Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Tuesday 24th June 2025 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, Amendment 323E, tabled by the noble Lord, Lord Berkeley, is a curious but important proposal, addressing a very real challenge in the evolving world of work. The noble Lord, Lord Russell, pointed this out, as has the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Hendy.

The amendment seeks to clarify that substitution clauses in app-based platform work, such as food delivery, courier services and private hire transport, are valid only where the right to substitute is genuine, viable and actually used in practice. As many of us will know, much of our employment legislation was developed in an era when the labour market looked very different. The rise of app-based platforms and the gig economy has created new forms of work that do not always fit into the traditional categories of employment or self-employment, as has been said by previous speakers.

This amendment seeks to clarify one such grey area: the use of substitution clauses in platform work. It rightly asks whether these clauses are, in practice, genuine and workable, or whether they are being used to deny individuals the worker status that they would otherwise be entitled to. The noble Lords, Lord Russell and Lord Hendy, and others have explained in detail how that works in practice.

The broader point is that the Government must ensure that our workers’ rights framework is not stuck in the past. It must be up-to-date and dynamic enough to reflect the modern patterns of work and provide reasonable security for those engaged in them.

Too often, the flexibility of gig work is celebrated without enough attention being paid to the insecurity that can come with it: uncertain hours, low pay—which has been mentioned, including lower pay than the normal driver—and limited recourse to rights. Ensuring that the legal definitions we rely on are not open to exploitation is a vital step in protecting workers and maintaining fairness in the labour market. As other noble Lords said, this amendment may not be the final word on the matter, but it makes an important contribution to a conversation—the noble Baroness, Lady Neville-Rolfe, used the word “discussion”.

I give my compliments to the noble Lords, Lord Hendy and Lord Russell, and the noble Baroness, Lady Neville-Rolfe, and others for this conversation—or discussion. I hope that the Minister and the Government will see that there is a gap in employment legislation that needs to be looked at. We ought to deal with people, such as couriers and drivers, who are substituting to people paid even lower wages—and then scooting in front of you at the traffic lights, trying to push up the number of deliveries or collections they are making—in primary legislation, not in a statutory instrument somewhere down the line. I hope that the Government will look at this before we get to Report.

[Lord Sharpe of Epsom (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Palmer, with whom I agree pretty much entirely.

This has been a much more fascinating debate than I was anticipating, and that says a lot more about me than it does about the debate. I was particularly struck by the comments from the noble Lord, Lord Hendy; I had no idea that such practices had been accepted by the courts. That seems to be one of the cases, as we discussed in an earlier group, where the gig economy workplace is evolving rather faster than the law. That clearly needs to be looked at, otherwise we will end up with what seem to me, as a lay man, relatively perverse situations.

I have to say to the noble Lord, Lord Russell, that the thought of a peanut butter and pineapple pizza sends a rather nasty shiver down the spine. Do people really eat that? I would seriously hope not.

The gig economy and platform-based work are obviously integral parts of the modern labour market. We should not forget that the sector offers flexibility that many workers value, because it allows people to choose when, where, how much and how they work. For some, that flexibility is vital; it means they can balance their work with other commitments or supplement their income in ways that traditional employment models do not allow.

I completely agree with the noble Lord, Lord Berkeley, who introduced his amendment so eloquently, that there seems to be an incentive to come to this country. If we were able to control this, there would be an opportunity to help at least stem the flow of the boats, which is something that used to occupy a lot of my time.

On the amendment before us, which seeks to regulate the substitution clauses and redefine certain worker classifications, at this stage, we approach it with some caution, while acknowledging that it is clearly a subject to which we should all return and which demands further consideration. The intention to protect gig economy workers is commendable, but we should not make regulatory changes that unintentionally undermine the entire industry. With that in mind, I look forward to the Minister’s comments, but I do not believe that this subject will go away any time soon.

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

My Lords, I thank my noble friend Lord Berkeley for tabling Amendment 323E and everyone who contributed to this short but important debate on the issue of substitution clauses.

To be absolutely clear, the Government are very alert to the risks that my noble friends Lord Berkeley and Lord Hendy and the noble Lords, Lord Russell of Liverpool and Lord Palmer of Childs Hill, all raised on substitution. We recognise that substitution in the platform economy is an issue, and we share the concerns about the impact that it can have on working conditions and the prevalence of illegal working.

Some of the critiques that my noble friend Lord Berkeley made about e-bikes and e-scooters, and some of the comments made by the noble Baroness, Lady Neville-Rolfe, fall a little outside what we are talking about tonight. One only has to be in the Chamber at Oral Questions on a regular basis to understand that noble Lords across the whole House share concerns about the impact that e-bikes and e-scooters are having on general society, as well as their attitudes towards the noble pursuits of cycling, walking and sharing public spaces.

There is growing awareness of substitution clauses and their use to deny workers core protections, including the national minimum wage and holiday pay, as set out by many noble Lords this evening, particularly the noble Lord, Lord Russell of Liverpool. Clearly, in extremes this can lead to abusive and exploitative treatment of workers, and we are looking at it closely.

My noble friend Lord Berkeley raised the issue of illegal working as reported in today’s edition of the Sun. It is important in considering this issue to realise that the Government recently introduced an amendment to the Border Security, Asylum and Immigration Bill on Report in the other place to extend the scope of the requirement on employers to carry out right to work checks on limb (b) workers or individual subcontractors, such as those working in the platform economy.

We must remain in step with modern labour market models. The purpose of these changes is to require businesses that employ individuals in new labour markets to check that only those with a right to work in the UK are eligible to participate in these arrangements, and to enable Immigration Enforcement to issue penalties where they are not. This ensures that compliance is equivalent for traditional employers. That, as I understand it, is the core of the issue raised in the newspaper report described by my noble friend Lord Berkeley.

The links between substitution and employment status demonstrate how complex this area is. As my noble friend Lady Jones said earlier this evening in discussing Amendment 318, we are committed to consulting on a simpler employment status framework. My noble friend Lord Hendy said that we should look at this holistically. I am confident that this will provide an opportunity to hear views from a wide range of stakeholders on the use of substitution clauses and the interactions with employment status. This is an important issue, but I am also aware that there is a complex interplay with measures we are going to discuss shortly in Committee on the Border Security, Asylum and Immigration Bill. In that context, it might be useful for me to take this back to colleagues in the Home Office and see how best to pursue it further.

I therefore ask my noble friend Lord Berkeley to withdraw Amendment 323E. In so doing, as this will be my last opportunity to speak in Committee, I would like to take this opportunity to thank all noble Lords who have taken part in the wonderful 11 days in Committee on this Bill for their constructive engagement and, indeed, at times, stimulating debates—who would have thought we would get so many days in Committee? I take note of what the noble Lord, Lord Sharpe, said earlier about the pace of progress during immigration legislation. As I am going to be on the Front Bench for the Border Security, Asylum and Immigration Bill later this week, all I can say is: I simply cannot wait.

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Moved by

[Lord Sharpe of Epsom]

325: Clause 153, page 148, line 31, at end insert—
“(3A) The Secretary of State must have regard to the following objectives when making any regulations under this Act—(a) the international competitiveness of the economy of the United Kingdom, and(b) its growth in the medium to long term.”Member’s explanatory statement
This amendment would require the Secretary of State to have regard to the objective of the international competitiveness of the economy and its growth in the medium to long term when making any regulations under the Act.

[Lord Sharpe of Epsom (Con)]

My Lords, I will speak to my Amendments 325, 326A and 329B, and briefly allude to Amendments 330BA and 330E, tabled by my noble friend Lord Leigh of Hurley.

The Government have stated that this Bill represents the biggest upgrade to workers’ rights in a generation. Given the tremendous importance that the Government have placed on this piece of legislation, one would reasonably have expected them to have conducted a comprehensive and thorough impact assessment. Indeed, the noble Lord, Lord Leong, argued earlier that the Government had done just that. However, the fact remains that Regulatory Policy Committee has awarded the Government’s impact assessment a red rating, which encompasses several critical areas, including the Trade Union Act 2016 repeals, day-one rights provisions, flexible working arrangements, and measures addressing harassment by third parties. Such a rating indicates fundamental deficiencies in the Government’s analysis of this legislation’s potential consequences—a point that has been argued from this side of the Chamber on a number of occasions.

I will illustrate precisely how inadequate this impact assessment is by examining one particularly striking example. It states that:

“There could also be wider impacts on society, including … a reduction in days lost to strike action if Trade Union reforms lead to better industrial relations, which will prevent significant costs on the economy. Rail strikes alone are estimated to have cost the UK economy at least £1.7 billion over the eight-month period to January 2023”.


This statement exemplifies the superficial and speculative nature of the Government’s analysis. Rather than providing concrete evidence and detailed economic modelling, they have resorted to hypothetical scenarios and broad generalisations. They suggest that their reforms might lead to better industrial relations, which could potentially reduce strike action and in turn prevent economic costs. However, this chain of assumptions lacks any of the rigorous analysis which legislation of this magnitude demands.

Furthermore, although the Government cite the economic impact of rail strikes, they fail to provide a comprehensive analysis of how their specific proposals would address the underlying causes of industrial disputes. They offer no detailed examination of the potential unintended consequences of their reforms, nor do they adequately assess the costs that businesses and workers might face during the implementation of these new rights. The mention of implementation affords me an opportunity to again remind the noble Lord, Lord Leong, that we will very soon be delivered an implementation plan.

On Amendment 325, we have heard Ministers trumpet on a number of occasions PwC’s global CEO survey, which ranked the UK as the second most attractive destination for international investment. Unfortunately, that claim collapses under scrutiny. The survey was conducted before the current Chancellor’s first Budget and before the Government began systematically dismantling the pro-growth, pro-enterprise environment that we left in place. Since then, the UK’s position has collapsed to 29th in IMD’s world competitiveness rankings. We are now considered less competitive than Oman, Saudi Arabia and the Czech Republic. We are barely ahead of Kazakhstan and Kuwait. That is not a global powerhouse. What is the Government’s response? Instead of halting the slide, they are doubling down with a raft of measures that will make the UK even less attractive to investors, less hospitable to entrepreneurs and less viable for businesses that are looking to grow.

At the centre of this is the Employment Rights Bill. This legislation threatens to make Britain one of the most rigid and punitive labour markets in the developed world. Let us be clear: the Bill introduces day-one rights for employees to bring legal claims, dramatically increasing the litigation risk for employers from the moment a contract is signed. It expands rights around dismissal, probation and workplace disputes, turning even small staffing decisions into potential courtroom battles. It removes key flexibilities that employers rely on to respond to changing economic circumstances. This may all sound very appealing in the abstract. The Government will say that it is modernising employment rights, but in practice job creation will slow, entrepreneurial risk will drop and, crucially, offshoring will accelerate, because businesses can choose to hire in other jurisdictions —and they will.

We are already seeing warnings from business leaders that the cost of employing in Britain is simply becoming too high, not just financially but legally and procedurally. A recent survey by Saffery and Ward found that employers are planning layoffs and the relocation of operations abroad in direct response to increasing national insurance contributions and regulatory burdens, and now the spectre of hostile employment legislation. EY has warned that high energy costs and slow growth are deterring investment, while major employers are now reviewing UK operations due to the cumulative cost of doing business here.

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[Baroness Jones of Whitchurch (Lab)]

We on these Benches meet with members of the SME sector all the time for various purposes. As well as the formal meetings, we meet them in all sorts of guises—for example, to discuss the industrial strategy and some of the digital growth policies. I do not think it practical to do what the noble Lord has asked, but I can assure him that the more formal consultation meetings happen regularly.

[Lord Sharpe of Epsom (Con)]

I thank the Minister for her response. It is clear that there is significant disagreement on this subject. Indeed, there is a degree of disagreement on the statistics. We seem to be quoting statistics that contradict each other. I have to say that I think ours are rather more up to date—but I would say that.

I thank the noble Lord, Lord Vaux of Harrowden. I completely agree with everything he said, as I do with everything said by my noble friends Lord Leigh of Hurley and Lady Neville-Rolfe. It is very concerning that, in the other House, the Government tabled further amendments with no meaningful assessment of their economic or practical impact, and no proper consultation with the stakeholders that this will affect. This is not how good legislation is made. It is not the standard Parliament or the country should accept.

The Minister just described the Bill as the biggest upgrade to workers’ rights in a generation. If that is the case, one might reasonably expect a thorough and credible impact assessment, not one that is rated red by the Regulatory Policy Committee. That is not a minor procedural footnote; it is a warning and a signal that the economic, legal and operational consequences of this legislation have not been properly understood.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Wednesday 18th June 2025 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

271ZB: Clause 94, page 112, line 13, at end insert “under Schedule 7, Part 1, paragraphs 1-12, 22 to 34 inclusive”
Member’s explanatory statement
This amendment seeks to ensure that any ‘fishing expedition’ actions of enforcement officers enabled by subclause (a) are limited to the most serious breaches, thereby preventing a broad expansion of an enforcement officer’s ability to enter business premises to include entering at any point to check on minor matters.

