Employment Bill

Lord Hendy Excerpts

Wednesday 6th April 2022 Lords Chamber

[Lord Woodley]

To ask Her Majesty’s Government when they intend to introduce the Employment Bill, announced in the Queen’s Speech in December 2019.

[Lord Hendy (Lab)]

My Lords, in the unavoidable absence overseas of my noble friend Lord Woodley, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government are committed to building a high-skilled, high-productivity, high-wage economy that delivers on our ambition to make the UK the best place in the world to work. We will do that by continuing to champion a flexible and dynamic labour market. As we build back better, we will continue to make it easier for people to both enter and remain in work.

[Lord Hendy (Lab)]

My noble friend Lord Woodley’s Question could not be more topical. Our employment laws failed utterly to protect the jobs, incomes and careers of 800 P&O seafarers, sacked without consultation or warning and marched off their ships by security guards. The Government’s proposals in response are set out in the all-Peers letter dated 31 March from the noble Baroness, Lady Vere. Not included is legislation to strengthen, and in particular enforce, employment rights to prevent repetition of such sacking by ambush. I ask the Minister: why not? Is it connected with the reports that the proposal for an employment Bill in the forthcoming Queen’s Speech was overruled last week by the Prime Minister?

[Lord Callanan (Con)]

The BEIS Secretary of State has formally commissioned the Insolvency Service to urgently undertake a thorough inquiry into the circumstances surrounding the recent redundancies made by P&O Ferries that the noble Lord referred to. We will not hesitate to take further action if we find evidence of wrongdoing. He will know that the Secretary of State for Transport has also committed to applying the national minimum wage to seafarers.

Trade Union (Levy Payable to the Certification Officer) Regulations 2022

Lord Hendy Excerpts

Monday 7th March 2022 Lords Chamber

[Lord Balfe (Con)]

My Lords, first, I should declare an interest as the president of BALPA, the TUC-affiliated union for pilots.

This is just unnecessary, is it not? The Act was passed in 2016. I remember that my noble friend who just spoke was the Minister then and we had one or two set-tos, but in the end, to my mind, her knowledge of the trade union movement helped ameliorate that Bill and get it on to the statute book. I had liked to think that the non-activity over the past two or three years meant that the Government had had another thought and decided that these regulations did not need to be brought into being—and of course they do not. They are not going to add anything. We have heard about the 34 complaints with no enforcement orders and about the fact that no other voluntary organisation pays for its regulator, and we know that the whole of this office is really not needed for the purpose for which it is being put forward.

What I would say though, particularly to the noble Lord, Lord Razzall, is that we should not make this a battle between the Labour Party and the Conservative Party over funding. It is not. It is about unnecessary control of the trade union movement. The majority of my union members voted for this Government. I am absolutely convinced of that, having talked to them. Some 30% of paying trade unionists vote Conservative. We have got to get over this idea that somehow the trade union movement is comprised of hard-working, left-wing socialists.

My wife was a district councillor for some years; she dealt with unions in rural England, and said that most of them were well to the right of her in their political beliefs. Most of them were voting for the Conservative Members of Parliament to be found in the depths of East Anglia. So let us get over this idea that union members are all Labour and not Conservative. It is important to get over it because I think the Minister needs to get over it and the Government need to get over it.

I have said over many years that we will have reached an achievement in this country when, just as the leader of the Opposition goes to the CBI on a regular basis, so the leader of the Conservative Party appears at the TUC and makes a speech and answers questions. Breaking down this divide is really quite essential if we are going to have industrial relations peace in this country.

We have not got a lot of time, so I am going to leave the Minister with just two questions, one of which has already been asked in one form. First, what, if anything, are the Government prepared to do about vexatious litigants? There will be people who will go to the regulator purely to cause trouble—every union has them; even BALPA has the odd member who gets great pleasure out of trying to run rings around its national executive. To what protection are the Government prepared to look to protect vexatious claims against unions? Secondly, the Government have pussyfooted around on electronic balloting the entire time I have been in this House. There are no questions about having a secure electronic ballot. Is it not time that the Government made a generalist gesture to the trade union movement and let it have what is a totally secure system, at its own choice, for running internal elections?

Those are two things the Government can give us. It will cost them nothing but it will show the Conservative-voting trade unionists of this country that the Government are a Government of the country and not just one part of it.

