Employment Rights Bill

Lord Fuller Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

[Baroness Noakes (Con)]

My Lords, I am a great fan of international competitiveness and growth objectives for regulators. When the first one was introduced for financial services regulators in the Financial Services and Markets Act 2023, I thought it was an incredibly important addition to the way regulation of financial services is undertaken. Just last week, your Lordships’ Financial Services Regulation Committee issued its report on how that international competitiveness and growth objective is working, and I commend it to noble Lords.

I support what my noble friend Lord Sharpe of Epsom has said about applying the duty to the Certification Officer, but I invite him to consider whether there is a much more important area where such a duty should be applied in this Bill, which is to when the Secretary of State makes decisions about, for example, the enforcement provisions or making the various regulations that we know are necessary to make Part 1, and indeed other parts of the Bill, operate effectively.

The most important aspect of the Bill is going to be driven by what the Secretary of State does once it is enacted, but there is not an equivalent requirement on the Secretary of State to take into account the needs of international competitiveness and growth. It is essential for the Secretary of State to have that at the front of his mind when making regulations that will have such a big impact on the way that businesses operate in this country. I therefore commend my noble friend’s amendment, but if he is considering bringing something back on Report, he might consider something a little broader.

[Lord Fuller (Con)]

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

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

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

[Baroness Jones of Whitchurch (Lab)]

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

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

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

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

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[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

The noble Baroness will need to because it is an amendment, and therefore at the end one has to ask for it to be either considered or, by leave, withdrawn.

[Lord Fuller (Con)]

My Lords, I support this amendment, but not for the reasons my noble friend gave. Many years ago—Members on the Government Benches may realise quite how long ago this is when I give the names of the unions concerned, which are long since consigned to history—I was the director of a small haulage firm. It no longer exists or trades, but I cut my teeth on labour relations behind the wheel.

In our small business, which employed about 50 people, there were three types of worker: those who were not in a union at all, a small number who were with the TGWU—that dates me—and those with a new union, the United Road Transport Union. The shop steward of the URTU came to see me and said: “It’s like this, John. I think that you should recognise our union”. So I did. It was personally convenient to deal with one person rather than try to have a mass meeting with 30 or 40 people, all with different views. Unlike what some noble Lords might think of those on the Conservative Benches, I found a huge amount of value in being able to negotiate with the URTU, which had the most members but was not entirely pervasive in our company. Arthur Harris was in the TGWU—he was such a long-standing member of our business that he was employee no. 1 on our payroll system—and was not about to go to the URTU for a moment.

The point of this story is that I negotiated in good faith with the URTU and recognised that it had the most members. When making an agreement, we were somewhat apart but not completely, and I said: “Peter, put this offer to them and let’s see what they say”. He did not really want to, but the point is that I needed to make the offer as well to the other union, the TGWU, and to those members who were not in a union at all.

My noble friend made the point about the Port of Felixstowe and I inferred from her remarks that there was a single union to deal with, but that is not the landscape for many organisations. Later this evening I will talk about my experiences in local government, where there are three different unions involved—UNISON, Unite and the GMB—and a complicated negotiating environment.

I support this amendment because it provides equality to the smaller unions, not just the big ones, some of which have their own agendas. It is incumbent on all unionised labour to at least see what is on the table, whether or not their union negotiated it. That is why my noble friend’s Amendment 257A is very important and should be given proper consideration; it recognises the complex labour landscape found in many companies, particularly in private business, not just the monolithic larger organisations where there are single unions, facility time and other things.

[Lord Hunt of Wirral (Con)]

My Lords, I strongly support my noble friend’s amendment, which, as she explained, addresses a fundamental democratic deficit in our current industrial relations framework. I thank my noble friend Lord Fuller for giving his personal experience of how important this deficit can be if it is not addressed.

This amendment would require trade unions to present any employer offer to their membership for a vote, regardless of whether the union leadership supports it. My noble friend gave the example of Felixstowe; others could give similar examples, such as what has been happening with the Birmingham strike. This is not an anti-union measure—it is a pro-democracy measure that seeks to strengthen the voice of individual workers within the collective bargaining process. It recognises that in a democratic society it should be workers themselves, not union officials, who decide whether an employer’s offer meets their needs and aspirations.

The principle underlying this amendment is simple and would be seen as uncontroversial in any other democratic context: those affected by a decision should have the right to make that decision for themselves. When union leaders can simply reject employer offers without consulting their membership, they effectively deny workers the fundamental right to democratic participation in decisions that fundamentally affect their livelihoods. We would surely not accept a system where parliamentary leaders could reject government proposals without allowing MPs to vote. We would not tolerate local councils where executives could dismiss motions without having to present them to councillors. The same should surely apply to trade unions.