[Lord Sharpe of Epsom (Con)]

My Lords, in moving Amendment 271ZB I will speak also to Amendments 271ZBA, 271ZD and 273LA in my name. Amendment 271ZB ensures that the powers being granted to enforcement officers under this part of the Bill are used proportionately and only in response to the most serious breaches of labour market law. Without this amendment or something very much like it, we risk handing enforcement officers sweeping powers to enter business premises with very little constraint.

As currently drafted, Clause 94(1)(a) grants enforcement officers the authority to “enter any premises” for “any enforcement purpose”. That is an extraordinarily broad power. This amendment would limit such warrantless powers of entry to those paragraphs of Schedule 7 that deal with the most serious forms of labour market abuse, namely child labour offences, the failure to pay the minimum wage, unlawful deductions from wages and exploitation through forced labour. These are the areas where strong enforcement action is absolutely justified.

However, is it appropriate that the same powers—entry without warrant or consent—could be used to check whether someone forgot to keep a copy of an employment agency contract on file or perhaps miscalculated a payslip by a few pounds? We must not lose sight of the bigger picture. The vast majority of employers want to comply with the law; they invest time and money in doing so. However, if we allow overly broad enforcement powers, we risk creating an atmosphere of distrust, regulatory overreach and disproportionate intrusion, particularly into smaller businesses which may not have the resources to constantly defend themselves against investigatory overkill. The Government say they want better enforcement, and so do we, but good enforcement is not the same as unchecked enforcement.

Turning to Amendment 271ZBA, as currently drafted, Clause 95 restricts the power to enter dwellings to those occasions where a warrant is issued by a justice. This is a well-established and necessary safeguard, reflecting the heightened privacy interests we attach to a person’s home, but there is a conspicuous gap in the safeguards applying to entry into non-dwelling premises, such as business premises, offices or other places of work.

Clause 94 grants enforcement officers wide powers to enter any premises for enforcement purposes, without the same explicit requirement for a warrant or judicial authorisation, unless it is a dwelling covered by Clause 95. This gap means that, unlike the protections for residential premises, business premises can be entered and searched by enforcement officers without prior judicial approval. This is a significant and unwarranted imbalance. The intrusion into a business, especially a small or medium enterprise, is a serious matter. Entry and seizure powers can disrupt operations, damage reputations and create an atmosphere of suspicion.

That is all quite apart from the rather sinister nature of this power. For many small businesses, their premises are their livelihoods. The difference between a home and a business may be one of degree, but the right to protection from arbitrary state intrusion should be similarly robust. Judicial oversight ensures that these powers are used only when there is a legitimate and evidenced basis for entry, and it prevents abuse or overreach.

The requirement for a magistrate to authorise a warrant is a safeguard that protects due process, proportionality and the rule of law, and is of course very well established. It requires that enforcement officers demonstrate reasonable grounds and the necessity for the warrant. That is not a bureaucratic hurdle; it is just a check that balances the state’s legitimate enforcement interests with individual and business rights.

On Amendment 271ZD, as it stands, the appeal process focuses primarily on the accuracy of the sums claimed or the penalties imposed. It is essential that underpayments and penalties are correctly calculated and justified, but this narrow scope overlooks a critical element: the manner in which enforcement powers are exercised.

Enforcement officers hold significant authority when issuing notices, including entry, inspection and seizure powers. However, these powers must be exercised lawfully, proportionately and with respect for those affected. This amendment allows tribunals to consider whether enforcement officers have acted beyond their legal authority or used their powers excessively or unfairly. It further empowers tribunals to cancel or vary notices where misconduct or disproportionate enforcement is found and to award compensation as appropriate. This is not only a matter of protecting businesses and individuals from overreach but is vital to maintain public confidence in the enforcement regime. When enforcement is perceived as fair, transparent and accountable, compliance will improve and the number of disputes will reduce.

On Amendment 273LA, at this stage, the Bill does not define who enforcement officers are in any detail—we started this discussion on Monday—nor does it set any clear limits on the powers they may exercise when carrying out their functions. This lack of clarity is deeply concerning, especially given the serious nature of the enforcement powers being proposed, which include entry, inspection and seizure of documents and property. It is vital to establish unequivocally that enforcement officers, who are not police offices and do not have the training or mandate of the police, must not be allowed to use physical force or authorise others to do so. The use of force is an extreme measure that can be justified only in very specific and regulated circumstances, and generally only by trained law enforcement personnel. The amendment simply ensures that enforcement officers cannot resort to physical coercion, which is not appropriate for officials tasked with regulatory enforcement in the labour market. That is a matter of basic human rights and dignity. It is also a safeguard for businesses and individuals who may otherwise be subject to intimidation or physical harm.

I have absolutely no doubt that Ministers on the Government Front Bench have no interest in physical coercion being a part of these powers. In that case, they should accept this amendment because, if they do not, the implication is clear: they accept that physical coercion is acceptable. I do not believe that is what they want and I beg to move.

[Baroness Lawlor (Con)]

My Lords, I support the amendments in the name of my noble friend Lord Sharpe. I declare an interest as a director of a very small business—a think tank.

As an employer, the idea that we have no warrant or judicial oversight of an enforcement officer’s intrusive visit to a business to seize or take copies of documents and to check up is intrusive on the time and output of the business. It is also an infringement of a business freedom to conduct the business to the best ability of those in the office or the business.

Both clauses in fact contain very intrusive proposals. As my noble friend pointed out, one of the things that is deeply worrying about them is we do not know who the enforcement officers will be or exactly what their powers will be. We have seen, even with the best trained police force in the world, the Metropolitan Police and local police forces, a certain amount of over-zealousness in pursuing certain types of crime. Therefore, with an untrained and unknown quantity and with such powers, we need very clear limitations, and we need to focus on the most serious crimes and those outlined in these amendments. For those reasons, I support both the amendments in the name of my noble friend.

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[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the noble Lord, Lord Carter of Haslemere, for his intervention, because I was about to raise a similar point. It has been a long time since, as a policeman, I applied for a warrant, but we did not routinely notify the intended recipient of our visit that we were about to do it. I do not buy the argument that that would see an awful lot of documents destroyed or anything that they might have been pre-warned being removed from the premises—they would not know. I do not see why it should be different for enforcement officers and the police, who obviously are, in some cases, investigating much more serious crimes.

On the use of force arguments that the noble Lord, Lord Katz, deployed, surely the point is that these powers are being extended and, yet again, we are relying on future guidelines, comments or statements that will be written into their terms of employment. I simply do not believe that that is enough. The public deserve the reassurance of having this in the Bill or, at the very least, clarified in a Dispatch Box Statement.

As we bring this debate to a close—my noble friend Lady Lawlor, I think, homed in on this point—the fundamental concern that underpins all these amendments is that the Government have not yet provided a clear definition of who the enforcement officers will be, what precise powers they will hold, and what training or accountability measures will govern their conduct. The absence of clarity is not a minor oversight; it is a significant gap that leaves businesses and individuals vulnerable to potential overreach and misuse of authority. Enforcement officers will be vested with extraordinary powers of entry, inspection and seizure, but we have no clear picture of the safeguards that will be put in place to prevent abuse.

These amendments are not about obstructing enforcement or denying the Government the tools that they need to tackle serious breaches of labour market law; on the contrary, we recognise the importance of robust enforcement. However, enforcement must be lawful, proportionate and accompanied by proper oversight and accountability, or it will risk losing public trust.

We have sought to introduce reasonable limits on when and how enforcement—

[Baroness Lawlor (Con)]

Does my noble friend agree that, in addition to the problems he has raised, there is a very great danger of vexatious claims being made without evidence, and of disproportionate actions and intrusions taking place as a result?

[Lord Sharpe of Epsom (Con)]

I absolutely agree with my noble friend; that is one of the reasons that we are seeking more clarity in the Bill. As I said, without transparency, accountability and a clear definition of what the powers will be—they are unarguably vague —all those concerns remain. It is disappointing that the Government have not fully recognised the risks inherent in the broad powers envisaged by the Bill. We argue that the Government should, at a very minimum, provide clear guidance on these roles and responsibilities and on the limits of enforcement officers. This subject is so important that I think we will have to return to it. For now, I beg leave to withdraw my amendment.

Amendment 271ZB withdrawn.

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Moved by

[Lord Sharpe of Epsom]

271D: Clause 113, page 124, line 31, at end insert, “and the worker has provided written consent to the Secretary of State to bring proceedings on their behalf,”
Member's explanatory statement
This amendment requires the worker’s informed consent before the Secretary of State can initiate legal action, preserving individual autonomy and control over personal legal matters.

[Lord Sharpe of Epsom (Con)]

My Lords, in moving Amendment 271D, I shall speak also to Amendments 272ZZA, 272ZZB, 272ZZC, 272ZZD, 272ZZE, 272ZB, 272ZC, 272AA, 272AB and 272AC.

There is a troubling message throughout this legislation of the fundamental belief that third parties, whether they be unions or the state in Part 5, will make decisions on behalf of individuals rather than individuals being able to make decisions for themselves. The challenge with third parties making decisions is that they pay no price when they are wrong, and that is evidenced in this clause. Clause 113(6) states:

“The Secretary of State is not liable to any worker for anything done (or omitted to be done) in, or in connection with, the discharge or purported discharge of the Secretary of State’s functions by virtue of this section”.


That is an unacceptable subsection in this clause, hence my Amendment 272ZZE.

The reality is that workers whose claims are taken up or not taken up by the Secretary of State risk having their rights mishandled or ignored, yet, under the clause as drafted, they would have no recourse, remedy or ability to challenge that failure. We think that that sets a dangerous precedent, because we are granting power without responsibility. We would be creating a regime in which decisions that affect individuals’ livelihoods and legal rights can be made from behind a veil of immunity. That is neither just nor consistent with the principles of good governance. We need to be clear that, if a private employer or a trade union behaved with this level of impunity, we would not accept it, so why are we accepting it from the state?

The fundamental principle underlying Amendments 271D, 272ZZA, 272ZZB, 272ZZD and 272ZC is consent. Clause 113 currently allows the Secretary of State to initiate legal action in a worker’s name without requiring that worker’s consent. That is deeply problematic. Legal proceedings, particularly employment proceedings, can be deeply personal, reputationally sensitive and complicated. To bring such proceedings without the individual’s explicit and informed consent is a serious encroachment on personal autonomy. My Amendment 271D would insert a requirement that the worker must provide written consent before the Secretary of State may act on their behalf. That is not a mere administrative formality; it is the cornerstone of the individual’s control over their own legal affairs.

What if consent was not initially required or given but circumstances change? That is addressed in my Amendment 272ZZA, which would establish a clear opt-out mechanism. It would ensure that the worker is given notice before proceedings begin and is afforded 28 days to object. If they do, the case does not proceed. Surely this strikes a balance between the state’s interest in pursuing enforcement and the worker’s right to decide how their own case is handled. Legal action is not always welcome, even when it is justified. The consequences of litigation, especially in employment, can be damaging professionally and personally. Workers may prefer alternative dispute resolution.

However, consent and opt-out are not enough on their own. Even with consent, the state must be bound by a duty to act in the worker’s best interests. That is why I have proposed an amendment requiring that the Secretary of State should have regard to the worker’s stated objectives, the potential impact on their current and future employment, and the proportionality of taking legal action in the specific context. That is a safeguard to prevent well-meaning intervention becoming harmful or heavy-handed.

Then there is the matter of control. A worker may initially consent to the Secretary of State taking the lead but later wish to take back control of the proceedings, perhaps because they have secured private representation or circumstances have changed. My Amendment 272ZZD addresses this. It would ensure that the worker retains the right to reclaim their case and that the Secretary of State must accommodate that request. It affirms that ultimate control remains with the individual and not with the state.

Finally, my Amendment 272ZC would introduce a fundamental principle, that of subsidiarity. The state should not intervene unless there is absolutely no other viable route to justice. If the worker has representation or access to advice or union support, that route should be exhausted first. Legal action by the Secretary of State should be a last resort, not a first impulse.

These amendments are not intended to frustrate enforcement—far from it. They are designed to ensure that enforcement is fair, consensual and genuinely in the interest of the person whose rights are at stake. Workers are not passive subjects of policy; they are individuals with agency, judgment and a right to decide how they wish to pursue justice. We must ensure that the Bill does not cross the line from protection into paternalism.

I turn to Amendments 272AA and 272AC. Amendment 272AA simply calls for an annual report—nothing excessive, just a basic record of how often these powers have been used, what types of claims have been pursued, the outcomes and any costs or awards recovered. This is a common-sense transparency measure. If the state is litigating on behalf of private individuals, we should, at the very least, be keeping track of how that power is being exercised and with what effect.

Amendment 272AB, however, is the more pressing amendment because it would place a sunset clause on the power, causing it to expire at the end of the next Parliament unless it is actively renewed. It would also require an independent review to assess whether this power has delivered real value for workers, for justice and for public money, because the truth is we simply do not know if this clause is necessary. We do not know if workers even want the state litigating on their behalf; we do not know if the outcomes justify the costs; and we certainly do not know if this is the most effective way to improve enforcement. If this power is to remain, Parliament should be given clear evidence that it works and works better than the alternatives.

Finally, Amendment 272ZB would introduce a simple but important safeguard: a public interest test before the Secretary of State can bring proceedings on a worker’s behalf. Without this, we risk allowing the state to pursue claims that may be frivolous, politically motivated or unnecessary, potentially at public expense and also to the detriment of both workers and employers. Litigation should not be used to make a point; it should be used to deliver justice where it truly matters. This amendment would ensure that such powers are exercised responsibly and proportionately, and only where there is a clear public benefit. I beg to move.

