Employment Rights Bill
Lord Goddard of Stockport Excerpts(1 day, 6 hours ago)
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Lord Goddard of Stockport (LD)
My Lords, I will speak briefly to Amendments 215 and 332, both in the name of the noble Lord, Lord Sharpe. Amendment 215 proposes a new clause to grant trade union members a statutory “right to switch off”; that is, to disengage from contact initiated by trade union representatives.
It raises the wider question of work/life balance and members’ autonomy. That is not a bad thing to raise and probe in this amendment. However, the caricature by the noble Lord, Lord Hunt, of a typical union member is a little fanciful. When I was a shop steward, I certainly would not be ringing up union members at 8 o’clock when England were playing football against somebody. I would have got very short shrift and probably would not have been the shop steward the following week. That is the power of trade unions: they can remove and add shop stewards on a whim.
We just need to be a little bit grown-up about the modern trade unionist. We are living in a different age now. It would be wrong for me to say that communication does not happen, but it is now via text, X and WhatsApp, and that is completely acceptable. Where the line is drawn is around giving people a statutory right to switch off, or not. I think it is down to individual members to decide whether they want to be able to be contacted. It should be for the members themselves to decide that, rather than there having to be some statutory right. It is not for me to pass judgment on the desirability or otherwise of it, but I would be interested to understand the rationale and the evidence underpinning the need for such measures.
Amendment 332 is more technical in nature, providing for the commencement of these provisions a year after the Act receives Royal Assent. This delayed implementation may allow for guidance to be prepared or for institutions to adapt. With that in mind, I would like to hear the Minister’s response to both these things—bearing in mind that, at the end of the day, trade unions exist because of their members; if members do not like a trade union, they can leave a trade union. That point has not been brought up anywhere in this House by anybody. You are free and able to join a trade union. You are also free and able to leave a trade union.
I know that, in 1973 and 1974, people did leave the GMB union over some policies that the union had. It was not an impossible thing to do. They were still treated fairly; they were given full consultation and assistance. It was for us to persuade them to come back into the union, which nine times out of 10 they did. It is not always a one-way street. I would hope that the Conservatives understand that unions are controlled by members.
We have annual congresses. One of the greatest things we used to do as the Lancashire region was to overturn the executive once a year in conferences; to us, that was the object of conference. It did not go down well with John Edmonds and the senior management team. I would stand there berating them for the poor pay of gas workers and objecting to a 2% pay rise, and I would get full support. Then I would have to go and see Mr Edmonds. The words he once said to me were, “You control the union for one week and we control it for the other 51 weeks, so I will let you have this week, David. Now leave”. I have deleted and added words there to avoid using any language that would be unfit for this House.
Again, it is a balancing act. I do hope that the Minister will address it in that manner and not just ignore amendments that come in from the Benches opposite. There is something behind the amendments. They are probing amendments and we are just trying to get the flavour of where the Government sit on membership and the unions, with regard to consultation. We spent a few hours—a lot of hours—the other night talking about union rights and members’ rights. I think this issue just touches on the end of that. I can see why it was not raised in that group, but it is still something that needs explaining a bit more clearly.
Lord in Waiting/Government Whip (Lord Leong) (Lab)
My Lords, I first thank the noble Lord, Lord Goddard, for his very entertaining contribution, and the noble Lord, Lord Hunt of Wirral, for speaking to Amendments 215 and 332 in his name and that of the noble Lord, Lord Sharpe.
The proposed new clauses would create a right in primary legislation for trade union members to switch off from contact from trade union representatives. As far as I am aware, there is not any demand to introduce such a requirement on trade unions. I have not heard this from my colleagues, or from trade union members, or from any worker, or indeed from any employer or employer organisation that I have spoken to lately.
It is difficult to see what benefit or purpose such an obligation inserted into membership contracts might serve. Currently, there is no obligation for a trade union member to reply to communications from their trade union, as was ably set out by the noble Lord, Lord Goddard. There is nothing stopping a member ignoring them or telling them to **** off.
This Government are committed to the well-being and positive work-life balance of all workers. The Employment Rights Bill is proof of this commitment, with relevant measures including making flexible working the default except where not reasonably feasible. This will help employees and employers to agree solutions which work for both parties.
I say politely to the noble Lord, Lord Hunt, that I reject his allegation of trade union influence and power interfering with people’s lives. As it stands, every member can ignore the messages and communications —whoever has approached them—outside work. There is no evidence that this is currently happening. I ask the noble Lord, Lord Hunt, to reflect on that and to be careful with some of the pretty harsh words he has said. I invite him to withdraw his Amendment 215.
Lord Goddard of Stockport (LD)
My Lords, I rise to speak to the amendments standing in the name of the noble Baroness, Lady Jones. These proposals, while numerous and largely technical in nature, form an important part of the broader framework for trade union recognition and access. Although they are technical in nature, if you read the amendments—and there are quite a number of them—you will see that the Government are beginning to put a bit of meat on quite a small bone. This is the first time in the Bill that we have seen that kind of thing begin to be teased out. Notably, government Amendments 215A and 215F set out clear procedural timelines and information-sharing requirements between employers and the Central Arbitration Committee to help improve transparency and predictability for all parties involved. By establishing firmer timelines, such as a five-day window to provide workforce data and the 20-day period to agree access arrangements, these provisions aim to support a more orderly and informed recognition process, which I welcome.
I turn to the amendments tabled by the noble Lord, Lord Sharpe. I acknowledge the intention to reflect the workforce changes more accurately, but in our view, some of his proposals risk creating a little uncertainty. Amendments 215AZZB and 215AZZC, for instance, introduce provisions to include new and hired workers in the ballot, potentially undermining the principle that eligibility should be based on the state of the bargaining unit at the time of the application. It is like buying a lottery ticket after the lottery has finished, and then complaining if your numbers come up and you are not allowed to win—you literally have to be in it before it starts.
Similarly, the carve-outs from the three-year stability periods found in Amendments 216FA and 216FB could weaken the clarity and consistency that employers and trade unions require. We must be cautious about layering too many exceptions that could reopen settling matters and prolong disputes unnecessarily.
Finally, while the Government’s overall aim of modernising these areas of law is welcome, it remains vital that clarity and simplicity are not lost in that process. We need to ensure that the frameworks, particularly around recognition, access and enforcement, remain workable and intelligible for employers and workers alike. This is important in sectors characterised by high turnover and volatility. I therefore urge Ministers to consider refining these proposals with that principle in mind: that the system must support effective and fair collective bargaining without inviting further ambiguity.