[Lord Hendy (Lab)]

My Lords, the Minister’s justification for the levy is that it is entirely normal for a regulator to be paid for by those whose businesses are subjected to regulation. That argument is untenable for at least five reasons.

First, the CO is not a regulator in the same way that others are. She has an administrative role to list trade unions and employers’ associations but her principal function is judicial, regulated exclusively by the Trade Union and Labour Relations (Consolidation) Act 1992. It is confined to the following matters: elections; disciplinary proceedings; balloting, other than for industrial action; the constitution and proceedings of the executive; elections for president, general-secretary and executive committee; political funds; amalgamations; transfers and engagements; accounting records; and annual returns. All these are purely matters of internal trade union affairs. The Secretary of State has the power to specify other matters by order but has not done so.

In relation to these issues, the CO acts judicially. If she receives an application from a member against the union which manifests a prima facie case, the CO conducts a formal hearing. Both parties take their turns—often through counsel—to present their evidence, cross-examine witnesses and make legal submissions. The CO then hands down a decision and may make a declaration if she finds a breach.

Appeals lie from the CO to the Employment Appeal Tribunal, which is of course a division of the High Court presided over by a High Court judge. There are few regulators with such judicial functions and where the governing legislation has specified a direct route of appeal to the High Court. However, one such is the employment tribunal, from which there is the identical route of appeal to the EAT. Noble Lords will recall that the Government legislated to impose fees on employment tribunal claimants but the Supreme Court, in the Unison case, held that that was unlawful; the Government consequently withdrew the fees regime. However, what is significant in this debate is that the Government have never suggested a levy on employers to pay for employment tribunals. It is not surprising therefore that trade unions point to the fundamental injustice of them paying a levy to meet judicial costs under the legislation which applies to them when the costs of adjudication under the legislation which applies to employers is met by taxpayers.

The second point is that the justification for the imposition of virtually every regulator is the need to protect the public. That does not apply to the CO. The primary purpose of bodies such as the CO and the employment tribunal is not to protect the public but to adjudicate in disputes between specified classes of claimants and respondents. In the case of tribunals, this is between workers and employers, and in the case of the CO between unions and members. The jurisdiction of each is limited to the statutorily specified subject matters. That is why members of the public cannot complain to the employment tribunal or to the CO that a friend of theirs has been unfairly dismissed by an employer or unfairly disciplined by a union.

Therefore, the CO is not there to protect the public from breaches of the relevant rules but to give trade union members, and only trade union members, an avenue of judicial complaint. It is true that the Government have now extended the remit of the CO to investigate matters on her own initiative, even where no member has complained, but the scope of her jurisdiction is still confined to the specific items I have listed. An infraction by a trade union in any of those matters will not impinge on members of the public and neither will any member of the public have the right to bring proceedings before the CO about it. So the public interest argument is simply without merit.

This is important, for although unions are complaining that newspapers and political parties hostile to them will rush to make complaints to the CO, such complainants cannot make a formal application and, if she thinks there is any merit in an informal complaint, the CO will be called upon herself to act as investigator, prosecutor and judge. That is not a position she is likely to enjoy, I imagine. Indeed, I doubt that she will welcome the extra workload of investigating allegations from unaffected outsiders about the internal workings of a union where no member feels sufficiently aggrieved to make a formal application to her.

My third point, which has already been dealt with by my noble friends Lord Bassam and Lord Monks, is that where regulators are funded by a levy, they are invariably conducting a business for profit, or at least earning a living from the regulated activity. That does not apply to trade unions, which make no money from the regulated activities.

That leads to the fourth point, which is that where a regulator is funded by a levy, those who must pay it are able to deduct the cost of their levy from the tax they pay on their profits. Trade unions cannot do that. Their income is derived, as has been said, almost exclusively from members’ subscriptions and goes to offset their running costs. They have no profits to tax. They do not have a tax bill against which to claim their levy.