[Baroness Coffey (Con)]

My Lords, I oppose the Question that Clause 113 stand part of the Bill. I raised this in Second Reading, and I appreciate the discussions that have taken place with officials and the Minister since, but I genuinely believe these are novel powers.

I appreciate that we are perhaps just not going to agree today on how far the Equality Act 2006 goes, but when I tabled Questions to the Minister, they were passed to the EHRC. The commission said that, since it had received those powers—I think it was commenced in 2007—no powers had been used to initiate legal proceedings that were not judicial review or as an intervener. It gave me the distinct impression that it did not necessarily believe that it should be initiating legal proceedings in this regard. It has its own policy and that is under consultation. However, it does beg the question, given some of the other consultations that the Government have initiated, whether they will in future seek to take over any such duties or powers that the EHRC has in a variety of legal proceedings, because the EHRC is not using powers that the Government think it has. However, I think that is still really a matter of debate.

Building on the amendments that have been tabled by my noble friends on the Front Bench, I think this is an odd situation. I appreciate we have discussed elements of Clause 113 before; indeed, the other day we debated my noble friend Lady Noakes’s sensible amendment that this should be in the public interest. It would be helpful to understand from Ministers what they see will happen as a consequence of this. Where are we getting to? What is going on?

I have deliberately degrouped some parts of this discussion on Clause 114—about the money side—but it is useful to understand that, for the purposes of this clause, this is not just about people who are working; it is about people who do not have a job with the person they are seeking to take to court. We had a debate some time ago about why that could be, and we got into a debate about what sort of special privileges there might be. Nevertheless, this seems quite an extraordinary shift in the capability of the Government, first, to initiate these proceedings anyway and, secondly, to do so when the worker involved does not intend to do so. That is why, I appreciate, the legal wording really restricts any inclusion of the worker at a future date, which specifically seems to be ruled out in various provisions in the clause, except in Clause 113(5), which allows the worker to be brought in at an appeal stage. However, I am concerned more generally about this approach of a new agency.

Another element that really concerns me is subsection (6), which in essence provides:

“The Secretary of State is not liable to any worker for anything done (or omitted to be done)”.


I expect that is there to cover circumstances—we may have had a brief exchange on this already—in which the worker says, “You didn’t go after this bit or that bit”; it is kind of “Tough luck”. As it stands, it is not clear to me whether, if the worker is unhappy with the action taken, double jeopardy is allowed: will the worker be allowed to initiate separate claims against the employer, if they feel that the Secretary of State and the enforcement officers have admitted different things?

Overall, this clause is an unnecessary innovation. I am concerned about it, and I would be grateful for some broad examples of how it could be used in the future.

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[Baroness Jones of Whitchurch (Lab)]

On that point of clarification, I will write to the noble Baroness.

In conclusion, the civil proceedings powers within the Bill align with our manifesto commitment to strengthen enforcement and improve outcomes for workers through a fairer, more accessible system. We need to let the fair work agency operate with the tools it needs, guided by the statute but not constricted by inflexible restrictions or ministerial bottlenecks. I therefore ask the noble Lord, Lord Sharpe, to withdraw Amendment 271D.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the Minister for her reply. She will not be surprised to know that I am afraid I did not buy any of those arguments.

I am extremely grateful to my noble friends Lady Coffey, Lady Lawlor, Lord Jackson, Lord Ashcombe and Lady Verma for their interventions; they all made extremely good points. I will return to the points raised by the noble Lords, Lord Carter of Haslemere and Lord Murray of Blidworth, in a second.

We have just heard this clause described variously as “beyond belief”, “especially bonkers”, “an utter mess”, “quite extraordinary” and “perverse and unheard of”. Do you know what? It is all of those things. This has been an extraordinary debate, and so many interesting points have been made that it is hard to sum up. However, there is one point that was brought to my attention by the noble Lord, Lord Sandhurst, who was sitting next to me at the time. He pointed out that this clause might be in contravention of Article 8 of the European Convention on Human Rights: the right to respect for private and family life. This needs to be explored, and it is important for the Minister to take account of, because, under Section 19(1)(a) of the Human Rights Act 1998, she has to sign on the front of this Bill that it is compatible with the rights under that convention.

I will read the relevant article, so it is on the record:

“Everyone has the right to respect for his private and family life, his home and his correspondence … There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others”.


I do not expect the Minister to answer this now, but I would be very grateful if she could at least allude to the legal advice that she was given before she signed the Bill to confirm that it did not contravene Article 8.

I appreciate that government legal advice is rarely published, but, having had some experience of government lawyers and their risk-averse nature, I would be very surprised if they had considered this in its entirety. I would be grateful if the Minister would come back to that issue, perhaps in the letter to my noble friend Lord Murray of Blidworth. This is clearly one of the subjects to which we will have to return, because, as both the noble Lord, Lord Carter, and my noble friend Lord Murray have explained, this is extraordinary and positively Kafkaesque.

I will leave the last words to my noble friend Lord Murray of Blidworth, who pointed out that we could end up in a state where we have litigation about litigation on behalf of someone who does not want to litigate. That is frankly absurd. For now, I beg leave to withdraw my amendment.

Before I sit down, I congratulate the noble Baroness, Lady Fookes, on her 55 years of public service. I believe that she was first elected on 18 June 1970 to represent Merton and Morden—many congratulations.

[The Deputy Chairman of Committees (Baroness Fookes) (Con)]

That is most kind, but we must not be diverted from the business in hand. Is it your Lordships’ pleasure that this amendment be withdrawn?

--- Later in debate ---

[Baroness Coffey (Con)]

My Lords, my Amendment 279GZA seeks to understand what “and, in certain cases” means in Clause 149. I would be grateful for an explanation. I looked extensively in Schedule 12 and saw only the insertion of a regulation to do with Northern Ireland. I would be grateful to understand that.

I am happy to support Amendment 323, which seems a sensible way of trying to ensure that justice is delivered effectively and people can still have fair access while also making sure that we make the best use of employment tribunal judges’ time.

[Lord Sharpe of Epsom (Con)]

My Lords, I am grateful to my noble friend Lady Coffey for introducing her amendment and also to the noble Lord, Lord Goddard, for speaking to the amendments of the noble Lord, Lord Fox, the first of which proposes a report on the expansion of legal aid in employment tribunals. It would not itself change entitlement but seeks to prompt a structured exploration of the options. Legal aid is, of course, a complex and often contested area, and this amendment simply calls for a government-led review that considers both employer compliance and the financial position of workers. It is reasonable to assess whether the current system adequately supports access to justice in employment disputes.

I have a question for the noble Lord, Lord Fox. I will discuss with him outside but, just to get it on the record, I am curious to know whether the “report on the options”, which he describes in subsection (1) of the proposed new clause in his lead amendment, extends to small and medium-sized employers as well. I am interested to know whether he thinks they should be included within that survey based on the fact that many of them will also suffer some financial hardship.

On the proposed new clause on summary judgments in employment tribunals in Amendment 323 by the noble Lord, Lord Fox, such a power could offer a means of reducing the burden on tribunals, improving efficiency and focusing resources on cases where the issues genuinely require full examination. In short, both amendments are interesting and I look forward to hearing the Minister’s response.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I will first speak to Amendment 279H in my name, which increases the time limit for making a claim to an employment tribunal in relation to paid time off for employee representatives in consultations on certain changes to occupational and personal pension schemes from three months to six months. This would amend the employment tribunal time limit that is set out in the Schedule to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006.

This amendment is essential to ensure consistency with the time limits for the majority of tribunal claims which are being amended to six months throughout the Bill. This is a technical amendment which brings the provisions on consultations on pension schemes in line with the other clauses in the Bill regarding the increase in time limits which have been set out.

Increasing tribunal time limits will provide employees and employers more time to resolve disputes internally or through the conciliation process as well as more time for employees to consider the merits of bringing a claim to an employment tribunal. Judges will continue to have the discretion to hear out-of-time claims on a case-by-case basis.

Amendment 279GZA from the noble Baroness, Lady Coffey, seeks to provide that the extension of employment tribunal time limits from three to six months does not apply in respect of industrial tribunals in Northern Ireland. We have worked closely with the Northern Ireland Executive to develop an approach to extending time limits which respects the Northern Ireland Assembly’s competence to legislate on devolved matters. Where time limits are in UK-wide legislation that extends to Northern Ireland and that relates to matters that are reserved, such as the National Minimum Wage Act 1998, this Bill amends the time limits for bringing a claim to the industrial tribunal in Northern Ireland. We will continue to work with the Executive to consider implementation and, if appropriate, these changes may come into force at different dates for Great Britain and Northern Ireland. The Bill does not amend time limits in legislation that extends to Northern Ireland and is transferred—that is, devolved powers.

On Amendments 273 and 323, I understand the motivation of the noble Lord, Lord Fox, in tabling his amendments, and I thank the noble Lord, Lord Goddard, for speaking to them so ably. In order for the reforms we are making through this Bill to be effective, it is vital that workers can enforce their employment rights. As noble Lords know, tribunals, including employment tribunals, are designed to be informal, accessible and low-cost means of accessing justice. I agree with the noble Lord, Lord Goddard, that the backlog of tribunal claims at the moment is unacceptable. We are taking steps to address that backlog in conjunction with the Ministry of Justice, and the fair work agency can also play a part in easing that load. We will be able to debate the measures that we are taking further in later groups.

However, I would like to reassure the noble Lord that legal aid is available, subject to means and merits tests, in relation to discrimination and breaches of the Equality Act 2010. Where an issue falls outside the scope of legal aid, funding may still be available through the exceptional case funding scheme. Of course, members of trade unions will receive advice and representation anyway as part of their membership.

Turning to the amendment of the noble Lord, Lord Fox, on employment tribunal summary judgments, I can reassure the noble Lord, Lord Goddard, that employment tribunals have a wide range of existing powers to address weak claims or responses, including strike-out and default judgments, to achieve the aims set out in this amendment. The strike-out rule in its framing and application is already similar to that of Rule 24 in the Civil Procedure Rules. It allows employment tribunals to strike out half or all of a claim or response, including where there is no reasonable prospect of success. I therefore ask the noble Lord, Lord Goddard, to withdraw Amendment 273.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Wednesday 18th June 2025 Lords Chamber

[Baroness Chakrabarti (Lab)]

Yes, I would.

[Lord Sharpe of Epsom (Con)]

My Lords, that was a most interesting exchange, and I thank the noble Baroness, Lady Chakrabarti, and my noble friend Lord Jackson for it. As I have said many times, I am not a lawyer, but as a broader observation, there seems to be a slight philosophical discussion developing this evening between intervention and initiation when it comes to various state interventions in certain areas of law.

I have no doubt at all that the intention behind the noble Baroness’s amendment is to strengthen the enforcement of equal pay laws. As she rightly says, we all support that objective, but we feel that this particular proposal is somewhat flawed, not least because we just do not think it will work. At its core, the amendment risks conflating pay disparity with unlawful discrimination. It assumes that if a pay gap exists, there must therefore be wrongdoing. As the noble Baroness, Lady Chakrabarti, acknowledged, it is not that simple, because pay disparities can and often do arise for entirely legitimate reasons, such as differences in experience or qualifications, performance geography or even negotiated terms, to my noble friend Lord Jackson’s point. To suggest that a mere statistical difference is indicative of discrimination is to abandon the nuanced legal framework carefully set out in the Equality Act 2010. While paying a great deal of respect to the arguments—and there is considerable merit in this—we cannot support this amendment.

[The Minister of State, Office for Equality and Opportunity (Baroness Smith of Malvern) (Lab)]

My Lords, like my noble friend Lady Chakrabarti, I am also an occasional visitor to this Committee, but I am very pleased to be here this evening to address her Amendment 275. I thank her for recognising the engagement there has been with the Government and others on this up to this point.

Certainly, the Government want to make very clear that we share the broad aims behind this amendment. Over 50 years after the Equal Pay Act 1970 and 15 years after the Equality Act 2010, it is clear that equal pay has not yet been achieved. That is why the Government have committed to strengthen the equal pay regime and end pay discrimination. I share the concerns of my noble friend in identifying the challenge of enforcement in this case. There is more we can do to ensure that the onus does not fall only on women to find out whether they are receiving the same pay as their male colleagues for equal work and to take enforcement action against employers in the case of a breach.

It is possible to envisage, in relation to the points made by the noble Lord, Lord Jackson, a system in which you have both the contractual arrangement and the ability to take individual action as is the case now and an enforcement body that supports people doing that in general terms and identifies thematic or consistent ways in which equal pay is being breached. That is why the Government are committed to establishing an equal pay regulatory and enforcement unit with the involvement of trade unions. As part of this, we will carefully consider how we can improve the enforcement of the equal pay scheme.

On 7 April we launched a call for evidence on this issue and wider equality law to ensure that any steps we take will lead to a meaningful strengthening of protections against pay discrimination—an objective that I am sure my noble friend will share. It is important that the Government are able to develop these changes in partnership with business, trade unions and civil society to ensure that the law works for everybody. For that reason, I hope my noble friend will recognise that this will be a more appropriate process through which to address these issues. As she suggests, we will give these areas very close consideration in advance of the equality, race and disability Bill.

