Employment Rights Bill

Lord Londesborough Excerpts

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, I briefly add my support for Amendment 102 and will pick up on the comments of the noble Baroness, Lady Garden, on her committee’s recent visit to the Blackpool and The Fylde further education college. I declare an interest as a commissioner at the Social Mobility Commission, the chair of which is also the principal of the FE college that the committee went to visit. From the perspective of social mobility and the importance of apprenticeships, any measure that would deter the creation of quality apprenticeships that are successful is a bad one, and I therefore support this amendment.

[Lord Londesborough (CB)]

My Lords, I rise to speak to Amendment 102 in the name of my noble friend Lady Wolf of Dulwich and pitched so perfectly by my other noble friend Lord Aberdare—I realise that that sounds as though I only have two friends in this House, which I hope is not the case.

This amendment addresses a consequence of the Bill that will significantly reduce the willingness of employers to hire young people as apprentices—a consequence that I am sure was neither anticipated nor desired by the Government or indeed the Bill’s drafters, which is strange because this Government are acutely aware of the skills shortages facing this country and the need to address them. It was notable that, in introducing the Government’s new immigration strategy last week, both the Prime Minister and the Home Secretary emphasised the need to invest in skills so that the immigration system

“no longer ignores the millions of people who want the opportunity to train and contribute”.

They also highlighted that, in sectors like engineering, apprenticeships have “almost halved” in recent years.

We only very recently debated the Bill, now an Act, that abolishes the Institute for Apprenticeships and Technical Education. That change was not introduced because the Government are against apprenticeships; on the contrary, this is part of a reform that is creating a new integrated strategic body, Skills England, as we have heard, to meet, in its own words,

“the skills needs of the next decade across all regions”,

and apprenticeships are a central part of Skills England’s brief.

Young people do not need persuading of the value of apprenticeships. On the contrary, there is huge excess demand, as we have heard. Of those 17 to 18 year-olds who make a serious effort to find an apprenticeship, only 25% succeed. Young people typically start off on what are called intermediate apprenticeships, but these are in decline too, in absolute numbers and proportionally —crowded out by so-called higher apprenticeships, which are equivalent to university qualifications.

Today, more and more of our apprentices are older. Around half of apprenticeship starts now involve people over the age of 25. Critically, large numbers of older apprentices were already working for their employer before they became an apprentice. This is especially true of large employers who pay the apprenticeship levy, who account for a growing proportion of apprenticeships. So, if the Government are going to achieve their aims, we need to have far more openings for young apprentices —but there is a serious danger that the Bill will make large employers even more inclined to give apprenticeships to existing employees, with whose employment they take no risks, rather than hiring new young apprentices.

What about the young people who make up the growing number of NEETs? SMEs are the main employers of young apprentices and absolutely central to the economies of less-advantaged areas. But their apprenticeship recruitment has been plummeting. SME business owners complain that apprenticeships, as we have heard, have become more and more burdensome and bureaucratic, and just too expensive. So if, on top of this, young apprentices are entitled to full employee rights from day 1, many more employers, especially SMEs, will surely just walk away.

Taking on an untested person is always risky, and this Bill will make it much more so. In many other European countries, apprentices have a specific distinctive legal status. In the UK, they do not; they are simply any employees who have received an apprenticeship training contract. This Bill’s provisions will apply to them all, whether they are an 18 year-old training as an electrician or a 50 year-old on a leadership apprenticeship. These are the dangers of a one-size-fits-all approach, as I have already pointed out numerous times in Committee.

Employment Rights Bill

Lord Londesborough Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Baroness Meyer (Con)]

My Lords, I shall speak to my amendments, as well as Amendment 84, for the same reasons so clearly highlighted by the noble Lord, Lord Young of Acton, and the noble Baroness, Lady Fox. Of course no one should ever face sexual harassment at work. That is why we passed the worker protection Act 2023 to place a clear duty on employers to take reasonable steps to prevent it, including from third parties. That law came into force only six months ago, so, as the noble Baroness, Lady Fox, quite clearly highlighted, why are we adding the so-called banter clause?

