Business and Planning Bill

Debate between Lord Hendy and Lord Hain

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Tuesday 14th July 2020 Lords Chamber

[Lord Hain [V]]

Amendment 77 is also in the names of my noble friends Lord Hendy and Lord Monks, and the noble Baroness, Lady Ritchie. It promotes much closer employee-employer co-operation and requires the Secretary of State, within six months of the Act being passed, to lay before Parliament a strategy for employee-employer co-operation with regard to businesses implementing the Act’s provisions. In producing this strategy, the Secretary of State must consult trade unions and other organisations that represent employees, relevant businesses and any other persons the Secretary of State considers appropriate.

Surely the Government cannot possibly object to close partnership between employers, trade unions and —where no unions operate in businesses—employees. Will that not better help keep business running safely, rebuild the economy and support those businesses badly damaged by the Covid-19 crisis? Everyone acknowledges that this crisis is by far the greatest Britain has faced since World War II. Unless the Government extend open arms to trade unions and employees to work in partnership to overcome the crisis, they are disabling themselves and everybody else.

Trade unions have already demonstrated in practical ways their value in helping employers to work through this crisis while ensuring the health and safety of staff and customers. Take, for example, the communications sector, which has been crucial to keeping the nation connected and supporting economic activity through the lockdown. The Communication Workers Union, for which I should declare that I worked for 14 years before being elected a Member of Parliament, has played a critical role in sustaining our postal and telecoms services and helping businesses to open up safely where they were initially forced to close.

They have secured agreements with Royal Mail, British Telecom and a range of other employers on the adequate provision of PPE and social distancing measures, higher levels of protection for riskier front-line roles, the introduction of thorough workplace risk assessments, the safe use of vehicles, home working for office-based staff with suitable equipment, support for the clinically vulnerable and comprehensive safeguards for staff and customers in high street retail outlets before they opened in the middle of June.

The amendment also exemplifies what a missed opportunity the Bill represents. Yes, it provides a range of measures to help businesses develop new ways of working as the country recovers from Covid-19—but what a narrow range, and what tunnel vision. Paragraph 72 of the Explanatory Memorandum reports that representations have been received from the trade union Unite about the difficulties bus and truck drivers face in getting medical reports to keep their driving licences valid. Difficulties are understandable in current conditions, of course; not all today’s tailbacks are on motorways. Some are outside GPs’ surgeries.

However, what neither the Bill nor the Explanatory Notes acknowledge is the call by Unite the Union’s leadership for the Government to involve the country’s 100,000 trade union health and safety representatives in helping with test, track and trace and in finding safer ways of working that deal with the ongoing risks from Covid-19. Independent evidence shows that workplaces where unions are recognised have half the accidents of those where unions are absent. Have the Government even acknowledged Unite’s offer? There is, seemingly, no response to it in the Bill.

Clause 14 is a small step in the direction of helping businesses to adjust to safer ways of working, but what the British economy needs are giant strides towards a bolder objective—more productive ways of working—which is what this amendment is designed to achieve.

The Department for Business, Energy and Industrial Strategy recognised long ago that the way that work is organised and how people are managed are key factors in determining workplace performance results. None of that wider awareness is visible in the Bill. The Covid-19 crisis is also a chance to make workplaces more productive by encouraging closer co-operation at work and by challenging both sides of industry to boost productivity by working in partnership. The Bill, again, fails to grab that chance.

The crisis has shown that many established ways of working are past their sell-by date and that working people often have much more to offer than established working practices allow them to contribute. They are trapped in traditions and wrapped in routines that stifle creativity and dull initiative. Instead of work that they find fulfilling and rewarding, with opportunities for advancement, too many employees feel locked into undemanding humdrum jobs and are prisoners of rigid rules, hierarchical structures and narrow horizons.

The problem stems from both sides of the bargaining table. Too many managers cling to a command- and-control approach, fearful of sharing information with employees and too many union representatives, while talking a good game about teamworking and joint endeavour, although not necessary pursuing it. By working together, unions and employers can deliver big improvements in performance, boosting productivity and profitability, lifting living standards and improving job prospects. For instance, a mutual pledge on co-operation and a problem-solving approach to employment relations can free up management time, promote effective teamworking and improve dignity at work.