In relation to some of the specific points my noble friend raises about the way this might operate, we certainly recognise the benefits that can arise from government departments, including HMRC, working together. HMRC already has a number of joint working and data-sharing arrangements with departments and agencies. The Government are therefore not closed in principle to establishing new data-sharing arrangements with regulatory authorities where this can support their regulatory functions.

My noble friend made a very interesting point about the use of AI. It would not be sufficient simply to compare the pay of different people working within a workplace unless you could also have some analysis of how that applied to the nature of the work and whether that was work of equal value. It may well be that advances in technology, including AI, would be a way in which we could support that monitoring.

Policy is at a very formative stage. My officials will explore a wide range of options to improve the enforcement of equal pay rights. While taking great care to ensure that safeguards are put in place in relation to personal data, particularly where that relates to discrimination and protected characteristics, I suspect the sort of description that she gave of the contribution of AI is very much part of what, across government, we are wanting to see in terms of its use in future.

We are sympathetic to the ultimate objectives of my noble friend’s amendment. I hope she recognises that and the progress that we intend to make on that pledge to deliver stronger enforcement mechanisms and, in particular, an equal pay regulatory and enforcement unit. With that assurance, I hope she feels able to withdraw her amendment.

--- Later in debate ---

Moved by

[Lord Sharpe of Epsom]

279ZZB: After Clause 146, insert the following new Clause—
“Impact assessment on enforcement of holiday pay compliance(1) The Secretary of State must, within 12 months of the day on which this Act is passed, lay before Parliament an impact assessment of the ability of businesses to comply with the enforcement provisions of this Act relating to holiday pay entitlements.(2) The assessment under subsection (1) must include—(a) an evaluation of the practical, administrative and financial implications for employers in meeting the requirements relating to holiday pay,(b) consideration of the capacity of small and medium-sized enterprises to comply with those requirements, and(c) an analysis of any barriers to compliance identified during implementation.”Member’s explanatory statement
This amendment places a duty on the Secretary of State to assess how effectively businesses—particularly small and medium-sized enterprises—are able to comply with the enforcement mechanisms relating to holiday pay under this Act, and to identify any practical barriers or burdens.

[Lord Sharpe of Epsom (Con)]

My Lords, I will speak to Amendments 279ZZB and 305 to 309, which are in my name.

Turning first to Amendment 279ZZB, we firmly support the principle that workers must receive their full entitlement to holiday pay and that those rights must be enforceable. However, we believe that achieving that goal in practice, particularly under the new framework set out in the Bill, requires us to be clear-eyed about the real-world challenges that many businesses face. Holiday pay is one of the most complex areas of employment law and has only become more so following the changes introduced in January of this year.

While some employers regrettably seek to avoid their obligations and should rightly being sanctioned, the reality is that many more are simply trying to navigate a legal framework that is very confusing, technical and still evolving. For small and medium-sized enterprises in particular, compliance is not always a question of willingness but of capacity and clarity. That is why this amendment is both timely and proportionate: it asks only that the Secretary of State undertakes an impact assessment to consider how businesses—particularly SMEs—are coping with the new enforcement provisions. It would require an evaluation of the practical, administrative and financial implications of compliance and establish whether any barriers have emerged during implementation.

Crucially, this is not about weakening enforcement. In fact, it is quite the opposite: it is about ensuring that the fair work agency, which we hope will become a cornerstone of enforcement under this Bill, is properly resourced, modernised and equipped to support both workers and employers in meeting their obligations.

Turning to Amendment 305, this Government have managed to get unemployment to hit its highest since the pandemic—4.6%, according to the most recent ONS figures. This is not a figure that we can shrug off because, of course, behind it are real lives, real households and real businesses that are facing uncertainty. At the same time, the business environment is under considerable strain. Recent changes to national insurance contributions have forced employers to make extremely difficult decisions. The employer rate has risen from 13.8% to 15% and the threshold has been lowered, placing even greater pressure on payrolls.

Research from S&W has shown that around a third of UK business owners are still planning further job cuts as a direct result of these changes. Many have already begun reducing headcount. Others are cutting hours, freezing pay or raising prices—moves that will impact both employees and consumers. So, the question that has to be asked is: how will this legislation affect employment in that context? I should also have mentioned, of course, that May showed a very significant drop in payroll numbers.

It is easy to sit in Westminster and write these rules. It is much harder to understand how the rules will play out in towns and factories, in small businesses, in hospitality, in logistics, and across the many sectors that make up our labour market. That is why this amendment is vital.

I turn to Amendment 307. The British Retail Consortium has warned of a potential “high-street bloodbath”, with one in 10 retail jobs at risk over the next three years, if the Bill’s measures are implemented without careful consideration. Retailers are already grappling with rising costs and squeezed margins, and these additional employment burdens could accelerate job losses in an industry that is vital to our economy. I believe that 180,000 jobs—I forget the precise number—are at risk through to 2028, according to the BRC.

Similarly, the Institute of Directors has published stark findings showing that nearly three-quarters of its members—72%—believe that this legislation will dampen economic growth. Some 49% of business leaders say they plan to reduce hiring; 36% of them intend to outsource more roles; and 52%, more than half, anticipate investing further in automation as a response. These figures paint a clear picture: employers are preparing to scale back on job creation and are likely to replace human roles with technology, in response to rising costs and compliance demands.

The Federation of Small Businesses echoes these concerns. SMEs are the backbone of the UK economy, yet many are telling us that the cumulative impact of new regulations, increased national insurance contributions and rising wage floors are forcing them to reconsider recruitment plans or even reduce existing staff. The FSB has called for a more balanced approach that safeguards workers’ rights without stifling the very businesses that create these jobs, and the growth. Can the Minister name a single business that expects to increase hiring because of the measures in the Bill?

On Amendment 306, what of our youth? At a time when the Government should be prioritising opportunities for young people entering the workforce, the figures are concerning. Between January and March 2025, an estimated 354,000 young people aged 16 to 24 were not in education, employment or training; that is up by 21,000 compared with the same period last year. The Government will no doubt argue that the provisions in this Bill, such as the right to guaranteed hours and changes to statutory sick pay, are designed to protect vulnerable workers, many of whom are young and may be on the margins of employment. However, the reality is more complex. Although well intentioned, these changes will make it more costly and complicated for employers to hire young people, who often lack the experience and are seeking flexible or part-time work to get started in their careers. The burden of additional costs and rigidities can discourage employers from offering entry-level roles or apprenticeships—exactly the opportunities that young people desperately need to develop skills and build work histories.

On Amendments 308 and 309, let me turn to a specific sector in the UK: manufacturing. In the north-west, manufacturing is not only a significant contributor to the regional economy but a vital source of skilled employment and innovation. Many manufacturers there are actively seeking to invest in advanced technologies, including artificial intelligence and automation, to improve productivity and to remain competitive on the global stage. However, these ambitions risk being undermined by the additional costs and compliance burdens imposed by this Bill. Manufacturers are already grappling with the challenges of global tariffs, supply chain disruptions and inflationary pressures; adding further regulatory and financial strain threatens to hollow out this critical sector.

If the increased labour market enforcement and associated costs become too great, there is a real risk that manufacturers will reduce investment, scale back hiring or even relocate operations. The knock-on effects on local economies, particularly in regions depending on manufacturing, would be severe, affecting jobs, skills development and regional growth. While the objectives of the Bill—to protect workers’ rights and promote fair employment practices—are indeed laudable, we must ensure that they do not come at the expense of vital industries and communities. I beg to move.

--- Later in debate ---

[Lord Leong (Lab)]

I thank the noble Baroness for that. Figures go up and down every month but let us look at it in the longer term. We are creating new jobs and that is what is really important. In conclusion, I ask the noble Lord, Lord Sharpe, to withdraw his amendment.

[Lord Sharpe of Epsom (Con)]

I am enormously grateful to the Minister for his passionate defence of his Government and for his remarks. I am genuinely delighted that he has taken on a new role in small business because, unlike the vast majority of his Government, he actually knows what he is talking about when it comes to small business. We are very pleased to hear that and we welcome his general remarks. I also agree with Jamie Dimon about the growth agenda, but the fact is the Bill will not help the growth agenda. That is the argument we are trying to make.

I am also grateful to the noble Lord, Lord Goddard, for his remarks. He accused me of being doomy and gloomy, but I did not get those statistics out of thin air; they were all supplied by the employer organisations that we referenced. If he would like, I will happily put him in touch with them all. The fact is that, once again, the Minister could not rise to the challenge of naming a single business that expects to increase hiring because of the measures in the Bill, and references to the strategic defence review do not help that argument.

The other reason why I am doomy is because, the other day, I came across a notice in a window in London that said, “After much reflection, and as a result of the substantial business rate and national insurance cost increases imposed on us in this year’s Budget, we have made the difficult decision to close. Our final day of service will be 28 June 2025”. That is a real business going out of business—that is disgraceful.

The Government’s impact assessment of the Bill, which we have debated a number of times and which I know irritates the Minister every time we bring it up, was simply inadequate. There is not enough detailed rigorous analysis to understand how these enforcement measures will affect businesses and employment across the country. Without that, we are walking blindly into serious economic risks. At this rate, if the Bill proceeds without the necessary amendments and safeguards, it will not just fall short, it will create unemployment. The additional burdens on employers, especially small and medium-sized businesses and crucial sectors like manufacturing, threaten to reduce hiring, stall investment and ultimately cost jobs. This is not speculation; it is happening, as my noble friend Lady Noakes pointed out. It is a clear and present danger based on the evidence that we have seen, and the trend is unlikely to diminish.

We support workers’ rights, but not at the expense of widespread job losses and economic harm. The Government have to provide a proper, thorough impact assessment—one that honestly addresses these risks—before we proceed further. I am grateful to the noble Lord for his offer of a meeting to discuss this, but I am not sure what there is to discuss without the actual impact assessment or the commitment to hold it as soon as possible. If this does not happen, the Bill will fail both workers and employers, and we will face the consequences of higher unemployment as a result. That is something no one wants. I beg leave to withdraw the amendment.

Amendment 279ZZB withdrawn.

--- Later in debate ---

[Lord Jackson of Peterborough (Con)]

My Lords, I will be very brief. I feel like the support act, really, because the substance, the meat, of this issue and this clause has been debated, although I am delighted that this is the final schedule and the final part, so we are on the final stages of the Bill. I just say very briefly, with respect, to the Minister, that we often ask the Minister to write to elucidate the remarks that she and her colleagues have made in the course of the Committee’s proceedings. We are watching that and making sure that we do get replies and, if we do not get proper replies, we will raise those issues on Report. I do hope, very gently, that the Minister is aware of that. Of course, we understand that information is not always at her disposal or her colleagues’ disposal, but we will need that information in order to make an informed decision on Report if the House divides at that juncture.

The second issue that I think it is appropriate to raise, raised several Committee days ago by my noble friend Lady Coffey, is impact assessments. The Cabinet Office guidelines say that impact assessments should be updated as the Bill goes through. To the best of my knowledge, that has not happened, and I am not sure that the Minister has satisfactorily answered the question that my noble friend asked earlier. With that in mind, I think that the rationale that the Minister used for the extension from three to six months was not even tepid and not even weak; it was just non-existent. To say that the Law Commission has done a consultation I do not think cuts the mustard. We on this side believe firmly that extending that period will bring more uncertainty to business, will be more costly, will encourage more litigation and workplace strife and will be a false economy.

I look over at the Government Benches and I see the pawprints of the trade unions in this. I do not know why they would want to do this, but, as on so much of the Bill, they are seemingly pulling the strings and I think that, in the end, it will not be in the best interests of workers for this to happen, not least because, as my noble friend Lord Hunt of Wirral said, the system is creaking. It is no good saying, “Oh, well, it was creaking under you”; this Government have been in power 12 months now, it is incumbent on them to fix the system with their legislation and I think that this is a retrograde step. It will not work, it will backfire, and on that basis, I think that neither Clause 149 nor Schedule 12 should stand part of the Bill.

[Lord Sharpe of Epsom (Con)]

My Lords, most of what I needed to say was said in the last group, so I will not labour the points, except to add a bit of colour, because my noble friend Lord Hunt of Wirral and I consult quite widely. We consulted this morning with a distinguished employment lawyer, who told us that, if you apply now to an employment tribunal, you will have no chance at all of getting even a preliminary hearing for 10 months. That is next April. In order to get a resolution, a case resolved, you would be looking probably at December 2027. That is nearly two and a half years away. It will take a lot more than the number of judges the noble Baroness mentioned that they have recruited so far in order to fix that particular problem. I wish her good luck and I hope she succeeds, but I really do not think that we should be doing this.

[Baroness Jones of Whitchurch (Lab)]

My Lords, the first thing I will say to the noble Lord, Lord Jackson, is that if we say we are going to write, we will write: we do not need to be told that this is being monitored in some way. I would say that I feel that we on these Benches have bent over backwards to engage with noble Lords, not only in debates but outside, by having meetings and trying to work through some of these issues in more detail. So I do resent the accusation that we are somehow hiding from accountability on these issues. We are bending over backwards to be accountable.