These amendments are well laid and extremely well made. I thank the noble Lords, Lord Sharpe and Lord Hunt, for their clarity tonight in dealing with the issues. To everybody who has been sitting here for seven or eight long nights, I must say that business is not moving any more slowly, but clarity is much improved. I thank the Front Bench and the Conservative group for being more concise in speaking to the issues; I have appreciated that, and I know my group have too. I think the Minister might agree—through slightly gritted teeth—that this is the way forward.
Baroness Lawlor (Con)
My Lords, I support the amendment of the noble Lord, Lord Burns, and the amendments seeking greater transparency for trade union members on where their money goes.
I support the retention of the status quo—so that people have to opt in—and maintaining the changes we saw made in 2016. I do so because these are moderate amendments. They do not attack the existence of the status quo or the political fund, which is, as is often announced on the websites of the unions, a campaigning fund. I agree with the noble Lord, Lord Prentis, that it is made clear by UNISON and Unite to new members, when joining, what their fees are for. Certainly, it is clear to the public that some members are affiliated to the Labour Party, and some of the funds of political campaigning will indeed go to the Labour Party. I think the noble Lord, Lord Hendy, said that 13 were affiliated; I had the figure of 11 in my head, but that is only a small difference.
None of that is under attack; that is a subject for another debate. I would like to stress to your Lordships why I support the noble Lord, Lord Burns. This area has been very contentious for a century, and every single attempt to reach a settlement has involved compromise. Although one may think that the opting-in arrangement of the 1927 Act was against the interests of the trade unions, one has to remember that that was in the wake of the General Strike of 1926 and that the Conservative Party, which was the party of government, would not follow the inclination of many of its Back-Benchers—and, I think, one of its Front-Benchers, but I will not say whom —to get rid of the political fund. The Prime Minister of the day said, “We will not fire the first shot”.
That was an attempt to find a compromise, so that the trade unions could keep their political fund, continue to contribute to the Labour Party—which was a founder party and recognised as such by the Conservatives—and continue to campaign on the issues they judged important for their members. I agree that they have done great work, through their membership fees, on pensions and so on. Much of the settlement on the national insurance system not only drew on trade union knowledge and experience in practice but used their funds to nationalise —which I think was a less good idea.
We should have a spirit of compromise and reflect the compromise that was made in 2016. If we go down the route that the Government propose, I hope that the party on my side will again seek to bring in a compromise, because the laws of this Parliament should be made in the interest of transparency for all those affected by them. That goes for trade unionists in the workplace, who should have to opt in to a scheme in the interest of transparency. I support the amendment from the noble Lord, Lord Burns.
Lord Goddard of Stockport (LD)
My Lords, I will be extremely brief, as the dinner hour is upon us and there are—as we say—strangers in the House.
While I recognise the importance of transparency to inform members’ choice regarding funds, this group of amendments raises serious questions about proportionality. Amendments 216YC and 216YD would introduce notably higher thresholds for political resolutions, requiring support from a majority of all eligible members, rather than just those voting, and mandating new resolutions every five years. These are significant changes from the current practice. Likewise, Amendments 221 and 223—expertly explained by the noble Lord, Lord Burns—seek to reduce opt-out notices from 10 years to one or two.
While the intention behind these proposals is clear, the impact warrants careful consideration. Other issues have been slightly sidetracked. There are fundamental issues that I would like the Minister to address head-on. These issues are at the nub of trade unions and political funds, so we need some clarity on them from the Dispatch Box.
Lord Hunt of Wirral (Con)
My Lords, what an important debate this has been. I think 14 noble Lords have participated, starting with my noble friend Lady Coffey. She dealt with Clause 58 in particular, whereas most of the rest of the debate has been around Clause 59.
I am very grateful to the noble Lord, Lord Burns. His speech dominated the debate, as he set out so clearly the history of what he described as the 2016 compromise—which in fact it was—that Clause 59 now seeks to overturn. I accept the points made by the noble Lord, Lord Prentis of Leeds, about the importance of campaigning and seeing full participation in that area. I am also very grateful to my noble friend Lady Finn for coming specially on her birthday to remind us all of the role she played on the Burns committee. Despite interruptions, she got across a series of key points about that compromise. Those who were interrupting her did not seem to realise that shareholders have to approve any political donations made by companies—but never mind.
I move on quickly to the noble Baroness, Lady Fox of Buckley, and my noble friends Lord Jackson of Peterborough and Lady Cash, who had a fascinating exchange with the noble Lord, Lord Hendy. I have to say to the noble Lord, Lord Hendy, speaking now as a practising lawyer, that my noble friend Lady Cash is right: if money is taken for any period without knowledge or consent, freedom of association has been removed—it does not matter whether it is for a week, a month or a decade. In a way, though, that was a side issue.
The noble Lord, Lord Monks, then took us way back in time. We all always benefit from the noble Lord, Lord Monks. I still have the guilty feeling that I caused a cartoon to be shown in the Guardian showing him getting into bed with me, in which his was the face on a huge cart horse. I was Secretary of State for Employment, and I was being accused by the Guardian of being too nice to the trade union movement by getting into bed with the noble Lord, Lord Monks—but we are not in the same bed tonight.
We heard from my noble friend Lord Johnson of Lainston, who really put the record straight and elevated the sort of smears that were thrown—usually from a sedentary position—from the party opposite in that context. My noble friends Lord Leigh and Lady Lawlor did the same. I thank the noble Lord, Lord Goddard of Stockport, for really trying to encapsulate what has been a very complicated and detailed debate.
Let us be clear on one thing—and it is up to the Minister to respond to all the very valid points that have been raised: Clause 59 says that workers will be presumed to consent to union political contributions unless they actively opt out. This is a fundamental shift. It reverses the presumption of consent in a way that would never be tolerated were it an employer imposing such terms on a worker. Where, then, is the Government’s concern for free choice, transparency and the dignity of the individual to act without coercion? Surely, if we are to be consistent in protecting worker autonomy, we must apply the same standards to trade unions as we do to employers. Anything less is not principle; it is partisanship.
The Bill includes provisions that would require employers to provide workers with written statements outlining their trade union rights on day one of employment and at other points that the Government see fit. But until Amendment 218 comes along, that principle appears to vanish entirely so far as political fund contributions are concerned. A worker can be enrolled into a union and begin contributing to political causes, most often aligned with one single political party, without ever being clearly and directly told what that money supports or how to stop contributing. I believe that to be a serious democratic deficit.
