the 2019 judgment in Federación de Servicios de Comisiones Obreras v. Deutsche Bank, which stated that the employers must have an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured. The case held that records must be kept in relation to the right to a minimum daily rest period of 11 consecutive hours in each 24-hour period; the right to a minimum uninterrupted period of rest of 24 hours in each seven day period; and of course the maximum weekly working time limit.

That judgment made it clear that record keeping was, in fact, important for the health and safety of workers, and was not something that could become subservient to pure economic factors. That is surely right. Ensuring that workers are able to work safely is more important than the pursuit of profit. This matters not just in private businesses, but in the public sector as well. The British Medical Association says:

“From the perspective of doctors, it is essential that the daily working hours are recorded to ensure both that doctors are fairly paid for the hours they are working rather than those that are scheduled to work (which are routinely a significant underestimation of how long a doctor will have to work depending on what kind of shift they undertake) and the working hours of doctors do not exceed the contractual and legislative safeguards put in place. Any attempt to undermine the recording of these hours will have a profound, long lasting and damaging impact on doctors and the wider functioning of the NHS. In the context of enduring NHS pressures and the scale of stuff for the staffing crisis, such a change to the recording of daily working hours poses significant risk to staff retention and wellbeing, as well as having a detrimental impact on patient care.”

The BMA also says:

“Without guarantees that the hours they have worked will be accurately remunerated or that they will not be subject to rotas which breach the safeguards that protect them and their patients, more doctors could leave the NHS. The health service cannot afford to lose any more doctors.”

I think we all understand where the BMA is coming from. What discussions has the Minister had with his ministerial colleagues in the Department for Health and Social Care? Is he not a little bit concerned that the BMA says the removal of these records will have

“a profound, long lasting and damaging impact”

on the NHS?

We argue that better enforcement and strengthening of the law to prevent workers from being exploited is needed, not regulations that fly in the face of court judgements. It would be easier to accept the Government’s arguments that these requirements are too onerous for a business were there not already stringent obligations on employers to keep records to show compliance with the national minimum wage. It seems clear to me that putting in requirements to ensure that workers are not overworked would not only have health and safety benefits, but would lead to a productive and happier workforce. Would businesses not prefer alternative ways of monitoring the hours of their employees? Did the Government consider any other approaches? If they did, I would be grateful if the Minister told us what other approaches were considered before this decision was arrived at.

Finally, as if that were not enough change to be included in one piece of secondary legislation, we also have a few provisions to amend the TUPE regulations. Under existing rules, in advance of a transfer of a business, the current employer and new employer need to inform and consult with the affected workers’ existing representatives—typically trade union reps—or arrange elections for representatives. For the record, I refer to my entry in the Register of Members’ Financial interests and my trade union membership. There is an exemption from this requirement already in place for businesses with fewer than 10 employees if there are not already representatives in place, but as the Minister outlined, this will now be extended to larger businesses: specifically, it will change the collective consultation requirements of businesses that employ fewer than 50 employees where a transfer affects fewer than 10 people. We have concerns about that.

We know how lax the Government have been about consultation requirements in other areas of the law, and I need not remind the Committee of the fact that some 43,000 employers have resorted to fire and rehire in recent years. We are also concerned about the way in which this will shift the balance of power during transfers, self-evidently placing more power in the hands of employers, which are clearly far better resourced than workers in these situations.

Transfers are a stressful and fearful time for employees in the business being taken over. They are likely to be worried about the potential for their position being abolished or the terms of their contract being changed, all the while feeling helpless that they do not have a collective voice to represent their interests. We do not think that the requirement to seek volunteers to fill the role of representatives is onerous or complex. On the contrary, consulting with individual workers can actually be far more complex and challenging. The changes encourage employers to move away from best practice, and do not assist good employers, which want to hear from their workforce. Instead of having questions and issues funnelled through a representative. They will now have to cover these issues for all individuals. In the circumstances, it is hard not to conclude that this simply represents another attack on collective workplace rights.

I will end there, Mr Efford, because I know that in a similar Committee last week, we did not leave enough time for the Minister to respond. I hope he has sufficient time today to address some of our concerns.

--- Later in debate ---

[Kevin Hollinrake]

I thank hon. Members for their valuable contributions.

We have been clear throughout the Brexit process that we have no intention of abandoning our strong record on workers’ rights, having raised domestic standards over recent years to make them some of the highest in the world. The shadow minister always talks about the impact on workers—today, the impact on irregular and part-year workers. In our debates last week and today, I noticed that Opposition Members never once mentioned the rights of businesses or protections for businesses. It is always workers. Does the hon. Member for Ellesmere Port and Neston not understand that there is a balance to be struck between the rights of workers and the rights of businesses? I never hear Members of the new “party of business” taking the needs of business into account. Why does that never feature in any of his remarks?

[Justin Madders]

We do support business, but every time this Government bring forward legislation, it is about attacking workers. Is it not the same today? Is not taking £250 million out of workers’ pockets an attack on workers?

[Kevin Hollinrake]

I do not accept that. Again, that speaks to the fact that the only organisations quoted in last week’s debate and today’s are the unions, such as the BMA. But I think what the if I can deal with his point, if I may, I think the

On the hon. Gentleman’s point about part-year workers, there is no doubt that there is a £150 million saving for businesses, but he also talked about parity, and this is about parity. It is about two workers working in slightly different patterns but working the same hours every year having the equal amounts of holiday pay. That is what this is. Many people would consider the judgment that led to a difference to be unfair, a perverse outcome. What we’re legislating for here is fairness across the board, whether people work a part-year or a full year.

[Kevin Hollinrake]

It is quite the opposite. We do not pick a side; we try to help both sides and to achieve a balance. That is where we are. I never hear about that balance between both sides from the Opposition; all I hear is about the impact on workers and on unions. In the debate last week, not once did I hear once about the 4 million working days lost to strikes, the 2 million operations cancelled, the hospital appointments cancelled, or the £3.5 billion impact on the hospitality sector.

[Justin Madders]

Was the Minister not listening when I when I talked about how having a different holiday pay calculation rate for the four weeks and the extra 1.6 was actually going to create more burden on businesses?

[Kevin Hollinrake]

The hon. Gentleman raises an interesting point. He is talking about a single pot of annual leave. We believe in maintaining two pots. Presumably he is talking about the four weeks at normal pay currently and 1.6 weeks at basic pay, and about raising the 1.6 weeks of basic pay to the level of normal pay, which actually costs employers more. How much more is he suggesting employers should pay to regularise that position?

[Justin Madders]

Can the Minister give us a figure for how much more this would be?

[Kevin Hollinrake]

It is incumbent on the hon. Gentleman to do that. We are maintaining the status quo. He wants to make that change. What is the figure for what he describes as a simpler position? Does he not agree that that would be a cost on business? It is simple as that, yet he throws that out as if it were no matter for employers, who would have to deal with the extra cost.

[Justin Madders]

The Minister pointed out that, apparently, this will save businesses £1.2 billion. I don’t know if that is more or less than the change would cost, but I would have thought that it is something that could have been looked at, yet it does not appear to have been considered at all.

[Kevin Hollinrake]

I think we are back to the same place. As the hon. Gentleman knows, the £1.2 billion is largely the administrative costs of maintaining a recording position. What he wants to move to would cost a cost employers £1 billion. That is an interesting point.

Raising concerns that I think are scaremongering, The hon. Gentleman said that in future employers would be able to keep records “if they like”. That is not the case, and he knows that. Why would he say that kind of thing? Employers are required to make and keep adequate records. He knows that from the legislation. He also raised some concerns about change expressed by one of the unions, but it is not a change, because these measures have not yet been implemented in the UK economy. Again, he raises those concerns that somehow this is detrimental to health workers, but that is not the case. Does he accept that?

In terms of the points on rolled up holiday pay raised by the hon. Gentleman and the hon. Member for Walthamstow, the Government believe the existing safeguards are proportionate in addressing current concerns about impacts on workers from rolled up holiday pay. Employers are already required to provide an opportunity for workers to take leave, and we have heard through our stakeholder engagement that this is taking place. We also have safeguards in relation to the 48-hour working week, where a worker cannot work more than 48 hours a week unless they choose to opt out.