I also say to the noble Lord, Lord Jackson, that we have updated the impact assessment and written to the noble Baroness, Lady Coffey, about it already. As noble Lords have said, we have now debated this issue quite extensively. We argue that the proposals we are putting forward will benefit not only employees but employers, by increasing the time within which workplace procedures and conciliation can be completed, creating an opportunity for more disputes to be resolved without the need for litigation.

Current ACAS performance data shows that that around a third of early conciliation notifications go on to submit an employment tribunal claim. Therefore, the longer period of time for resolving disputes internally and/or via conciliation will simplify the time limits for making employment tribunal claims and improve access to justice.

I have heard the arguments of the noble Lord, Lord Jackson, and, as I say, we have now debated this extensively. I can assure your Lordships that this clause and schedule are essential for those who need to bring a claim to a tribunal in order to have adequate time to prepare a robust claim. I therefore ask that they stand part of the Bill.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Noakes for so expertly introducing her amendment, and I welcome the contribution from my noble friend Lady Penn regarding the establishment of an employment law advisory committee.

We believe my noble friend’s amendments would significantly strengthen the framework for effective and balanced labour market regulation. The creation of a dedicated advisory committee, modelled on the Social Security Advisory Committee, seems a prudent and timely measure. It would provide the Secretary of State with expert independent advice that draws from a diverse range of perspectives: employers, workers, and independent experts alike. This inclusive composition is vital to ensuring that any regulations developed under the enacted Bill are well-informed, fair and workable in practice.

Moreover, the proposed committee’s clear statutory function to scrutinise draft regulations before they are laid before Parliament would introduce an important additional layer of oversight and transparency. It would help to ensure that regulations and the views of all relevant stakeholders are carefully considered. The requirement for the Secretary of State to publish the committee’s report alongside any laid regulations, including an explanation when recommendations are not followed, would enhance accountability and public confidence in the regulatory process.

In sum, we think that these amendments represent a balanced and constructive approach to policy-making in the complex area of employment law. They would help guard against rushed or poorly considered regulations, support better policy outcomes and uphold the principles of consultation and transparency that are essential to good governance.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank the noble Baroness, Lady Noakes, for her Amendments 299 and 300. The Government have already committed to consulting on the detail of implementation and have already undertaken extensive engagement with employers, businesses and workers’ representatives, trade unions and experts. We will continue with this approach as we develop our secondary legislation.

There are some specific instances, such as in the enforcement space, where we are proposing setting up an expert group. Upgrading the enforcement of workers’ rights is an important and complex task, where it is right to draw on expertise from businesses, workers and independent representatives.

That is why the Bill requires the Secretary of State to establish an advisory board. It will play a critical role in providing advice and insight to the Secretary of State on their enforcement function under Part 5 of the Bill, which they will in practice deliver through the fair work agency. This is a proportionate and necessary step to help ensure the agency’s effectiveness. But this is not required across the Bill and wider labour market legislation as a whole. The committee proposed by the noble Baroness would be a repetition of the planned engagement and consultation on the Bill. We have already engaged with more than 190 different stakeholder organisations on our Plan to Make Work Pay, including employers of all sizes, from SMEs to large corporations, trade unions and representative organisations representing thousands of businesses and millions of workers.

We have held round-table discussions focused on particular topics, such as zero-hours contracts, and with particular groups, such as leaders of small businesses or retailers. As a Government, we are committed to engaging closely on our plans, and we will continue to do so. This engagement will continue throughout implementation, including as we develop regulations under the Bill.

On parliamentary scrutiny, the Select Committees will of course scrutinise the government proposals and reforms as they are rolled out. The Economic Affairs Committee had an inquiry on the labour market, and the noble Baroness was herself a member of that committee, so we know that there are already bodies in the parliamentary network that can be used to provide that scrutiny. On the basis of our proposed consultation and the parliamentary scrutiny available, I ask the noble Baroness to withdraw her Amendment 299.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

263ZA: Clause 87, page 107, line 12, at end insert—
“(3A) A person may not be appointed as an enforcement officer under this section unless they—(a) possess professional qualifications relevant to the enforcement of labour market legislation;(b) have undergone prescribed training in the exercise of statutory powers, including rights of entry, inspection, and seizure.”Member’s explanatory statement
This amendment ensures that enforcement officers possess appropriate professional qualifications, training, and suitability.

[Lord Sharpe of Epsom (Con)]

I will speak to Amendments 263ZA, 263ZB, 263B, 263C and 271ZA in my name. I will also briefly refer to Amendments 268 and 271 tabled by my noble friend Lord Holmes of Richmond who sends apologies that he cannot be here this evening.

Amendments 263ZA and 263ZB go to the heart of what it means to enforce employment and labour rights in a manner that is consistent with the values of competence, fairness and democratic accountability. They correct a notable deficiency in the current drafting of the Bill and help to align the enforcement regime with the expectation of the workers it is meant to protect and the legal and moral standards of the state that commissions that protection. The role of an enforcement officer is not merely administrative. It is a position of public authority. It carries with it the power to enter workplaces, examine records and question individuals and in some circumstances to impose sanctions or refer matters for prosecution. These are not trivial tasks. They are functions which, if carried out poorly, inconsistently or abusively, can cause serious harm, not only to employers but to vulnerable workers who may already be in a precarious or marginalised position.

Under the clauses currently drafted, there is no explicit requirement for enforcement officers wielding these powers to possess any formal qualifications or specific training. That silence is troubling and perplexing. We would not allow an environmental health inspector to carry out food safety inspections without the requisite public health training, we would not permit a planning enforcement officer to issue legal notices without understanding the statutory framework in which they operate, yet here we are contemplating giving substantial and often intrusive powers to individuals without requiring that they meet even a basic threshold of professional competence. This amendment seeks to address that omission in a way that is clear, proportionate and entirely consistent with how enforcement is handled in other regulatory spheres. It is not enough to presume that competence will arise through experience alone or that the Secretary of State will voluntarily set high standards through policy or guidance. Experience in other areas has shown that when qualification and training requirements are not embedded in statute, they become vulnerable to erosion, particularly when budgets are tight or political pressures arise.

The second amendment proposing new subsection (4A) is of equal importance. It would require the Secretary of State to ensure that enforcement officers maintain records of all enforcement actions, that they provide written notice to the persons affected by those actions explaining the reasons for the intervention and that they submit activity reports to an independent oversight body. Again, this is not a matter of administrative detail but a fundamental principle. Enforcement that is opaque is enforcement that is liable to error, inconsistency and, in the worst cases, abuse. The powers under this part of the Bill are extensive and potentially disruptive. They can lead to business interruptions, reputational damage and personal distress. For these reasons, it is only right that enforcement activity be recorded, explained and subject to independent scrutiny.

The requirement to maintain accurate records of enforcement action is essential not only for the protection of those being investigated, but for the proper functioning of the enforcement system itself. Without such records there can be no effective auditing of performance, no analysis of systemic trends and no evidentiary basis for defending an action should it be challenged in the employment tribunal or the courts. Similarly, the obligation to provide written notice to those affected by enforcement actions is a basic requirement of procedural fairness. It ensures that individuals and businesses understand why a given action was taken and gives them the opportunity to challenge it if they believe it to be unjustified or disproportionate. It is a protection against not only state overreach, but the perception of arbitrary or unfair behaviour by agents of the state. Perhaps most importantly, the requirement for regular reporting to an independent oversight body injects an essential layer of democratic accountability into what is otherwise a closed executive process.

The oversight body would not be tasked with micromanaging individual cases. Rather, its function would be to ensure that the enforcement regime as a whole operated in a manner consistent with the rule of law, with proportionality and with respect for the rights of those subject to state power. The amendments would protect businesses from inconsistent or poorly executed interventions, and they would protect the integrity of the enforcement regime itself from reputational damage and legal challenge.

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[Baroness Jones of Whitchurch (Lab)]

I said earlier in my contribution that the letters of appointment made to these people will spell out their duties. Obviously, their relationship to the Secretary of State will be spelled out in the letter of appointment. I have said several times now that they will be operationally independent, so that could be a key message in those letters of appointment.

[Lord Sharpe of Epsom (Con)]

I am very grateful to the Minister for her extensive answer and to my noble friends Lady Noakes and Lady Coffey, the noble Lords, Lord Carter of Haslemere, Lord Londesborough and Lord Stoneham, for their contributions to this short but very interesting debate.

As we come to the end of our discussion on these amendments to the Employment Rights Bill, I express my thanks to noble Lords who have contributed with such clarity and conviction and my disappointment with the Government’s response. Amendment 269, tabled by my noble friend Lady Noakes, fits very neatly with the requirement on the Secretary of State to produce annual reports under Clause 92. The Secretary of State has a duty to consult the advisory board, so I simply cannot understand why the Government would reject the idea of just combining the two and getting on with it. Equally, I do not understand why they would not want to take the suggestions of my noble friend Lady Coffey to tighten up the requirement. Nothing under those terms for the advisory board or the reports that need to be produced by the Secretary of State require a great deal of external information.

We have tabled amendments that are measured, constructive and rooted in principle. We have not sought to gut the Bill or to frustrate its aim of enforcing fair and lawful treatment in the labour market. On the contrary, we have sought to strengthen it and to ensure that the powers that it grants are effective and accountable, that enforcement is robust and fair and that ordinary businesses, especially small and micro enterprises, are not crushed under the weight of uncertainty, disproportionate penalties or faceless bureaucracy.

The noble Lord, Lord Carter, made excellent points about accountability. Enforcement is about not just force but legitimacy. It is about trust, and trust is only sustained when those who wield power are subject to oversight, transparency and to reasonable limits. That is not red tape. It is just a democratic principle. That is why we ask for qualifications and training to be made a prerequisite for enforcement officers, an obvious step given the serious powers that they will be entrusted with.

The Minister rejected my amendment introducing that notion, saying that it was not necessary because of Clause 87(6), just referred to by the noble Lord, Lord Carter. I note that Clause 87(3) says:

“In this Part ‘enforcement officer’ means a person appointed by the Secretary of State under this section”—


note that it says, “a person”, not necessarily “a qualified person”—whereas Clause 87(6), on which the Minister replied, says:

“A person appointed under this section may exercise any powers of an enforcement officer to the extent specified in the appointment”.


As the noble Lord, Lord Carter, informed us, there is no notion in there of independence, skills or anything else. That argument as to why our amendment is not necessary falls based on what is in the Bill.

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[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

I advise the Committee that if this amendment were agreed to, it would not be possible for me to call Amendment 264A for reason of pre-emption.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Coffey for her amendment in this group and for her introduction. I will speak to Amendments 266 and 267 in my name. These amendments are not presented in opposition to the spirit or general objectives of the Bill. Indeed, we fully support the aims of enforcing employment rights and ensuring that bad employers do not undercut fair ones. These amendments respond to a real and serious concern about the breadth of the power that the Bill currently gives to Ministers—a power that, if left unchecked, would allow a future Government to expand the remit of the fair work agency with far-reaching consequences but only the most minimal parliamentary oversight.

Paragraph 35 of Schedule 7 allows the Secretary of State to add to the list of enactments that fall under the enforcement remit of the fair work agency by way of regulations. That list, set out in Part 1 of Schedule 7, includes a range of statutory rights covering pay, working time, sick pay and protections against exploitation. The current drafting allows for the addition of any enactment that relates to employees, workers, employers or trade unions. That is an extraordinarily broad formulation. It would allow the Secretary of State to bring into the fair work agency’s scope virtually any area of employment or labour law, potentially even those governing union recognition, industrial action or collective bargaining, by secondary legislation and with no meaningful boundary in statute.

Amendment 266 seeks to address this by narrowing the scope of this delegated power. It would limit the types of enactments that can be added to those that relate to hours, pay or holidays. These are, after all, the core minimum terms and conditions of the employment relationship. They are well understood, capable of objective enforcement and already subject to statutory minima in other parts of the Bill. They also reflect the matters over which the recognised trade unions typically have statutory bargaining rights. There is, therefore, a clear and principled rationale for limiting the fair work agency’s enforcement jurisdiction to these domains.

We put forward this amendment on the grounds that it is both reasonable and proportionate. It would still allow Ministers to respond to emerging issues in labour markets, such as new forms of pay abuse or evasion of working time rules. It would, however, prevent this power being used to draw the FWA into controversial or contested areas of employment law, or into territory where individual enforcement through tribunals is more appropriate than systemic enforcement by a regulator. It would preserve the coherence of the agency’s function and protect against mission creep over time.

We anticipate that Ministers will argue that this amendment is too prescriptive and does not allow sufficient flexibility to bring in related rights that may not neatly fall into the categories of pay, hours or holidays, but that are none the less important for fair work—for example, information rights, certain protections from detriment or emerging contractual abuses not yet addressed by current law. The Government may say that drawing such hard lines in primary legislation is undesirable and that a degree of discretion is necessary for effective future-proofing.

If the Government do not accept Amendment 266 on the grounds that it is too narrow, it follows that the strength of Amendment 267 becomes even more essential. This amendment would require that any regulations made under paragraph 35 be subject not merely to the affirmative resolution procedure but to the super-affirmative resolution procedure, which I know the noble Baroness, Lady Jones, is fond of, as defined in Section 18 of the Legislative and Regulatory Reform Act 2006.