Employment Rights Bill
Lord Goddard of Stockport ExcerptsThursday 5th June 2025
(6 days, 6 hours ago)
Lords ChamberRead Full debate Employment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-VII(a) Amendment for Committee (Supplementary to the Seventh Marshalled List) - (4 Jun 2025)
Lord Moynihan of Chelsea (Con)
My Lords, what a pleasure to follow my noble friend Lady Lawlor. I support the amendments introduced by my noble friend Lord Jackson. I am assured by my noble friend Lord Leigh that he believes that Hansard will record that he referred throughout his speech to “the noble Lord, Lord Jackson”.
Employment is a precious coin. It is the many coins of employment that keep this economy going. When there are more coins, the economy grows, and this whole House is united in wanting that to happen. We are all on the same side on that. We want the economy to grow, certainly not to shrink. And, like any coin, it has two sides: the side of the employee and the side of the employer.
Sitting through the many days of this Committee, any poor, benighted individual who has been watching on Parliament TV might think that this Chamber contains two parallel universes, with two entirely incompatible ideas of what employment is about. On the one side they are hearing about greedy employers, grasping capital, and the need for trade unions to protect the poor employee. But what is this coin of employment? It is a place where an individual says, “I want work. I want to go to work and earn money for me, my family, and my future”, and where an employer says, “I want to provide work. I want to risk my endeavours and my capital, even my solvency since I might go bankrupt, in order to give you that employment”. And it is a fair bargain.
Most employers, particularly small employers, who start up a business and employ people are not thinking, “I’m going to exploit these poor workers”. The vast majority of workers are not the victims that we have heard described as the reason why this clause is necessary. The vast number of employees work harmoniously with their employer, and the vast number of employers work harmoniously with their employees. I imagine this poor person watching Parliament TV and possibly, if the camera cuts to the faces opposite, seeing the looks of doubt, irritation and disbelief when I say this. But I have been an employer on literally scores of businesses, large and small, and I know how it works. What the employer wants is to provide a good or a service and sell it at a slightly higher price than the cost of providing that good or service, so as to make a little profit and employ lots of people at the same time. That is what they want to do.
What they dread is law upon law that they have to spend all their time on and which bad actors can use to exploit them. We all know that in the human population it is said that 3% are what they call “dark triad” personalities—narcissistic, Machiavellian and sociopathic—who are very good at concealing their behaviour and coming across as caring individuals, by the way. They are found in the most caring societies, and on all sides of the Chamber. The employer dreads that individual joining their company and having a mechanism by which they can exploit the company and make money out of it, taking it to the employment tribunal or threatening it with that and getting paid off, not working hard or doing whatever.
We are saying here that some poor person who is going to hire, say, three, five or 10 employees is going to have to spend all their time understanding these laws, doing the things that the laws lay down and responding to employment tribunals when a bad actor comes into their company—as they do, from time to time, in every company—rather than doing what they are there to do, which is to provide great goods or services to their customers. That is what nearly all of them, employer and employee alike, want to do.
Barbara Castle, the great Labour politician, recognised the problems with trades unions and produced a paper called In Place of Strife. I suggest that the Bill—you can imagine the poor employer with three employees having to go through its 300 pages to figure out what they are going to have to do with it, even as it is passed —is creating strife in many places, and that even Barbara Castle might be turning in her grave when she sees how far this Government are prepared to go. I have sat here sometimes wondering whether the Government really believe the things they are saying.
Lord Goddard of Stockport (LD)
My Lords, I ask the noble Lord, Lord Moynihan, to address the amendment. These sound like Second Reading speeches being redelivered and redelivered. When is the noble Lord going to address the actual amendment? This is just a tour de force around the 1970s and 1980s, with anecdotes from the Back Benches again. We are trying to do business.
Lord Moynihan of Chelsea (Con)
I thank the noble Lord for his intervention, but I hope I am forgiven for thinking he has not been listening to what I have been saying. As I understand it, this clause is about reducing the number of people down to more or less nothing who are necessary in a company in order for a bunch of trades union mechanisms to be created. The amendment would remove that and tries to push up the number of employees below which this clause would not take effect. That is all that I have been talking about and I am startled to believe that a noble Lord of such eminence apparently has not been listening. I could finish fairly soon, if not interrupted much more.
My concern is that we are all people of good will. I am sure the noble Baroness, Lady O’Grady, is rightly proud of the many good things that trades unions have done, but surely she cannot be unaware of how the people of Birmingham might feel about the striking dustmen or about how the people of this great capital feel about striking Underground workers and the commuter trains that so often muck up their daily life. She must be aware that, on another coin of trade unionism, there is the good and the bad. We have employment tribunals with two years of delay to even get to a tribunal, but clause after clause, including this one, threatens to increase the number of references to employment tribunals.
This clause is going to increase the awful number that we have just seen today of 150,000 job losses. In the parallel universe that we are in, can it possibly be that the Government Benches believe that that loss of 150,000 jobs has nothing to do with this plan, with their NIC changes, as my noble friend Lord Lilley said, or with so many other changes that are detrimental to employment in this country?
Lord Ashcombe (Con)
My Lords, I had no intention of coming here today to speak until I had dinner last night. Having put in a day’s work, I thought it was time to come here and express an opinion.
I would like to describe that situation last night. It follows on from a lot of what my noble friend Lord Leigh of Hurley said and the powerful words of the noble Baroness, Lady Lawlor. This friend of mine, whom I have known for 30 or 40 years, is a small businessman in Bath, down in the West Country. He said to me, “Mark, we have a major problem coming. I have friends in similar places who run small businesses”—he runs a business of some six or seven people. “We are all talking together, because that is how we transfer knowledge, and the number of us beginning to think about throwing in the towel is significant. I want you to know about it”.
If this change were to happen, it would affect the poor employees of these businesses. There is nothing inherently wrong with these businesses but there is, as we have heard, more and more legislation coming upon them. It is the employees who are going. The domino effect through local economies is too much for these businesses. These small guys have to employ lawyers, HR experts and so on. I work for a company where we have those in house. They are just getting to the end of their tether. They do not want to stop, but I hope that Amendments 205 and 207 will help prevent that sort of thing happening and another nail in the coffin for these small businesses, which are really struggling as they think about the hassle of going on.
Lord Goddard of Stockport (LD)
My Lords, this group of amendments concerns the provision of employment rights. The essence of the group is about requiring employers to provide workers with a written statement of their trade union rights. Even after seven hours, I enjoyed listening to the noble Lord, Lord Jackson of Peterborough, describe a romp through the 1970s and the bad old days of the Labour Party bringing the country to its knees and almost losing the car industry. He failed to skip into the 1980s, when the Government did destroy an industry—the coal industry—and did immeasurable damage to the trade union movement, which it has taken decades to recover from and is at the heart of the Bill. It is a direct result of actions taken by a certain Government in a previous life. In response to the noble Lord, Lord Moynihan of Chelsea, I have been here since the start of the debate and listening. As the Companion says, it is courtesy to be here at the start of the debate to listen to the opening speeches and then the winding up speeches. There seems to be real departure from that by Members, who just wander in, make contributions and wander out.