In terms of consultations, employers will have to tell their workers if they intend to start using rolled up holiday pay, and this payment will have to be clearly marked on the worker’s payslip. If employers need to make changes to terms and conditions, they must seek to reach an agreement with their workers or their representatives.

I think I have covered most of the points raised—I am sure I will be told if I have not. Our standards and our workers’ rights were never dependent on membership of the EU—indeed, the UK provides stronger protections for workers than are required by EU law. For example, we have one of the highest minimum wages in Europe, and on 21 November, the Government announced that we will increase the national living wage for workers aged 21 and over by 9.8% to £11.44 an hour. That will certainly help the hon. Lady’s constituents, some of whom may be low paid, as she said.

Our regulatory system is recognised globally, but we want to raise the bar even higher and deliver on our ambition to become the best regulated economy in the world, as we embrace our newfound freedoms outside the EU. By doing so, entrepreneurial businesses will have more opportunity to innovate, experiment and create jobs, and importantly, workers’ rights will be protected. This will cement our position as a world-class place to work and to grow a business.

Oral Answers to Questions

Justin Madders Excerpts

Thursday 30th November 2023 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

Fire and rehire is rife in this country. Research published by the Chartered Institute of Personnel and Development found that, between March 2020 and July 2021, 43,000 employers changed their employees’ contracts through fire and rehire techniques. The Government promised in March 2022 that they would take action following the P&O scandal, and we now learn that it will be a full two years since that time before anything actually changes. Given the propensity for using fire and rehire tactics, can the Minister tell us how many employees he estimates will have had their contract changed through fire and rehire in that two-year period?

[Kevin Hollinrake]

I do not have that number to hand. We want to strike a balance between employers and their workforces. We condemn what P&O did. We need to bring in new measures on fire and rehire, and we have committed to do that. A consultation is clearly needed to make sure those provisions are fair on both businesses and workers. That is what we are doing right now, and we intend to bring those provisions before the House next spring.

Draft Code of Practice on Reasonable Steps to be taken by a Trade Union (Minimum Service Levels)

Justin Madders Excerpts

Monday 27th November 2023 General Committees

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair this afternoon, Ms Nokes. I draw the Committee’s attention to my membership of the GMB and Unite trade unions.

I thank the Minister for his introduction. However, it will come as no surprise to him that the Opposition will oppose the code of practice. He described it as controversial, which is an understatement. We remain clear in our view that the Strikes (Minimum Service Levels) Act is fundamentally unworkable and places undue limitations on an individual’s freedom of association. These freedoms have been fought for and won over many decades, and they deserve much better than to be chipped away and undermined in the way that we see before us today. Labour has promised to repeal the legislation when we get into government, and we stand by that pledge.

“Reasonable steps” is a pivotal phrase that jumps out at anyone reading the Act. It stands out so much not only because it is vague and is left undefined in the primary legislation, but because the phrase’s definition carries hugely punitive consequences for those who get it wrong. It determines whether a union’s actions could leave it liable to proceedings in tort for sums that would be likely to bankrupt it. It could also see an individual worker’s protections against unfair dismissal removed. Those are not issues that as legislators we can ignore.

How “reasonable steps” is defined is a fundamental part of the legislation. As the Bill progressed through the House, we repeatedly asked for greater clarity as to what it meant. Time and again, we asked what constituted “reasonable steps”. In response, all we got from the Minister was that it would be for a court to decide.

[Richard Burgon]

My hon. Friend and I have many things in common, one of which is that we were both trade union lawyers, which Government Members perhaps think are not a good thing. Why are the Government so keen to give so much business to employment lawyers? The code of practice’s use of the phrase that my hon. Friend has just mentioned—“reasonable steps”—is a lawyer’s dream, whether they be on the employer’s side or the workers’ side. In legal libraries across the country, there are fat books of case law to determine what is and is not reasonable in various employment situations. The code is a recipe for further clogging up the courts, and it will cost further money for both trade unions and employers. Does my hon. Friend agree that it is absolutely ridiculous?

--- Later in debate ---

[Justin Madders]

Yes. We both have some industrial experience of how this works, so we can see what is going to happen. There has been no regulatory impact assessment for the code of practice. If there had been, it would have produced some eye-watering numbers on what it will mean for legal costs not just for trade union members, but in the end for the taxpayer, because a lot of the disputes will involve public sector employers.

During the passage of the Bill, the Minister’s refrain was that it is for the courts to decide, but even after the code of practice is issued, it will still be up to the courts to decide. There are still so many ambiguities and unanswered questions. The fact that we had to vote on such an important piece of legislation without any clarity about what “reasonable steps” meant shows that this debate is taking place 10 months too late. As elected legislators, we really should have known what this all meant before being asked to vote on a Bill that was passed into law. That is no way to go on, and it is by no means the only example of this Government rushing through legislation without an adequate opportunity for scrutiny.

Let us be honest: we were told at the time that there was an urgent need for this legislation, and that it needed to be rushed through a Committee of the whole House in just one day. That was back in January. We are now in November, so in reality we could have had a proper Bill Committee stage and evidence sessions in which these issues were properly debated and voted on. Will the Minister tell us whether the rush at the start of the year was because the Government did not want scrutiny of the Bill? Or was it because they were making it up as they went along?

The provisions before us are at odds with expectations about what the Act was meant to deliver. The code of practice does not alleviate any of our concerns about the workability of the legislation. Actually, it adds more levels of concern, complexity and ambiguity. It contains provisions that go well beyond what was discussed and included in the Act, and it contains language that is at odds with ministerial comments at the Dispatch Box. Many important elements are left undefined, presumably for the court to pass judgment on at some point—not to mention the inconsistencies in the code’s guidance, which I will come on to. Unreasonable expectations are also being placed on unions to police the behaviour of their members, and there are excessive diktats on the language to be used in communications between a trade union and its members.

The Minister says that measure has been produced as a result of consultation, but we know that most of the employers’ organisations, never mind the trade unions, think that this is a complete mess. The reason why it is still before us today shows us everything about where the Conservative party is coming from with this legislation. The document deliberately defines the phrase “reasonable steps” in a way that is designed to infringe on a trade union’s actions to a degree that is not in line with the Act’s stated policy aim, which is to reduce disruption during strikes. Put simply, we believe that the code seeks to further restrict the right to strike and limit the lawful actions of trade unions during a period of industrial action.

Turning to the first recommended step—the “identification of members”—it is clear that the interpretation that the code offers is unduly burdensome on unions. It imposes tight deadlines and has the effect of creating confusion. That is before we look at whether this can be done in a GDPR-compliant manner. The Minister did not really address the concerns that several hon. Members raised about what happens in a workplace where more than one trade union is recognised by the employer. Of course, that is quite commonplace.

Paragraph 19 is the most important part of this section of the code of practice. It states:

“Unions should begin identifying their members who are subject to the work notice as soon as reasonably practical after receiving a work notice”.

That means that with potentially as little as seven days’ notice, a union would have to comb through a list—most likely just a list of names—and pick out its members who could be involved in a particular industrial dispute. But not only that: due to an employer’s right to vary a work notice up to four days prior to strike action, that work could be in vain. I will return to that issue shortly. To me, this responsibility seems particularly onerous. We should remember that the sectors in which work notices can be introduced have vast workforces and can be national in scope. It is quite possible that an industrial dispute could involve hundreds of thousands of workers across the country and potentially impact hundreds of different workplaces.

For example, the RMT has highlighted that during a multi-train company dispute, similar to the one that has taken place over the past 18 months, a number of employers could send more than 10,000 names, comprising 100 different grades working at 100 different locations. To provide unions with a matter of days to sort through such an expansive list and identify which members could be impacted by the strike is an enormous undertaking. I am sure that if such an obligation was placed on a business, Ministers would be jumping up and down about all the extra red tape, but we know that this Government do not judge trade unions by the same standards.

One could even take the view that this expectation is designed to be completely impossible, especially given that there is no guarantee that employers will provide defining characteristics alongside the names. That means that the union may not be able to differentiate between two people with exactly the same name or a similar surname, for example. The guidance addresses that by stating that unions “may wish” to engage with employers ahead of strike action on how work notices can be designed to avoid that. That will depend on employers’ co-operation, although, as we have heard, they will be subject not to a statutory code of practice, but to non-binding guidance, which gives us no guarantee that they will co-operate at all.