Status of Workers Bill [HL]

Lord Hendy Excerpts

3rd reading
Friday 28th January 2022 Lords Chamber

Moved by

[Lord Hendy]

: Clause 1, page 2, line 44, at end insert “and any such regulations must be made by statutory instrument which is subject to annulment in pursuance of a resolution of either House of Parliament.”
Member’s explanatory statement
This is a technical amendment to ensure (in order to comply with the recommendation of the Delegated Powers and Regulatory Reform Committee in HL Paper 101, 18 November 2021) that the Bill, which inserts identical provisions regulating the status of workers into the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996, provides identical mechanisms to allow the Secretary of State to exercise the additional powers given by the Bill to expand the categories of “worker” and “employer” (Clauses 1(6) and 2(6)). Currently, the 1996 Act requires such powers to be exercised by Statutory Instrument subject to the negative procedure but the 1992 Act does not. The proposed amendment would amend the 1992 Act so as to ensure consistency under both Acts.

[Lord Hendy (Lab)]

My Lords, this amendment is in my name and on a sheet marked HL Bill 14—TR(a). It is a technical amendment, so perhaps I can remind your Lordships of the context of the Bill and the purpose of the amendment. The context is that the Bill seeks to amend the two major Acts of Parliament regulating employment in the United Kingdom: the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996. It provides amended definitions of the concepts of worker, employee and employer.

In the Bill, the Secretary of State is given power to make regulations to deal with anomalous cases. The problem is that the 1996 Act provides a mechanism for the Secretary of State to do that by way of statutory instrument, subject to the negative procedure. However, the 1992 Act does not provide such a mechanism. Therefore, this amendment is designed to give effect to the democratic purpose by providing an equivalent power to the Secretary of State to exercise his regulatory power by statutory instrument, subject to the negative procedure. It is entirely technical and makes the provisions of both Acts, should the Bill be passed, equal.

I was not aware of this defect when drafting the Bill, which may be thought surprising, given that I spent almost my entire career arguing over bits of both pieces of legislation. However, the anomaly was drawn to my attention by the Delegated Powers and Regulatory Reform Committee’s report, which was published after that committee dealt with my Bill. I am sorry to say that I am a member of that committee, so it was particularly shameful to be rapped over the knuckles by it for my omission. I hope now to put the matter right. I beg to move.

Amendment agreed.

--- Later in debate ---

Moved by

[Lord Hendy]

That the Bill do now pass.

[Baroness Merron (Lab)]

My Lords, I speak in place of my noble friend Lord Bassam, who cannot be here today.

We on these Benches support my noble friend Lord Hendy and his Bill, which will create a single status of worker. I express my thanks to my noble friend for introducing the Bill and for his amendment, along with his great honesty about the need for it.

The Bill elegantly replaces existing employment categories, thereby removing qualifying periods for basic rights and protections. It gives workers rights in the job from day one, so all workers would receive rights and protections, such as statutory sick pay, national minimum wage entitlement, holiday pay, paid parental leave and protection against unfair dismissal, while the genuinely self-employed would retain their status. It is of course a shame that parliamentary time limits mean that the Bill may be going no further. I therefore hope to see it as a government Bill before too long.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, I thank the noble Lord, Lord Hendy, for moving his technical amendment in order to comply, as he said, with the recommendation of the Delegated Powers and Regulatory Reform Committee. While the Government are not convinced that the Bill is the right course of action, we agree with the importance of legislative scrutiny and consistency. The Government therefore welcome the amendment, which would ensure consistency under the Trade Union and Labour Relations (Consolidation) Act 1992 and the Employment Rights Act 1996—although, as I said, we cannot support the Bill.

I congratulate the noble Lord on bringing the Bill to the House and on enabling this debate on an important subject. I thank all noble Lords for their contributions during Second Reading, which allowed for what I thought was an insightful and important debate on this topic. I also thank the Delegated Powers and Regulatory Reform Committee for its expert contribution and the noble Lord, Lord Hendy, for tabling his amendment.

As I said at the start, the Government are not convinced that the Bill is the right solution to give greater protection to those in insecure work. We will continue to take steps to protect vulnerable workers, delivering on our ambition to make the UK the best place in the world to work and grow a business.

[Lord Hendy (Lab)]

My Lords, I am grateful to the Minister for his speech. I am grateful, too, for the other speeches made today and those which were made on Second Reading. I am particularly grateful that the Bill has enjoyed wide support across the House, on all sides. I of course understand the position of the Minister in being unable to support it, but he stands alone in this. If the Bill is passed it will, as the noble Lord, Lord Balfe, said, render great justice to hundreds of thousands of workers who are wrongly classified, and thereby deprived of the statutory rights which Parliament has bestowed on working people. It will also provide, in accordance with the Government’s policy, a levelling-up process by which all employers will stand on a level playing field in the engagement of their workforce.

