Employment Rights Bill

Lord Hendy Excerpts

Report stage
Monday 21st July 2025 Lords Chamber

[Baroness Barran (Con)]

My Lords, Amendments 111A, 111B, 116A and 116B in my name seek to improve the Government’s proposal to mandate a single, detailed set of terms and conditions for all support staff.

As we debated in Committee, the status quo is not perfect. The current national joint council arrangements have significant weaknesses in their application to schools, which has led some local authorities to opt out of the Green Book terms and conditions. I hope the House will forgive me if I remind noble Lords why these amendments are necessary. First of all, we are talking about a very large workforce: about half a million people are employed within the school support staff workforce. Half of those, roughly, are teaching assistants, and the other half have a huge range of roles, literally thousands of different roles. This is a very complicated area. There is variety in roles and in pay and conditions, which reflects local needs, whether it is the organisational structure of a trust, pressures on a local authority where it opts out of the NJC, or where employers have particular needs because of geographic local market conditions. I mentioned in Committee the difference in trying to recruit an IT assistant in Cambridge versus Oldham.

The landscape is very different today from the early 2000s when the SSSNB previously existed. We now have around 2,500 trusts, with about half our schools in trusts and half in local authorities. But the innovation that we have seen in relation to pay and conditions for school support staff has of course been largely in the trust sector.

I will just recap our specific worries about the Bill as currently drafted. The first is that it will add to the complexity, workload and cost of every single school in the country at a time when we know that schools are under considerable pressure and when the Government are rightly focusing on recruitment and retention of the teaching and support staff workforce. My Amendment 111A seeks to mitigate the potential damage of this by limiting the SSSNB’s powers to creating a framework that academies must consider regarding remuneration, terms and conditions, training, career progression and related matters.

I tried to work out roughly how many role profiles the department will need to create to meet the breadth of roles that the SSSNB will cover. I think it is realistic to say that across about 22,000 schools and around 2,500 trusts, there will literally be thousands of ways of dividing up and specifying roles, so that if the SSSNB is to try to articulate role profiles in detail, it will have to produce thousands of them. We just debated the power of AI; maybe these are all going to be drafted by AI—who knows? If not, it could take a very long time.

I will just give one example of the complexity of this. If we think just about finance roles in schools and trusts, they could vary from the chief financial officer of a large trust to the chief operating and financial officers in medium-sized trusts who manage estates and technology, through finance directors of smaller trusts who might be more like executive business managers in larger trusts, and to finance directors in single-academy trusts who have a role not unlike a business manager in a maintained school, but with more accountability. Then we have finance managers, finance assistants, management consultants, senior management consultants, financial accountants, finance business partners, payroll managers—the list goes on. These are all in endless combinations that change over time as trusts and schools grow, shrink and change. The same is true for HR, technology, data and projects, as well as pastoral roles.

This illustrates that we are looking at a vast undertaking, and more importantly a needless one, given my Amendment 111A and the Government’s very welcome Amendment 112 and associated amendments that clarify that there cannot be an agreement that cuts the pay of a school support staff member. But any national framework that fails to acknowledge this reality risks becoming either so vague as not to be useful or too rigid to serve communities effectively. We have not had clarity yet from the Government about how this is going to be addressed in the real world.

We are also worried that there is no estimate at all for the additional costs that this approach will create for schools, and my Amendment 116B aims to address this. It seems extraordinary to introduce a measure that will increase costs to schools and costs to the public purse without working out how much that would be. I do not know whether the Minister can update the House on that point.

Our final concern is that the Government’s Amendment 112 will not fully address the ability of trusts to innovate and improve the terms for their support staff, which, rightly, the Government have as their priority for recruitment and retention. As I read it, it appears to say that new subsections (2) to (5), introduced by Schedule 4 on page 207, do not apply if each individual term and condition is to the advantage of the employee. I phrased that in a positive sense; the amendment is phrased the other way around.

Across the House, I hope we are keen that innovation around terms and conditions is possible where it provides an advantage to the employee in the round, but not necessarily looking at every element separately. For example, some trusts currently have a policy that everybody who joins in a child-facing role must either have or work towards achieving a level 3 qualification. That is clearly good for children. It leads to higher pay, which is good for the member of staff. But the duty on an employee to work towards a level 3 qualification is clearly a new requirement on that employee. My understanding is that anything that requires a person to acquire a qualification or undertake training is not defined as an improvement in their terms and conditions. An employee could reasonably say, “I don’t have to do that under the new national terms and conditions”, even where the unions think it is a good idea and other employees are in favour of it. So trusts would not be able to stick with such approaches, which benefit children and staff. I hope that the Minister can confirm that my understanding of this is right.