Clause 20 is not just unnecessary but a threat to free speech, a blow to small businesses, and a betrayal of the very spirit of this country. It amends the Equality Act 2010 to extend third-party harassment to non-sexual conduct. A casual comment between customers that is misunderstood or simply unpopular could trigger a legal claim, as noble Lords previously explained. This is not the same as the Conservative Government’s earlier reforms, which explicitly protected political, moral, religious or social opinions. Are we really expecting publicans, shopkeepers and café owners to police conversations on their premises? Someone joked that pubs would need “banter bouncers”. The Government laughed, but for small businesses it is not a joke. Even the Equality and Human Rights Commission warns that this is legally complex and challenging. Employers will need legal advice, staff training and new policy, and will risk get it wrong.

Clause 20 also demands that employers “take all reasonable steps” to protect their employees. This sounds minor, but it creates major uncertainty. What does “all reasonable steps” mean? To make matters worse, the Secretary of State will define reasonable steps by secondary legislation, without parliamentary scrutiny. This is not good governance. And at what cost? The Budget itself estimates an extra £3.4 billion cost for the hospitality sector alone. Dozens of pubs are already closing every week. Do we really want to make this worse?

This debate is not only legal and economic; it is also cultural and, for me, personal. I became a British citizen not because I had to but because I wanted to. I fell in love with this country for its soul, its quiet strength, its humour and its tolerance. In Britain, we did not take offence; we took the mickey. We disapproved without outrage. We rolled our eyes and moved on. We did not report people or call a lawyer. As Douglas Sutherland once said, the Englishman is never quite so natural as when he is being artificially humorous. That gentle irony—that refusal to take ourselves too seriously—is part of who we are. This clause will legislate it out of existence. This is not dignity at work; it is paranoia in public. Clause 20 will create a society where offence becomes power and litigation will replace common sense. We will become a society that silences its own people. We have seen where that leads—in regimes built on censorship and denunciation.

These amendments are crucial. Without them, the consequences will be more regulation, more red tape, more job losses and more silent voices before, once again, we will be forced to admit that we have gone too far. I support all the noble Lords who spoke before me in favour of these amendments. In particular, I reiterate that Clause 20 is unnecessary.

[Lord Londesborough (CB)]

My Lords, I will speak in particular to Amendments 83 to 85, tabled by the noble Lord, Lord Young of Acton. Clause 20, on harassment by third parties, although well-intentioned, has triggered this batch of amendments, none of which is perfect. Most seek to damage limit the Bill or bring in exemptions.

I will focus on the exemptions proposed in Amendment 85 and declare up front a relevant interest, in that I hold a significant minority stake in a rural community pub in mid-Wales. As we have already heard, the hospitality sector is low margin and struggling with a range of issues, including shortages of staff, smoking bans, competition from supermarkets, the rise of home entertainment, big tech and social media. Pubs specifically have had a horrendous time. In England and Wales alone, we have lost 13,000 pubs in the past 25 years and, as we have heard, each and every week another 10 close their doors for the final time.

Now this Bill expects the owner or the bar manager, often on low pay and inexperienced, to take on the role of a conversation arbiter or chat monitor in case a customer says something to their drinking or dining pal that is overheard and deemed offensive by an employee. To be clear, I accept that employers should step up if their customers or clients are being offensive to their staff. Yes, they have a responsibility to their staff’s welfare and to their code of conduct, but is legislating in this way the answer? It leaves so many questions, on a subjective level, of what is offensive and what is not.

That brings me to the second sector proposed for exemption by Amendment 85: sports venues. This is where Clause 20 threatens to become unworkable. This struck me only yesterday while I was in the London Stadium, with 60,000 others, watching West Ham stumble to yet another home defeat, this time against Nottingham Forest. There was a lot of anger in the crowd and much of the language could be described as vulgar or offensive. Others would call it passionate, fruity, spiky or humorous, but these views could be heard—or, importantly, overheard—by club officials, security staff, stewards, the police, bar staff, programme sellers and burger flippers, all of whom are employees of the club, the stadium, or various contractors and subcontractors. These views, in the space of 10 minutes, included the manager’s IQ being questioned vigorously and frequently; savaging of the players and their work ethic; forthright suggestions that the referee’s assistant should book multiple appointments at Specsavers; and, finally, the referee himself being repeatedly accused of practising self-love.

