Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Committee stage
Thursday 5th June 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I start by saying how pleased we are to see my noble friend Lord Holmes of Richmond in his place. I had the privilege of moving his previous amendments in his absence, but we are delighted to see him back with us and I thank him for proposing this important amendment.

The way my noble friend did it was very welcome because, at the heart of his speech, was a recognition that the labour market—especially the supply of temporary and agency workers—has to be fair and transparent. He used those particular words and stressed their importance. I agree with him that it is essential that all companies involved in these arrangements operate under the same clear set of rules. Too often, we see instances where umbrella companies or certain intermediaries do not meet the standards expected of traditional employment agencies, whether on pay, workers’ rights or transparency. This inconsistency undermines the integrity of the labour market and can put vulnerable workers at risk. Licensing could, in theory, help address this by ensuring that any business participating in employment arrangements meets minimum standards and is subject to proper oversight.

However, as my noble friend Lady Coffey stressed, the amendment raises some other important questions. Clause 34 broadens the definition of “employment business” to encompass a range of activities connected to supplying workers who are employed by one party but work under the control of another. This means that the regulatory net will be set much wider than before, potentially to cover businesses beyond traditional recruitment agencies.

Moreover, it is worth considering whether the same objectives could be achieved through improved enforcement of existing regulations rather than by introducing a new licensing framework. In this Chamber, we have to weigh carefully the costs and benefits, particularly to smaller businesses that may struggle with additional compliance burdens. We must also consider the impact on businesses and the wider economy. Many employment businesses operate with tight margins; for them, licensing means added costs, added paperwork and longer lead times to launch new services or respond to labour demand.

This is not an argument against regulation per se; it is simply a recognition that badly designed or poorly phased licensing can create barriers to entry, reduce competition and even push some providers underground, where abuses are harder to detect. In sectors that are already experiencing labour shortages, such as social care, hospitality and logistics, the cumulative impact could be significant.

As my noble friend Lady Coffey pointed out, there is also the risk of regulatory duplication or conflict. Some sectors already have licensing or registration schemes; others are subject to sector-specific standards set by Ofsted, the Care Quality Commission or the Financial Conduct Authority. Without co-ordination, we risk creating overlapping regimes, with businesses subject to multiple audits, rival codes of conduct and inconsistent enforcement. Workers too may be confused about their rights and the mechanisms available for redress.

I also note that the amendment does not contain any provisions for parliamentary oversight or consultation. The power it seeks to create is broad and, while it is subject to the discretion of the Secretary of State, it is not constrained by any statutory duty to consult stakeholders. In a sector as economically important and socially sensitive as this, there must be consultation. Against that background, I look forward to hearing the Minister’s response.

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

My Lords, I thank the noble Lord, Lord Holmes of Richmond, for his amendment concerning the licensing of employment businesses. I join the noble Lord, Lord Hunt, in saying how nice it is to see him in his place this afternoon. I share the privilege that the noble Lord, Lord Hunt, noted as I responded to the amendments that were tabled in the name of the noble Lord, Lord Holmes, and these were on important issues that he was right to raise. As the noble Lord, Lord Hunt, said, these are around fairness, transparency, equity and the problems that some less than scrupulous umbrella organisations and employment agencies currently raise in the market. He is not raising unimportant issues.

As the noble Lord, Lord Hunt, has already noted, through Clause 34, the Government have sought to amend the definition of “employment business” in the Employment Agencies Act 1973, so that it includes the concept of employment arrangements. This expanded definition will capture so-called umbrella companies and place them in the scope of regulation. As your Lordships know, employment businesses are subject to regulation through the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which were enforced by the Employment Agency Standards Inspectorate and subsequently will be enforced by the new fair work agency that Part 5 of the Bill creates.

The Government acknowledge that the current regulations are not appropriate for application to umbrella companies so, following consultation, we will set out a new regulatory framework that will apply to umbrella companies. In our view, these regulations are the most proportionate way of reducing non-compliance in the umbrella company market, without introducing a new regime that would add complexity for business. The creation of a licensing authority at this time would therefore not be appropriate. I am happy to say that on this rare occasion, we share the concerns of both the Opposition Front Bench and the noble Baroness, Lady Coffey, from whom we heard earlier on this amendment.

The regulation-making powers in the Bill have been carefully considered and included only where the Government consider it justified and necessary. We are not convinced that the amendment will provide additional benefits for businesses or workers significant enough to expand this power, as it proposes.