Lord Moynihan of Chelsea (Con)
I hope the noble Lord, Lord Goddard, is not saying I was not here for the start of this debate. Of course, the Labour Government closed down more coal mines than Margaret Thatcher.
Lord Goddard of Stockport (LD)
I did not imply that the noble Lord was not here—he was. He is assiduous in his attendance to this House and I enjoy 90% of what he says, much of which is quite amusing, but not much knowledge from it goes into my head.
I have one final point for the noble Baroness, Lady Coffey, for whom I have the highest regard. I thought she was an excellent Minister and makes excellent contributions. However, I have to gently remind her that I think she also made her contribution tonight a couple of nights ago, in response to my intervention about the reason behind the Bill. However, I enjoy the heart and soul that she puts into this. She is interrogating and pushing the Government, but I try to keep it to what we are trying to do here.
These provisions are intended to ensure that individuals are made aware of their right to join a trade union. I do not think there is anything wrong with that. It is a fundamental element of workplace democracy. The amendments in this group raise important and valid questions about how that requirement should operate in practice, especially for smaller employers—and, yes, it may put a burden on them. For example, Amendments 205 and 207 examine whether it is appropriate for those duties to apply universally, or whether the threshold should be considered to avoid placing disproportionate burdens on small businesses.
I am somewhat concerned about the amendment proposed by the noble Lord, Lord Sharpe, to remove the provisions from the Bill entirely. It risks sending the wrong signal about the importance of transparency around trade union rights. Although it is, of course, necessary to ensure that new obligations are proportionate and clearly drafted, deleting the entire clause at this stage could be seen as an overly blunt response. It would be preferable for the Government to engage with all the points raised tonight in these amendments and explore whether a more targeted approach could be achieved, with a fairer workable outcome that upholds workers’ rights without creating undue complexities for employers.
Baroness O'Grady of Upper Holloway (Lab)
I am sure the noble Lord opposite would agree that those workers who joined a union and wanted to have a union voice at work to improve their pay and conditions deserve respect, too, and that union-busting techniques and approaches to avoid even meeting unions to come to an agreement is, frankly, unacceptable in a modern, civilised society.
Lord Goddard of Stockport (LD)
My Lords, I will be brief. This group of probing amendments relates to new provisions in the Bill concerning trade union access to the workplace. Amendments 208A, 209A, 210 and 210A would narrow the definition of access by removing or limiting references to communication with workers, including through digital channels. These changes would raise questions about how access is intended to operate in practice, particularly in light of evolving workplace models. It would be most helpful to hear from the Minister how these changes are expected to support the overall objectives of the Bill and whether they risk narrowing the scope of access in ways that may affect its effectiveness.
Amendments 209, 211 and 213 in this group would also address the application of provisions to small and medium-sized enterprises. Others, including Amendments 213AA and 213B, introduce specific considerations for sectors including healthcare—all very laudable and quite reasonable—or for the timing and method of access for those applications. These amendments appear to probe the balance between ensuring orderly access and managing operational pressures. Could the Minister clarify how the framework, as currently drafted, is expected to work in different types of workplaces as I have alluded to, and how it ensures that both the employers’ and employees’ work interests are taken into account?
Lord Katz (Lab)
I thank all noble Lords who have taken part in the debate on this group, and in particular I thank the noble Lords, Lord Jackson of Peterborough and Lord Sharpe of Epsom, the noble Baroness, Lady Noakes, and my noble friend Lord Hendy for tabling Amendments 208A, 209, 209A, 210, 210A, 211, 212, 213, 213A, 213B and 214.
Before we get into the detail, I will frame my remarks by pointing out that we have heard previously in this debate in quite heated tones a discussion of the role of trade unions in our society. From our perspective as a Government, and from my perspective—for what it is worth, I have been a member of a trade union all my working life—progressive legislation and reform, which we on this side have always tried to pursue through working with the trade union movement, have done much to improve not just the world of work and the rights of workers but the economy as a whole. We are proud of this progress and history. This Bill represents a further stride towards a successful, mature framework for employment relations in this country.
It is important when we talk about striking the balance between employers, unions and workers—in particular, between employers and workers—that we do not equate the two as having equality in terms of power dynamics. That is often missed from this debate. Many employees, whether they work in Amazon’s warehouses, an SME or a microbusiness, do not necessarily feel that they have the same equality of relationship with their employer as their employer has with them. That may be natural, but one of the roles of a trade union or employee representative is to level that playing field. It is always important when discussing trade union rights to bear that in mind.
In Amendments 209, 211 and 213, the noble Lord, Lord Jackson, and the noble Baroness, Lady Noakes, are seeking to exempt smaller businesses from Clause 56. The right of access is a key part of our wider commitment to strengthening workers’ voices in the workplace, enhancing their representation and ultimately improving working conditions through increased trade union membership, participation and dialogue. My noble friend Lady O’Grady of Upper Holloway ably illustrated why, in some cases, trade unions do not need any improvements to access because they have a perfectly good and amicable working relationship. It is worth noting that in roughly 30% of the cases referred to the CAC the applications have been withdrawn because there has been a voluntary agreement, and that is a very good thing to see. However, there are cases where there is not that level of co-operation and access, which is why the Government are legislating to provide it.
We have heard in debates on previous groups that noble Lords on the Benches opposite think that trade unions are a good thing and have a role in the workplace. I absolutely take them at face value on that. To have that role in the workplace, they need to have access to workers. We cannot be starry-eyed about this; not all employers behave as responsibly and open-mindedly as we all believe they should in creating access for employees to their representatives. That is why we are discussing these bits of the Bill tonight.
The policy we have developed has been designed to be fair, consistent and workable for all employers. We will consult on specific details of the framework before they are set out in secondary legislation, including with the CAC, and we encourage businesses and unions to share their views. I understand the points around legal ambiguity raised by the noble Lord, Lord Hunt of Wirral, but, in the previous group, we discussed the levels of granularity and specificity in a particular statement that it is proposed that employers should give to employees about their rights to join a trade union. I posit that, if we had had the level of detail that the noble Lord suggested, we would have had a similar level of discontent from Members opposite. That is of course their right, but I make the point gently that you cannot have it both ways.
