Employment Rights Bill

Debate between Lord Leong and Lord Goddard of Stockport

Committee stage
Wednesday 18th June 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, these amendments collectively highlight the critical importance of supporting small and medium-sized enterprises as they adapt to the changes introduced by the Bill. We have raised this issue repeatedly throughout our deliberations. Night after night, this comes up in other parts of the legislation. It all comes back to small businesses. My biggest postbag at the moment is from small businesses concerned about their future—of no political persuasion at all. This is one of the few chances, in this small debate, where we get to talk about those challenges and the enforcement mechanisms, especially around things such as holidays. As alluded to by the noble Lord, Lord Sharpe, compliance can be complex and resource-intensive, although I do not fully agree with his complete doom-and-gloom scenario of this part of the Bill.

Recent data shows that SMEs employ around 60% of the UK workforce, yet many report that regulatory burdens can disproportionately strain their limited administrative capacity. The amendments proposed by the noble Lord, Lord Sharpe, such as Amendment 279ZZB, would place a duty on the Secretary of State to assess how effectively the SMEs can meet those obligations and to identify any practical barriers that they face. It is important to ensure that the Bill’s ambitions do not inadvertently disadvantage the very businesses that form the backbone of our economy. That the Government should have a means of tracking how the Bill’s implementation is impacting on the economy is vital.

I briefly turn to the reviews called for in Amendments 305 and 309, which seek to examine the Bill’s impact on employment, youth opportunities, job creation and regional labour markets, especially in the north-west of England, where my heart still lies and where the Industrial Revolution began. We are trying to embrace AI. We are trying to become ground-breakers again at Manchester University and other establishments. I know that these really affect the regional labour markets, but these are valid concerns, as we are still recovering from the recent economic shocks. The requirement for independent assessment would help us get a clearer picture of this legislation and how it affects businesses and workers. While amendments by the noble Lord, Lord Sharpe, and others are cautious in their approach, they reflect a genuine concern that implementation must be manageable for SMEs, without stifling growth for employment.

As we move forward, I look forward to hearing the Minister’s view on these amendments and would appreciate some remarks about how the Government intend to physically support SMEs throughout these changes and the unintended consequences. Because that is at the heart of this. You can have and develop the policies, but what businesses are asking me is, “What are you going to do? What can I see that helps me to embrace this legislation and to take people on, train them and employ more people?”—as opposed to the perception that the burden is against that, which is an unintended consequence of trying to do the right thing of giving everybody employment rights, and it is a fine line. We are politicians and we understand it a bit clearer than people in a small company employing 10 or 15 people. They are just concerned that something is going to overwhelm them: something is going to come that they cannot control.

I want the Minister to explain the following to me and members of my group. What practical things will the Government put in place to give those small businesses confidence to embrace this and to work with them to make employees more secure, safer and have better rights? Meanwhile, how can small and medium-sized companies, not the giant multi-million companies, carry on creating jobs, developing the economy and lifting us out of the doom and gloom? We have done it before, and we can do it again. That is the question that needs answering—whether or not the Minister can do so tonight, we need some clarity before Report, or we will be meeting other people. This is important. This is not just me grandstanding; small businesses are saying to me, “Just ask the Government what they are doing and how they can help us”. This is what I am trying, clumsily, to say as we draw to a close this evening: if the Minister can give me some hope that what we are doing and have put in place will help small and medium businesses, I will be satisfied.

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

My Lords, here we go again on impact assessment. I hope that the noble Lord, Lord Sharpe, will forgive me if some of my notes repeat what was said in previous debates, but I will answer some of the points here. First, I thank the noble Lords, Lord Sharpe, Lord Hunt and Lord Goddard, for their amendments relating to impact assessment.