Bill passed and sent to the Commons.

Energy Costs

Lord Hendy Excerpts

Thursday 6th January 2022 Lords Chamber

[Lord Hendy (Lab)]

My Lords, I congratulate the noble Baroness on securing this debate. This year the UK faces what the Resolution Foundation has called a cost-of-living catastrophe. Does the Minister agree with the Leader of the House of Commons that the rise in national insurance planned for April should be scrapped?

Noble Lords have suggested, and will suggest this afternoon, ways of dealing with the rise in energy prices. The impact on pensioners is obvious: the way to deal with it is to raise the state pension and the winter fuel allowance. I wish to focus on those on low incomes. The Resolution Foundation and the Office for National Statistics have shown that the real value of wages has been more or less flat since 2008 and is predicted to fall this year. The pandemic and Brexit introduced fluctuations in some sectors but these have not had a wider impact. Britain is a low-wage, low-productivity economy. Given the Government’s stated objective to reverse this, presumably the Minister will agree with the new year message from Frances O’Grady of the TUC that Britain needs a pay rise.

The question is how that might be achieved. Treating workers as commodities on the so-called labour market, where the price of their labour is fixed by employer demand on one side and mitigated by the need of workers to keep themselves and their families from penury on the other, does not produce a high-wage, high-productivity economy. The Government should look to the real high-wage, high-productivity countries such as those of Scandinavia, and note that the key feature which produces such results is high levels of collective bargaining—levels of over 70% and as much as 90% of workers covered by collective agreements. Even the European Union has now finally recognised the importance of collective bargaining coverage of 60% or more in its proposed directive on the minimum wage. In contrast, in this country, from a level of around 85% of British workers, which ran from the Second World War until the 1980s, collective bargaining coverage has been steadily driven down by government policy and restrictions on unions to something less than 25% today. That means that three-quarters of our workers, some 24 million of them, have no collective say over their terms and conditions, and next to none is in a position where an employer will negotiate with them individually.

Given the UK’s commitment to promote collective bargaining as articulated in the International Labour Organization’s convention No. 87, which was recently reiterated in the trade and co-operation agreement with the EU, and in the UK-Australia free trade agreement, will the Minister consider reintroducing the wages councils legislation, first promoted by Sir Winston Churchill in 1909, which required compulsory collective bargaining across each sector of industry where it did not occur voluntarily? The resulting agreements were binding on every worker and every employer in the sector. It was introduced and functioned precisely to remedy the blight of low wages.

The Minister might also consider developments in New Zealand, where legislation was introduced last year to introduce fair wage agreements, much like those of the wages councils, and in Spain on 29 December, just a week ago, where there was a restoration of collective bargaining, by agreement with the social partners.

Status of Workers Bill [HL]

Lord Hendy Excerpts

2nd reading
Friday 10th September 2021 Lords Chamber

Moved by

[Lord Hendy]

That the Bill be now read a second time.

[Lord Hendy (Lab)]

My Lords, Covid-19 has highlighted many of the failings in the law of the workplace in the UK. Working people have found that their workplace rights have not secured their jobs, their incomes or their health. One particular injustice is that many hundreds of thousands have only very few of the rights that Parliament has legislated that employees must have, such as rights to the minimum wage and to unfair dismissal protection. This is because “armies of employers’ lawyers”, to use a phrase used by the Court of Appeal in one case, have constructed contracts that seek to categorise these workers as something other than employees. The proper interpretation of such contracts has provided meat and drink to lawyers and judges for decades. The Bill is intended if not to remove then at least to narrow the grounds of contention by unifying the classification of workers into a single status, subject to an important exception.

Let me deal with a preliminary point on my use of the term “worker”. There is a definition in the Bill but, for the purposes of my speech today, I use the term loosely and generically: I mean a person who works for a living. This is close to the generic meaning in international law as used by the International Labour Organization, the Council of Europe and the European Court of Human Rights. The current problem is that there are subspecies of worker and this gives rise to the injustice that the Bill is intended to cure. Each subcategory—I identify six—is entitled to a different set of statutory rights. That means that employers, understandably, have an incentive to downgrade the status of staff so as to diminish the rights that they enjoy and hence the costs inherent in the provision of those rights. By creating a single status, this possibility is removed. In consequence, the effect of the Bill would be to give entitlement to all statutory employment rights to all workers from day one of their engagement, although I would gladly accept an amendment to remove or reduce waiting time for rights to be effective, such as for unfair dismissal. The Bill does not affect rights, such as to holidays, that increase over time.