I turn now to Amendments 212 and 213B. Amendment 212 would require that trade unions provide a request for access to a workplace in writing, and with more than 24 hours’ notice from the requested date and time that access would happen. Amendment 213B would introduce two additional factors for the CAC to consider when making a determination on whether access should occur: first, the method, frequency and timing of the access requested, and, secondly, whether the purpose of access could be reasonably met without physical entry into the workplace. The Secretary of State will, by regulations, be able to set the time period in which an employer is required to respond to a request for access from a trade union, as well as the form that the trade union’s request must take and the manner in which it is provided to the employer.
I will respond to the point raised by the noble Baroness, Lady Coffey, around the difference between this sort of trade union activity and organising for industrial action. As far as I am concerned, it is pretty obvious that this is about organising for recognition, where the legal conditions can be met, and indeed organising for recruitment and awareness for other very reasonable trade union activities, such as promoting health and safety at work, which we all agree is important and worthwhile.
The Secretary of State will also be able to set, through regulations, the circumstances the CAC must take into account when making decisions on access. These areas of detail will be subject to public consultation before the regulations are made, and we will invite all interested parties to provide us with their views on these matters when we launch our consultation. To pick up on the comments made by the noble Lord, Lord Jackson, he may find that 24 hours after the consultation is deemed to be just right, or indeed too short a period. That is the reason for this consultation, rather than just prescribing everything at this point in time. If we had prescribed it in the Bill, and it was less than 24 hours, I suspect that the noble Lord, Lord Jackson of Peterborough, would not be at all happy.
Amendment 214 was tabled by my noble friend Lord Hendy. The proposals in this amendment would make declarations by the CAC under new Section 70ZI(5) enforceable, as if made by the High Court, opening a greater possibility of an employer being found to be in contempt of court. I am happy to reassure my noble friend that new Sections 70ZH and 70ZK, which were introduced by the Government on Report in the other place, already provide for a strong remedy against employers who do not respect these new rights of access, mainly in the form of CAC orders but ultimately backed by serious financial penalties when necessary. As my noble friend Lady O’Grady of Upper Holloway said, these need to be serious financial penalties and they need to have heft. The new sections that were tabled on Report in the other place say that penalties can be linked to various metrics, such as annual turnover or, indeed, the number of workers employed in the liable entity. In the case of large companies, that would make a very serious penalty indeed. We do not want them to be fined; we want them to grant the access to trade unions and trade union representatives that their employees deserve. In our view, the available remedies are already powerful and proportionate. The Government do not consider it necessary to go beyond these.
Lastly, I turn to Amendments 210, 208A, 209A, 210A and 213A. The noble Lords, Lord Sharpe and Lord Hunt, are seeking in Amendments 210 and Amendments 208A to 213A to exempt digital forms of communication from the right of access policy. In response to the noble Baroness, Lady Coffey, that can be found in new Sections 70ZA(4)(a) and (b) in the Bill as it left the other place. This clause was designed for the modern workplace and with various working practices in mind. It is important that this clause provides for a digital right of access to ensure that unions can reach workers who may not work in a physical workplace, such as home workers or those who work in a hybrid manner. In my opinion, if I may be so bold, the noble Lord, Leigh of Hurley, answered his own point. As he acknowledged, in some businesses, it is not as simple—
Employment Rights Bill
Lord Goddard of Stockport ExcerptsWednesday 21st May 2025
(3 weeks ago)
Lords ChamberRead Full debate Employment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-V(a) Amendments for Committee (Supplementary to the Fifth Marshalled List) - (20 May 2025)
Lord Goddard of Stockport (LD)
My Lords, there are two things that I can safely say. One is that I am unanimous in my comments tonight, and the other is that you cannot accuse the Liberal Democrats of extending the debate past a reasonable hour; we have done just over an hour on this debate. The debate has been quite sensible and both sides have ventured into the usual jousting, but the comments from the noble Baroness who just spoke were a bit disingenuous in saying, or intimating, that the real reason behind this measure is to increase union membership and generate money for the Labour Party. That could not be farther from the truth of what this Government are trying to do, whichever way you look at the Bill.
Baroness Coffey (Con)
Has the noble Lord read the later parts of the Bill that specifically say that? In the human rights assessment, there is a qualified comment from the Government that, basically, cites in particular the element about postponing any refunds until January. That is exactly what part of the Bill is designed to do.
Lord Goddard of Stockport (LD)
I will reply to that. Yes, it is a technical question, and perhaps that wording sits there, but any person with an ounce of common sense who sees the Bill can see what the Government are trying to do. I do not think that the Bill, with over 300 amendments to it, is geared to do what the noble Baroness is intimating. That is cheap political point-scoring, and I think it is beneath her.
I have carefully considered the amendments put forward by noble Lords in this group, particularly those seeking to remove Clause 23 and Schedule 3, including Amendments 23 and 334 from the noble Lord, Lord Vaux, the series of amendments from the noble Baroness, Lady Neville-Rolfe, and others relating to probationary periods, including Amendments 105 to 112. While I am not persuaded by those amendments or the case for removing the provisions or fundamentally changing the Bill, I recognise the need for greater clarity on probationary periods. Given the Bill’s current drafting, which relies heavily on future regulation, it is essential that the Government provide clear and firm guidance on how the provisions will operate in practice, especially for small businesses, which will find ambiguity challenging in difficult times.
Amendment 107A from the noble Lord, Lord Lucas, which proposes a default initial employment period but would allow the Secretary of State flexibility to amend that through regulation, offers a balanced concept that could be helpful in providing certainty while retaining adaptability. Likewise, Amendment 334 from the noble Lord, Lord Vaux, which calls for a retention of the current qualifying period until suitable regulations are in place, reflects concerns about the smooth transition, and that deserves attention. However, I am less convinced by the calls for further impact assessments or reviews of the proposals in Amendments 103 and 123, which I believe risk delaying the necessary reforms without providing clarity.
In light of those amendments, I urge the Government to seize this opportunity to give definition and definite practical guidance on the provisions that the Bill will implement. It would be better if the Minister could say in absolute terms the length of time for which probationary periods will be set in future regulation after the passage of the Bill. That would be particularly important for smaller employers that need certainty to comply. Providing that clarity would help to ensure that the reform worked as intended, and it would help to strike the right balance between protecting employees’ rights and allowing employers the flexibility to manage probationary employments effectively. On that basis, I look forward to the Minister’s response.
Lord Sharpe of Epsom (Con)
My Lords, I thank the noble Lord, Lord Vaux of Harrowden, and my noble friends Lady Neville-Rolfe and Lord Lucas for their amendments and their thoughtful contributions in this group. It has been a most interesting debate. I will speak to my Amendments 103, 113 and 123.