The Government want to take care to get the regulations right. We have heard throughout our wonderful time spent discussing the Bill in Committee so far that there is a balance to be sought between the burdens that we create through new legislation and regulation on businesses, including small businesses, and protecting the rights of workers. It is a balance we get right, and we want to make sure that we get regulations right in relation to the new definition of employment businesses in this case. Our focus will be on that, alongside the establishment of the fair work agency.

Taking all these factors into consideration, I therefore ask the noble Lord, Lord Holmes of Richmond, to withdraw his amendment.

--- Later in debate ---

[Lord Hunt of Wirral (Con)]

My Lords, we all owe a great debt of gratitude to the noble Lord, Lord Faulkner of Worcester, and my noble friend Lord Parkinson of Whitley Bay, for introducing a fascinating debate. My own relationship with heritage railways goes back some 45 years, to when I participated in all those wonderful railways in north Wales. I took my daughter Daisy to the top of Snowdon in one of these wonderful train rides. Sadly, the Western Mail had a picture of Daisy and me driving the locomotive, illegally, with the headline, “Daisy drives Dad around the bend”. I shall never forget that.

Therefore, like my noble friends Lady Neville-Rolfe and Lord Mendoza, the noble Earl, Lord Clancarty, and the noble Lord, Lord Palmer of Childs Hill, I approach this debate with some degree of positive expectation, because the noble Lord, Lord Katz, is going to reply. If ever there was anyone who would understand the need for this amendment, it is the noble Lord, Lord Katz. Whether his brief will allow him to show that level of understanding, we will have to wait and see.

This amendment brings welcome clarity and common sense to an area where outdated legislative definitions risk interfering with well-established and valued community practice. Heritage railways and tramways are not industrial undertakings in the conventional sense. They are, overwhelmingly, charitable or volunteer-led organisations dedicated to preserving history, offering educational experiences and engaging communities, often in rural or heritage-rich areas. This amendment recognises the important distinction between exploitive industrial labour and safe, structured, voluntary participation. Many young people who volunteer on heritage railways gain practical skills, develop a sense of responsibility and form connections across generations. It is, for many, their first taste of civic engagement and teamwork and is often a path into engineering, public service or the arts.

By inserting this narrow and well-defined exemption into the 1920 Act, this clause would ensure that young volunteers can continue to participate safely and legally in activities that benefit not only themselves but the broader public. Importantly, this does not in any way dilute protections against child labour or weaken employment law. It simply makes sure that our legal framework does not unintentionally penalise or prohibit what is clearly a public good.

[Lord Katz (Lab)]

My Lords, my reputation seems to precede me on this amendment. I am very grateful to my noble friend Lord Faulkner of Worcester for tabling Amendment 201 and have enjoyed a slight diversion in subject matter on the Employment Rights Bill. It is truly a pleasure to be able to continue the discussions that I have had with my noble friend Lord Faulkner about the railways for many years, both inside and outside this House. My noble friend is a true champion of heritage railways across the whole piece, not simply on this issue. I pay tribute to his role as president of the Heritage Railway Association.

It has been fantastic to hear from a number of noble Lords, including the noble Earl, Lord Clancarty, the noble Baroness, Lady Neville-Rolfe, and the noble Lords, Lord Mendoza and Lord Palmer of Childs Hill, all of whom extolled the virtues of heritage railways in providing a positive way of involving young people in transport, industry and civic engagement—as the noble Lord, Lord Hunt, was just saying—as well as contributing to the tourist sector and the Government’s mission for growth. The noble Lord, Lord Parkinson of Whitley Bay, spoke very strongly about that, and, as he pointed out, it is the 200th anniversary of the railway this year. We are doing a lot to commemorate that, and heritage railways will have their own role in that. I pay special thanks to the noble Lord, Lord Parkinson of Whitley Bay, for being the first person to out me as a rail nerd in this debate, and the noble Lord, Lord Hunt, also had that pleasure.

The noble Lord, Lord Parkinson, took us on a little tour d’horizon of the Private Member’s Bill debate we had in this House on this topic a few years ago, and mentioned a number of heritage railways. I can speak of the pleasure I had as a young child travelling on the Ruislip Lido railway, which was small in scale but mighty in reputation for those of us in north-west London. The noble Lord is right to point to the virtues of heritage railways, both as an economic activity and in individual engagement.