An agreed undertaking to find more flexible ways of working that suit both employer and employees can cut customer order lead times, boost motivation and morale and improve the work-life balance. A shared resolve to boost training and personal development can make continuous improvement a reality, ease the take-up of new technology and enhance employability and pay. A mutual commitment to accident prevention and risk avoidance can streamline production, boost reliability and make workplaces safer. Surely that is priority No. 1 in the Covid-19 crisis.

Both management and unions need help if we are to be able to grasp this opportunity to create a new framework for co-operation at work. Something like President Roosevelt’s National Labor Relations Board could even up the balance of power between bosses and workers and encourage union recognition. It could help poorly paid key workers and the nearly 4 million people in insecure jobs to get a fairer deal.

The Government should build on the success of Ministers’ recent sector-by-sector meetings with trade union and business leaders by backing sectoral bargaining. This could put a floor under pay and conditions of employment, raise standards and stop responsible employers being undercut by irresponsible rivals and workers being exploited unfairly. I have every intention of returning to this issue with my noble friends on Report unless, as I hope, the Minister can accept our amendment or at least embed in the Bill a version of it.

[Lord Hendy (Lab) [V]]

My Lords, I thank my noble friend Lord Hain for moving this amendment and I agree with everything that he said in support of it. I shall add just one point—the essential modesty of the amendment.

Last month, 30 June marked the 70th anniversary of the ratification by the United Kingdom of Convention No. 98 of the International Labour Organization, one of the two most fundamental conventions in international labour law. It has not merely been expressly ratified by no fewer than 167 nations but is also considered to be part of customary international law. Article 4 of the convention calls on ratifying states to take measures

“to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers’ organisations and workers’ organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements.”

Article 6 of the 1961 European Social Charter—of the Council of Europe, not the EU—was ratified by the UK 48 years ago and makes similar provision.

In addition to compliance with domestic law, the rule of law requires states to comply with such ratified provisions of international law. As the late Lord Bingham put it in his well-known public lecture on the rule of law in 2006, the existing principle of the rule of law

“requires compliance by the state with its obligations”

in international law—the law that, whether deriving from treaty or international custom and practice, governs the conduct of nations. I do not think that that proposition is contentious.

This modest amendment does not ask, as the UK’s binding international legal obligations do, for machinery for collective bargaining to be established in the present context. It merely asks for the Government to provide a strategy for collective co-operation. It is a point of principle shared by me and noble friends that workers should be involved in important decisions of the businesses that employ them, as that is to the mutual benefit of both, as my noble friend has just pointed out. Many such decisions will arise in relation to this Bill. For myself, I am unable to discern any rational objection to the amendment and I look forward to hearing the Minister on the subject.

Corporate Insolvency and Governance Bill

Debate between Lord Hendy and Lord Hain

Report stage & Report stage (Hansard) & Report stage (Hansard): House of Lords
Tuesday 23rd June 2020 Lords Chamber

[Lord Hendy (Lab) [V]]

My Lords, I too shall speak to Amendment 75. In precisely one week’s time, we will celebrate the 70th anniversary of the ratification by the United Kingdom on 30 June 1950 of Convention No. 98 of the International Labour Organization, one of the two most fundamental conventions in international labour law. It has not only been expressly ratified by 167 nations but is considered part of customary international law. Article 4 reads as follows:

“Measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers’ organisations and workers’ organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements.”


Another anniversary will be commemorated on 11 July, for on that day in 1962, as a member of the Council of Europe, the United Kingdom ratified Article 6 of the 1961 European Social Charter. The article reads:

“With a view to ensuring the effective exercise of the right to bargain collectively, the Contracting Parties undertake … to promote joint consultation between workers and employers … to promote, where necessary and appropriate, machinery for voluntary negotiations between employers or employers’ organisations and workers’ organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements”.