I completely agree with the noble Lord, Lord Vaux, that it would be much better to get this right now rather than pursuing Amendment 103 in particular, which returns to the Government’s insufficient impact assessment. The assessment that has been produced states that this provision will have one of the highest impacts, yet, as we have mentioned before, the Regulatory Policy Committee has given the Government’s analysis in this section a red rating. The RPC’s critique is not a matter of minor technicalities because it identifies serious deficiencies in the Government’s case for intervention in the options that they have considered and in the justification for the policy that they propose. The Government’s impact assessment admits that it lacks robust data on dismissal rates for employees with under two years’ service. To answer the question from the noble Lord, Lord Vaux, there is no evidence for that. It proceeds regardless, however, with only superficial reference to “asymmetric information” and without any substantive analysis of any market failure.
The RPC highlights the impact assessment’s failure to consider how long-serving employees might view the equalisation of rights for new joiners—an issue of fairness and workplace cohesion that the Government have ignored. The impact assessment itself mentions that options such as reducing the qualifying period to 18 months or one year were considered and rejected without detailed assessment. No real exploration of probation periods was provided. That is not a balanced appraisal of possible alternatives; it is a justification for a predetermined decision.
On the justification of the preferred option, the impact assessment is again found lacking. The RPC calls for clarity on the costs to businesses—the costs of managing performance, handling disputes and the increased settlements to avoid tribunal risks. It also questions whether the Government have considered evidence from existing unfair dismissal claims and how risks might vary across sectors or job types, particularly in roles where reputational damage from a claim might deter employers from hiring at all.
More significantly, the Government have not addressed indirect and dynamic labour impacts, such as whether day-one rights might lead to more cautious hiring, greater use of temporary contracts or weaker overall job security. These are not abstract concerns as they go to the heart of how this policy might reshape employment relationships across the country. Noble Lords might be interested in a real example. I was talking this morning to a senior executive at a FTSE 100 company. It is an exemplary employer in every way; for example, offering many day-one rights. But this year—partly as a result of the jobs tax but also in anticipation of the Bill—it has reduced its hiring by 84%. I repeat that for the record: 84%. This is not abstract or theoretical. This is real, this is now.
It is important to note that these likely labour market impacts are not accounted for in the £5 billion cost to businesses, so the real cost is likely to be significantly higher. The result is a policy with high ambition but little practical clarity, as the noble Lord, Lord Goddard, has just noted. How will unfair dismissal rights interact with a statutory probationary period? Will employers still have access to the same set of fair reasons for dismissal? Will there be a different threshold for acting reasonably during probation? Can probation be extended if needed? None of those questions has been clearly answered.
The noble Lord, Lord Leong, reminded us of the light-touch, nine-month proposal, but what does that mean in practice? My noble friend Lady Meyer asked that. At the same time, the Government’s own analysis predicts that granting day-one rights for unfair dismissal alone will result in a 15% increase in employment tribunal claims. Using the statistics given by the noble Lord, Lord Barber, that is an additional 750 claims per year, on top of the 50,000 backlog already waiting 18 months to two years. The noble Lord argued that this is, in effect, a statistical irrelevance, but it is not to the 750 business owners who are being dragged through courts. That is a substantial impact. It represents direct costs to businesses in terms of time, legal risk and, of course, the chilling effect on recruitment.
The tribunal system itself needs to be looked at. Without significant new investment it is hard to see how the system will cope with this 15% increase. The result could be longer delays, greater costs and justice deferred for all parties. In an earlier group we heard about a case that is going to take more than two years to come before a tribunal. Yet the Government intend to bring these changes into force in 2026. On what basis? There is nothing in the impact assessment that explains why 2026 has been chosen or how the system will be ready by then. Businesses will need time to revise contracts, restructure probation processes and train managers on the new rules. What assessment has been made of whether 2026 is realistic, with all those things in mind? What engagement has been carried out with employers, particularly SMEs, about what implementation will require?
It is not unreasonable to ask the Government to explain how the timeline was determined and whether it is genuinely achievable, given the lack of clarity in both the policy detail and the supporting evidence. We all agree that employees deserve fair treatment, particularly in the vulnerable early stages of employment, but employers must also have a reasonable opportunity to assess performance, capability and suitability without the immediate threat of litigation.
We have established that there is no evidence for any of this clause. In fact, when the noble Lord, Lord Hendy, was arguing his point, he said that it is very difficult anyway for employees to take a case to an employment tribunal. The noble Lord, Lord Barber, as I just mentioned, said it is, in effect, a statistical irrelevance. If there is no evidence, it is too difficult and it is a statistical irrelevance, why are we bothering at all?
I want to raise a final point that others, particularly my noble friends Lady Neville-Rolfe and Lady Noakes, have referred to. It is not just about the policy itself; it is a more troubling concern. The policy will create unintended incentives, but for whom? It is not just about employers scaling back hiring overall but about who they stop hiring. If we remove the qualifying period for unfair dismissal and provide no workable probationary mechanism, we tilt the hiring incentives away from risk-taking, as we have heard. It will, in effect, stop employers taking a punt.
Right now, a small business owner might be willing to take that chance on someone with no formal qualifications, or from a non-traditional background, or re-entering the workforce after a time away. That chance exists because the employer has a short window to assess their suitability—and vice versa, of course—before facing the full weight of employment litigation risk. If that safety net is removed and exposure begins from day one and the probationary period lacks clarity or legal protection, that same employer will think twice. They will play it safe.
Noble Lords opposite should pay attention to those of us who have employed people. It is a simple fact. Who is going to suffer? It is not the already advantaged candidate with a polished CV. It is the young person with gaps in education, the career switcher with no references, the working parent returning after years out of the labour market, or the person coming back to work after a long period of illness. Noble Lords opposite should reread the speech given by my noble friend Lord Elliott, with his experience of the Jobs Foundation. He explained this much more eloquently than I just have. Those are the people who benefit from flexibility and second chances and who may now find those doors quietly closed.
This goes to the heart of social mobility and genuine workplace diversity. I would like to ask the Government a rhetorical question: have they considered the incentives this policy creates? If they have not—both common-sense experience of real working life in the private sector and, indeed, the RPC suggest that they have not—we risk designing a policy that sounds progressive but, in practice, reduces opportunity for the very groups that we should be helping the most. We need a decent impact assessment, and my amendment would allow for it.
Lord Goddard of Stockport (LD)
My Lords, I wish to speak in support of the amendments put forward by my noble friend Lord Fox, who is unfortunately away today, on NATO business I believe. Tomorrow, no doubt, he will pore over today’s Hansard. I hope that the noble Lord, Lord Hunt of Wirral, will be available then. I cannot unsee the picture of him in a four-poster bed with the trade union man climbing aboard, and will have to try to explain down the telephone to my noble friend Lord Fox, “It was quite humorous”. We will see what happens with that tomorrow.