As a Government, we recognise and support the valuable opportunities young people have through volunteering to do a wide range of different work activities, including on heritage railways. Obviously, it is important that these things are carried out in a safe way, with employers, organisers and volunteers supervising activities to make sure that risks are properly controlled. To give some background, I will say that noble Lords will be aware that the Health and Safety Executive is responsible for regulating health and safety at work, but, in the case of the heritage railways, the Office of Rail and Road is the enforcing authority. Both these regulators have considered carefully what powers they have and how these would be applied in the case of young people aged between 14 and 16 volunteering on a heritage railway.

The Employment of Women, Young Persons, and Children Act 1920, which my noble friend Lord Faulkner of Worcester referred to, is a long-standing piece of legislation intended to prohibit the employment of children carrying out high-risk work, such as construction in industrial settings. To be honest, amending or repealing it would not be a straightforward matter.

The law protecting children in the UK is also a complex area, and this amendment touches on not only health and safety protections but other legislation and local authority by-laws. These are all devolved matters in Northern Ireland, and this amendment would impose changes there too. The 1920 Act is old legislation; amending it should be considered only after a thorough review of the impact on other areas of law, as there may be unintended consequences. It is worth pointing out that the primary legislation governing child employment, including light work, is the Children and Young Persons Act 1933. Amending or repealing the 1920 Act would still leave the 1933 Act in place, which—together with any by-laws made under it by local authorities—limits children to undertaking only light work. So repealing the 1920 Act could have unintended consequences across a number of sectors, and a full impact assessment would be required.

As we have heard, modern health and safety legislation does not prevent children and young people volunteering on heritage railways. I was pleased that my noble friend Lord Faulkner of Worcester referred to the Heritage Railway Association survey, which demonstrated that there are around 800 under 16 year-olds volunteering on heritage railways across the country. There may be activities that are unsuitable for young volunteers to carry out—for example, safety-critical tasks such as train diving—but I am pleased to say that both regulators are very willing to work with the Heritage Railway Association, as we have heard from my noble friend Lord Faulkner of Worcester, to determine what sorts of activities would be safe, appropriate and suitable for young volunteers aged 14 to 16 to perform on the railways.

Of course, regulators should, and do, take a proportionate approach to enforcement action. It is worth noting that the last time the 1920 Act was used to support health and safety enforcement was in 2009. As my noble friend Lord Faulkner of Worcester told us, there have been no prosecutions under the 1920 Act, either of public bodies or private individuals, which proves that the status quo is not absolutely terrible.

The aim of this amendment is to remove any barriers to allow children to gain valuable experience volunteering on heritage railways and tramways. Nobody wants to see more young men and women developing an interest and, indeed, a career on the railway more than I do. It is not clear that there is an overwhelming amount of evidence that this legislation is creating any barriers and, as we know, many heritage railways run very successfully with young people volunteering in a wide range of activities to support those ventures.

Both the Office of Rail and Road and the Health and Safety Executive remain very willing to work with the Heritage Railway Association to develop additional guidance and, possibly, examples of good practice to ensure that young volunteers can continue to work safely in heritage railway settings. While this is a sensible and proportionate way forward to address this issue, I have heard the strength of opinion on this matter from across the Committee. I am more than happy and willing to facilitate a meeting with my noble friend Lord Faulkner of Worcester—other noble Lords may be interested—with the HRA, DfT, ORR and HSE to further pursue this issue. Without making any further commitments, I therefore ask my noble friend to withdraw this amendment for now.

--- Later in debate ---

[Lord Katz (Lab)]

I am very happy to write. I resist the idea that I am not being candid here. The noble Baroness may not like what I am saying, but the point stands. I am of course very happy to write to her and to the noble Lord, Lord Leigh of Hurley, with more detail.

In conclusion, we expect that, in many cases, employers and trade unions will be able to agree the terms on which access takes place, including for digital access. In the event that there is no agreement, the CAC can impose terms, including terms dealing with digital access. I repeat: the precise details of how this will work in practice will be set out in secondary legislation following further consultation. I therefore ask that Amendment 208A be withdrawn and that noble Lords do not press their other amendments.

[Lord Hunt of Wirral (Con)]

My Lords, first, I say to the House authorities that we greatly appreciate the way they have tolerated the fact that we have gone way beyond the normal rising time on a Thursday, particularly as we are sitting tomorrow at 10 am. In mitigation, I note that we have tried to truncate what is a hugely important group of amendments. There are many things that we would want to probe further, so we will have to return to this on Report.