What steps will the Minister take to address that? Will action be taken against employers that fail to engage with unions to help them to differentiate workers? How will the Minister ensure that any union conducting strike action in the short term will receive work notices that allow them to differentiate names on the list? Will they be offered dispensation if they are unable to identify any workers within a very tight deadline?

Paragraph 20 of the code offers guidance on employers’ ability to vary work notices at four days’ notice. It is hard to understand how that provision could not be deliberately designed to cause confusion and undermine trade unions. What will happen if an employer varies a notice over a bank holiday weekend, or even at Easter, when there is a bank holiday either side of the weekend? Are trade unions expected to have people perpetually on call during such periods just in case another notice is issued? The code makes no mention of bank holidays and weekends, so might a union be asked to respond to hundreds of varied work notices at two days’ notice—or even one day’s notice—with no leeway given?

[Neil Coyle]

If employers are not compelled to share information, is this dog’s dinner of legislation even remotely workable?

[Justin Madders]

The overwhelming response to the consultation on the measure, and to that on the original Bill, was that the process will be very difficult in practice. That is because it is not about providing minimum service levels, but about trying to stop trade unions from exercising their lawful and democratic right to take industrial action.

The instruction at paragraph 25 of the code of practice that a union should send its compliance notice to its members “by electronic means” is the biggest irony in all this, because the Government have sat on a review on e-balloting for industrial disputes for some five years, yet made no attempt to implement it. Does the Minister finally accept that it might be reasonable to allow trade unions to enter the 21st century, with industrial action communications sent by email? Does he accept that that should include the actual balloting for industrial action? It is inconsistent, to say the least, that the code of practice specifically instructs unions to contact members about industrial action electronically, yet the law specifically prohibits them from balloting their members by email. I know that the Minister has had a lot of practice in e-balloting from his party’s leadership contests, so does he now accept that it should be possible to ballot trade union members on industrial action electronically?

Paragraph 25 further states that

“if the union is aware that any member will be unlikely to access electronic communications before the…strike”

it should send notice by “first class post” instead. What on earth does that mean? Is a union to require a read receipt from every member to form a view of whether they are likely to access their emails? Does the Minister realise that even four days’ notice would be asking rather a lot of Royal Mail, leaving aside bank holidays and weekends, because the latest stats on the delivery of first-class mail show that it is well below its performance targets?

The most problematic aspect of the code is probably paragraph 20, given its provisions on varying work notices. Anyone tasked with ensuring that all the right members are contacted within the incredibly tight timescale of seven days will experience a logistical nightmare, and that would only be exacerbated by the option of amendment only four days out.

Sadly, the provision leaves the door open to employers to deliberately and purposefully issue erroneous work notices in the first instance, only to vary them closer to the relevant date with a view to undermining industrial action. Members should not forget that “four days before” can start at 11.59 pm on the relevant day, effectively leaving three days. While the motivation might not be malevolent—it could be due to negligence—the practical effect of the requirement will be that a union would be expected to contact an employee to encourage them to attend work on the day of a strike, but then say to them a couple of days later, “Actually, you don’t need to attend,” while telling a whole new set of people that they need to attend. It is not hard to see how that could be abused to create an air of confusion on the part of the worker as to whether they are meant to be on strike or at work. When the consequences for making a mistake are so great, it is understandable that a worker would be likely to err on the side of caution and attend the workplace. Of course, all the energy and time expended on deciding who needs to get a notice and who does not could be spent on trying to resolve the dispute.

All those problems are compounded by a contradiction in the code of practice. Paragraph 19 indicates that, under the duty, a union is expected to take reasonable steps to contact members included in a work notice as soon as is “reasonably practical”.

[Mick Whitley]

Does my hon. Friend share my confusion about why the onus for communicating with members who have been named in work notices has been placed on unions, rather than on employers, which routinely communicate with their employees as a matter of course? Does he also worry, as I do, that given the difficulties that unions often encounter in contacting members, the measure greatly increases the likelihood of workers being subject to disciplinary action and even dismissal?

[Justin Madders]

My hon. Friend is absolutely right that the code puts the onus on trade unions. How odd is it that we are in a world in which a Government instruct a trade union to tell employees to attend the workplace? I cannot think of anything more bizarre. But the measure is not actually about ensuring that people attend work; it is about undermining collective industrial action. From what we have seen today, it is clear that that is exactly the Government’s intention.

The trade union’s duty to take reasonable steps to contact members as soon as is “reasonably practical”, contained in paragraph 19, is contradicted in step 2 of the code, which provides guidance on how to encourage members to comply with a work notice. In this step, the code states that once a union has identified all its members, it should communicate this to them via a compliance notice. Paragraph 23 states that the union

“should send the compliance notice before the strike action”

but that it would be “reasonable” to send the notice

“once it is clear that the work notice will not be subject to variation by the employer—either because the last day on which the employer can vary the work notice without the union’s agreement has passed or because the employer has notified the union in writing that it will not vary the work notice”.

That is completely inconsistent with what the code of practice states earlier—that the union should contact its members as soon as is “reasonably practical”. They cannot both be right. Given the consequences of getting this wrong for both the trade union and the individual, the code of practice really ought not to contain such a mixed message. Will the Minister therefore confirm whether a union is supposed to wait until the conditions in paragraph 23 are met, or just get on with it as soon as is “reasonably practical”, as paragraph 19 suggests?

Beyond that issue, the code’s recommendations on encouraging members to comply with a work notice are plainly unreasonable, misleading and complex. Step 2 of the code contains stipulations that are drafted in such a way that grounds for legal challenge will inevitably be opened. Paragraph 26 and annex A, in particular, can be seen to do this. Paragraph 26 includes a list of eight features that a compliance notice must state “clearly and conspicuously”, and annex A contains a pro forma template for unions to use, which is recommended for use by unions at paragraph 27. Paragraph 27 states that a union can amend the template but that the compliance notice must retain

“the overall substance and effect of the notice”.

So why go down this road at all? Why go to the trouble of drafting a template letter and then say that unions can vary it? Is that not just inviting trouble?

We know that the slightest transgression in an industrial action ballot can lead some employers to seek injunctions, even though the practical effect of that transgression is nil, so there is a concern that any deviations from the template will invite legal challenge from employers. The TUC believes that deviations

“will almost certainly lead some employers to seek to legally challenge unions”.

Does the Minister agree with that point of view? How does he think that such satellite litigation will aid the resolution of industrial disputes? Can he also explain the rationale for including a pro forma template on top of the guidance contained in paragraph 26?

Unfortunately, that is not the only way in which the code could instigate legal challenge. Plenty of areas in the code appear to allow for challenges if the union makes an error. Paragraph 39, for instance, states:

“communicating with members whom the union knows are identified in a work notice to induce them to strike”

could constitute an act that undermines steps taken to comply with a work notice. Taken literally, that means that for the period of the work notice, the trade union cannot contact any member subject to one at all with any information on the industrial action. Is the Minister saying that on certain occasions, for a certain period, a trade union cannot contact some members to tell them what is happening with the strike? The mere mention that a strike is taking place could be considered an inducement to strike. I am interested to hear what the Minister says about that, because to me it looks like a fundamental attack on democratic freedoms.

If the Minister does not accept that that is the intention behind paragraph 39, does he accept that there could be a real problem in some circumstances—for example, where there is a technological or administrative error in distributing emails on a mailing list that could risk some of the wrong members receiving that email? Trade unions in those circumstances would lose their protection from liability in tort and employees would lose their automatic protection from unfair dismissal. Is that really what is intended with the code of practice, because that is what paragraph 39 seems to suggest?

The stakes are far too high for such an error to constitute a breach of the code, especially given that the names included in the work notice are liable to change, often at short notice. As there is already guidance in the code stating that compliance notices should include statements telling those on work notices to ignore calls to take part in strikes, paragraphs 38 to 40 seem excessively punitive and unnecessary. The only conclusion that one can draw from such a communication—a blackout around strikes—is that this is a deliberate attempt to undermine trade unions and impact the effectiveness of industrial action.