I am choosing my words carefully and not quoting directly in order to meet this House’s Code of Conduct, which I respect and have signed up to, but if I did not and repeated some of the profanities I heard yesterday, I would be in trouble. Here is the thing: Parliament, as an employer, would not currently be taken to a tribunal by a colleague, a doorkeeper or a Hansard employee who found my language offensive, but that could change if this Bill has its way.

The point is that most workplaces are covered by a code of conduct or employer’s handbook that sets out the markers and helps sort most of these incidents without the need for dispute litigation, employment lawyers or, indeed, tribunals. Much of this is driven by common sense and human decency, and the mutual interest of employer and employee to ensure a productive and harmonious working environment. Clause 20 threatens to undo much of that. I ask the Minister and this Government to seriously think again.

[Baroness Lawlor (Con)]

I rise to support the amendments in the names of my noble friends Lord Young of Acton and Lady Noakes to Clauses 20 and 21. Both noted, as have other noble Lords, the impact these clauses will have on small businesses already struggling under a juggernaut of burdens, particularly those introduced since last July.

I begin with my noble friend Lady Noakes’s amendments to Clause 21, which, as she noted, amends the Equality Act 2010. These amendments, Amendments 89 to 96, would require regulations to specify the steps an employer needs to take to prevent the harassment of an employee and to cover all forms of harassment so that, provided those steps are followed, the employer is protected from liability. This change is reasonable and proportionate, in that it would oblige regulations to specify the steps needed to protect employers from liability to claims. It is a matter of fairness and good law that a measure should be clear about the duties under it, rather than leaving it to litigation.

The measure also has precedents, such as health and safety regulations in which employers’ duties are set out. In the Management of Health and Safety at Work Regulations 1999 the main duties are to identify risks, assess them and reduce them. The Workplace (Health, Safety and Welfare) Regulations 1992 require employers to provide adequate lighting, heating, ventilation and workspace and to keep them in a clean condition—and so on throughout the health and safety regulations of the 1990s. As if to egg the cake, we have the HSE’s guide on the steps needed to manage risk, which sets out step by step the process for controlling health and safety risk, in line with the regulations to identify hazards, assess risk and so on.

My noble friend Lady Noakes’s amendments to Clause 21 would ensure that employers know what is required in respect of preventing harassment, which matters in itself and is germane to good law. I therefore support them.

I also support Amendments 83 to 88, to Clause 20, in the names of my noble friends Lord Young of Acton and Lady Noakes. They address what is and is not required of employers in protecting their employees; clarify harassment to exclude

“the expression of an opinion on a political, moral, religious or social matter, provided the opinion is not indecent or grossly offensive”;

exclude the hospitality sector, university settings and sports venues so the obligation on the employer does not apply; exclude indirect harassment; take account of the employee’s perception of the circumstances and whether it was reasonable to have the effect; and take account of whether it was an isolated incident. These are all important amendments that have a great deal of support across the Committee.

Noble Lords have already explained how Clause 20 could undermine freedom of speech. We are not speaking of an employer’s liability for direct harassment by a third party, such as customers or clients, against an employee. That is covered by Section 40 of the Equality Act 2010. Rather, the clause being amended has the effect of making the employer liable for what third parties say when speaking among themselves, and which is then overheard by an employee. This might occur in a bar, restaurant, shop, the foyer of a cinema or theatre or on public transport. Customers in a restaurant or a bar might be discussing the latest immigration figures, the likelihood of yet more unsustainable migration into the country, the shortage of housing, schools and hospitals, ever longer waiting lists for a place or a bed, or an inability to understand English. To hold an employer liable for a private conversation among customers overheard by an employee is wrong. It would bring the law into disrepute.

Employment Rights Bill

Lord Londesborough Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

This Bill will have massive impacts on millions of small businesses which are nowhere near the 50-employee threshold. If that does not negatively impact growth, it will be a miracle. I also particularly worry about scale-ups and start-ups, but, fortunately, the noble Lord, Lord Londesborough, who knows far more about them than me, will—I hope—be speaking about them in due course. In the meantime, I beg to move.

[Lord Londesborough (CB)]

My Lords, I rise to speak to Amendments 5 and 124 in the name of the noble Baroness, Lady Noakes, to which I have readily added my name.