I refer to the point by the noble Lord, Lord Goddard, about what the Government are doing concerning SMEs. I have just recently been appointed as the spokesperson for the Department for Business and Trade, and my priority is to have regular communications with micro-businesses and small businesses. That is what I will be focusing on. Today, we appointed the Small Business Commissioner, who will start work very shortly in tackling late payments and some of the abuses that small businesses experience from big companies not paying them on time. We will be publishing a small business strategy very soon, and our industrial and trade strategy very soon as well, hopefully sometime next week or thereabouts. We are doing a lot—not only myself but the Secretary of State, my noble friend Lady Jones and all the Ministers in the department. We have regular contact right across the business community.

We have had extensive debate already on impact assessments related to this Bill. My commitment in an earlier debate to meet noble Lords to further discuss the impact assessments still stands. The Government have already published a comprehensive set of impact assessments based on the best available evidence on the workers likely to be affected by these measures. This includes an assessment on the economic impacts of the Bill, including on workers, businesses, sectors and regions. This package shows that there are clear, evidence-based benefits from tackling issues holding back the UK labour market. This analysis is based on the best available evidence and consultation with external experts and stakeholders, including academics and think tanks. Further analysis will be forthcoming, both in the form of an enactment impact assessment when the Bill secures Royal Assent and when we consult on proposed regulations to meet the Better Regulation requirements.

Before I conclude, I share with noble Lords some really startling statistics. We already know that healthier and happier workers are more productive workers. The Health and Safety Executive estimates that stress, depression or anxiety accounted for something like 17.1 million working days lost in 2022-23, which is equivalent to a loss of something close to £5.3 billion in output per year. In addition, close to 2 million employees report feeling anxious about hours worked or shifts changing unexpectedly. By increasing the job security of these workers, the Bill would have well-being benefits worth billions of pounds a year. The Bill will therefore create a healthier and happier workforce, which is not only the right thing to do but will help businesses by making the workers more productive as well as resulting in lower treatment costs for the NHS.

Earlier, the noble Lord, Lord Sharpe, asked me what we have done to support growth since getting elected. I am proud to share with the noble Lord that, since the election, 500,000 more people are in work. In recent weeks, we have had the strategic defence review with some 30,000 new jobs building submarines created, and the announcement of the Sizewell C project, which will create some 10,000 new jobs. So, we are creating new jobs.

In addition, we have people who are investing in this country and who have confidence in this Government. Jamie Dimon, who has run one of the largest US banks, JPMorgan Chase, for two decades, told the Financial Times:

“I’ve always been a believer in the UK’s inherent strengths as a place to do business and there’s much to like about the new government’s pro-growth agenda”.


Further, a couple of weeks ago, Jon Gray, president of Blackstone, one of the largest private equity companies in the world, which has invested close to £100 billion in the UK and employs some 50,000 people, told the Times:

“I would give the UK government a lot of credit for embracing business”.


This is not what the Government are saying, but what people with money who are investing in this country are saying to us. Further, every single day, £200 million is being invested in tech companies in this country. I do not call that a small sum, I call it confidence in the UK Government and what we are doing for business.

Employment Rights Bill

Debate between Lord Leong and Lord Goddard of Stockport

Committee stage
Tuesday 10th June 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, I will speak briefly to Amendments 215 and 332, both in the name of the noble Lord, Lord Sharpe. Amendment 215 proposes a new clause to grant trade union members a statutory “right to switch off”; that is, to disengage from contact initiated by trade union representatives.

It raises the wider question of work/life balance and members’ autonomy. That is not a bad thing to raise and probe in this amendment. However, the caricature by the noble Lord, Lord Hunt, of a typical union member is a little fanciful. When I was a shop steward, I certainly would not be ringing up union members at 8 o’clock when England were playing football against somebody. I would have got very short shrift and probably would not have been the shop steward the following week. That is the power of trade unions: they can remove and add shop stewards on a whim.