This amendment does not seek the fulfilment of the Government’s obligation to promote collective bargaining on the consequences for workers in a company that is running into financial difficulties and the measures such as a moratorium to alleviate them, but it does require the fulfilment of the more modest obligation to promote consultation between workers and employers about such consequences. It is difficult to the point of impossibility to see what objection there could be to the imposition on directors of an obligation to hear from their workers—in this case their employees—their perceptions of and suggestions for ameliorating the company’s situation. Under the Companies Act, directors already have an obligation to take into account the interests of the employees, so it is really not asking much to require them to ask their employees to express their views.

Given that the biggest impact of the moratoria and other measures relating to a company’s financial difficulties will be on the workers whose livelihoods are on the line, why not hear their voices? They will be the most ardent and innovative in finding ways of keeping the company alive. Certainly, the Minister and his team have offered no objection to the principle or the practicality of this so far. All that has been said is that employees are already protected and that the courts have a duty to ensure that arrangements are fair and equitable.

The first point is hopeless. There is no extant legal obligation to hear the voices of workers, no obligation to bargain collectively, no obligation to consult save where collective redundancy procedures apply, and no requirement to have worker directors on the board. The second point is equally without merit. There is no provision for workers to be parties to, to be represented, or even to be heard in the specific court proceedings to which this Bill relates. Without hearing from representatives of the workers in respect of the measures being proposed, how can the court be satisfied that any measure is fair and equitable to them? I urge the Government to accept the amendment and to fulfil at least partly their international legal obligations.

[Lord Hain (Lab) [V]]

My Lords, following the excellent speeches of my noble friends Lord Hendy, Lady Bryan and Lord Kerslake, I wish to support Amendment 75.

There was a moment during the response of the Minister, the noble Lord, Lord Callanan, in Committee to various amendments aimed at protecting the interests of a company’s workforce in the moratorium process when I was reminded of the Hatton Garden safe deposit robbery in 2015, the biggest burglary in British legal history. The conspirators in that crime called carving up the proceeds “the slaughter”. One of the gang nearly missed out on the slaughter. He had bailed out after the first attempt to break in because he did not want to risk returning to the scene of the crime. Some of his co-conspirators felt that he had thereby forfeited any share of the proceeds. Fortunately for him, there was honour among thieves, and they relented and gave him a cut.

The Minister argued that workers are already well protected and that consulting employees or their representatives in the moratorium process is unnecessary because the aim of the Bill is to keep companies in business. In his view, consulting employees would risk publicising a firm’s problems before it could be protected from creditor action, leading to more company failures—in short, that the workers should know their place, run along and let their betters deal with the problem. If he had patted them on the head, I would not have been surprised. Surely there should be a less patronising attitude to people who may have invested much of their working lives in a company that is now facing financial distress.

For workers, insolvency puts more than just their jobs in jeopardy. They may have back pay at risk. Their pension rights may be in danger. Their redundancy rights may be under threat and their tax and national insurance responsibilities may be in doubt. Indeed, the company may even have defaulted on payments to HMRC already deducted from their pay. Their employer may be defaulting on its equal pay and equal rights obligations.

Workers have a vital interest in the insolvency process. They deserve a voice in the consultation process and surely the Government cannot deny that; otherwise, they will be left where they are now—on the outside, at the end of a long tail of unsecured creditors, unrecognised, unheard and unwelcome, while the professional insolvency practitioners practise their black arts. Britain’s workers deserve better, and that is the purpose of Amendment 75.

The amendment is very modest, simply requiring companies to consult their workforces. It imposes no vetoes by employees on the moratorium process and specifies no hurdles that have to be surmounted; instead, it simply imposes an obligation to consult. Surely the Government must agree to that principle or, alternatively, endorse an attitude that says in effect that company owners’ rights matter, creditor and debtor rights matter but employee rights do not. I urge the Minister—and, if not, then your Lordship’s House—to support Amendment 75 or, alternatively, as I now understand he might do, at least to give some proper guarantees that employees will not be left in the lurch.