It is frequently the case that contracts for support staff in trusts are constructed very differently from those in the maintained sector. If contracts specify that hours, holidays, allowances, pay scales et cetera are set out in a completely different way from the SSSNB terms and conditions, but the overall impact is better for everyone, why would we want to rule this out?

The noble Baroness, Lady Smith of Malvern, kindly met the noble Lord, Lord Goddard, and me last week. She pointed out that school support staff are the only public sector workforce without a pay negotiating body. She is right about that but, if the Government are interested in the outcomes rather than the process, my amendments, particularly Amendment 111A, achieve their aims but avoid complexity and cost.

We believe that the Government have addressed the issue of setting a floor not a ceiling on pay, but, although I understand it is their intention to address innovation, the amendment as drafted does not address the reality of innovation and improvements of terms and conditions—hence my Amendment 111B. I hope that the Minister is able to be clear when she sums up that the Government agree with me and the noble Lord, Lord Goddard, and that we can find a way to address this effectively. I beg to move.

[Lord Hendy (Lab)]

My Lords, may I rather impudently congratulate the Government on their Amendments 112 to 116 and 117 to 119? In Committee, I moved a series of amendments to similar effect; namely, that the output of the negotiating body should not impose a detriment to existing terms and conditions and should permit any enhancement to existing terms and conditions by negotiation or otherwise. I am not so immodest as to imagine that there is any causal connection between my amendments in Committee and the appearance of these amendments on Report. I recall that the noble Baroness, Lady Noakes, also had amendments to similar effect; it may be that she had much more traction with my noble friends on the Front Bench than I had. Whatever the process—it is of course irrelevant—I congratulate my noble friends on the Front Bench for the introduction of these amendments, which make solid that this is a floor and not a ceiling.

[Lord Agnew of Oulton (Con)]

My Lords, I support my noble friend Lady Barran in her Amendments 111A, 111B, 116A and 116B. I have not spoken on the Bill before, so I refer noble Lords to my registered interests, in particular as a founder of a multi-academy trust with 18 schools and around 1,400 staff.

This new negotiating body—a central bureaucratic body dictating terms and conditions and pay for all to obey across our whole nation—literally drives us back to the 1970s. It would remove any ability to take note of local employment conditions. My own multi-academy trust completed a secondary school core structure review in 2022 and we have just finished the same review for our primary schools. We now have in place posts and grades that meet the needs of each school and, most importantly, those of our pupils.

We have set out a grading system to reflect the local conditions in which we operate. Primary and secondary staffing levels are strong and sustainable. The SSSNB would undo all this, and the cost of going through this new legislation would be bureaucratic and increase the overhead in our human resources. Administering these changes would take resources away from the front line with no meaningful benefit. I congratulate the Government on at least accepting that there is a floor to this whole arrangement, but it still leaves an extremely complicated central bureaucracy.

To provide good education we need flexibility. We operate harmoniously with our unions; we share a common mission and believe we have created a first-class cadre of support staff. Indeed, only two weeks ago, one of our support staff saved the life of one of our children, who had a cardiac arrest on a playing field when playing away. The local defibrillator had broken and he kept the child alive for 20 minutes.

I am looking at this whole Bill more widely. If we zoom out beyond the area of education, we start to see the impact of the aggressive anti-employer strategy being deployed by this Government. We have already seen the impact of VAT on private schools, with them going out of business and staff losing their jobs. We have already seen the escalation of employers’ national insurance and the widening of the bands, which has contributed to some 60,000 jobs being lost in the hospitality sector. Last week, we tried to warn the Government about the banter clause, which will drive another nail into the coffin of the hospitality sector.

Private sector employment market vacancies are under great pressure. At the beginning of last year, there were 900,000 vacancies and, by May this year, that was down to about 720,000. We heard earlier in the debate from the noble Lord, Lord Clement-Jones, on AI, and we are already seeing the impact of this—perhaps more dramatically in the US, where Microsoft has got rid of 15,000 staff in the last two months.

--- Later in debate ---

Moved by

[Lord Hendy]

122A: After Clause 53, insert the following new Clause—
“Statutory rights of GB-linked ships’ crews(1) The members of the crew of a GB-linked ship shall be entitled to the statutory rights to which employees in the UK are entitled under statute.(2) In this section, “GB-linked ship” means a ship providing a service—(a) for the carriage of persons or goods, with or without vehicles, and(b) that is within subsection (3) or (4).(3) A service is within this subsection if it is operated between a place in Great Britain and another place in the United Kingdom.(4) A service is within this subsection if—(a) ships providing the service entered a harbour in Great Britain on at least 120 occasions in the period of 12 months ending with the day on which one or more of the statutory rights referred to in subsection (1) is claimed, or(b) 15 if the service has been provided for less than 12 months before that day, ships providing the service entered a harbour in Great Britain on at least 10 occasions in each month for which the service has been provided.(5) But a service is not within subsection (4) if the service—(a) is for the purpose of leisure or recreation, or(b) is provided by a fishing vessel.(6) In this section—“harbour” has the same meaning as in the Harbours Act 1964;“ship” has the same meaning as in section 193A of the Trade Union and Labour Relations (Consolidation) Act 1992 (see subsection (4) of that section).” Member's explanatory statement
This new clause is intended to extend entitlement of the rights of GB-linked ships’ crews from the right to collective redundancy notification in clause 29 to entitlement to all statutory rights enjoyed by UK employees.