We just need to be a little bit grown-up about the modern trade unionist. We are living in a different age now. It would be wrong for me to say that communication does not happen, but it is now via text, X and WhatsApp, and that is completely acceptable. Where the line is drawn is around giving people a statutory right to switch off, or not. I think it is down to individual members to decide whether they want to be able to be contacted. It should be for the members themselves to decide that, rather than there having to be some statutory right. It is not for me to pass judgment on the desirability or otherwise of it, but I would be interested to understand the rationale and the evidence underpinning the need for such measures.

Amendment 332 is more technical in nature, providing for the commencement of these provisions a year after the Act receives Royal Assent. This delayed implementation may allow for guidance to be prepared or for institutions to adapt. With that in mind, I would like to hear the Minister’s response to both these things—bearing in mind that, at the end of the day, trade unions exist because of their members; if members do not like a trade union, they can leave a trade union. That point has not been brought up anywhere in this House by anybody. You are free and able to join a trade union. You are also free and able to leave a trade union.

I know that, in 1973 and 1974, people did leave the GMB union over some policies that the union had. It was not an impossible thing to do. They were still treated fairly; they were given full consultation and assistance. It was for us to persuade them to come back into the union, which nine times out of 10 they did. It is not always a one-way street. I would hope that the Conservatives understand that unions are controlled by members.

We have annual congresses. One of the greatest things we used to do as the Lancashire region was to overturn the executive once a year in conferences; to us, that was the object of conference. It did not go down well with John Edmonds and the senior management team. I would stand there berating them for the poor pay of gas workers and objecting to a 2% pay rise, and I would get full support. Then I would have to go and see Mr Edmonds. The words he once said to me were, “You control the union for one week and we control it for the other 51 weeks, so I will let you have this week, David. Now leave”. I have deleted and added words there to avoid using any language that would be unfit for this House.

Again, it is a balancing act. I do hope that the Minister will address it in that manner and not just ignore amendments that come in from the Benches opposite. There is something behind the amendments. They are probing amendments and we are just trying to get the flavour of where the Government sit on membership and the unions, with regard to consultation. We spent a few hours—a lot of hours—the other night talking about union rights and members’ rights. I think this issue just touches on the end of that. I can see why it was not raised in that group, but it is still something that needs explaining a bit more clearly.

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

My Lords, I first thank the noble Lord, Lord Goddard, for his very entertaining contribution, and the noble Lord, Lord Hunt of Wirral, for speaking to Amendments 215 and 332 in his name and that of the noble Lord, Lord Sharpe.

The proposed new clauses would create a right in primary legislation for trade union members to switch off from contact from trade union representatives. As far as I am aware, there is not any demand to introduce such a requirement on trade unions. I have not heard this from my colleagues, or from trade union members, or from any worker, or indeed from any employer or employer organisation that I have spoken to lately.

It is difficult to see what benefit or purpose such an obligation inserted into membership contracts might serve. Currently, there is no obligation for a trade union member to reply to communications from their trade union, as was ably set out by the noble Lord, Lord Goddard. There is nothing stopping a member ignoring them or telling them to **** off.

This Government are committed to the well-being and positive work-life balance of all workers. The Employment Rights Bill is proof of this commitment, with relevant measures including making flexible working the default except where not reasonably feasible. This will help employees and employers to agree solutions which work for both parties.

I say politely to the noble Lord, Lord Hunt, that I reject his allegation of trade union influence and power interfering with people’s lives. As it stands, every member can ignore the messages and communications —whoever has approached them—outside work. There is no evidence that this is currently happening. I ask the noble Lord, Lord Hunt, to reflect on that and to be careful with some of the pretty harsh words he has said. I invite him to withdraw his Amendment 215.

Employment Rights Bill

Debate between Lord Leong and Lord Goddard of Stockport

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, I wish to speak in support of the amendments put forward by my noble friend Lord Fox, who is unfortunately away today, on NATO business I believe. Tomorrow, no doubt, he will pore over today’s Hansard. I hope that the noble Lord, Lord Hunt of Wirral, will be available then. I cannot unsee the picture of him in a four-poster bed with the trade union man climbing aboard, and will have to try to explain down the telephone to my noble friend Lord Fox, “It was quite humorous”. We will see what happens with that tomorrow.

