Employment Rights Bill

Debate between Lord Goddard of Stockport and Lord Hunt of Wirral

Committee stage
Thursday 8th May 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, this has been a valuable debate; I agree with the Minister. Indeed, I welcomed her admission that zero-hours contracts work very well for students and are valued by them. I was interested in the TUC survey. All the surveys I have seen so far tell this Committee that full-time students do not want to lose zero-hours contracts.

It may be that the Minister will say, “Why is this amendment necessary, because they will not request full-time employment?” However, under the Bill, the employer has to work out how the business will be able to offer someone on a zero-hours contract full-time employment as and when they request it. It comes later, of course, when we are moving amendments, that we can say that it should not be the duty of the employer to give the opportunity of full-time employment; it should be the right to request full-time employment. What I think we are arguing about is whether all employers will have to go through the process in advance of any request being received. Under this legislation, they have to work out how they will be able to respond positively to an offer.

My noble friend Lady Lawlor shared the real-life experience and the way in which various students have taken advantage of these contracts. But what if they are not going to be offered them and given the opportunity of working as and when, in the flexible, lumpy way they want to organise their studies, as my noble friend Lord Jackson of Peterborough, pointed out? I thank him for going down memory lane; it was a fascinating glimpse of life as a stacker. I suppose all of us will remember what we did as students. I volunteered. I crossed Whiteladies Road in Bristol and offered my services to the BBC. The BBC took me on as a freelance newsreader.

[Lord Goddard of Stockport (LD)]

As everybody does.

[Lord Hunt of Wirral (Con)]

Yes. I had to turn up at 5 am and then read the news.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, as we now move to consider reasonable notice in agency work, I will speak to Amendments 33 and 36 to 38.

Unfortunately, and despite all their show of consultation, I believe the Government have failed to realise how agencies operate in the labour market, so once again the drafting of the Bill shows the failure of a one-size-fits-all approach. The challenge we face in the context of the Bill is clear. Work-finding agencies operate in a highly dynamic and often unpredictable environment, where the flow of information from hirers is essential in matching workers to available shifts.

This brings us to the core concern. Agencies often rely on information from hirers about the availability and cancellation of assignments. Without timely and sufficient details from hirers, agencies cannot predictably or properly fulfil their role. Therefore, any new obligation to provide reasonable notice for agency workers must consider the time taken for agencies to receive this confirmed information and make the necessary arrangements and assessments.

Regulation 18 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 lays down that an agency cannot

“introduce or supply a work-seeker to a hirer unless the agency or employment business has obtained sufficient information”

to assess the suitability of the worker for the role in question. The issue here, therefore, is straightforward. Agency workers often find themselves without income as a consequence of cancellations initiated by hirers, yet agencies are held financially liable for those decisions, even though they have no control over the cancellations.

To illustrate the risk, let me provide a scenario. A work-finding agency places an agency worker with a hirer for a shift. However, due to unforeseen circumstances, the hirer cancels the shift at short notice. The agency, having no control over the cancellation, is still required to compensate the worker. The financial burden therefore falls on the agency, despite the cancellation being the decision of the hirer.

How will this amendment help to ensure that small and medium-sized agencies are not disproportionately impacted—that is what we seek to do here—bearing in mind the financial responsibility associated with hirer-induced cancellations, particularly when the business in question may already be financially vulnerable? Do the Government believe that it is justified to place the financial burden of a cancellation or curtailment on the agency when the failure to provide notice lies entirely with the hirer?

I believe that the Minister understands the complexities of the agency-worker relationship, but the Bill in its present form does not make proper allowance. How do the Government propose to monitor and enforce the full accountability of hirers for failures in notice arrangements? This is an issue that has to be faced, given the rigidity of the legislation we are required to consider under this Bill. I beg to move.

[Lord Goddard of Stockport (LD)]

My Lords, I am pleased to speak to this group of amendments, which seek to clarify the framework governing agency workers, and I have some sympathy with the views of the noble Lord, Lord Hunt, on this matter. It seems to me that a third person looking into this process will see the Labour Party trying to protect employees and give them 100% rights and the Conservatives trying to ensure that small and other businesses have a level playing field to employ, create jobs and grow the economy, which I thought was the Government’s objective. I wonder why, with this employment Bill, we cannot get a little closer to dealing with the mechanics.

The answer that the Minister gave to my probing amendment baffled me. I wanted to get up to ask him to explain what he said to me. Millions of people who listened to it or who read Hansard tomorrow will not have a clue. As my lumpy noble friend has said in previous debates, we seek clarity before the Act comes into power. We need to know these things. I spent four years on the Secondary Legislation Scrutiny Committee. The watchword on that committee was quite clear: do not give Ministers unfettered powers. What is in the tin of a Bill is what it says on the front of the tin of a Bill. I wonder whether this tin will say “tomatoes” but when you open it, you will have carrots—a problem for somebody that does not eat carrots.

Running through this group of amendments, we on these Benches are trying to bring the parties together to understand that it is a two-way thing. I have been a committed trade unionist for 25 years. I have also run a business and employed 20 people. Those two things are compatible, but they are complicated, because you have different pressures from a different standpoint. As with all legislation, we try to move it through by being sensible and finding common ground for what the trade union movement wants, what the Government want and what employers want. I had guests in yesterday who were asking about the Bill. I roughly outlined it, and they could not believe it. They employ 30 people. They said, “We can’t afford HR, we can’t afford lawyers, we can’t afford for people to take us to tribunals. We just want to employ people, make a small profit and grow the business”. I cannot understand how this has become so complicated.

On Amendment 33, concerning the interpretation of “reasonable notice” when shifts are offered to agency workers, the aim appears to be to require agencies to make offers promptly once details are confirmed by the hirer and all the checks have been completed. While this may be an attempt to bring greater clarity, I question whether that proposal and that language fully address the practical realities of agency work. The intention may be sound, but there is a risk of replacing one form of ambiguity with another. That said, for agency workers some degree of predictability and transparency is important and long overdue.

Amendment 36 introduces the idea of joint liability between work-finding agencies and hirers when a shift is cancelled or curtailed at short notice. There is merit in exploring whether a shared responsibility could lead to fairer outcomes, particularly when neither party should be able to shift all risk on to the other. Equally, it is important to consider how such provision would work in practice and whether it risks disincentivising the use of agency labour altogether.

Amendment 37 proposes that compensation should be triggered only when a shift has been formally confirmed, rather than relying on the more subjective “reasonable belief” test. I appreciate the effort to bring objectivity to a murky area, but workers should not be left guessing whether an assurance from an agency amounts to a genuine commitment. We need to understand how this might interact with the fast-moving nature of some temporary staffing such as seasonal work or that connected with the weather. Ambiguity in the current framework serves no one, least of all the workers.

Finally, Amendment 38 provides that the agency would not be liable to pay compensation where the hirer fails to give appropriate cancellation notice. This is arguably a fairer allocation of risk, as agencies should not be penalised for the failure of others. However, it must be clear that such changes would not weaken the overall protections intended for the worker.

While these amendments raise important issues around the treatment of agency workers, I am not yet convinced that they strike the right balance in all aspects. There is a risk that in seeking to impose clearer structures, we introduce new complexities and unintended burdens. I think that this is what the Government are trying to say. Nevertheless, the underlying objectives—clarity, fairness and accountability—are ones that we should continue to pursue. Any changes to the framework must support clearer obligations and deliver fairer outcomes, for the workers and for the agencies and hirers. If these amendments highlight anything, it is the pressing need for the Government to offer clarity and consistency in this area.