I have said that there is an important exception in the Bill. This is my first category. Those who are genuinely self-employed, in business on their own account, with their own clients or customers, will be unaffected by the Bill. These are, by and large, the professionals. Examples are the owner-driver of the London taxicab or Hackney carriage—“mushers”, as they are known in London—the self-employed painter and decorator, the jobbing electrician, the gigging musician, the novelist, the barrister, of course, and many more. Their status and their rights will be untouched by the Bill. Some of these professionals have established a personal service company, a PSC, through which they find it convenient to work. This is a limited company in which the professional or a member of the family is the major shareholder and director. The professional is the sole employee and is content that his or her rights as an employee are exercisable only against their own company. Such genuine PSCs, my second category, will also be exempt.

The Bill is intended to stamp out abuse of these first two categories. It will therefore regulate my third category, bogus self-employed workers. These are workers whose arrangements are dressed up to look as if they are self-employed, but who are in reality employees. Unless they challenge their status in successful litigation, they are not entitled even to the national minimum wage or paid holidays—not even some health and safety protections. Bogus self-employment is rampant in the construction industry but by no means confined to it. Drawing the line between bogus and genuine self-employment is not easy, but the courts will be aided by the Bill placing the burden of proof on the employer who claims that the relationship is genuine.

The Bill will also regulate my fourth category: those forced into PSCs. This is where a worker is told by the real employer that if she wants to work, she must set up a personal service company to make a commercial contract with the real employer to supply her services and to make a contract of employment with herself. This contrivance is often arranged by the employer. On the face of it, the worker has full employment rights, but only against her own personal service company; the real employer is insulated against any responsibility for her rights. Such abusive PSCs are common in parcel delivery, construction and many other sectors. I will not dwell on the technicalities, but the Bill endeavours to draw a clear line between the genuine and the abusive PSC.

The fifth category are the so-called limb (b) workers. The term derives from the definitions in Section 296(1)(b) of the Trade Union and Labour Relations (Consolidation) Act 1992 and Section 230(3)(b) of the Employment Rights Act 1996. These are workers who have a contract but not a contract of employment. They are a subspecies of the self-employed. They get only some of the rights that employees have—for example, the national minimum wage and paid holidays. They do not get protection against unfair dismissal, parental leave and so on. This is the status that the Uber drivers achieved in their Supreme Court victory earlier this year. Limb (b) workers are common in food delivery, taxi driving and other service industries.

Finally, there are the employees. They are entitled to all the statutory rights that Parliament has provided, so long as they have been employed for long enough.

The Bill takes up issues identified in the Matthew Taylor report some years ago, but by proposing a single status it goes beyond Matthew Taylor’s recommendations. I wanted to give your Lordships a sense of the scale of the problem, but the statistics are limited. What can be said is that at present there are about 28 million employees, a figure that includes the single employees of up to some 700,000 personal service companies. In addition, there are just under 5 million self-employed, but the statistics do not distinguish between those who are limb (b) workers, those who are bogus self-employed and those who are genuinely self-employed. What is clear is that the number of those in PSCs and self-employment is proportionately greater and growing faster than elsewhere in Europe.

Though some opportunistic employers will not welcome the Bill, it would in fact benefit employers generally by preventing greedy or uncaring employers from undercutting good employers who are prepared to confer full employment rights on their staff. It would also stop the worst employers free-riding on the rest of us by using categories for their staff that avoid payment of national insurance, tax and pension contributions. The Bill is obviously intended to benefit workers and I am pleased to say that it is supported by the Trades Union Congress. It will, if passed, extend employment rights to hundreds of thousands who do not currently enjoy them. It will protect those who already have such entitlement from the danger of being degraded, downgraded to or undercut by workers with fewer rights.

I have one last point. Employers often try to persuade workers of the benefits of a lesser status on the basis that it provides flexibility for the worker, but this is a false argument, since legal status has nothing whatever to do with whatever flexibility employers confer on their workers. That flexibility can just as easily be enjoyed by employees if the employer is prepared to concede it. If the Minister supports the Prime Minister’s avowed levelling-up objective, here is a measure that he can and should support. I beg to move.