My noble friend Lord Fox’s concerns include his Amendments 116 and 121, which offer much-needed clarity and balance to the protections around contract variations and unfair dismissals. The issue of predatory fire and rehire, as seen in the widely condemned P&O Ferries case highlighted by the noble Lord, Lord de Clifford, is an unacceptable, serious and pressing concern that employment legislation rightly needs to address now. No worker should be threatened with dismissal simply to impose worse terms and conditions on that person.

My noble friend Lord Fox’s proposals to exclude routine non-detrimental contract changes from triggering automatic unfair dismissal protections, as in Amendment 116, and to safeguard reasonable flexibility clauses expressly agreed in contracts, as in Amendment 121, would help ensure that protection against abuse is balanced with the practical realities that employees face. His further clarification in Amendments 117 and 122—that dismissals linked to redundancy with offers of suitable alternative employment and the lawful use of fixed-term contracts should not be unfairly restricted—rightly recognise that not all contract variations are harmful and that employees must be able to operate flexibly and fairly.

The amendments in the name of the noble Lord, Lord Sharpe, would facilitate contractual changes for financial organisations or workforce-related reasons. Although the intention is understandable, it is crucial that the Government provide clear guidance to ensure fair protection for workers, particularly those in smaller businesses. The approach to seasonal and variable-hour workers also requires careful consideration to safeguard their rights. We will return to that in a later group.

These amendments collectively illustrate the careful line that the Government must tread. Although it is crucial to clamp down on unfair and predatory fire-and-rehire tactics, as addressed by my noble friend Lord Fox’s amendments, we must equally recognise the legitimate need for flexibility and contract review in a changing economic landscape. I commend my noble friend’s amendments for their clarity and fairness in this regard, and encourage the Government to consider how best to incorporate these protections. At the same time, I urge the Committee to approach other proposed changes—as in Amendments 115 and 115A, which seek to clarify reasonable adjustments and productivity improvements—with a measured and practical mindset, to support both workers’ rights and sustainable business operations. I look forward to the Minister’s comments.

[Lord Leong (Lab)]

My Lords, I thank all noble Lords who have spoken in this debate. This Government are absolutely clear that the use of unscrupulous fire-and-rehire practices must end. Employers should not be able to impose contract changes through threats of dismissal, except in the most limited and justified circumstances. We recognise that, at times, businesses may need to restructure to survive and protect jobs. The legislation accounts for such cases where there is genuinely no alternative and a business faces immediate financial difficulty. Fire and rehire may be used, but only following a proper good-faith process, grounded in open dialogue and mutual understanding.

Let me begin by addressing Amendments 113ZA, 113B and 118 from the noble Lords, Lord Sharpe and Lord Hunt, Amendment 115 from the noble Lord, Lord de Clifford, and Amendment 116, spoken to by the noble Lord, Lord Goddard, on behalf of the noble Lord, Lord Fox. These amendments aim to exclude certain types of contract variations from the clause, such as those relating to terms other than pay, benefits, hours or location, or to allow changes made for good or operational reasons. When a change in contract is essential and the employee will otherwise become redundant—for example, due to a move in location—or where the changes are necessary to reflect a change in the law, the employer will still be able to explain to the employee when proposing these changes. However, such changes should always be a result of meaningful consultation. Employers and employees must reach mutual agreement, allowing both sides to understand and assess the impact of the proposed changes. Open dialogue is key.

I turn to Amendment 114 from the noble Lord, Lord Sharpe, and Amendment 115. These propose broadening the permitted use of “fire and rehire” to include changes that are reasonably necessary to improve workforce productivity. The Bill is the first phase of delivering our plan to make work pay. We are supporting employers, workers and unions to get Britain moving forward. Alongside this and a new industrial strategy, the Bill will support the Government’s mission to increase productivity and create the right conditions for long-term, sustainable, inclusive and secure economic growth.