Before I get stuck into the detail, I should perhaps offer an apology for comments that I made at Second Reading, when I compared this Bill to a giant vampire squid sucking the life out of our economy. Although this metaphor generated considerable media coverage, it prompted several eagle-eyed members of the public to point out that the vampire squid is no bloodsucker as it eats only dead organic material. It turns out that I inadvertently picked the only mollusc that does not eat live prey, so I stand corrected and apologise to the marine life community for this oversight.

As far as the Bill goes, I make no apology. I will focus on Part 1 and its impact on our all-important start-ups and scale-ups. We have 35,000 scale-ups in the UK, contributing £1.6 trillion to the UK economy annually; that is more than 50% of the value of the whole of the UK’s SME economy, despite these companies making up less than 1% of the SME population. They are crucial because they represent the most dynamic element of our economic growth: they create jobs at the fastest rate, promote their staff at the fastest rate and attract significant investment.

I should declare my interests as set out in the register: I chair, advise and invest in a range of start-ups and scale-ups, and it is their lived experience that informs my comments, along with my own years as a micro, small and medium-sized employer.

Working for scale-ups and start-ups is both demanding and rewarding. Entry-level jobs tend to pay less than average and have considerably fewer benefits than average, but progress more rapidly in terms of pay, bonuses and promotion, with such employees often becoming equity stakeholders. Scale-ups thrive on flexibility and a performance culture—something that Part 1 of this Bill seems to ignore.

Another important group sitting within the small and micro sector is family businesses employing fewer than 50 staff, the majority of them having fewer than 10 employees. These businesses often have only one member of staff covering each responsibility, and their HR has to be covered by the owner or the senior manager. Subjecting these groups to the full battery of clauses and schedules in Part 1 of this Bill is, I believe, disproportionate, costly, distracting and growth-sapping.

On the subject of costs, the Bill’s impact assessment suggests a burden of an extra £5 million per annum for all employers and admits that this will disproportionately fall on small and micro-businesses, as the noble Baroness, Lady Noakes, just outlined. However, that is a crude estimate and appears to have been drawn very narrowly. It fails to assess the invisible costs of complicated recruitment, performance reviews, dismissals and the general administration of HR. The smaller the business, the greater the distraction from core activities, tying up key leadership and management time in less productive areas. In plain language, this means lost output.

Recruitment is critical for small and micro-businesses and is set to become far riskier in an already difficult climate. Part 1 of this Bill threatens to complicate probation, performance reviews and dismissal for fair cause. Day one rights and dismissal constraints will deter risk-taking and reduce employment opportunities at entry and graduate levels, especially in middle and senior management. It will encourage employers to hold on to bad hires and to promote mediocre or underqualified ones.

Flexible working, shift changes and guaranteed hours have already been covered in the previous group, so I will not duplicate, other than to say that this is a special problem for small and micro-businesses, especially those that rely on part-time workers and shift patterns. The hospitality sector is a prime example.

I shall finish by countering the Government’s expected response to this group of amendments: that there should be no exemptions as these new employment rights should apply universally across the economy, and that we should not create a two-tier workforce. Although I understand the thrust of that argument, it does not reflect the real employment market. SMBs, as we have already heard, cannot compete with large businesses when it comes to pay scales, training, promotion opportunities and a whole range of benefits, including pensions. Indeed, most have no HR function, let alone department, and that reflects their size.

However, what SMBs do have to offer is a friendly working environment; greater flexibility than average; a stakeholder culture, whether that is reflected in equity or in identity; and the fact that every role in their organisation is a critical part of the business, leading to strong employee loyalty and identification. Applying to small and micro-businesses consisting of five or 10 staff the very same employment rights that are applied to multinationals such as Amazon, which employs 75,000 people in this country, will do serious damage to our jobs market. That is why I wholeheartedly endorse these amendments.

[Viscount Trenchard (Con)]

My Lords, I rise to speak briefly in support of Amendments 5 and 124, so ably spoken to by my noble friend Lady Noakes, and well supported by the noble Lord, Lord Londesborough. I also support Amendment 282, which I expect will be addressed by my noble friend Lord Sharpe or my noble friend Lord Hunt.

The impact on the smallest businesses will, as stated by my noble friend Lady Noakes, be great. The cost to business of implementing the Bill could be as much as £5 billion, according to the noble Baroness, Lady Jones of Whitchurch. She said that this would be a transfer to the lowest-paid segment of the workforce. I do not think that that would be the result. My noble friends’ amendments would mitigate the stifling effect on small businesses that the Bill will have.