This amendment recognises that the priorities, circumstances and risk tolerances of individual workers may differ from those of their union leadership. A young worker saving for a house deposit may take a very different view of sustained strike action from that of an established worker nearing retirement. A worker in precarious financial circumstances may prefer settlement on reasonable but suboptimal terms to prolonged uncertainty and loss of income. Surely we all want to avoid a situation where workers are denied a voice in decisions that so profoundly affect their lives.

Contrary to weakening collective bargaining, this amendment would strengthen it by increasing member engagement and ensuring that union positions truly reflect membership priorities. When workers know that they will have the final say on offers, they are more likely to engage with the bargaining process and provide clear guidance about their priorities. Enhanced member involvement can improve union negotiating positions by ensuring that they are based on genuine membership preferences rather than leadership assumptions. It can also increase employer confidence in the bargaining process by ensuring that negotiated agreements will not be undermined by membership rejection.

Although many trade unions always act in good faith when considering employer offers, this amendment would put protections into legislation to prevent bad actors denying workers their democratic voice. Without legislative safeguards, the system could enable a dangerous information asymmetry where union officials control what information reaches members and the manner in which that information is presented.

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[Lord Sharpe of Epsom (Con)]

My Lords, my Amendment 262 concerns an issue of considerable importance, not merely for those involved directly in industrial relations but for the health of our broader economy, the stability of our public services and the legitimacy of this legislation. The amendment would require the Government to commission and publish, within 12 months of Royal Assent, an independent assessment of the impact of this Act on the number of working days lost to strike action, specifically comparing the 12 months following its enactment with the 12 months preceding it. That report would then have to be laid before Parliament. This amendment is modest in scope. It does not seek to obstruct the Bill or alter its provisions. It merely seeks transparency, accountability and, above all, vital evidence-based analysis in due course.

There is a striking—if I may use that word without inflaming the debate—absence of hard data or persuasive analysis in support of the central justification for these changes, namely that repealing certain elements of the Trade Union Act 2016 will result in better industrial relations. Indeed, the Government’s own impact assessment acknowledges that there could be a benefit

“if Trade Union reforms lead to better industrial relations”.

I emphasise “if”. Hope is not a good substitute for policy. Nor should legislation of this consequence be built on assumptions rather than analysis. I will therefore structure my remarks around three core questions which the Government have failed to answer convincingly and which this amendment would help to address.

If we are to repeal elements of the 2016 Act, we must first understand what standard the Government are using to declare that Act a failure, or at the very least to assert that it is no longer fit for purpose. The Trade Union Act 2016 introduced significant changes: minimum turnout thresholds for strike ballots; requirements for information on ballot papers; limits on picketing; and restrictions on facility time in the public sector. It was controversial, certainly, but it was also justified by the Government of the time as necessary to ensure that industrial action had a strong democratic legitimacy, and that the wider public were protected from excessive disruption.

Now we are told that these measures must be rolled back, but we have at no stage been told what objective, or even subjective, measure of success or failure is being applied. Are we to believe that the 2016 Act failed because it did not eliminate all industrial action, because it was unpopular with some stakeholders or because it placed an administrative burden on unions—or, more worryingly, is it being repealed simply as a matter of political preference? To look at some figures, according to the Office for National Statistics, the number of working days lost to strike action was at a historic low throughout the period following the 2016 Act until a sharp rise in 2022-23, partly driven by inflation, the consequential erosion of real-terms pay and broader discontent in the traditional public sector.

Are we being told the legislation was ineffective because strikes still happened in 2022? If so, that ignores the very different macroeconomic context we now face. Or is the claim simply that industrial relations will somehow improve if these legal constraints are lifted? In any of those cases we must ask: compared with what? Compared with the pre-2016 environment? Compared with our European neighbours? Or compared with a model of workplace consensus that may not exist in reality? Without a baseline for comparison, the Government’s argument is essentially unfalsifiable and unjustifiable.

Let us assume for the sake of argument that the Government believe that these changes will lead to more equitable bargaining, greater union engagement and ultimately improved relations between employers and workers. Even if that were true, we must still ask at what cost. If these reforms lead to a rise in industrial action, that will have implications not only for the affected sectors but for the public at large. Trains will be cancelled, schools will be closed, hospital appointments will be postponed, bin collections will be missed and courts will be adjourned. These are not abstract costs, so it is extraordinary to repeal a major piece of industrial relations legislation without offering any quantification of the risks of increased disruption and without explaining how those risks will be mitigated.