The super-affirmative procedure is not some theoretical or obscure mechanism. It exists precisely for circumstances such as this, where Parliament grants the Executive a broad power to amend the application of primary legislation by secondary means. The procedure ensures that Parliament is properly consulted, that draft regulations are subject to scrutiny before they are laid and that there is an opportunity for representations to be made, considered and reflected in the final statutory instrument.

The two amendments offer a choice. If the Government agree with us that the power to amend Schedule 7 should be tightly confined, they can accept Amendment 266. If they prefer to retain flexibility, they must accept that that comes with the responsibility of subjecting that power to a higher standard of parliamentary scrutiny, in which case Amendment 267 is the minimum safeguard necessary. What would be constitutionally unacceptable is for the Government to reject both amendments, leaving in place a broad and undefined power exercisable by ordinary affirmative resolution. That would be to hand the Executive a blank cheque over the shape and scope of labour-market enforcement in this country, without adequate safeguards in place.

To conclude, I urge the Government to consider carefully the implications of paragraph 35 as currently drafted. It is not enough to say that Ministers do not intend to use this power in a wide-ranging or politically contentious way. We are legislating not just for the current Secretary of State but for future ones, too. If the Government want discretion, Parliament must have oversight, and if they want latitude, we must have safeguards. The amendments give the Government the opportunity to make a choice: define the limits of this power clearly or accept the heightened scrutiny that wide powers properly demand.

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Coffey, for tabling Amendment 264ZA, which concerns the fair work agency’s remit. I also thank the noble Lord, Lord Sharpe of Epsom, for Amendments 266 and 267, which seek to alter the delegated powers in Part 2 of Schedule 7.

Amendment 264ZA would seriously restrict the fair work agency’s ability to tackle labour exploitation of a more serious nature where the threshold does not meet the requirement under the Modern Slavery Act. There are no other enforcement provisions in the Bill that would cover this scenario. Currently, a number of Gangmasters and Labour Abuse Authority investigations have to be abandoned when the modern slavery threshold is not met. Since 2023, 104 cases have been dropped. That is bad for labour abuse victims and for taxpayers.

We are adding elements of the Fraud Act to the fair work agency’s remit precisely to address this issue. It will allow the fair work agency to investigate cases of financial fraud by abuse of position. That has specifically been included within the Bill following extensive discussions with stakeholders, including the Gangmasters and Labour Abuse Authority and the Home Office. Removing the Fraud Act offences from the fair work agency’s scope would truly limit the agency’s effectiveness, and I must therefore respectfully resist this amendment.

Amendment 266, tabled by the noble Lord, Lord Sharpe, would drastically narrow the scope of the power. This would undermine the very purpose of the fair work agency, which is to simplify and consolidate the enforcement of labour market legislation. The fair work agency will be greater than the sum of its parts as its remit is further expanded. This will relieve pressure on a struggling employment tribunal system, which I have heard many times from noble Lords across the aisle.

The power to expand the fair work agency’s remit has appropriate safeguards and limitations. Any expansion of its scope will be informed by the advice from the agency’s tripartite advisory board, and with consideration of the overall enforcement strategy. Furthermore, any changes to the remit will be through affirmative-resolution regulations that will be laid before Parliament and, where relevant, will require the consent of the relevant Northern Ireland department. This power is crucial to the long-term flexibility of the fair work agency. By enabling the remit to expand over time, it can respond to developments in the labour market. If we were to restrict the power to such a narrow range of issues, we would be tying our own hands.

Amendment 267, also in the name of the noble Lord, Lord Sharpe of Epsom, would require that a super-affirmative resolution procedure be used when the Secretary of State exercises the delegated power in Part 2 of Schedule 7. In my almost three years in this House when the party opposite was in government, I never heard them bring any super-affirmative resolution in any of the Bills they brought before this House, so I do not understand the sudden change of heart.

This amendment is unnecessary. The Bill provides for appropriate parliamentary scrutiny as use of this power will be subject to the affirmative resolution procedure. I also highlight that the recent report by the Delegated Powers and Regulatory Reform Committee did not raise any concern with this power as currently drafted. The additional scrutiny this amendment calls for would place unneeded burdens on parliamentary time, which is currently stretched. With this point in mind, I ask the noble Baroness to withdraw Amendment 264ZA.

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[Baroness Coffey (Con)]

My Lords, I will also speak to Amendments 267ZA, 267AA and 267AB in my name in this group. Schedule 7 tries to bring together a whole bunch of legislation in a meaningful and sensible way so that it can handily be used in future. I could have extended some of these amendments, but I decided to focus Amendment 266A on paragraph 35(5)(b) of Schedule 7, which relates to Clause 89 on the delegation of functions. I could have considered a whole number of these, because this is a classic Henry VIII clause—put something in primary, shove something through regulations and, hey presto, a whole Act can change before our very eyes. In particular, Clause 89(6), which I address in Amendment 267AB, stood out to me.

My concern is that we start off with this agency, the enforcement officers and all these different things, but Clause 89(1) says:

“The Secretary of State may make arrangements with a public authority”.


I do not think “a public authority” is defined anywhere else in legislation at all. This is the first time I have seen it defined, as

“a person certain of whose functions are functions of a public nature”.

That could be a whole bunch of people. What does it really mean? Are they seeking to act in the public interest, or in a different way?

The Explanatory Notes do say what they are, but, as the Minister and the Committee will know, they are not part of legislation. One of the reasons for bringing this out is to try to understand from the Minister precisely what it means. The consequence of these bits of the legislation is that, by statutory instrument, this novel area that we are getting into could be changed very quickly, away from what might have seemed a sensible agency, though I appreciate that the noble Lord, Lord Carter of Haslemere, would rather have operational independence.

This is why I have peppered through my amendments in this group the very specific point that it should be a public authority that has civil servants in it and is not a non-ministerial department. I think that there are about 24 non-ministerial departments. Perhaps really only two—the Supreme Court and the Crown Prosecution Service—should be non-ministerial, recognising the accountability that, understandably, Parliament and the public expect.

The difference of a non-ministerial department is that it is accountable to Parliament. The device to do that is principally through the Select Committee in the House of Commons, perhaps the Public Accounts Committee, not so much in the House of Lords. Therefore, significant parts of the work being done are left to an occasional accountability meeting, whereas if civil servants are not in a non-ministerial department, the Secretary of State is directly responsible and can be held to account by Parliament and can hold those civil servants to account. I am therefore very nervous about how easy it will become to change Clause 89(6) and what that then means. It would be better for the Government to have more in the Bill about what it is.

As we are starting to get into Part 5, could it be that the public authority starts to become not-for-profit groups of solicitors who start to have these enforcement functions? Could arms of trade unions suddenly start enforcing and be able do all these different elements and to take employers to court so this starts to spread? The reason for my amendments is to try to get better legislation about what this is supposed to be. I am desperately trying to make sure that the only people to whom these things can be delegated will be civil servants who honour what the Government have set out in Part 5 and that the variety of enforcement officers and the fair work agency will be directly accountable and have the executive powers of the Secretary of State. That can be done only if people are civil servants and they are not in a non-ministerial department. I beg to move.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Coffey for her amendments that comprise this group, and I speak in support of them. They bring much needed clarity and constitutional discipline to the question of to whom the Secretary of State may delegate important public functions.

Clause 89, as drafted, grants the Secretary of State, as my noble friend has explained, broad discretion to delegate enforcement and other key responsibilities to a public authority. However, the current definition of that term is overly expansive. It could include not only departments under direct ministerial control, but also non-ministerial departments and other bodies with a degree of operational independence from the Government, which raises fundamental issues of accountability.

If enforcement powers, which could be potentially intrusive and far-reaching, are to be delegated, they should be exercised by those within the direct chain of ministerial responsibility. They are civil servants who operate under the authority of Ministers and who are, in turn, accountable to Parliament. Amendment 267ZA, therefore, rightly confines the scope of Clause 89 to public authorities that are comprised of civil servants and are not non-ministerial departments. That would ensure such functions are not handed to bodies that lack clear ministerial oversight or democratic accountability.

Amendment 267AA serves as a necessary consequential safeguard because it ensures that any legal substitution of the Secretary of State with another authority in the eyes of the statute is similarly limited to such core public bodies. Without this clarification, we risk a situation where statutory references to ministerial powers are extended, potentially without scrutiny, to entities with a more ambiguous constitutional status. This is not about casting aspersions on the competence or integrity of non-ministerial departments. Many do good work, but they are deliberately designed to operate at arm's length from Ministers. They should not be the recipients of powers that the public rightly expects to be exercised under ministerial responsibility.

[Lord Leong (Lab)]

My Lords, I thank the noble Baroness, Lady Coffey, for Amendment 266A, 267ZA, 267AA and 267AB.

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[Baroness Coffey (Con)]

My Lords, I shall speak also to Amendments 267BA, 267BB and 267D in my name. This is where we get to the composition of the board. In this group of amendments, the most important that I have tabled is probably Amendment 267D. It would remove the words “trade unions” but would insert “employees”. I am conscious that, of course, trade unions represent employees, but I was surprised by the composition of the board: that the word “employee” did not turn up as to who the members of the board were supposed to represent. To that end, one reason why I laid Amendment 267D is that we should remember that only 22% of UK workers belong to a trade union. That leaves 78% who, at the moment, may not necessarily be represented in the consideration of the advisory board. I think it is important that we rectify that.

It is possible that independent experts and others may be involved. By the way, this happens on a variety of other bodies—I think it is so on the Health and Safety Executive. Usually, the organisations representing employees are trade unions, but the point is made that it does not have to necessarily be trade unions. It could be professional associations—that has happened in the past as well, from my recollection.

In looking at the composition of the board, I noticed that my noble friends on the Front Bench have come up with a slightly different approach. Mine has tried to be pretty straightforward and to, in effect, insert an independent chair, who should be put forward to the relevant committee in the House of Commons for consideration before their appointment.

Deliberately, I have put in some specifications as to who should chair the board. Recognising that this is all going to be about enforcement of legislation, considering a wide range of issues including taking legal action when it has not been requested by people, by workers, I have specified that we should consider this board, which is going to be very important to the Secretary of State because there are a number of situations where the legislation says that the Secretary State “must” consult the advisory board. To that end, it would be worth while to have somebody who is a qualified barrister, a KC, but who shows a particular level of accomplishment without needing to look to tribunal judges or similar to chair that board. I beg to move.

[Lord Sharpe of Epsom (Con)]

My Lords, I shall speak to Amendments 267B, 267C and 268A standing in my name, and I also thank my noble friend Lady Coffey for introducing her amendment, and, of course, my noble friend Lady Noakes for signing them. Amendments 267B and 267C are not mere technicalities; they are a matter of principle. They are a matter of representation and ensuring that the new fair work agency advisory board truly reflects the full diversity and complexity of the modern UK labour market.

As drafted, Clause 90(4) proposes a tripartite board composed equally of individuals representing trade unions, employers and so-called independent experts. While the intention of the balance is commendable, the provision as it stands is both overly simplistic and insufficiently representative of the contemporary workface. As my noble friend highlighted, trade unions, for all their historic importance, now represent only 22.4% of employees across the United Kingdom, 12.3% of the private sector—so the bulk of those are in the public sector.

As my noble friend also pointed out, that leaves a staggering 77.6% of working people whose voices, interests and concerns are not captured through union representation. To restrict employee representation on this advisory board solely to trade union nominees is to exclude the overwhelming majority of the workforce. That is neither democratic nor representative. It is outdated.

This amendment seeks to rectify that imbalance by introducing a more inclusive and nuanced structure. It proposes that the board includes two representatives from the trade unions, rightly acknowledging their important role; three representatives of employees beyond the trade union movement, an expansion that ensures that the voices of non-unionised workers, gig economy participants, freelancers and precarious workers are also heard; five employer representatives to be appointed only after the Secretary of State has sought advice and recommendations from recognised business representative organisations, a process that will ensure that these appointments are rooted in sectoral legitimacy rather than political expediency; and three independent experts to provide critical objective insight grounded in academic, legal or practical labour market expertise. That structure would do three things. It would broaden representation, professionalise appointments and future-proof the board against the ever-evolving nature of work.

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[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful to all noble Lords for tabling these amendments. I will begin by addressing Amendments 267AC and 267BB, which relate to the chair of the advisory board. The Bill already provides for a strong and credible chair, and we are confident that appropriate appointments can be made under the current drafting. These amendments would significantly narrow the pool of qualified candidates and exclude highly capable candidates. There is no precedent for such restrictions among similar bodies.

For example, the current chair of the Equality and Human Rights Commission is the noble Baroness, Lady Falkner of Margravine. She brings deep expertise in public policy, regulation and public service to the role, but she is not a practising barrister. The focus should be on appointing the best candidate through a rigorous merit-based process, not restricting eligibility by profession. Moreover, there is no precedent for these amendments. Similar bodies, such as the Low Pay Commission and the Advisory, Conciliation and Arbitration Service, do not impose this level of restriction or require parliamentary approval. These models work precisely because they allow the Secretary of State to appoint individuals with diverse and complementary expertise. We fully support a strong, credible chair, but that is best achieved through a robust and flexible appointments process, not through rigid statutory constraints or exclusions.