The Government do not support these amendments. We believe this practice should be allowed only where an employer faces no reasonable alternative and is under imminent financial threat. The noble Lord, Lord Hunt, mentioned what happens if a company is facing insolvency. I am sure most noble Lords know that insolvency does not come straight away. There is a whole process, and it is during this that consultation should happen between the employer and employee. When it comes to the last resort, when until and unless something happens the company is going to go belly-up, there may be a practice of “fire and rehire”, but before that, there should be consultation along the way.

These amendments would significantly widen the exemption and make it necessary for employers to use “fire and rehire”. That is not our intention. While businesses can still agree changes to boost productivity, such changes must come through proper negotiation, not coercion, as I just mentioned.

I now turn to Amendment 119, also from the noble Lord, Lord Sharpe, which proposes allowing “fire and rehire” if the changes are reasonable and supported by a majority of affected employees. This issue here is subjective. What is reasonable for one employee may be deeply unreasonable for another. Our goal is to protect individual rights. Clause 26 is designed to reduce the use of “fire and rehire” as a means to push through significant changes without individual consent.

I will address Amendments 117 and 122 from the noble Lord, Lord Fox, and Amendment 120 from the noble Lord, Lord Sharpe. They focus on whether dismissals for redundancy or the end of a fixed-term contract should be considered automatically unfair under Clause 26. The Government’s position is that, where a role is no longer viable under current terms, employers should follow due process, including meaningful consultation to seek agreement to vary contracts. If employees do not agree, and if the employer no longer requires the work to be done, redundancy may still be appropriate. In such cases, redundancy procedures must be followed, including consideration of alternative roles. Where the principal reason for a dismissal is redundancy, the dismissal will not be automatically unfair under Clause 26.

Now I turn to Amendment 121 from the noble Lord, Lord Fox, which concerns variation clauses in employment contracts. I wish to reassure the House that existing case law already governs the enforceability of such clauses. This clause applies only where there has been a dismissal, and so would not apply where a lawful variation clause has been lawfully exercised. Courts and tribunals will not uphold variation clauses if they are oppressive and exercised unreasonably. This amendment is therefore unnecessary as a legal protection already exists.

I now turn to Amendments 120A and 120B, which relate to the factors a tribunal should consider when assessing the fairness of a dismissal under the clause exemption. It is appropriate that tribunals should consider where the employer offered the employee something in exchange for agreed-to changes. Fair contract variation should be built on dialogue, not pressure. It is right that the Secretary of State should have the power to specify additional relevant factors for tribunals to consider in future. These regulations would be subject to affirmative resolution procedure, ensuring full parliamentary scrutiny.

Finally, Amendment 113 from the noble Lord, Lucas, seeks to limit the clause to only substantial contract changes. We reject that. Even minor-seeming changes can have major consequences for individual employees. Individuals must be allowed to consider proposed changes without facing dismissal threats. That principle underpins the clause.

Employment Rights Bill

Debate between Lord Leong and Lord Goddard of Stockport

Committee stage
Thursday 8th May 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

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

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

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

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

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

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

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

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

[Lord Leong (Lab)]

My Lords, I thank the noble Lords, Lord Hunt and Lord Goddard, for their contributions, and the noble Lord, Lord Sharpe of Epsom, for tabling the amendments in this group, covering Amendments 33 and 36 to 38.

Before I speak to these, I reassure all noble Lords, especially the noble Lord, Lord Goddard, that the Government respect and appreciate all the amendments tabled by noble Lords. The whole purpose of this is to address individual amendments and see where the Government are coming from and how we can find a way forward. There are some things in noble Lords’ amendments that may not be required because the Bill already covers them elsewhere. We are trying our very best to address every amendment and we welcome noble Lords’ scrutiny of the Bill. I reassure noble Lords that we are not being flippant about any of these amendments.