--- Later in debate ---

[Lord Hendy (Lab)]

My Lords, I am grateful for and humbled by the support around the House for the Second Reading of the Bill. I am grateful to all speakers who have contributed, particularly the noble Lord, Lord Moylan. Were it not for him, the heroic defence of the current situation by the noble Lord, Lord Callanan, would have stood alone.

It will be understood that I mean no disrespect by not summarising the elegant arguments put forward both for and against the Second Reading of the Bill, but I will take up just a couple of points. First of all, I would like to say how grateful I am for the support of the noble Lord, Lord Blencathra, and his reference to caring capitalism. Personally, I prefer caring socialism, but caring capitalism appears to be an achievable aspiration that is appropriate to aim for with this Bill.

I am grateful to the noble Baroness, Lady Greengross, for pointing out the particular vulnerability of young workers and older workers, and to the right reverend Prelate the Bishop of St Albans for expressing Christian support for the Bill and drawing to our attention the benefit to the state in increased tax and national insurance that would follow from the adoption of the Bill—a point reiterated by the noble Lord, Lord Balfe.

The noble Lord, Lord Holmes, raised a point about unpaid interns. I looked again at the Long Title of my Bill, and unfortunately I do think I would be able to persuade the authorities to include an amendment that dealt with unpaid interns—but I completely agree with him that unpaid internships should not be permissible except as a certified part of a formal educational course.

I loved the reference by the noble Baroness, Lady Wheatcroft, to the current law as a braying ass. That is a phrase I shall remember and cherish. She reminded us of the continuous struggle over centuries for the dignity and rights of workers to be protected by statute. This Bill is simply the latest attempt to achieve that.

The noble Lord, Lord Moylan, made an important point about the status of directors. Currently, directors may or may not be employees. Indeed, under this Bill they may or may not be workers; it will depend on the arrangements. I would be happy to accept an amendment to clarify the status of directors, but I am not prepared to accept Uber drivers having their contracts rewritten to make them all directors of some fictional Uber company. The noble Lord, Lord Moylan, pointed to the messy complexity of real life, but the noble and learned Lord, Lord Etherton, for whose judicial support I am grateful, pointed out that the messy complexity is in fact created by the state of the law and the exploitation of it by employers’ lawyers.

I indicated that I was not going to deal with those who kindly supported this Second Reading, but I must just mention my noble friend Lord Davies of Brixton’s intervention drawing attention to the way the Bill would protect pensions. The noble Lord, Lord Balfe, also drew attention to the fact that the protection of workers ought to be a cross-party issue; I agree with him on that.

The opposition to the Bill from the noble Lord, Lord Callanan, really boils down to an assertion that the current state of the law provides the right balance, which no other speaker apart from the noble Lord, Lord Moylan, accepts. He says that is based on the preservation of flexibility and the fundamental protections that currently exist for workers. So far as flexibility is concerned, I am afraid I cannot understand why it can be said that flexibility depends on the absence or restriction of employment rights. Flexibility is perfectly possible with full employment status and the rights that go with it. There are thousands, tens of thousands, hundreds of thousands—if not millions—of workers on flexible contracts who are still employees, so that argument simply does not hold water.

As for fundamental protections, I regard one of the protections of workers to be a right to complain if they are, or believe themselves to be, unfairly dismissed. I have not heard a justification for delivery riders such as those employed by Deliveroo, or the Uber drivers the noble and learned Lord, Lord Etherton, spoke about, being denied the right to make a complaint to a judicial authority that their engagement was unfairly terminated.

I did a case in the Court of Appeal a few years ago concerning a lap dancer, Quashie v I forget the name of the nightclub that engaged her. She worked three nights a week, week in, week out, over a period of years. An allegation was made that she was in possession of drugs; her engagement was instantly stopped. We tried to bring a claim for unfair dismissal but were met with the argument that she was not an employee but an independent contractor. We lost in the employment tribunal and won in the Employment Appeal Tribunal. Unfortunately, we lost in the Court of Appeal because of the complexity of the current law, as explained by the noble and learned Lord, Lord Etherton. I turn back to the fundamental point: why should she not have the right to say, “This allegation was false and unjustified, and my termination is unfair”?

In conclusion, I thank all noble Lords who have contributed to the debate.