I will return briefly to the annex and paragraph 26; this is an example of the state trying to dictate the contents of a union’s communications with its members. First, according to the stipulation in paragraph 26(f), unions are expected to encourage workers to undertake the work set out in the work notices. We think it is inappropriate for a union to encourage a worker to comply with a work notice, as it could undermine the collective endeavour of industrial action. Yes, a union must advise a worker of the possible consequences of failing to comply with a work notice, but it is not the role of the state to instruct a union to do that in an enthusiastic way, as is implied in the code of practice.

What does “encourage” even mean? Is it like a football supporter encouraging their team from the terraces and cheering the team on? Is it sending text messages to a mobile phone with affirming messages such as “Please go to work today. I know you’ve got this”? It seems a very odd thing to request that a trade union encourage its members to go to work, given that presumably on every other day, the employee does not require such encouragement to turn up and do their job.

[Chris Stephens]

Is there not another concern that trade unions have flagged up? Trade union representatives will be identified in the work notices, so the trade union representative will be the one who is picked to, effectively, bust their own industrial action.

[Justin Madders]

Yes, I will get on to that—there is a bit more, I am afraid, Ms Nokes, because there is an awful lot to talk about. The measure fundamentally pits trade unionists against their core beliefs and principles. That does not seem to register with Government Members, but it really is doing that.

The requirement to encourage members to turn up for work is an odd thing to request, given the failure to explain the legal issues with the necessary accuracy in paragraph 26, which states that unions are advised to tell members that they should receive from the employer

“a statement that the member is an identified worker…and must comply with the…notice given to the union.”

But there is no obligation under the Act for an employer to communicate with workers named by the work notice. Employers need do so only if they want to keep open the option for dismissing them for not attending work. If not, they can let the trade union do all the work.

The code also states that the compliance notice should contain a comment stating that two notices should be received from the employer and that if the member receives both, they

“must carry out the work during the strike or could be subject to disciplinary proceedings which could include dismissal”.

However, the Act gives neither the employer nor the Government the power to compel people to attend work. What it actually does is state that a worker who has been notified by the employer that they are named in the work notice may be dismissed and denied the automatic right to protection from unfair dismissal for taking part in the strike. The code does not highlight that a worker who was dismissed might still be able to bring an unfair dismissal complaint under the general law.

The code and template letter are therefore misleading. But why do they have any reference to dismissal at all? The template requires the union to warn a member that

“you could also be dismissed as a result”

of not following the work notice. However, that is not what the Minister told us would happen. When he was at the Dispatch Box on Monday 22 May 2023, he said:

“The reality is that nobody will be sacked as a result of the legislation.”—[Official Report, 22 May 2023; Vol. 733, c. 103.]

If that still stands, why does the code of practice require unions to warn people of something that is not going to happen? Why would the Minister ask unions to write to their members about something that he said at the Dispatch Box would not happen? I invite him to withdraw his comments or, ideally, withdraw the whole draft code.

The compliance notice template in annex A states:

“The work required of you should be work which you normally do or work which you are capable of doing and is within your contract of employment.”

Can the Minister tell us whether the notice remains effective if it requires someone to undertake a role with which they are not familiar? After all, many contracts of employment have a catch-all clause requiring employees to undertake whatever duties their employer sees fit. At the very least, there ought to be some guidance on what the employee should do if they face such a request. That point also raises the question of what happens if a non-union member is included in a work notice, but the employer fails to contact them. Would they be subject to disciplinary procedures as well? Both those examples show how far the code is from providing certainty; it just adds more complexity and confusion.

The code of practice’s guidance on picketing is an element that came as a surprise, as there was no mention of it at all in the Act. It is covered by different legislation and a different code of practice. There was next to no discussion of picketing when the Bill passed through Parliament, so its inclusion in the code of practice is another example of the way in which this Government have sidestepped scrutiny at every opportunity. I see no legitimate reason for its inclusion; it seems that it is an attempt to expand the scope of the legislation via the back door. That is at complete odds with the purpose of a code of practice that is supposed to put flesh on the bones of how an Act works, not to expand its reach.

Step 3 of the code is simply titled “Picketing”. It sets standards on the union to instruct picket supervisors. Paragraph 33 states that

“the union should…use reasonable endeavours to ensure that picketers avoid, so far as reasonably practicable, trying to persuade members who are identified on the work notice not to cross the picket line at times when they are required by the work notice to work.”

The irony of a code of practice explaining what is meant by the term “reasonable steps” by using the phrase “reasonable endeavours” is certainly not lost on me. It is not exactly a great leap forward, is it? Using “reasonable endeavours” not to do something is a novel concept: it is usually a concept applicable where there are positive obligations on someone to act. I struggle to see how that translates into a negative obligation.

Certainly, nothing that I have heard today explains what that means in practice. But that is the point, isn’t it? This and many other areas in the code of practice leave important questions open to interpretation by the courts. It will take a case making its way to court, and probably several levels of appeal, before it becomes clear what “reasonable endeavours” a union must actually take to prevent members persuading those on a work notice not to cross a picket line. The weight of the punishments that the union and its workforce could be forced to pay will doubtless mean that unions will be cautious about how this works in practice.

This is a legal nonsense. It is quite blatantly a tactic from the Government to attack a union’s right to strike by blunting some of its most effective tools. However, it is a tactic that will add to court backlogs, as we have heard, and will cost the taxpayer, unions and businesses large sums of money when all these issues end up being litigated. Ultimately, it will do absolutely nothing to improve industrial relations in this country.

I will return to the crux of the extract from which I quoted: that picketers should not try to persuade workers listed in a work notice to join them on strike. It is clearly drafted to completely undermine the role of a picket, to the extent that it will be unworkable and difficult to enforce. How is a picket supervisor supposed to know who is on a work notice, especially if the notice runs to hundreds or even thousands of people? Are they expected to know them by appearance? Unless they are told otherwise, picketers are therefore going to have no idea who is bound by the work notice and who is not.

It is completely unclear how the picket supervisors, who are expected to execute this duty and enforce this measure, will be able to do so in practice. The aim of the picket is to encourage compliance with the strike, but the picket supervisor is expected to undertake duties well beyond ensuring that a worker named in a work notice simply is not hindered in going into work. It is another fundamental attack on the role of trade unions. Does the Minister understand that he is asking trade unions to turn on their core beliefs and jettison the very essence of what they stand for?

It is also unclear whether the Government have considered the case of Ezelin v. France, as the TUC’s submissions recommend. In that case, the European Court of Human Rights found that requiring a lawyer to disassociate himself from a demonstration infringed his rights under article 11 of the European convention on human rights? A response on that issue from the Minister, either in his closing speech or in writing after today’s proceedings, would be appreciated.

Other hon. Members wish to speak, so I will draw to a conclusion. We are being asked to vote on a code of practice that goes far beyond the legislation that it is meant to explain. It places potentially insurmountable burdens on unions, leaves important legal questions unanswered, requires unions to be the mouthpiece of the state and expects unions to enforce a draconian piece of legislation that goes against the very essence of their values. To top it all off, there is the threat, should unions not follow the guidance to the letter, of having to pay out exorbitant costs through proceedings in tort and of leaving all their striking workers vulnerable to being sacked.

It is clear what the code of practice seeks to achieve. As we said of the Act throughout its passage, it is an attack on trade unions and their members, and it undermines the fundamental right to strike. We cannot vote for it. No one who believes in freedom of association can vote for it in good conscience. The Government need to go back to the drawing board and redraft the code of practice—or, better still, get rid of the Act altogether.

[Several hon. Members rose—]

Regulatory Impact Assessments Bill

Justin Madders Excerpts

2nd reading
Friday 20th October 2023 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I thank the hon. Member for Christchurch (Sir Christopher Chope) for introducing this Bill. This has been a wide-ranging debate that has covered a whole range of topics, but it is, at heart, about accountability for Government decisions, and it is clear that there are concerns about that.