[Lord Hendy (Lab)]

My Lords, the purpose of this amendment is to probe the extent to which the new category of seafarers, “GB-linked ships’ crews”, should benefit from other employment rights apart from the one bestowed by the Bill, which gives them a right in relation to consultation over collective redundancies, as a consequence of the P&O Ferries scandal. I understand that there have been discussions between the unions representing these seafarers and the ministerial team. In the light of that, I shall leave it to the Minister to set out the situation. I beg to move.

[Lord Davies of Brixton (Lab)]

Having raised these issues at the beginning of Committee, I just want to say that, following the favourable response of the Front Bench to the idea of arranging a meeting at which they can be discussed, I very much look forward—at least, I hope I can—to the reply of my noble friend the Minister.

--- Later in debate ---

We would welcome the opportunity to continue the extensive engagement that we have already undertaken with the unions and industry about the application of employment protection to seafarers. The Maritime Minister recently met the RMT and undertook to continue dialogue on this matter. He would be happy to meet the RMT again following official-level discussions to explore how we could secure the objectives behind my noble friend’s amendment. With that, I ask my noble friend to withdraw Amendment 122A.

[Lord Hendy (Lab)]

My Lords, in the light of my noble friend the Minister’s recognition of the shortfall in employment rights for seafarers and the commitment to continued engagement with the maritime unions, and indeed employers, to discuss the ways in which the intent behind the amendment might be ultimately achieved, I am happy to beg leave to withdraw the amendment.

Amendment 122A withdrawn.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, Amendment 125 in my name speaks to a fundamental principle that we should run through every piece of employment legislation that we consider, and that it is the right of the individual to determine their own path.

Too much of the Bill rests on an implicit and rather patronising assumption that workers are somehow incapable of managing their own affairs—that they must be corralled, collectively represented, spoken for and ultimately told what is best for them. This amendment challenges that assumption head on. It affirms the right of a worker who is not a union member to say that they wish to stand on their own two feet and do not wish to be bound by collective agreements that they had no part in negotiating and no say in accepting. That is not anti-union; it is pro-choice and pro-individual. If we believe in personal responsibility then we must also believe in personal freedom. Some workers are independent-minded individuals, who want to make their own decisions about their pay and their terms and conditions.

We have to be clear: statutory rights remain in place. This amendment would do nothing to undermine minimum standards; it would simply allow the worker to rely on those rights without being bound by a collectivist framework that they never opted into. That is not a threat to fairness but the definition of fairness.

The Government treat workers as a monolith. They are defined not by merit or initiative but by membership and conformity. This proposed clause offers a quiet but powerful alternative: that the individual workers matter, that their preferences matter, and that freedom of contract is not some abstract legal concept but a cornerstone of liberty. I beg to move.

[Lord Hendy (Lab)]

My Lords, before I speak to my Amendment 127, I will say a few words about Amendment 125, from the noble Lord, Lord Sharpe. He and other noble Lords on that side of the House often accuse those on this side of ignorance of business, but his amendment shows ignorance of what happens in industrial relations on the ground.

I will make three points. First, there is nothing in the law to prevent an employer and an individual employee agreeing an improvement to terms and conditions on an existing collective agreement, save in exceptional circumstances such as that illustrated by the case of Wilson and Palmer v the United Kingdom, where the employer offered to pay workers a higher rate of pay if they surrendered their union membership. That principle would also apply to prevent the penalisation of workers on the grounds of any other protected characteristic. However, as a general principle, workers and employers can agree to improve on an existing collective agreement.

Secondly, why would an individual employee agree to detrimental terms worse than an existing collective agreement—lower wages, longer hours, fewer holidays, fewer breaks, and worse terms and conditions? There can be no reason why a worker would wish not to abide by the existing collective agreement. Employees need protection against bad employers who might otherwise exploit the proposed loophole by saying to an individual employee, “I want you to opt out of the collective agreement”, hence undermining it.

Thirdly, collective agreements are not dictated by the trade unions but are agreed by an employer and, usually, by a vote of the employees. We need more negotiation and less litigation.