I thank my noble friends Lord Jackson of Peterborough, Lady Lawlor, Lord Leigh of Hurley and Lady Coffey for their contributions. I was interested, as always, to hear the noble Lord, Lord Hendy, and the noble Baroness, Lady O’Grady, although I hope that she will mitigate the damage she may have done with her remarks about one of the biggest investors in the UK, Amazon.

[Lord Hunt of Wirral (Con)]

I am sorry about that discordant note, introduced into what has been a really useful day in Committee on this important Bill.

I hope that people outside will realise that we have been debating a group of amendments that were made at the last moment in the House of Commons. They have not had any scrutiny at all in Committee in the Commons. That is why this House has so much responsibility to ensure that, in a fast-moving digital world, we do not transgress in a way that places employers and employees in an impossible position.

I thank the noble Lord, Lord Goddard of Stockport. He asked some direct questions, but we have not yet had the answers to them. It may well be that the Minister will write generally to us all to respond to the points he did not have time to answer today. I appreciate that he has limited time too, but he might like to respond in writing to us all, covering the points that he has not yet been able to deal with.

[Lord Katz (Lab)]

I am very happy to write, particularly to the noble Lord, Lord Goddard.

[Lord Hunt of Wirral (Con)]

On that positive note, I beg leave to withdraw the amendment.

Employment Rights Bill

Debate between Lord Katz and Lord Hunt of Wirral

Committee stage
Tuesday 13th May 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

I agree with the noble Lord, Lord Fox, whose fox has not been shot.

This has been such an interesting, important, fascinating and deeply moving debate. We owe a debt of gratitude to the noble Lord, Lord Palmer of Childs Hill, for very positively introducing the fact that unpaid carers are the backbone of the care system, and for bringing us up to date with the reality of modern families. I think the Committee has spoken with one voice as we await the reply from the Government Front Bench. Have we not united in saying what we want the Government to do? It will be very interesting to hear the response. I hope they will use every moment between now and Report to be more specific about how they wish to respond to the issues that have been thrown up in this debate.

Like the noble Lord, Lord Palmer, I acknowledge the importance of kinship carers—the grandparents, aunts, uncles, siblings and other close family members who step forward when children need a stable and loving environment. These individuals often take on significant responsibilities with little preparation or support, and they always do so with compassion and commitment. The contribution of kinship carers cannot be overstated. As the noble Lord, Lord Watson of Invergowrie, and the right reverend Prelate the Bishop of Newcastle reminded us, they help prevent children entering the care system. They keep families together, and often do so at great personal and financial cost.

I have to acknowledge the contribution of my noble friend Lord Young of Cookham, who had some wonderful specific quotes to share with the Committee. There is an important strategic alliance here, particularly with the noble Baronesses, Lady Pitkeathley and Lady Lister of Burtersett, and it will be important to respond positively to the points that they have made.

I believe there is a genuine case for us to explore how we might better support those who take on these caring responsibilities in such difficult circumstances. While I appreciate that statutory leave may not be straightforward to implement, especially in the current economic climate, there is room, as the noble Lord, Lord Fox, suggested, for a wider conversation about what more might be done. There should therefore be further consultation on this matter—with kinship carers themselves, with businesses and with the wider public—to understand the practicalities and to gather the necessary evidence. If we can find a solution that is proportionate, workable and rooted in the realities faced by both carers and employers then that will deserve our serious consideration. As the noble Baroness, Lady Smith of Llanfaes, has said, there is room here for a modest move forward that would make a significant contribution.

We have to acknowledge the moving speech of the noble Lord, Lord Brennan of Canton, about bereavement leave. He spoke movingly of his Commons colleague Sarah Owen, MP for Luton North, who has blazed a trail of understanding in some areas that previously have not been properly understood, and we need to respond positively to that.

The noble Baroness, Lady Grey-Thompson, talked about serious childhood illness, pay and leave, supported by the noble Lord, Lord Hogan-Howe. That that is another area where we need to explore how we can better tackle these challenges. In all these areas, I am confident that, through continued dialogue, we can work towards a sustainable strategy.

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

My Lords, this has been another wide-ranging debate and I am grateful for the contributions of all noble Lords. As the noble Lord, Lord Hunt, my opposite number, just said, it has been a moving and profound debate that has demonstrated the complexities of the issues in front of us. There is unanimity across the Committee, I am sure, that we should do as much as we can to support carers. We have to ask ourselves how best we do that. We have picked up the baton from the last Government, who passed the Carer’s Leave Act, and we must move forward on that—but I am getting ahead of myself.