It is worth drawing the House’s attention to the report of the House of Lords Secondary Legislation Scrutiny Committee of 10 October 2022, entitled “Losing Impact: why the Government’s impact assessment system is failing Parliament and the public”. I know that minds were probably elsewhere around that time last year, but it is a very important report, and it draws on many of the points that have been raised today. The executive summary of the report said:

“In 2017, we noted that there had been some improvement in the quality of Impact Assessments (IA) provided with secondary legislation. Unfortunately, this improvement has not survived the dual challenges of Brexit and the pandemic, during which time the speed of legislating meant that corners were cut. We had hoped that the return to more normal working would provide an opportunity not just to reinstate the previous IA system but to improve it: this has not happened.”

To pick up on the points raised by the right hon. Member for Tatton (Esther McVey), as the shadow Health Minister at the time I spent an awful lot of days on the Committee corridor opposite the right hon. Member for Charnwood (Edward Argar). Unfortunately, he is not here now, but I am sure he will recall fondly a number of occasions on which we drew to his attention the fact that many of the regulations introduced under the Public Health (Control of Disease) Act 1984 had no impact assessment and very little information to back up the decisions that had been made. We understood at the start of the pandemic why that was not always possible, but as time moved on, it felt that that was a pattern that did not have any justification. This matter is not limited to public health regulations.

[Esther McVey]

Does the hon. Member agree that we need to change the 1984 Act so that we do not bypass the House and go into lockdowns without full scrutiny by all Members of this House?

--- Later in debate ---

[Justin Madders]

I would like to wait and see what the inquiry says about the way that that was handled. An awful lot of evidence has been given about Government decision making at the time, which it makes clear was less than ideal. It is probably best for us to wait and see what comes out of the inquiry on how we as a Parliament can best deal with these issues in future. Hopefully that situation will never repeat itself, but the hon. Member for Shipley (Philip Davies) made the point that the solution to many of these challenges lies in Members robustly challenging Government when opportunities arise.

The House of Lords Committee said that an impact statement

“should not just be treated as an item on a ‘to do’ list but be an integral part of the policy formulation process… One of our major concerns is that IAs which are published late, or that appear to have been scrambled together at the last minute to justify a decision already taken, may undermine the quality of the policy choices that underpin the legislation.”

Again, that theme has been picked up in the debate.

[Kevin Hollinrake]

Reflecting on that particular statement, does the hon. Gentleman think his party was wrong to call for longer lockdowns on the basis of no evidence in cost-benefit analysis?

[Justin Madders]

That is a bit rich from a Minister of a Government who did not introduce any impact assessments when they first brought in the lockdowns or various restrictions. I can recall on numerous occasions asking Ministers why people were limited to being in groups of six or why pubs had to close at 10 o’clock. We never got a satisfactory answer to any of those questions, so for the Government to try to put that on us is a little rich.

[Esther McVey]

The hon. Member has just said to the House that he did not have sufficient answers for the rule of six and the 10 pm curfew. Does he not think it curious that Members, except for a handful of us here, still voted for them? Even he went along with it and voted for them.

[Justin Madders]

We are not going to relitigate the entire pandemic here, but it is very important to say that the Opposition’s position was to support the Government in trying to get on top of the pandemic. I think it is fair to say that, while we did that, we were concerned there was not always the evidence to support some of the Government’s policies. We took it on trust that they had those conversations with the Scientific Advisory Group for Emergencies and so on, but again, I think those things—the level of detail and the consideration taken before recommendations came forward—will come out during the inquiries.

To pick up on another point from the Lords Secondary Legislation Scrutiny Committee recommendations, it said:

“Our concern is that the number of qualifying instruments which have not followed the IA”—

impact assessment—

“procedure has increased and, given that no sanctions appear to be applied where a department fails to comply, there would seem to be little incentive for departments to improve.”

Obviously, the Bill would create an incentive in the sense of bringing a Minister here every three days to answer for the lack of an impact assessment when one is not produced. As much as I enjoy seeing the Minister, I do not think it would be a particularly good use of parliamentary time to have him come here every three days to explain why an impact assessment had not been prepared. It would probably create an unnecessary pressure to produce one in a rushed manner that might not actually be fit for purpose. On that point, the Minister referred to the Regulatory Policy Committee, which does a kind of audit of impact assessments. It has said itself that around a quarter of all impact assessments are not fit for purpose. If we are to rely on the RPC for approval of the way impact assessments are delivered, we ought to listen to its recommendations a little bit more. They are not always as glowing as we would like.

I will not detain the House any longer, but some important points have been raised.

[Sir Christopher Chope]

On the hon. Member’s last point, if he accepts that the system is not working, what does he think should be the sanction for failing to ensure that it does work?

[Justin Madders]

The answer lies in Members’ own hands. It is up to Parliament itself to object to or vote against legislation if it does not think the impact assessments support the policy direction. The powers have always been there. Members can turn up to any secondary legislation Committee if they wish to. I understand the thrust of what the hon. Member is saying with this private Member’s Bill, but I am not quite sure it is the right method to deliver it. What needs to happen is for the Government to instil from day one a commitment to evidence-based decision making. There have, I am afraid, been too many examples recently where that has not happened.

Worker Protection (Amendment of Equality Act 2010) Bill

Justin Madders Excerpts

Consideration of Lords amendments
Friday 20th October 2023 Commons Chamber

[Danny Kruger]

This is an important discussion. The hon. Lady is saying that the law is a teacher—indeed, it is—and influences the culture. It is also true that the law needs to reflect the culture, so we modernise our legislative framework in response to public opinion and how things are. We now legalise things that were illegal in the past in response to the way culture evolves.

However, the law is a teacher in a bad way too. It can introduce negative effects into our culture and chill free speech. It can inhibit the sorts of conversation that are necessary for the development and progress of our society, which is a topic that will come up later in other legislation. There were significant attempts during the pandemic to effectively criminalise or inhibit free speech around the pandemic response, on exactly the same grounds that we might use in this debate, namely that it is important for public protection and the protection of the vulnerable that misinformation, disinformation and, in this context, harassment should be criminalised. That was wrong, and I really worry about the possible chilling effect of this legislation.

A narrow gap is left in this law to criminalise free speech. Many Members will raise the outrageous and unacceptable behaviour that many employees have to put up with in the workplace—I recognise that too. We absolutely need to insist that that does not happen, but that is a job for the culture and for employers. In a sense, it is a job for all of us to instil the right sort of moral conduct in our communities, but frankly it is impossible to write legislation in black and white that achieves the outcomes the hon. Lady wishes without also inhibiting free speech.

I will end with an observation about another piece of legislation that I understand is being contemplated for the King’s Speech: a conversion therapy ban. I am afraid that that is another instance where, under the noble and honourable impulse to stop outrageous and unacceptable practices going on, we are proposing a piece of performative legislation in response to a vocal and activist lobby group that will put into law an imprecise and fuzzy set of moral aspirations. Once Opposition Members get hold of it in Committee, on Third Reading and in the House of Lords, the scope will be expanded and then courts will be required to criminalise conversations between adults and their therapists, parents and children, which is exactly what happens in other countries where this well-intentioned legislation has been passed into law. The law is a teacher, but it is not an opportunity for moral grandstanding and virtue signalling. We have an obligation to put into black and white words that the courts clearly understand and that do not end up curtailing free speech.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a relief that we have this Bill back here today, given that it was reported earlier in the year that it was likely to be shelved, possibly because of the backlash we have just heard. The Bill has come back from the other place, albeit heavily amended, and it still represents a step in the right direction, albeit a very small one. The hon. Member for Bath (Wera Hobhouse) has done a sterling job in getting this Bill through the Parliamentary maze. She has been extremely gracious and generous in her comments today, given what is left in the Bill. I think it is a fine description to say that it has been narrowed in scope. Alternatively, it could be described, as the hon. Member for Devizes (Danny Kruger) has just done, as having had the guts ripped out of it. I know which description suits what has happened better.

--- Later in debate ---

[Justin Madders]

Yes, that is absolutely right. The Equality Act is framed in such a way that it protects everyone from harassment on the basis of their sex. I think that we now have a Bill that, after the amendments, to our regret will not protect workers from third-party harassment. The duty to take all reasonable steps has now been reduced or watered down to taking reasonable steps. We are disappointed that the Bill returns in a form that looks very different from what was originally passed by this House. It seems that the original good intentions of the Bill have—to use the terms of the hon. Member for Devizes—been “gutted”, and I am sorry to say that seems to have been with the support of the Government. Let us not forget that, when the Bill passed through the Commons originally, it did have support from the Government and it also had cross-party support, which is a rarity these days. Therefore, it is extremely disappointing that the democratically elected House seems to have given in to the unelected Lords, seemingly with the endorsement of the Government.