My noble friend Lord Fox’s concerns include his Amendments 116 and 121, which offer much-needed clarity and balance to the protections around contract variations and unfair dismissals. The issue of predatory fire and rehire, as seen in the widely condemned P&O Ferries case highlighted by the noble Lord, Lord de Clifford, is an unacceptable, serious and pressing concern that employment legislation rightly needs to address now. No worker should be threatened with dismissal simply to impose worse terms and conditions on that person.
My noble friend Lord Fox’s proposals to exclude routine non-detrimental contract changes from triggering automatic unfair dismissal protections, as in Amendment 116, and to safeguard reasonable flexibility clauses expressly agreed in contracts, as in Amendment 121, would help ensure that protection against abuse is balanced with the practical realities that employees face. His further clarification in Amendments 117 and 122—that dismissals linked to redundancy with offers of suitable alternative employment and the lawful use of fixed-term contracts should not be unfairly restricted—rightly recognise that not all contract variations are harmful and that employees must be able to operate flexibly and fairly.
The amendments in the name of the noble Lord, Lord Sharpe, would facilitate contractual changes for financial organisations or workforce-related reasons. Although the intention is understandable, it is crucial that the Government provide clear guidance to ensure fair protection for workers, particularly those in smaller businesses. The approach to seasonal and variable-hour workers also requires careful consideration to safeguard their rights. We will return to that in a later group.
These amendments collectively illustrate the careful line that the Government must tread. Although it is crucial to clamp down on unfair and predatory fire-and-rehire tactics, as addressed by my noble friend Lord Fox’s amendments, we must equally recognise the legitimate need for flexibility and contract review in a changing economic landscape. I commend my noble friend’s amendments for their clarity and fairness in this regard, and encourage the Government to consider how best to incorporate these protections. At the same time, I urge the Committee to approach other proposed changes—as in Amendments 115 and 115A, which seek to clarify reasonable adjustments and productivity improvements—with a measured and practical mindset, to support both workers’ rights and sustainable business operations. I look forward to the Minister’s comments.
Lord Leong (Lab)
My Lords, I thank all noble Lords who have spoken in this debate. This Government are absolutely clear that the use of unscrupulous fire-and-rehire practices must end. Employers should not be able to impose contract changes through threats of dismissal, except in the most limited and justified circumstances. We recognise that, at times, businesses may need to restructure to survive and protect jobs. The legislation accounts for such cases where there is genuinely no alternative and a business faces immediate financial difficulty. Fire and rehire may be used, but only following a proper good-faith process, grounded in open dialogue and mutual understanding.
Let me begin by addressing Amendments 113ZA, 113B and 118 from the noble Lords, Lord Sharpe and Lord Hunt, Amendment 115 from the noble Lord, Lord de Clifford, and Amendment 116, spoken to by the noble Lord, Lord Goddard, on behalf of the noble Lord, Lord Fox. These amendments aim to exclude certain types of contract variations from the clause, such as those relating to terms other than pay, benefits, hours or location, or to allow changes made for good or operational reasons. When a change in contract is essential and the employee will otherwise become redundant—for example, due to a move in location—or where the changes are necessary to reflect a change in the law, the employer will still be able to explain to the employee when proposing these changes. However, such changes should always be a result of meaningful consultation. Employers and employees must reach mutual agreement, allowing both sides to understand and assess the impact of the proposed changes. Open dialogue is key.
I turn to Amendment 114 from the noble Lord, Lord Sharpe, and Amendment 115. These propose broadening the permitted use of “fire and rehire” to include changes that are reasonably necessary to improve workforce productivity. The Bill is the first phase of delivering our plan to make work pay. We are supporting employers, workers and unions to get Britain moving forward. Alongside this and a new industrial strategy, the Bill will support the Government’s mission to increase productivity and create the right conditions for long-term, sustainable, inclusive and secure economic growth.
The Government do not support these amendments. We believe this practice should be allowed only where an employer faces no reasonable alternative and is under imminent financial threat. The noble Lord, Lord Hunt, mentioned what happens if a company is facing insolvency. I am sure most noble Lords know that insolvency does not come straight away. There is a whole process, and it is during this that consultation should happen between the employer and employee. When it comes to the last resort, when until and unless something happens the company is going to go belly-up, there may be a practice of “fire and rehire”, but before that, there should be consultation along the way.
These amendments would significantly widen the exemption and make it necessary for employers to use “fire and rehire”. That is not our intention. While businesses can still agree changes to boost productivity, such changes must come through proper negotiation, not coercion, as I just mentioned.
I now turn to Amendment 119, also from the noble Lord, Lord Sharpe, which proposes allowing “fire and rehire” if the changes are reasonable and supported by a majority of affected employees. This issue here is subjective. What is reasonable for one employee may be deeply unreasonable for another. Our goal is to protect individual rights. Clause 26 is designed to reduce the use of “fire and rehire” as a means to push through significant changes without individual consent.
I will address Amendments 117 and 122 from the noble Lord, Lord Fox, and Amendment 120 from the noble Lord, Lord Sharpe. They focus on whether dismissals for redundancy or the end of a fixed-term contract should be considered automatically unfair under Clause 26. The Government’s position is that, where a role is no longer viable under current terms, employers should follow due process, including meaningful consultation to seek agreement to vary contracts. If employees do not agree, and if the employer no longer requires the work to be done, redundancy may still be appropriate. In such cases, redundancy procedures must be followed, including consideration of alternative roles. Where the principal reason for a dismissal is redundancy, the dismissal will not be automatically unfair under Clause 26.
Now I turn to Amendment 121 from the noble Lord, Lord Fox, which concerns variation clauses in employment contracts. I wish to reassure the House that existing case law already governs the enforceability of such clauses. This clause applies only where there has been a dismissal, and so would not apply where a lawful variation clause has been lawfully exercised. Courts and tribunals will not uphold variation clauses if they are oppressive and exercised unreasonably. This amendment is therefore unnecessary as a legal protection already exists.
I now turn to Amendments 120A and 120B, which relate to the factors a tribunal should consider when assessing the fairness of a dismissal under the clause exemption. It is appropriate that tribunals should consider where the employer offered the employee something in exchange for agreed-to changes. Fair contract variation should be built on dialogue, not pressure. It is right that the Secretary of State should have the power to specify additional relevant factors for tribunals to consider in future. These regulations would be subject to affirmative resolution procedure, ensuring full parliamentary scrutiny.