With that, I turn to my Amendment 127, which is intended to provide my noble friend the Minister and the Secretary of State with a mechanism to promote and encourage collective bargaining on a sector-wide basis without prescribing in detail the model to be deployed. It would be used when needed and would not compel the Government to put it into operation. I will not repeat the arguments about collective bargaining that I developed in Committee over the course of three speeches, but I think I may be permitted to summarise the gist of those arguments in six points.

First, the Bill makes commendable reforms to the legal machinery to establish collective bargaining between trade unions and a single employer, but there is no mechanism in the Bill or anywhere else for multi-employer collective agreements or sector-wide collective agreements.

Secondly, sectoral collective bargaining was the norm for the United Kingdom from 1918 until 1990. It established a coverage of over 80% of British workers between 1945 and the late 1980s. The percentage of workers covered by collective agreement has now declined to 25%. That means that three-quarters of our workforce are employed on “take it or leave it” terms, without any possibility of negotiating anything better than that which the employer offers.

Thirdly, 80% collective bargaining coverage is curiously—or coincidentally—the level now set for the 27 member states of the European Union, after two decades during which the EU undermined sectoral collective bargaining. That policy was reversed in 2024 by means of a directive. Collective bargaining is now advocated by the OECD, since 2017, the IMF and, of course, the ILO.

Fourthly, Labour’s Green Paper, A New Deal for Working People; its subsequent publication on making work pay, implementing the new deal for working people; Labour’s election manifesto; and the King’s Speech all endorsed the extension of collective bargaining.

Fifthly, I come to the benefits of sectoral collective bargaining, which need spelling out again. There are at least eight benefits, as I identify them. The first is that sectoral collective bargaining increases wages. Let us recall that the real value of wages has risen only 0.5% in the past 20 years. Secondly, a rise in wages increases demand in the economy—demand for the goods and services produced by employers. Thirdly, collective bargaining contracts the differentials that have emerged: the gender pay gap, the ethnic-minority pay gap, the disability pay gap and so on. Fourthly, by increasing wages, collective bargaining diminishes the need for state benefits by way of subsidy to low wages. Let us not forget that 31% of those in receipt of universal credit are in work, which gives an indication of the lowness of wages in this country. Fifthly, increasing wages increases the Government’s tax take, which diminishes the need to find money elsewhere. Sixthly, sectoral collective bargaining prevents employers undercutting each other on labour costs. Seventhly, the other side of that coin is that it encourages employers to compete on productivity, investment, efficiency and innovation. Eighthly—this is an important point—it achieves a form of democracy at work. It gives workers a say in the terms and conditions on which they work.

I said there were six points, and the sixth and final point is one of particular interest to me as a lawyer. It is the observation that the rule of law plays a part here. The rule of law, Lord Bingham’s eighth principle, is that states must abide by the treaties they have ratified. That principle has been endorsed in almost every speech I have heard my noble and learned friend Lord Hermer KC, the Attorney-General, give since his appointment to that office. This is significant because International Labour Organization Convention No. 98 and Article 6.2 of the European Social Charter 1961 impose the duty on ratifying states, which includes the United Kingdom, not just to permit collective bargaining but to promote and encourage it. The Bill was the opportunity to promote and encourage collective bargaining at sectoral level, but it does nothing to do so in any sector of the economy.

--- Later in debate ---

[Baroness Verma (Con)]

My Lords, in response to the amendments from the noble Lord, Lord Hendy, I want to explore the fact that we currently have strong representation from the unions. We have seen, through recent strikes, that there is an ability to go out there and voice your opinion.

My worry—I would like to have this recorded—as a businessperson, as my registered interests lay out, is that most of the businesses impacted will be SMEs, which are already predominantly very good employers. Most small and medium-sized businesses work with their workforce. We all wish to do well because we want better productivity, and it is not in our interests not to do so.

I remind noble Lords that my own grandfather was one of the founders of the Indian Workers’ Association because, at that time, unions were not properly representing minority communities. My worry is that we are going to go back to a place where people from minority communities, who do not actually know whether they have a choice to be part of a union or not, will have to come back into a union—whether or not they know that they are a member. I want to know from the noble Lord, Lord Hendy, how that would be clarified. There will be many from minority communities who work incredibly hard, are ambitious and aspirational, and want to end up owning their own business, who find that working and learning from employers is the best way to do it.

I fully support my noble friend’s amendment because I think that the world has moved on so much. Technology has enabled us to do so many things differently so that we are far more able to hold employers to account. There is no place to hide for bad employers. I do not think that the amendment from the noble Lord, Lord Hendy, will actually make a lot of difference to today’s workforce, as we are using a lot of new technologies to be able to make sure that the workplace is a much fairer place.

[Lord Hendy (Lab)]

I do not really recognise the workplace that the noble Baroness describes. The fact of the matter is that only some—

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

I think I am right in saying the Companion says that the noble Lord is not allowed to speak twice in the debate as he has not moved the amendment.