I have to say that the Government’s decision to support the Lords amendments that have taken the guts out of the Bill is frustrating, given that the Bill was enacting pledges that the Government had made.

[The Minister for Women (Maria Caulfield)]

Does the hon. Gentleman not recognise that this is the Bill of the hon. Member for Bath (Wera Hobhouse) and it is up to her to decide which amendments she does or does not accept? The Government have fully supported the hon. Lady. This is not a Government decision; it is part of the parliamentary process.

[Justin Madders]

I thank the Minister for her comments. The Government have a majority, so if they wanted to keep the Bill in its original form they could have ensured that it passed. Let me quote what she said at Committee stage. She said that

“the Government committed to a package of new measures aimed at reducing incidences of workplace harassment. That includes the two legislative measures being brought forward in the Bill: explicit protections for employees from workplace harassment by third parties, such as customers and clients; and a duty on employers to take all reasonable steps to prevent their employees from experiencing sexual harassment.”––[Official Report, Worker Protection (Amendment of Equality Act 2010) Public Bill Committee, 23 November 2022; c. 10.]

[Wera Hobhouse]

It is true that I have accepted the Lords amendment. Indeed, it was ultimately me who proposed that we should go all the way in order to preserve one thing that I find incredibly important, which is the preventive duty on employers. Does the hon. Member not agree that this is an important step and for that reason it is right that I accept the Lords amendment?

[Justin Madders]

I accept what the hon. Member says. We will certainly not oppose the Bill, but we do have to challenge the Minister on why she has changed her mind, given that, last year, she said that the measures in the Bill

“continue to form a key part of the Government’s national strategy for tackling violence against women and girls.”––[Official Report, Worker Protection (Amendment of Equality Act 2010) Public Bill Committee, 23 November 2022; c. 10.]

Why have the Government decided to change their mind on it? It seems to me that they have folded to pressure from their Back Benchers. Let us not forget that the Bill came about as a result of an extensive Government consultation, which received more than 4,000 responses.

[Philip Davies]

It is not necessarily for me to come to the Government’s defence here, but I think the hon. Gentleman is tying himself up in knots with his argument. The amendment was passed in the House of Lords. He will have noticed, I am sure, that the Government do not have a majority in that House, so they cannot be held responsible for an amendment passed in it. If the Government had done as he asked by overturning the Lords amendment, the Bill would have fallen altogether, so I am not entirely sure what he is arguing for.

[Justin Madders]

I am sure that the hon. Member is aware that we vote regularly on Lords amendments in this place, and that the Government use their majority to overturn them. The point that I am trying to make is this: where does this leave Government policy on the issue? The Fawcett Society found that 56% of women working in the hospitality sector, and 47% of those working in the services industry, have faced sexual harassment in the workplace. What will the Government do about that?

[Philip Davies]

If the hon. Gentleman wished to press the matter to a vote as a point of principle, he could vote down the Lords amendment. I am sure that my hon. Friend the Member for Devizes (Danny Kruger) would be delighted if he did, because in doing so he would guarantee that the whole Bill fell. Is that really what he wants?

[Justin Madders]

No, that is not what I want, which is why I have said that we will not oppose the amendment, but we are still entitled to express our disappointment about the capitulation. The Equality and Human Rights Commission’s 2018 report found

“a quarter of those reporting harassment saying the perpetrators were third parties”

and that third-party sexual harassment was dealt with poorly and considered

“a ‘normal’ part of the job”

by some employers. I do not think that is a situation that we should defend. Let us be clear: we would not have objected to the Bill if that had been in place—we certainly would have supported it—but we will support it as it stands because, as the hon. Member for Bath said, it is an important step in the right direction, albeit a much smaller step than originally intended.

The question remains: what is the Government’s plan to deal with third-party harassment? If they will not bring forward a legislative solution, what do they intend to do? If there were a repeat of the scenes at the Presidents Club tomorrow, what would be the consequences for the perpetrators? We need answers to those questions.

Despite the removal of the word “all” from the Bill, the duty to prevent sexual harassment is, as the hon. Member for Bath said, a new duty that represents a positive step forward. Establishing that preventive duty will shift the emphasis away from a reliance on individuals reporting harassment to employers and will encourage employers to take preventive steps. We are optimistic—we can be—and hope that the Bill will drive structural change by fundamentally shifting the responsibility from the individual to the institution, but what that will mean in reality and how much capacity the EHRC will have to investigate complaints remains to be seen. Its responsibility to create a statutory code of practice should mean that the focus will be more on working with employers. Does the Minister have any information on when she expects that statutory code of practice to be published, should the Bill be passed, and will it draw mainly from the non-statutory code of practice that has already been produced?

We believe that everyone should be able to go to work safe from sexual harassment, knowing that their employer has taken steps to create a safe working environment. That is why a Labour Government would go much further than the House has today.

[Maria Caulfield]

I congratulate the hon. Member for Bath (Wera Hobhouse) on progressing this Bill, which tackles the important issue of sexual harassment in the workplace. I thank her for the pragmatism she has shown to ensure that the Bill can progress with agreement from across the House. It is slightly disappointing to see the shadow Minister, the hon. Member for Ellesmere Port and Neston (Justin Madders), take such a partisan approach, because the Bill has had cross-party support throughout all its stages.

It is often very difficult for private Members’ Bills to pass through this place, but the Government have fully supported the Bill, because it is such an important issue to tackle. We have especially made time for an additional sitting Friday, to ensure that the Bill passes. We remain committed to tackling sexual harassment in the workplace by introducing the employer duty, to strengthen protections in the Equality Act 2010.

While I note the concerns from my hon. Friends the Members for Southend West (Anna Firth) and for Devizes (Danny Kruger), I am very pleased that consensus has been reached here and in the other place, and I hope Members will agree that this important Bill should now be on the statute book. I would like to particularly thank my hon. Friend the Member for Devizes, who has some genuine concerns about the Bill that he has expressed today and at previous stages.

This is a difficult subject. While there may be differences in views and opinions, I am really pleased that the hon. Member for Bath has been able to progress the Bill through both Houses, because we need to make our workplaces better and safer. That is particularly true for women. We have heard recently about some of the experiences of female surgeons in the healthcare system. With my other hat on as a Health Minister, I am particularly pleased that this legislation will hopefully prevent some of those experiences in future.

I turn to the Lords amendments. Lords amendment 1 leaves out clause 1, to remove the proposed liability of employers for third-party harassment in the workplace. I am glad to hear that the amendment to remove this third-party harassment liability eases concerns that it could have had a chilling effect on free speech in the workplace. I am pleased that that has been addressed. There are some—I know the hon. Member for Bath is one of them—who are disappointed that the amendment has removed the third-party harassment liability, for very valid reasons, but this is about getting a compromise, so that we get the majority of the measures in the Bill through this place.

The Government believe it is important that workers are protected against this form of harassment, and good employers are already taking steps to ensure that their employees are protected from harassment by third parties, regardless of the legal position. However, to progress the Bill, we have had to be pragmatic, acknowledge the complexities at play and find a suitable balance. While we want to strengthen protections, we also do not wish to infringe on individuals’ rights to freedom of speech. Everyone has the right to their views and to debate them just as we are doing today, respecting others’ views in the process. The aim of the Bill is to tackle workplace harassment and not limit people’s freedoms. It is important to remember that, despite the removal of the third-party harassment provision, the Bill will still introduce a new duty on employers to take reasonable steps to prevent sexual harassment.

The Government’s priority is to ensure that the legislation works effectively. We have consistently consulted with a wide range of stakeholders and have listened to all their views. As my hon. Friend the Member for Southend West has consulted with her chamber of commerce, the Government have done so more widely. When concerns regarding the potential chilling effect on free speech were first raised as the Bill progressed through the Commons, the Government took on board those issues. It was feared that employers may take unreasonable or drastic measures to avoid liability for harassment of their staff, particularly by third parties, to the extent that they would feel obliged to shut down conversations in the workplace. While employers will be expected to take action against workplace harassment, we recognise that those actions should fall short of prohibiting conversations. Free speech is crucial to our way of life, and it is important that we found a way forward.