On Amendments 267B and 267BA, tabled by the noble Lord, Lord Sharpe, and the noble Baroness, Lady Coffey, we have no objection in principle to a larger advisory board, but this should be balanced against an increased cost to the taxpayer. In practice, we anticipate there will be nine members of the board mirroring the make-up of the Low Pay Commission, which has operated successfully for 25 years. The current drafting provides flexibility so that the Secretary of State may appoint more than nine members, but it is unwise to lock a specific number into primary legislation without operational justification. The amendment would create a fixed number of advisory board members. Clause 90 already provides for what the amendment seeks to achieve.

Turning to Amendments 267C and 267D, these amendments risk compromising the balanced representation of the advisory board. The current drafting has been carefully chosen to reflect the social partnership model that has served the Low Pay Commission and ACAS well for so many years with a mixture of employer, union and independent representation. Amendments 267C and 267D also seek to broaden employee representation on the advisory board by reducing the emphasis on trade unions. Let me be clear: trade unions serve to protect and advance the interests of all workers, and they are best placed to represent workers’ interests on the advisory board. Moreover, the Secretary of State has broad discretion to appoint members with relevant expertise as independent experts. The Government are also committed to ongoing engagement with relevant stakeholders through a variety of formal and informal means, so the advisory board is only one part of the landscape.

This leads me on to Amendment 268A, also in the name of the noble Lord, Lord Sharpe. The independent experts are intended to bring deep subject matter expertise and a perspective not already captured by the other members of the advisory board. The existing drafting already protects against partiality, as an independent expert is a person who does not fall within the groups mentioned in Clause 94. The Bill already provides a sound and balanced framework for the board’s composition, one that is adaptable, proportionate and future-proof. I must therefore resist these amendments.

I must also respectfully resist Amendment 269, tabled by the noble Baroness, Lady Noakes, which risks undermining the very purpose of the advisory board. Transparency in governance is vital, and the Government share the commitment to ensuring appropriate parliamentary scrutiny. Placing a statutory duty on the advisory board to publish its advice could compromise that level of confidentiality and flexibility which we believe is essential for it to carry out its role effectively. Mandating a separate annual report also risks formalising what should remain a responsive advisory relationship, potentially limiting the board’s ability to offer genuine, timely and informal guidance on emerging issues.

Introducing even more reporting requirements would place a confusing and unnecessary reporting burden on enforcement teams, potentially diverting staff and resources away from front-line inspection and enforcement work, where they are most needed.

With this in mind, I therefore ask the noble Baroness to withdraw Amendment 267AC.

[Lord Sharpe of Epsom (Con)]

My noble friend Lady Coffey and I raised the increasing statistical irrelevance of the trade unions. I do not think the Minister addressed that point. She also seemed to write off the idea of the advisory board amendments that we proposed, on the basis that they would be expensive to the taxpayer. But Clause 90(6) says:

“The Secretary of State may pay such remuneration or allowances to members of the Board as the Secretary of State may determine”.


They could determine to pay nothing, presumably, so why would that be an expense to the taxpayer?

[Baroness Jones of Whitchurch (Lab)]

I thought I covered those points. As I said, we anticipate that the advisory board will have nine members, but we are building in some flexibility. We were trying to avoid locking a specific number into the primary legislation without any operational justification. I think that answers that point.

On the point about the unions, of course, if we stick with the social partnership model, they will be in a minority anyway. They will have the expertise and the knowledge to represent all employment issues on behalf of the workers.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Tuesday 10th June 2025 Lords Chamber

Moved by

[Lord Sharpe of Epsom]

213AA: Clause 56, page 78, line 15 at end insert—
“(2A) Where an access agreement relates to a hospital (within the meaning of section 275 of the National Health Service Act 2006), physical entry may be refused where—(a) patient safety, infection control, or clinical operations would be adversely affected,(b) the access purpose can reasonably be achieved by alternative means of communication, or(c) access would unreasonably disrupt urgent or time- sensitive medical activity.(2B) In determining whether access is reasonable in the context of a hospital, the Central Arbitration Committee must give significant weight to the factors set out in subsection (2A).”Member's explanatory statement
This amendment makes special provision for hospital workplaces, allowing physical access to be refused where it would impact patient safety, infection control, or clinical operations, or where access purposes can be met by alternative means. It requires the Central Arbitration Committee to give significant weight to these factors when considering access in hospital settings.

[Lord Sharpe of Epsom (Con)]

My Lords, this amendment would introduce necessary and proportionate safeguards to ensure that patient safety, clinical operations and infection control were not compromised by well-intentioned but potentially disruptive physical access to hospital environments by trade union representatives. Hospitals are not ordinary workplaces. They are places where critical decisions are made every minute, where vulnerable patients receive life-saving care and where medical professionals must operate in conditions that are tightly controlled in terms of both hygiene and procedure. Permitting physical access to union representatives who are not part of the clinical team and not governed by the same professional or ethical codes introduces risks that simply cannot be ignored.

These are not theoretical concerns. Infection control protocols exist precisely because hospitals deal daily with immunocompromised patients, open surgical wounds and the spread of dangerous pathogens. Entry by any individual not trained in and accountable to those protocols could result in the transmission of infections, the contamination of sterile areas or the unintended exposure of patients to harm. Moreover, hospital environments are highly sensitive to disruption. In intensive care units, emergency departments, operating theatres and maternity wards, even small delays or distractions can have life-or-death consequences. The presence of non-essential personnel in those spaces risks delaying clinical teams, congesting movement corridors, or interfering with time-critical procedures.

Physical access is not just a logistical matter; it can be a direct threat to a hospital’s ability to function safely and effectively. The amendment does not seek to deny trade unions the ability to communicate with members or fulfil their lawful functions. On the contrary, it would explicitly allow access to be withheld only where the access purpose could reasonably be achieved by alternative means; and in the 21st century, such alternatives, as we heard last week, are abundant. Virtual meetings, secure digital communications, designated liaison officers or scheduled engagement in non-clinical areas would all be viable channels for meaningful trade union engagement.

Hospitals are already under enormous pressure, so it is neither safe nor fair to expect them to open their most sensitive environments when those same objectives can be achieved by safer, more appropriate methods. Hospitals also bear legal and regulatory duties that cannot be suspended. Clinical professionals are legally obliged to safeguard patients and maintain secure environments. To require hospitals to grant physical access to non-clinical actors where such access could conflict with those duties would place hospital management in a difficult, nay impossible, position, risking litigation, regulatory sanction and, above all, the trust of the public.

The amendment further recognises the importance of proportionality. It does not seek to impose an outright prohibition; it would simply require the Central Arbitration Committee, when deciding on access disputes, to give significant weight to those clinical and operational factors. That is the right balance, respecting the legitimate role of trade unions while upholding the sanctity of hospital care. To oppose this amendment would be to ignore the distinct and high-stakes nature of hospital environments. No one disputes the value of union representation, but the right to organise must never override the duty to protect.

Hospitals are not platforms for industrial theatre; they are sanctuaries of healing staffed by professionals who need order, safety and focus to save lives. We have a duty to shield them from any policy that risks disrupting that mission. I urge the Committee to support the amendment and uphold the principle that access, however important, must never come at the expense of patient welfare. I beg to move.

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

I thank the noble Lord, Lord Sharpe of Epsom, for his amendment and I hope, perhaps, that the lack of contributions means that we will make some good progress in Committee today.

[Lord Sharpe of Epsom (Con)]

We have been making progress.

[Lord Katz (Lab)]

On the noise from a sedentary position, I mean in numerical terms, if not in substantive debate.

As the noble Lord, Lord Sharpe of Epsom, just outlined, Amendment 213AA seeks to makes specific provisions for access into hospital workplaces by specifying circumstances in which access may be reasonably refused. It also requires the CAC to consider and give more weight to these factors when deciding on access.

As we discussed last week, the Secretary of State will be able, through regulations, to set the circumstances that the CAC must take into account when making decisions on access, including potentially complex access arrangements in workplaces such as hospitals and other healthcare settings. These areas of detail will be subject to public consultation before the regulations are made and we will invite all interested parties to provide their views on these matters when we launch our consultation.

It is a complex policy area that will involve detailed practical considerations. It is not as though, at the moment, we do not have strong and healthy engagement with a number of different trade unions in all manner of healthcare settings, including hospitals. We have trade union access, involvement and activity in complex workplaces, including hospitals. Special consideration is given to the importance of keeping them sterile and safe, particularly for those who have immunocompromised conditions and, indeed, anybody who is a patient in that setting. This can and has been achieved, and it is perfectly reasonable for the CAC, following consultation, to make regulations that set this. As I said, this is not a policy area that is not already well rehearsed and understood.

The noble Lord, Lord Sharpe, is right that hospitals are particularly special settings but they are also workplaces. The NHS employs large numbers of people and has a very mature industrial relations framework within it. It is certainly not implausible that, in consultation with all interested parties, the CAC could come to a perfectly reasonable compromise on access.

The Government also feel that it is not appropriate to make specific provisions for just this one kind of workplace—hospitals—prior to consultation. We are talking about hospital workplaces as opposed to, say, general practitioner or dental surgeries or other areas where you have regard to clinical safety and the sorts of considerations that the noble Lord talked about. Given that, I ask him to withdraw his amendment.

[Lord Sharpe of Epsom (Con)]

I am grateful to the noble Lord for his answer, but a little disappointed. His words largely give away why the Government should accept this amendment. I believe he just used the phrase “reasonable compromise” with regard to the Central Arbitration Committee, whereas the amendment just says

“must give significant weight to the factors set out in subsection (2A)”.

The practical impact of both those phrases is much the same.

So I am disappointed that the Government have chosen to reject this amendment, which is modest, carefully constructed and aimed at protecting one of our most vital public services. We were not asking for a sweeping exclusion, nor undermining the rights of trade unions or seeking—to use the noble Lord’s phraseology—to restrict involvement. We proposed a targeted safeguard that simply recognises the unique, high-risk nature of hospital environments. I will not press the point now, but we reserve the right to return to this in due course. For now, I beg leave to withdraw.

Amendment 213AA withdrawn.

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Moved by

[Lord Sharpe of Epsom]

215ZA: After Clause 56, insert the following new Clause—
“Section 56: consultation requirement(1) Before section 56 comes into force, the Secretary of State must consult such persons as they consider appropriate, including—(a) representatives of trade unions, and(b) representatives of employers,on the use of digital communication methods as part of access agreements under section 56.(2) The Secretary of State must publish the outcome of that consultation.(3) Section 56 may not come into force until the outcome of the consultation under subsection (2) has been published.”Member's explanatory statement
This amendment requires the Secretary of State to consult on the role of digital communication in trade union access agreements and to publish the outcome before the relevant provisions come into force.

[Lord Sharpe of Epsom (Con)]

My Lords, Amendment 215ZA is in my name and seeks to insert a new clause following Clause 56. This amendment would require the Secretary of State to consult relevant stakeholders, including representatives of both employers and trade unions, on the use of digital communication methods as part of trade union access agreements under Clause 56. Furthermore, it would require that the outcome of that consultation be published and that the provisions of Clause 56 may not come into force until that has happened.

Let me say at the outset that this is a moderate, practical and entirely necessary amendment. It does not challenge the principle of union access. It does not frustrate the core intent of the legislation. What it does is inject a degree of transparency, rigour and, crucially, consent into a provision that, as it stands, risks doing significant unintended harm to employers and employees alike.

I refer to the remarks made last week by the noble Lord, Lord Katz, during Committee. I thought they were illuminating and, frankly, somewhat concerning. The noble Lord assured us that the Government intend to consult further on the digital provisions. But here is the critical point: the legislation as currently drafted allows Clause 56 to come into force before that consultation has occurred and before any regulations are laid. In effect, this Committee is being asked to pass a framework of legal obligations that have real-word consequences for access to workplaces and digital systems without knowing the rules that will underpin them. This is legislation in reverse, because it enables powers first and critical definitions and safeguards later.

Let us take the words of the noble Lord, Lord Katz, directly. He said that

“the precise details of how this will work in practice will be set out in secondary legislation following further consultation”.

But secondary legislation, as we have discussed many times over the course of this Bill and others that this Government are putting through, is not subject to the same scrutiny as primary legislation. It is not amendable. It can be laid quietly and approved via negative procedures. That is why we must build the consultation obligation directly into the primary legislation. Without it, we risk leaving employers, particularly small and medium-sized employers, exposed to obligations they neither understand nor have had the opportunity to influence.

The noble Lord acknowledged that digital access was not included in the original drafting of the Bill and so was not debated during the Commons Committee stage. It was inserted at a late stage in the legislative process. When pressed on this by my noble friend Lady Coffey last week, the noble Lord could offer no justification for the timing or the rationale behind that late change. Instead, we were told that

“in 2025, the idea that access to a workforce would not include digital channels is, frankly, fanciful”.—[Official Report, 5/6/25; cols. 984 and 985.]

Again, those were the noble Lord’s words.