The impact assessment leans heavily on the idea that increased union involvement could lead to improved communication and better outcomes, and perhaps it could. But the fact remains that the cost of getting this wrong will be borne not by policymakers but by the public. That is why this amendment is so crucial. It simply asks the Government to return to Parliament within a year and tell us whether this has worked. Has industrial action decreased or increased? Are we seeing the promised harmony or the feared escalation? If it is the latter, we as legislators have a responsibility to know that and to act accordingly.

Perhaps the most fundamental question of all is: what actual, empirical, verifiable evidence do the Government have to support their central claim? We have not been given a retrospective analysis of the Trade Union Act 2016 and its impact. We have not been provided with consultation data that robustly supports repeal. We have not seen sector-by-sector breakdowns of how these measures will improve the industrial landscape. We have not even seen clear articulation of the problem the Bill is trying to solve. Indeed, the rationale appears to be more ideological than evidential. It seems to be based on the belief that loosening legal constraints will somehow foster good will and reduce conflict. All the academic research and literature on industrial relations remind us that legal frameworks matter, that institutions shape behaviour, and that rules, when clear, consistent and fairly applied, help prevent conflict and not exacerbate it.

If the Government are so confident in their position, why not test it? Why not commit to measuring its effect? Why not, a year on, lay before this House and the other place an honest assessment of whether their theory of change has delivered the desired result? If the evidence proves them right, they will be vindicated. If not, Parliament should be empowered to revisit the legislation. There is, after all, considerable flexibility inherent in legislation so riddled with Henry VIII powers. I look forward to the Minister’s reply and I beg to move.

[Lord Fuller (Con)]

My Lords, I rise to support Amendment 262 in the name of the noble Lord, Lord Sharpe, and others, because I want to talk about a simple economic truth. One of the provisions in the Bill will reduce the thresholds at which industrial action may be called or authorised. The truth is that when you reduce the threshold, the likelihood of industrial action does not grow linearly; it grows exponentially. The amendment is needed because the Bill, sadly, will provide the world with a real-life experiment that will inform political and economic science of that simple truth.

It could be worse than that. My experience comes from local government and my relationship with the National Joint Council. Local government employs 1.8 million local government workers. There are three principal unions: Unite, UNISON and GMB. Within the cohort of local government workers, I have negotiated with the craft workers, the Salisbury workers and the coroners. There is a red book, a green book and a blue book; there is even a gold book covering senior fire officers and police officers. There are 136 different activities that local authorities do and, of course, there are 350 principal councils. I have engaged with all this complexity over about 10 years sitting on the National Joint Council, the device through which the employers engage with the unions. I have sat alongside the noble Baroness, Lady Taylor, on that body for many years, and now we both find ourselves in here.

As part of the gang of four, the top four local government councillors engaged in these important negotiations, I have learned a lot of things. There is less beer, there are fewer sandwiches and there are palatial premises built by one of the unions in Euston. It has not been easy work, but we have had a series of national agreements engaging on a respectful basis. It has been valuable work. The important point is that there have been powerful incentives to avoid industrial action. The bar has not been impossible, but it has been a high bar against which strike action must be called. It has sort of worked, because there has been an equilibrium between the employer and the employees across 1.8 million unionised workers —just under a third of them all—in this country.

That equilibrium has meant that when there is a strike, it is serious. When people down tools, it is in the news. The Birmingham bin strike is a case in point: there is a strike, and it is serious. My anxiety about so many of the provisions in the Bill is that it is going to dissolve the powerful incentives to avoid industrial action and instead, arithmetically and structurally, put in the provisions where it is encouraged. The Bill sets the wrong balance, because we are not talking about simple organisations with single unions and small workforces in local government. We are talking about a very complex landscape. If you reduce the thresholds, people are more likely to strike because a minority, as little as 10%, of workers could call a strike. When 10% hold the 90% over a barrel, that is clearly not in the interests of the public; it is not in the interests of the workers; and I do not believe that in the long term it is in the interests of the unions.

Amendment 262 calls for a robust assessment of the effect of the Bill on days lost to industrial action. Not only is that the right thing to do but we would do a service, because it would demonstrate once and for all that simple efficiency of labour relations: if you reduce the threshold to call industrial action, the number of days lost to strikes will go up geometrically. I regret that we are going to do a service to political and economic science, but if that is the way it is, Amendment 262 is the way to achieve it.