With over 40 amendments tabled to the Bill in the other place following its Second Reading on 24 March, even after the Government tabled their amendment, it was clear that there remained concerns that the Bill would still have a chilling effect on free speech. The Government took those amendments very seriously, as they were fatal to the Bill. In our engagement with stakeholders and peers, we heard the strong concern, particularly about the third-party harassment issues, so we were eager to find a balance and a way forward for the Bill to reach the statute book with cross-party support. Therefore, the Government have been pragmatic and alive to the issues raised, and consensus was reached with peers by removing all but two of their amendments. The shadow Minister, the hon. Member for Ellesmere Port and Neston, did not comment on the other amendments—over 38 of them—that we managed to get removed.

Non-disclosure Agreements in the Workplace

Justin Madders Excerpts

Tuesday 5th September 2023 Westminster Hall

[Justin Madders (Ellesmere Port and Neston) (Lab)]

It is a pleasure to see you in the Chair, Ms Ali. I congratulate the right hon. Member for Basingstoke (Dame Maria Miller) on calling this debate; it is an area that she has worked in for a considerable period of time and she articulated very clearly what the problems are and why they need tackling.

There have been a lot of excellent contributions today. My hon. Friend the Member for York Central (Rachael Maskell) brought her vast experience of employee representation to the fore. She talked about having open cultures in the workplace, which is a good way of looking at how this all needs to change. The hon. Member for Oxford West and Abingdon (Layla Moran) made an excellent speech; she made the important point that when someone signs these NDAs, they are not for a month or a year, but for life. As I will go on to explain, that does cause people difficulties later.

The hon. Member for Stoke-on-Trent Central (Jo Gideon) described NDAs as being weaponised, which I thought was a good description. She also said that employment tribunals never tackle the underlying cause of discrimination in the workplace. Of course, tribunals can make recommendations to employers, but we are getting a body of evidence that this is not an effective tool, and that perhaps an enforcement body is needed to look at those issues. My hon. Friend the Member for Birmingham, Yardley (Jess Phillips) brought all of her experience to the fore and gave a truly fantastic speech. She was right to say that this issue is fundamentally about power and its imbalance, which I will come to in my speech.

I do not dispute that there is a need for some non-disclosure agreements. There are sometimes appropriate situations, where they are needed, but I think we all agree that they are far more prevalent than they need to be and are being abused to cover up other issues. In the absence of any data on the numbers of agreements in operation, we are reliant on the legal profession and campaigning groups to give us an idea of what is happening.

Evidence collected by the Women and Equalities Committee and a recent study conducted by the Solicitors Regulation Authority found that there is widespread use of NDAs in the workplace, with little regard given to their appropriateness. In 2019, the Committee said:

“Confidentiality and non-derogatory clauses have become commonly used in agreements reached between employers and employees when settling or closing employment complaints or employment tribunal cases about discrimination or harassment. Indeed, they are commonplace when settling any type of employment dispute.”

The Solicitors Regulation Authority said that

“firms often told us that NDAs are included as standard without consideration of the purpose for including such a clause. For example, a firm commented they were used even ‘when not strictly necessary, where everyone knew the ongoing issue.’”

As a former practising lawyer who has handled thousands of those settlement agreements, I can confirm that NDAs are standard and the attitude of most employers, when challenged on the inclusion of them, is that they are a standard clause and the agreement is presented on a take-it-or-leave-it basis—whether the NDA is necessary or not. The reason they continue is the imbalance in power in the employment relationship. The SRA found that only six of 25 solicitors it interviewed reported even questioning the need for a confidentiality clause. The fact that those drafting them give no particular weight to them is a trend. It is in direct contradiction to the advice given by ACAS, which says that they should only be used where necessary and not as a matter of course.

There are many workers bound by completely unnecessary NDAs at the moment, and when an important industry regulator, such as the Solicitors Regulation Authority, suggests there is a wholesale misuse of a contractual term—one that, as we have heard, can have a profoundly negative impact on workers—there is a good argument to say that the Government need to intervene. It is a good example of where there needs to be more intervention. I echo the question raised by my hon. Friend the Member for York Central, and ask the Minister what work will be done to understand the extent and misuse of these agreements.

It is easy to see why the agreements are so prevalent. The Employment Lawyers Association said clearly that employers are the driving force behind NDAs, as they enable settlement without admission of liability. The employers’ reasoning is simple: why settle publicly when they can wait for a tribunal that might get them off the hook or award a lower amount? That speaks to a wider, more problematic imbalance of power between employers and employees that is endemic in the labour market. In many ways, the proliferation in use of NDAs is both a symptom of, and a tool used to perpetuate, the imbalance of power in the workplace. The Solicitors Regulation Authority—which, let’s be honest, is not at the vanguard of left-wing workers’ rights—described the imbalance of power in the workplace as “fundamental”.

A witness before the Women and Equalities Committee —I think this evidence is very powerful—said:

“There is this very well-founded fear amongst women that, if they talk about having had problems at work, even if their problem is not of their own making, they will be labelled as a troublemaker and they will find difficulties getting new employment.”

Those comments, although made in the context of harassment, could equally apply to a trade union representative or, as the hon. Member for Cheadle (Mary Robinson) said, to a whistleblower or, indeed, to anyone who challenges poor practice in the workplace. That power imbalance affects everyone, across the board.

One of the most troubling findings in the Select Committee report was the culture that NDAs perpetuate in some workplaces. This means that dangerous cultures and management failures continue. In relation to the individual, NDAs starve alleged victims of any form of justice, either through internal processes or through tribunals. For the employees who remain, the alleged perpetrator can be left untouched, presenting a danger to the rest of the workforce.

The Committee concluded:

“We are particularly concerned that some employers are using NDAs to avoid investigating unlawful discrimination…and holding perpetrators to account.”

Let us not forget that employers have a duty of care to all their employees and should be looking to tackle these instances, whether or not the person involved is a “rainmaker”—that was another concerning part of the evidence. The Committee report referred to rainmakers being given a degree of latitude when it came to behavioural standards. Those individuals are worth more to the business, which continues to use NDAs to avoid holding them to account. That sends out a clear message that the safety of employees can be ignored if the accused is valuable enough to the company. One worker told the Committee:

“I was told the abuser was indispensable and I was not.”

I think we can all agree that that is completely unacceptable and should not be happening in any workplace in this country.

According to the Solicitors Regulation Authority, NDAs should not impede or deter someone from co-operating with a criminal investigation, reporting an offence to the police or reporting a breach to a regulator, or prevent proper disclosure about the agreement or circumstances surrounding it to professional advisers, including medical professionals and counsellors, or the making of a disclosure under the Public Interest Disclosure Act. However, although there were no cases of solicitors drafting these agreements to deliberately prevent that, the SRA’s recent investigation found

“a number of common trends or practices which inadvertently might contribute to this happening.”

This leaves signatories feeling uncertain as to whom they can speak to or what they are allowed to say. When combined with the threat of clawback or penalty clauses, many will, unsurprisingly, self-censor to prevent them from losing their settlement. It also brings with it a weight to be carried—a significant burden over the long term.

Clearly, questions must be asked of the response to this situation. What I and other hon. Members have described today is not a recent problem that has emerged from nowhere. The implications of the use of NDAs in the workplace have been known for some time, yet we have seen very little action taken. There was a flurry of interest and promises were made back in 2019, but more than four years later the only changes have been updated ACAS guidance and a warning notice sent out by the Solicitors Regulation Authority, both of which are non-binding and appear to have done little to mitigate the problems.

The Legal Services Board offered a damning indictment in a call for evidence earlier this year. It said that

“notwithstanding the usefulness of the standards and guidance summarised above, the evidence of continuing misuse of NDAs suggests that clearer and more effective expectations for the professional conduct of legal professionals may be required.”