Bill read a second time and committed to a Committee of the Whole House.

Office of the Whistleblower Bill [HL]

Lord Hendy Excerpts

2nd reading
Friday 25th June 2021 Lords Chamber

[Lord Hendy (Lab)]

My Lords, I too congratulate the noble Baroness, Lady Kramer, on introducing this Bill. She and the noble Baroness, Lady Altmann, who it is a pleasure to follow, are right to highlight that fundamental change to the legal framework for whistleblowing is necessary.

Having represented whistleblowers—indeed, the noble Baroness, Lady Kramer, mentioned one of my cases in her opening speech—and had the benefit of discussions with leading experts in the Institute of Employment Rights and with my friend Professor David Lewis of Middlesex University, I suggest the following eight points for consideration in the consultation that the Bill proposes.

First, there should be a statutory right to speak out and no civil or criminal liability for doing so within the legal confines of what whistleblowing is.

Secondly, all workers, including the police, armed services and security services, should have the protection of whistleblowing. Of course, it is understood that publication on matters of state security must be protected.

Thirdly, “reasonable belief” as a qualifier for public interest disclosure should be replaced by “reasonable suspicion” on the part of the worker, as proposed by Dame Janet Smith in the Shipman Inquiry.

Fourthly, trade unions have a role to play. A full-time trade union officer should be able to certify a protected disclosure and should be a legitimate recipient of a whistleblowing disclosure. Trade unions should have the right to bring proceedings on behalf of whistleblowers in the name of the trade union.

Fifthly, the list of wrongdoing already in the legislation should also include gross mismanagement or maladministration.

Sixthly, we should remove the public interest test and substitute for it a protected disclosure of a specified type of wrongdoing, as listed in the legislation, made to an appropriate recipient, including the office of the whistleblower.

Seventhly, measures to preserve the confidentiality of the disclosure and the whistleblower are needed. Measures are of course required to protect against reprisals against whistleblowers. The burden of proof should be on the employer.

Eighthly, there should be a statutory code of practice for workers and employers, which should extend to the procedure for whistleblowing, communication of a whistleblowing claim, confidentiality and anonymity, protection against reprisal, investigation and its timescale, feedback, hotlines, training and so on. The Bill from the noble Baroness, Lady Kramer, is a great start.

Employment Rights

Lord Hendy Excerpts

Thursday 10th June 2021 Lords Chamber

[Lord Callanan (Con)]

I thank my noble friend for his comments. The legislation will be introduced shortly, and it is important that we balance flexibility with protections. My noble friend feels very strongly about this issue. It is a dynamic, flexible economy that makes the UK such a fantastic place to work and gives us such relatively low levels of unemployment compared to many other European countries. We are the envy of the world in terms of not only our protection for workers’ rights but our flexible economy. The steps that we are taking on enforcement will help the country to build back better by taking a smarter approach to the enforcement of employment law, and will make it easier for the vast majority of responsible businesses to comply with the rules.

[Lord Hendy (Lab) [V]]

My Lords, the Minister in the other place said yesterday:

“It is unacceptable and, frankly, immoral to use the threat of fire and rehire as a negotiating tactic to force through changes to people’s employment contracts”,—[Official Report, Commons, 8/6/21; col. 841.]


yet in only seven months of last year just short of 3 million workers were subjected to it. There is nothing in the ACAS report to justify not legislating. Can the Minister not accept that these millions of workers merit legislation, not just guidance, to protect them?

[Lord Callanan (Con)]

This is a complicated area of employment law. We want to give employers flexibility to manage their business without producing undue effects on workers. Sometimes, sadly, it is necessary for employers to introduce changes; the alternative is that they go bust and no one has a job at all. We want to get this right and we want to introduce proportionate responses, but it is a complex area and we will be looking closely at it.

Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021

Lord Hendy Excerpts

Tuesday 27th April 2021 Grand Committee

[Lord Hendy (Lab) [V]]

My Lords, I join the applause for the Minister and the Government for introducing this statutory instrument, but the Government need to go further than this limited extension of rights. They should also remedy the unjustifiable exclusion of various classifications of workers for other key rights. A worker’s legal status determines the suite of rights to which she is entitled. Many employers seek to arrange for their workers the status to which the fewest rights attach—hence the profusion of litigation, most recently in Uber and in the case brought by the IWGB as to what the status of given workers is. The law on workers’ status is both complex and illogical, a situation that benefits only employers and lawyers.