I join the noble Lord, Lord Hunt, in paying tribute to the noble Lord, Lord Palmer of Childs Hill, and the noble Baroness, Lady Grey-Thompson, for putting the issue of kinship care in front of us, tabling Amendments 77, 78, 79, 134, 135 and 144. I also thank my noble friend Lord Brennan of Canton for tabling Amendment 81. I will do my best to get through these amendments at a decent pace.

I will begin with kinship care, speaking to Amendments 78 and 79, tabled by the noble Lord, Lord Palmer. I join others in emphasising how greatly I and the Government appreciate kinship carers, who generously step into the breach and offer loving homes for children who cannot live with their parents. I am sure that the whole House shares these sentiments.

I reassure noble Lords that the Government are committed to ensuring that all employed parents and carers receive the support they need to manage both their work and their family lives. As we have heard, Amendment 78 aims to establish a new “kinship care leave” entitlement for employed kinship carers. Amendment 79 then seeks to creates a legal definition of “kinship care” to be used to establish eligibility for kinship care leave.

The right reverend Prelate the Bishop of Newcastle, my noble friend Lord Watson of Invergowrie and, indeed, the noble Lord, Lord Palmer, himself, rightly talked about the amazing work done by kinship carers across the country, supporting children in times of greatest stress and need, in their own households, and in so doing relieving local authorities and the wider care system.

The Government recognise that the current support for working families needs improvement. We have already begun work to improve the system for kinship carers. We are defining kinship care through other legislation that is currently before this House, and later this year we will begin trialling a kinship allowance in several local authorities.

We are pleased to say that, for the first time, through the Government’s Children’s Wellbeing and Schools Bill, we will create a legal definition of kinship care for the purposes of specific duties within that Bill: the requirement to provide information about services to kinship families, and the duty to promote the educational achievement of children in kinship care. This will help to ensure that all local authorities interpret and apply the definition uniformly in relation to the new duty to publish information required, reducing ambiguity and potential disparities in information provided about support by different local authorities. This will, we hope, make life much easier at the sharp end of providing kinship care. It is a vital part of our commitment to keeping families together and supporting children to achieve and thrive.

I am also very pleased to say that the Government have recently announced a £40 million package to trial a new kinship allowance. This is the single biggest investment made by any Government in kinship care to date; indeed, it is the first of its kind. This financial commitment could transform the lives of vulnerable children who can no longer live at home. It would enable children to be raised within their extended families and communities. As we heard from the noble Lord, Lord Palmer, and others, it would minimise disruption to their formative years, allowing them to focus on schooling and building friendships—in short, having a normal life, as we want for all our children.

In addition, qualifying employed kinship carers may already benefit from various workplace rights aimed at supporting employees in managing work alongside caring responsibilities. These include a day one right to time off for dependants, which grants a reasonable amount of unpaid leave to deal with unexpected emergencies involving a child or dependant; the right to request flexible working; and unpaid parental leave, which, through this Bill, we are making a day one right.

Employees may not automatically have parental responsibility as a result of being a kinship carer, but they can acquire parental responsibility through different legal methods such as a special guardianship order. The Government have also committed to a review of the parental leave system to ensure that it best supports all working families. This review will be conducted separately from the Employment Rights Bill, and work is already under way on planning for its delivery.

Amendment 77 would provide foster carers with one week of leave every 12 months. As we have heard, foster carers play a life-changing role in the lives of children who need a safe and supportive environment. At times when young people are facing significant challenges, foster parents offer not only care and security but emotional support and consistency. I pay tribute to all those who step forward to provide the essential service of foster-caring—not least, as we have heard, the noble Lord, Lord Young of Cookham, who has now changed his place but is very much with us in the Chair.

It is important to highlight that a range of workplace rights already exists to help employees who take on the responsibilities of fostering. From their first day on the job, employees have the legal right to take unpaid time off in emergency situations involving their dependents. This enables them to respond swiftly to sudden issues, such as arranging care for a foster child. If a foster carer is looking after a child with a long-term illness or disability, they are entitled to carer’s leave. This provides them with up to a week of unpaid leave in a 12-month period, to manage healthcare needs or attend appointments. Those fostering with the intention of adopting may be eligible for paid adoption leave, provided they meet the necessary criteria. In addition, all employees are entitled to submit a request for flexible working arrangements from day one of their employment. Given that these existing provisions go a long way to help foster carers to balance work and their foster care responsibilities, it does not seem right to add a new entitlement without a proper assessment of the need for it and the impact it might have.