This is rather galling given that the Government promised to

“crack down on misuse of non-disclosure agreements”

all those years ago. Legislation was supposed to be in place to compel employers to write the limitations of the confidentiality clause in plain English, extend legislation to ensure that individuals signing NDAs get independent legal advice, and introduce enforcement measures to deal with NDAs that are not compliant and make them void. The updated ACAS guidance has included these elements, but that is not the same as enforceable legislation. As the right hon. Member for Basingstoke said, if it is right for the higher education sector, it is right for everywhere else as well. I feel that this area has fallen victim to the Government’s inertia on employment rights. As the Minister will have heard today, there is a great deal of willingness to see that changed.

[Rushanara Ali (in the Chair)]

I would be grateful, Minister, if you could leave a little bit of time at the end for Dame Maria Miller to respond to the debate.

Strikes (Minimum Service Levels) Bill

Justin Madders Excerpts

Consideration of Lords message
Monday 17th July 2023 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

Let me repeat, at the outset, our opposition to the Bill and our intention to repeal the Act that it will become should we be in a position to do so in the future. It is one of the most illiberal, unconscionable and ultimately destructive pieces of legislation produced by any Government. We believe that the right to withdraw labour is a fundamental right, a human right, and one that should not be extinguished. Even if some Conservative Members cannot see past their hostility to trade unions and past the easy headlines, they should see that what they are asking their constituents to do is distinctly un-British, because it infringes on individual freedoms that ought to be—even for Conservative Members—a basic part of any open and democratic society.

Freedom matters, and valuing freedom sometimes means that we protect another person’s freedom to do something even if we do not personally agree with the particular course of action. But our objections are based not just on principles, but on practicalities. Ultimately, we do not think that the Bill will work. The Bill is counterproductive because it will not quell the concerns of many people in the sectors that have taken industrial action. Taking away the right to strike will not take away people’s concerns. We cannot legislate away people’s legitimate grievances about their working conditions. Because the Bill is so ill defined and poorly thought through, Parliament must have a proper opportunity to consider its ramifications.

The measures set out in Lords amendment 2D attempt to address some of those issues. The amendment also provides yet another opportunity for us to raise our concerns about the Government’s lax approach to proper scrutiny during the Bill’s progress so far. Let us go back to when the Bill was first published. It is surely a basic expectation of Government that they should provide an impact assessment before asking hon. Members to vote on a Bill. But no—we were asked to trust the Government that the matter was in hand and that all would be fine. We said it at the time and we say it again: that approach is completely unacceptable.

The Bill had been trailed in the press for months before it was published, so not to have the impact assessment ready at the same time was a failure of basic competence. When it finally appeared, we could see why the Government were so keen to keep it under wraps. The Regulatory Policy Committee said that it was not fit for purpose—it could just as easily have been talking about the Government—and no wonder, given that the assessment contains statements that undermine both the purpose and execution of the Bill.

The impact assessment states that the Bill

“could mean a general increase in tension between unions and employers. This may result in more adverse impacts in the long term, such as an increased frequency of strikes for each dispute.”

When Ministers told us on Second Reading that the Bill would reduce the disruption caused by strikes, what they apparently did not know was that the Government’s own impact assessment would say that it could, in fact, have the opposite effect. The impact assessment also says, on at least half a dozen occasions, that assumptions are being made about the level of service that would be required. That is the point of the Lords amendment: unless we have some idea about what these minimum service levels will be—in the six months since the Bill was published, Ministers have not come to the Dispatch Box and told us—we are legislating in a vacuum.

The point has not been lost on the Delegated Powers and Regulatory Reform Committee, which wrote in its assessment that

“there is nothing in the Bill saying what those minimum service levels are. We shall only know when Ministers make regulations after the Bill is enacted. This is small comfort to Parliament, which is considering the matter right now.”

The Committee’s recommendation was that the Government should publish indicative draft regulations alongside the Bill. As it rightly points out,

“the Government must have some idea how they propose to exercise these powers.”

It is no surprise that the impact assessment got a red rating. Of the 861 Bills assessed by the Regulatory Policy Committee since its creation, just 2.9% have been given a red rating. When legislation represents such a fundamental departure from past practice, the importance of impact assessments increases rather than decreases.

If this all sounds familiar to you, Madam Deputy Speaker, that is because it is. Only last week the High Court said, in relation to the consultation process for the regulations that allow agency workers to break strikes, that

“this is not a case in which the evidence is that the proposal had obvious and undisputed merit based on cogent evidence, and enjoyed strong support from representative bodies in the sector”.

It could have been talking about this Bill—no doubt, in time, it will be.

The pattern is familiar. The Government decide the policy, although “policy” is probably too strong a word. The Government decide the headline that they want to create, rush through ill-thought-out legislation and then ignore all the voices that point out principled and practical objections. That is to treat democracy with contempt. Parliament is not a rubber-stamping process to agree whatever the Government of the day decide. When Parliament is starved of its ability to properly scrutinise legislation, that impacts on fundamental human rights, as it does in this case. It should come as no surprise that there is pushback from the other place requiring that a robust process be followed.

The amendment is important because the International Labour Organisation’s conference committee on the application of standards called on the Government to ensure that existing and prospective legislation is in conformity with the convention that governs freedom of association and the protection of the right to organise. I would not have thought that is too much to ask of a modern liberal democracy. In fact, I am rather ashamed that the ILO has had to point it out at all.

All this amendment does is what the ILO is asking the Government to do anyway, which is to undertake genuine consultation before implementing minimum service regulations. This means that, when regulations are published, they would include an impact assessment and there should be genuine consultation on the regulations, including on the protection for workers named in work notices and the reasonable steps a trade union needs to take to ensure compliance.

--- Later in debate ---

[John McDonnell (Hayes and Harlington) (Lab)]

I am sorry to interrupt my hon. Friend when he is in full flow but, as he is developing his argument on the need for consultation and impact assessments, has he been able to clarify with the Government what happens if an employer refuses to comply? In London, for example, the buses are contracted out, and individual bus companies have had individual disputes. If the Government instruct there to be a minimum service level but the employer does not want to sour industrial relations in the long term and therefore refuses to comply, what then happens?

[Justin Madders]

That is a very good question. My understanding—no doubt the Minister can correct me if I am wrong—is that it is still up to the employer to determine what work notices it issues, which makes the Bill a little ludicrous.

All these consultation papers, all these impact assessments, and we are still legislating in the dark.

[Rachael Maskell]

My hon. Friend has just made a valid point, because when NHS Employers and the NHS Confederation came before the Select Committee on Health and Social Care, they said that they did not want any of this legislation. Presumably, following that logic, they will not have to issue minimum service level terms for a strike.

[Justin Madders]

I thank my hon. Friend for her intervention. That is why it would have been so interesting to see what the consultation responses were to the draft regulations, because those might have told us whether employers were saying, “Don’t do this; we don’t think it is going to work.” We know that a long list of employers’ organisations are opposed to this Bill, and I will come on to that in a moment. They understand that, ultimately, it is not going to help industrial relations but will sour them.

In summary, the Bill’s impact assessment turns up late and is inadequate; no pre-legislative scrutiny or evidence sessions for the Bill took place; the Committee stage is rushed through in one day; and subsequent consultations are incomplete and leave many questions unanswered. Yet the Government still say that this Lords amendment is not necessary. The evidence to date and the opinion of the ILO say otherwise. I referred to the fact that the ILO is not alone in expressing concerns about the Bill. Many organisations have expressed alarm, including the Equality and Human Rights Commission, the Joint Committee on Human Rights, NHS Providers, the rail industry, the Chartered Institute of Personnel and Development, the TUC, and the Welsh and Scottish Governments. The Transport Secretary and the Education Secretary have also done so, and I could give more names, but I have only an hour for this debate and so I will leave it there.

When we have the shameful spectacle of the ILO calling this Bill out, Members need to think again. By rejecting this Lords amendment, the Government are, in effect, saying one of two things: either they do not know whether they break international law; or they do know but they just do not care. We ought to care, we ought not to be trailing behind in workplace protections, and we ought not to be mentioned in the same breath as Turkmenistan. We ought to be leading from the front, as an exemplar for other countries to follow and a leader on the international stage that says, “Yes, good workplace rights and strong trade unions are a key component in any prospering modem economy, and the right to withdraw your labour is a fundamental one.” However, this Bill is the hallmark of a weak Government who have run out of steam, have nothing left to offer but division and want to silence the very people who keep this country going—shame on them.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the Scottish National party spokesperson