Small and micro-businesses are already struggling with the additional costs of the increases in employers’ national insurance contributions introduced two weeks ago. It is small and micro-businesses that most need flexibility in the nature of the employment models they can offer workers. Putting such businesses into a straitjacket will remove employment opportunities for many of those who prefer flexible-hours contracts, and even for the many young people who actually quite like zero-hours contracts, or who would at least rather that such opportunities existed than not—which will otherwise be the consequence of enacting the Bill. My noble friend Lady Lawlor spoke convincingly on this matter in the previous group.

Part 1 of the Bill will prevent many small businesses taking the risks inherent in adding a new business line or expanding the size of their operations. I hope that the Minister will carefully consider the strong arguments made for the exemption of small and micro-businesses from these measures. In that way, the Government might achieve their declared aim of transferring value to the lowest-paid segment of the workforce.

Employment Rights Bill: Productivity

Lord Londesborough Excerpts

Monday 31st March 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

The noble Lord is right: we will have many happy hours debating this Bill in Committee and on Report in due course. On the issue of freelancers, he will know that this is only one piece of legislation. The make work pay programme includes a much more substantial piece of legislation. Where issues cannot be resolved fully in this legislation, they will come up in the wider Bills going forward.

[Lord Londesborough (CB)]

My Lords, this claim that the Bill supports productivity falls under the economic analysis section, which some have, perhaps rather unkindly, referred to as the economic fantasy section. The argument is similar to the one used for NICs Bill: increase the cost of employment; take out jobs at the lower-paid end; invest more in tech and innovation; and increase the average productivity of those left in employment. Does the Minister not agree that the danger with a flat economy, such as we have at the moment, is that we end up simply increasing unemployment, depressing real wages and lowering overall growth?

[Baroness Jones of Whitchurch (Lab)]

My Lords, we have to be clear about the fiscal inheritance which we inherited from the previous Government.

Employment Rights Bill

Lord Londesborough Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I have just four minutes, so I will not beat about the bush. While I understand the need to bear down on unscrupulous employment practices, this Bill is fundamentally misguided, out of date and out of touch and will wreck the spirit of enterprise. It will damage jobs, productivity and wages across both the public and private sectors. That is not just my view, but the OBR’s. The impact assessment, which claims that the Bill will have a net positive impact on growth, is guilty of fantasy economics, suggesting that its authors have little feel for, or experience of, creating jobs, developing careers or even meeting payroll.

Perhaps most troubling is that all the clauses in this 300-page Bill, and its 200 pages of Explanatory Notes, apply to all employers without exception, whether you are a UK multinational with a workforce of 100,000, a start-up with 10 staff or a family business with two employees. It is one size fits all, whether we are talking about day one rights, probationary periods, guaranteed hours or flexible working. This Bill shows scant regard for building a competitive economy with modem working practices. It discriminates against SMEs—our country’s engine of growth—and offers nothing for freelancers and the self-employed, for which perhaps we should be grateful.

My views are shaped by my lived experience over 30 years as an entrepreneur and employer, from a start-up with two employees around the kitchen table to building a workforce that grew to 10 staff, then to 50, 100 and eventually to 300 employees, plus 100 freelancers. I learned what it takes to recruit and train people effectively, to incentivise and reward them and to develop their careers from probation to permanent, from junior to management and from internship to becoming an equity partner. I took risks and made many mistakes along the way, from hiring the wrong people, holding on to staff for too long, overpaying, underpaying, growing too quickly and having to downsize in the rough and tumble of the free market. But here is the thing: I never once ended up in an employment tribunal and my experiences with staff and freelancers were overwhelmingly positive, driven by common mutual interest and without the need to resort to onerous employment manuals, interfering HR departments or, indeed, employment lawyers.

This Bill suffers from overreach and will kill entrepreneurial spirit, coming as it does on the back of the misguided NICs Bill, on which I have fought hard to protect our smaller businesses—and I will go into battle again on their behalf in Committee on this Bill, mindful that the Federation of Small Businesses reports that two-thirds of its members say that the proposals in the Bill will make them curb hiring. There are two professions that will benefit from this Bill—HR practitioners and employment lawyers—but, in terms of productivity, this Bill is terribly timed and represents another giant vampire squid sucking the life out of our economy.