There are now in fact five classifications of worker, by which I mean those who earn their living by supplying their labour to another. They are: the employee, with full statutory rights; the limb (b) worker, with limited statutory rights—this designation relates to Section 230(3)(b) of the Employment Rights Act; the false self-employed worker, with next to no statutory rights; the personal service company worker, who has no statutory employment rights other than hypothetically against the company of which she is the owner; and, lastly, the genuinely self-employed, in business on her own account with her own customers or clients but without statutory employment rights.

We need legislation to sort this out which adopts a binary solution, with, on one side, workers entitled to all statutory employment rights and, on the other, those genuinely self-employed, in business on their own account with their own customers or clients. I hope the Minister will tell us that the long-awaited employment Bill will do that and that it will be announced in the Queen’s Speech in May. In case not, I have entered such a Bill in the Private Members’ Bills ballot. Otherwise, anomalies will persist, as this statutory instrument shows. It gives protection against detriment for refusing dangerous work to both employees and limb (b) workers, but protection against dismissal for the same refusal—Section 100 of the Employment Rights Act—is reserved to workers only while limb (b) workers remain excluded.

National Minimum Wage (Amendment) Regulations 2021

Lord Hendy Excerpts

Monday 1st March 2021 Lords Chamber

[Lord Hendy (Lab) [V]]

My Lords, an increase in the national minimum wage must be supported. But for the reasons given by my noble friends Lady Chakrabarti, Lady Clark of Kilwinning, and Lady Blower, there is nothing to celebrate in an increase of a meagre 19p per hour.

The thesis that the national minimum wage should be as low as possible, otherwise it will be too expensive and employers will cease to hire, has been wholly debunked by experience and economists both here and in Europe. In fact, as the noble Baroness, Lady Jones, explained a moment ago, higher wages create more demand in the economy which leads to more goods and services and more jobs. It increases the tax take and diminishes the need for benefits to subsidise low pay. That is why the European Commission is proposing a minimum wage directive across the EU, one provision of which is to require the promotion of collective bargaining. Collective bargaining, particularly at sectoral level, is the most effective way of increasing wages. As my noble friend Lady Blower pointed out, the OECD and the ILO have strongly commended it to Governments in recent years.

In contrast, Government policy in this country has been to diminish the extent of collective bargaining year after year; 82% coverage of British workers in 1979 has sunk to less than 25% today. That is one reason why 9 million people living in poverty are in working families, with the consequences that Sir Michael Marmot has noted.

Yet in the EU-UK Trade and Cooperation Agreement, Article 8.3(7), the Government undertook to

“promote social dialogue on labour matters among workers and employers, and their respective organisations, and with relevant government authorities.”

The Low Pay Commission, although it contains nominees from various bodies, is not a negotiating body and does not fulfil the need for social dialogue; and miserable as the minimum wage rate is, some employers still strive to get away with paying less, as the noble and right Reverend Lord Harries of Pentregarth pointed out. In December 2020, HMRC named 139 companies which had failed to pay £6.7 million to more than 95,000 workers, and we know this is merely the tip of the iceberg. I hope the Minister can agree that the national minimum wage needs to be substantially increased, seriously enforced and subject to collective bargaining.

Uber: Supreme Court Ruling

Lord Hendy Excerpts

Monday 1st March 2021 Lords Chamber

[Lord Callanan (Con)]

I thank the noble Lord for his support. In my view, it is all about choice in the market. Those who wish to use services such as black cabs are free to do so, as are those who wish to use Uber or other home-grown services. That to me is the essentially Conservative thing; it is about choice and competition, which produce better standards for all. In answer to the noble Lord’s question, we will be making an announcement shortly.

[Lord Hendy (Lab) [V]]

My Lords, it is good to hear that the Government will introduce legislation to simplify this complex area of the law and end repeated litigation over workers’ status. Does the Minister agree that simplicity requires that worker status be limited to a simple binary choice between employees on the one hand and, on the other, those who are genuinely in business on their own account, with their own clients and customers?

[Lord Callanan (Con)]

As I said, we are committed to considering options to improve clarity on employment status and how best to address that in a post-Covid scenario. However, it is important that we retain the flexible labour market that has served this country so well and has resulted in our unemployment rate being significantly better than that of the rest of Europe.