Finally, Amendment 113 from the noble Lord, Lucas, seeks to limit the clause to only substantial contract changes. We reject that. Even minor-seeming changes can have major consequences for individual employees. Individuals must be allowed to consider proposed changes without facing dismissal threats. That principle underpins the clause.
Employment Rights Bill
Lord Goddard of Stockport ExcerptsTuesday 29th April 2025
(1 month, 1 week ago)
Lords ChamberRead Full debate Employment Rights Bill 2024-26 View all Employment Rights Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 81-I(a) Amendments for Committee (Supplementary to the Marshalled List) - (29 Apr 2025)
Lord Goddard of Stockport (LD)
My Lords, I will speak to my Amendment 7 in this group, as well as my Amendment 15. I also apologise for not being able to speak at Second Reading. I am walking somewhat of a tightrope this evening. For 15 years, I was a senior shop steward for the GMB as a national negotiator. I also have my own company with 20 employees. I do not think that I will be able to cope with the ramifications of some of this legislation. Also, I have some guests up in the Public Gallery: they are small business men who employ people. Dinner could get quite difficult if I say the wrong thing in the next 10 minutes, which I hope I will not do.
My first amendment would set the initial reference period for the right to guaranteed hours to 26 weeks, to give flexibility to industries that rely on a seasonal basis for operating and employing people. It would also give greater flexibility to the labour market itself. When Members see this amendment, they automatically think of seasonal workers as fruit and veg pickers harvesting crops, but nothing could be further from the truth. Work has changed. We are now essentially a service-led economy, with no more enormous factories employing thousands of workers every day, producing goods to export across the globe, clocking in and clocking out, as I did back in the 1970s. Flexibility is the key, and work/life balance for many is crucial. The days of the nine to five are well and truly over, in my opinion, especially for small businesses. That flexibility is not only for the agricultural industries but for tourism, retail, hospitality and events—things that bind our country together.
We welcome this Bill. One could argue that it is 30 years too late; that was probably the time when unions were most under attack, when our beloved Margaret was in charge. Perhaps that was when people should have risen up, but we are where we are. However, the Bill should be proportional and reasonable; those are the two things that we would wish to persuade the Government to embrace, through not only some of our amendments but those of other parties. Reasonableness and proportionality are what we are proposing. We will support the Bill, but its architects must accept that the labour market has evolved. Flexibility for workers and protecting workers’ rights go hand in hand.
I will now speak to my Amendment 15. Other amendments in this group have rightly raised challenges regarding the right to be offered guaranteed hours. My Amendment 15 strikes a necessary balance between protecting workers and allowing flexibility for genuine short-term employment situations. This amendment would not undermine the main principles of the Government’s legislation. Instead, it would make a reasonable accommodation for short-term contracts while maintaining safeguards through proper disclosure requirements and strict time limits.
For seasonal workers, this amendment offers significant advantages. It would increase their employability, as businesses could confidently offer work during peak periods without complicated hour guarantees that extend beyond the season. Many seasonal workers prefer concentrated work periods with higher hours, allowing them to earn more money during these limited timeframes. Additionally, this flexibility would enable workers in industries such as tourism, agriculture and entertainment to secure multiple seasonal positions throughout the year, improving their overall financial stability. Many industries in our economy, including agriculture and education, are connected to seasonal events. We need this practical provision.
I urge the Minister to consider this amendment, or at the very least be cognisant of the challenges these seasonally dependent sectors face. If this legislation is designed correctly, we can arrive at a set of provisions that will protect workers while acknowledging the realities of our diverse job markets.
Finally, my noble friend Lord Fox and I met Amazon a couple of weeks ago in Portcullis House. Amazon employs 75,000 people in the UK and is not unionised. It has evolved its own democratic in-house solutions. I am not commenting on that, but it shows that, sometimes, legislation is not the only way to protect people at work, guarantee earnings and pay reasonable rates. That is the kind of bigger picture thinking that this Bill is missing.
Lord Barber of Ainsdale (Lab)
My Lords, this group of amendments deals with the hugely important issue of zero-hours and short-hours contracts. As the noble Baroness, Lady Lawlor, said, well over a million people in the UK work on zero-hours contracts. In sectors such as retail, it is also common for workers to have a small number of guaranteed hours but to work the equivalent of full-time hours.
These arrangements are not a win-win for worker and employer. More than eight in 10 zero-hours workers want regular hours of work. Without guaranteed hours, workers do not know whether they will be able to pay their bills or organise their caring responsibilities. The flexibility is invariably on the employer’s side. Research has shown that more than half of zero-hours contract workers have had shifts cancelled at less than 24 hours’ notice. Many experience being sent home mid shift and very few are compensated. The vast majority of those who ask for guaranteed hours are turned down, so I fear a right to request would not resolve that issue.
There is also significant evidence that employers do not use zero-hours contracts just as stopgaps but will often park workers in these insecure arrangements long term. Two-thirds of zero-hours contract workers have been with their employer for more than a year, and one in eight for more than a decade.
As well as causing financial uncertainty and disrupting workers’ private lives, this distorts workplace relations, with workers fearful of challenging inappropriate conduct in case it leads to them losing their work. Recent accounts of poor behaviour at McDonald’s branches, where zero-hours contracts are prevalent, included a 17 year-old reporting that she had been asked for sex in return for shifts. Also, when employers rely on zero-hours contracts, what incentive do they have to invest in skills? The answer is: little or none, with predictable consequences for productivity.
The Bill implements measures first developed by the Low Pay Commission, with the support of both trade union and employer-side representatives. An employer will have to offer a contract based on a worker’s normal hours of work in line with a 12-week reference period. That gives a clear indication of a worker’s usual hours while evening out peaks and troughs. Any period longer than that, such as 26 weeks, would simply allow employers to park workers on a zero-hours contract for a prolonged period.
The Bill contains powers for Ministers to specify the notice period for shifts that employers must give to workers and compensation for cancelled shifts, and these are an essential part of the package. Currently, workers on variable-hours contracts bear all the risk of any changes in demand, and they are usually low-paid workers who can ill afford the sudden changes to income.
In the House of Commons, the Bill was amended to ensure that those rights also apply to agency workers. That is crucial in order to close the loophole that could have led to employers hiring zero-hour staff by agencies and entirely subverting the intent of the legislation. I know the TUC would strongly oppose any amendment that would exempt agency workers or fixed-term contract workers on variable-hours contracts from these provisions.
Employers will still be able to put in place arrangements for coping with fluctuations in seasonal work—for instance, via fixed-term contracts. What will change is that workers will not bear alone the burden, in reduced wages, of sudden changes in demand. The current situation allows manifest injustices to take place. It is time that we level up the labour market.