That may well be the case, but policy made on assumptions and generalities is not good policy. What exactly will “digital access” mean in practice? Will unions be allowed to email employees directly? Will they be granted access to internal mailing lists? What about secure internal platforms or workplace intranets? Will employers be compelled to share employee contact details or act as intermediaries in the distribution of union materials? What safeguards will exist to protect commercially sensitive information, particularly in small firms that operate on a single device or a shared system?

My noble friend Lord Leigh of Hurley also raised a very pertinent point last week. He said:

“The Government are asking the House of Lords tonight to pass legislation that will allow a third person the right to access an employee’s computer … without any controls, references or parameters”.—[Official Report, 5/6/25; cols. 984-85.]


That is not mere rhetoric but a credible reading of the Bill in its current form. If that is not the Government’s intent, we need clarity in law, not just reassurance from the Dispatch Box.

The noble Lord, Lord Katz, tried to deflect concerns by pointing to data protection legislation, but as many in this Committee know only too well, data protection laws regulate the use of personal data; they do not in themselves govern the parameters of access rights under trade union law. Nor do they address the central concern here: that employees and unions need agreed, defined rules of engagement for digital contact in the context of access rights. Indeed, the Government’s apparent position is that all this can be worked out later. That is simply not acceptable. When legislation interferes with the operation of businesses, the integrity of secure systems and the balance of power between employers and unions, it is not enough to say, “Trust us to sort it out in regulations”.

Let me also address the claim that consultation will happen eventually. Of course we welcome that promise, but good process means consulting before rules take effect, not after. It means asking those affected what is reasonable before forcing them to comply, and that is all this amendment does. It would require the Secretary of State to consult relevant stakeholders, including trade unions and employers; that the outcome of that consultation be published in the interests of transparency and trust; and that the relevant part of the legislation, Clause 56, cannot come into force until that is done. That would give everyone fair notice. It would ensure meaningful engagement and prevent the scenario we are currently hurtling towards: a system through which access rights could be imposed by the Central Arbitration Committee, including digital access, without any shared understanding of what that entails.

Access must be delivered in a way that is workable, proportionate and appropriate in each workplace context. In many modern workplaces, digital contact is indeed the most effective route, but in some environments, especially among some SMEs, it also represents a point of vulnerability both for the operations and for data security. I beg to move.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I thank the noble Lord, Lord Sharpe, for Amendment 215ZA, which seeks to commit the Government to consult with trade unions and representatives of employers on the detail of Clause 56, which covers trade union right of access. In particular, it would require the Government to consult on the use of digital communication as part of access agreements.

I can confirm that the Government have already committed to consulting with both trade unions and employers’ representatives on the framework and conditions of access, including on the details of that digital access. I can confirm that we will not bring forward secondary legislation on this before we have consulted. While I am grateful to the noble Lord for tabling this amendment, and I look forward to the upcoming debates on Schedule 6 and Clause 57, I must ask him to withdraw his amendment.

[Baroness Jones of Whitchurch (Lab)]

I can assure the noble Baroness that all the main business organisations are consulted as a matter of course, and many of our consultations are available more widely. I take on board her question about the black community and I will ensure that, where it has representative organisations, they are included.

[Lord Sharpe of Epsom (Con)]

My Lords, I am very grateful to the Minister for her answer. Just to be clear, as I understand it, that means that this aspect of the Bill will not be commenced until consultation has taken place. As my noble friend has just suggested, this begs the question of exactly who will be consulted and how. I look forward to hearing more from the Minister on that. I do not expect her to be able to answer that now, but it would be very welcome if she could outline the details of this consultation in a letter in due course. However, I am grateful that she has committed to having the consultation before the commencement of this provision. I beg leave to withdraw the amendment.

Amendment 215ZA withdrawn.

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Moved by

[Lord Sharpe of Epsom]

215AZZA: After inserted paragraph 13A(5), insert—
“(5A) Where the CAC is satisfied that changes to the workforce materially affect the composition of the bargaining unit, it may direct the employer to provide updated specified information before the close of any ballot.”Member's explanatory statement
This amendment enables the CAC to request updated workforce information from the employer where there have been material changes, ensuring that the ballot reflects the current composition of the bargaining unit.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Baroness for her explanation of the amendments, particularly the government amendments. However, she argued that this should have been something of the nature of a general debate. The reason why the amendments were degrouped in the other cases is because they all relate to the government amendments, which the Government are trying to pass off as technical when they are anything but. This deserved a discrete debate and that is what it is going to get. I will have to speak at some length, because there is a great deal to cover, for which I apologise in advance.

I will start with Amendment 215AZZA, which is essential to ensure that the union recognition ballot remains fair and truly representative of the bargaining unit at the time of the ballot. The Government’s current position, which locks in workforce data as of the application date and refuses to permit updates, rests on a false premise, and that is that the workplace is static and unchanging; this is simply not the case.

Many industries, from hospitality and retail to logistics and manufacturing, experience significant changes in their workplace composition over time. Employees leave, new workers are hired and entire teams can be restructured in response to market demand or seasonal shifts. By refusing to allow the CAC to request updated workforce information, the Government’s approach risks ballots that are fundamentally out of date—an electoral exercise held not on the actual workforce but on a ghost workforce that no longer exists.

Our amendment would give the CAC the power to direct employers to provide updated workforce information where material changes occur, allowing the ballot to reflect the current reality. This is not a matter of administrative tidiness. It protects workers from having union recognition based on outdated data imposed on them or from being excluded from the democratic process entirely because they joined the company after the arbitrary cut-off.

Furthermore, the CAC has a proven track record of acting promptly and impartially to ensure that ballots are fair and accurate, so the amendment would strengthen rather than weaken its role in protecting workers’ democratic rights. Without this power, the Government’s framework risks disfranchising many workers and undermining the confidence in the entire union recognition process. I have to say that noble Lords opposite frequently cite democratic concerns about current employment law, and if they are serious and not just paying mere lip service to that notion, they should back the amendment and the others to which I am speaking.

Amendment 215AZZB seeks to correct a fundamental injustice that is embedded in the Government’s Amendment 215A. The Government are excluding any worker who joins the bargaining unit after the application day from participating in the recognition ballot. This exclusion is indefensible. It denies newly hired employees any say in a process that will directly impact their working conditions, their representation and potentially their relationship with their employer. The principle at stake is simple: democratic fairness requires that those affected by a decision have the opportunity to participate in making that decision. To exclude workers based solely on an arbitrary application date denies them this right. It is not, as the Minister asserted just now, fair; it risks imposing union recognition —or, conversely, denying it—on employees who are not allowed to express their views.

In sectors where employee turnover is high or where the workforce expands rapidly due to seasonal demand, the Government’s approach risks disfranchising a significant portion of the workforce. These workers are often the most vulnerable and most in need of representation. Our amendment would ensure that all workers employed within the bargaining unit up to the close of the ballot would be eligible to vote. This aligns with the recognition process, with democratic principles and with the reality of modern employment patterns. To deny these workers a voice is to undermine the legitimacy of the entire process.

Amendment 215AZZC seeks to reinforce the need for fairness by ensuring that newly hired workers are not automatically excluded from the recognition ballot, provided they are employed before the ballot concludes. Again, we believe it is untenable for the Government to argue that workers hired after the application date should have no say in a process that determines their representative status and the terms and conditions that govern their work. In industries that are characterised by rapid hiring, seasonal peaks or unpredictable labour needs, the workforce on the application date may bear little resemblance to the workforce at the time of the ballot. By allowing all workers employed up to the ballot’s close to vote, we uphold principles of inclusivity and fairness, ensuring that this ballot truly reflects the views of those it affects.

Amendment 215AZZCA recognises the realities of sectors characterised by high seasonal or cyclical employment volatility, such as retail, hospitality and logistics. These industries often see dramatic fluctuations in employee numbers, with staff numbers sometimes doubling or halving within a matter of weeks or months. The Government’s proposals fail to take this volatility into account. They impose rigid cut-offs that disfranchise workers who join after the application day, even when their numbers materially affect the bargaining unit’s composition. This is not a marginal issue. In such sectors, the workforce on the application day may represent only a fraction of the employees who will work there over the coming months.

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[Lord Lucas (Con)]

I understand that, but it still requires something in the Bill to allow a minimum number. We can return to that matter on Report.

[Lord Sharpe of Epsom (Con)]

I beg leave to withdraw the amendment.

Amendment 215AZZA (to Amendment 215A) withdrawn.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Thursday 5th June 2025 Lords Chamber

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, following the invitation from the noble Baroness, Lady Bennett, I do feel obliged to say some very brief words on this group of amendments. I was at the helm of the TUC when we produced an AI manifesto for workers and that manifesto was AI-positive and optimistic about the potential for AI to help us create more satisfying work for workers and also boost productivity if we share those gains fairly. But it was also realistic, because the real experience of workers at the sharp end in terms of technology more generally is that it has often been used to drive, for example, the gig economy that this Bill proudly is looking to tackle in terms of insecurity and low pay.

Workers also experience oppressive surveillance, with Amazon being right at the top of the rogues’ gallery in that respect. And, of course, technologies such as facial recognition have been developed that bake in race discrimination. So, of course workers are right to be wary and concerned. That is why one of the key demands in that AI manifesto was, as the noble Lord has talked about before, the right to a human review when it comes to decisions about hire and fire. The right to a human review is a fundamental human right. Critically, the manifesto called for a voice for workers in agreeing new technology, including AI agreements, so that workers’ concerns are addressed directly and agreements are made with employers about how AI is introduced and used.

Given that, in a very welcome sense, there has been such broad interest and concern expressed in this short debate, can the Minister reassure us that we will be addressing not just problems such as the gig economy that we saw growing in the 20th century but the new challenges of the 21st century, where workers urgently need protection?

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lord Holmes of Richmond, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Bennett of Manor Castle, for their amendments in this group and for their thoughtful introductions and contributions to what is clearly a vital and timely discussion around the future of artificial intelligence in the workplace.

Amendments 148, 149 and 150, tabled by the noble Lord, Lord Clement-Jones, seek to define AI systems in statute, mandate a workplace AI risk and impact assessment, known as a WAIRIA—I was not sure how to say it—and impose statutory consultation duties on employers prior to the deployment of such systems. In my respectful opinion, these measures go a bit too far at this stage.

To begin with the proposed definition of an AI system, I fully accept the need for clarity in legislation, but the definition offered here is overly expansive and risks capturing a vast range of tools, from predictive text and email sorting to payroll systems and basic data analytics. Technology evolves rapidly, and we think that any attempt to lock such a broad and fluid concept into rigid statutory language at this point risks hindering innovation and forcing employers into compliance regimes for systems that may pose no meaningful risk at all.

On the proposal for workplace AI risk and impact assessments, the intentions behind this are understandable. However, the execution here reads a little more like a blueprint for a full-scale regulatory regime rather than a light-touch safeguard. Employers would be expected to carry out detailed documentation, consult staff, assess and monitor impacts on mental health, contractual terms, pay and more, and then repeat that process at least annually or upon any system change—and that is no small task. For large employers it might be possible, but for SMEs it would surely be burdensome and, in many cases, entirely unworkable. Our concern is not with the principle of transparency or fairness but with the disproportionate bureaucratic weight that these provisions would place on businesses, particularly those outside the technology sector, which simply may not have the capacity or technical knowledge to meet such a standard.

The third proposal, which is a statutory duty to consult employees or trade unions at least one month before deploying AI systems, again assumes a degree of foresight and technical certainty that may not always exist in practice. The development and use of AI systems is often iterative, and definitions, use cases and impacts evolve over time. Requiring formal consultation at every turn risks paralysing technological progress and may well deter even the cautious adoption of beneficial systems.

I recognise that the amendments are rooted in a desire to protect workers and uphold ethical standards, but we have to resist the temptation to reach immediately for sweeping, front-loaded legislation in a domain that is still very much in its infancy. Regulation in this space, as I am sure all noble Lords would agree, must be agile, proportionate and grounded in practical reality.

We are entering a new phase where AI is no longer confined to research labs or boardrooms. It is appearing across ordinary workplaces, public and private alike. There are tremendous opportunities to improve productivity, streamline operations and foster collaboration between human workers and AI tools, yet we think many of the proposals in this group—including those seen elsewhere, such as the mandatory appointment of AI officers, rights to personalised algorithmic explanations, opt-in clauses, and statutory principles of fairness and explainability—share a common shortcoming, which is that they attempt to legislate about highly technical and fast-evolving systems with a degree of rigidity that may prove counterproductive.

We on these Benches share the Government’s ambitions to become a world leader in this space, and therefore we must remain mindful of all those factors, as well as of existing protections. Several of these proposals risk duplicating duties already present under UK GDPR, data protection law and various existing employment safeguards. The creation of overlapping, inconsistent or duplicative regimes could confuse employers and regulators alike, all while doing little to prevent truly harmful practices.

While we acknowledge all the opportunities that are potentially offered by AI, we must remain vigilant to the risks that it poses, including algorithmic bias, opacity and decision-making—which we have heard a lot about—and the misuse of personal data. But that vigilance must be coupled with regulatory restraint. We ought to be cautious to not impose premature, overly burdensome rules that stifle innovation and overwhelm well-intentioned employers, particularly in low-risk use cases, such as rota planning, document handling or payroll automation.

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[Baroness Barran (Con)]

My Lords, it will amaze the Committee to know that I do not support the amendments in the names of the noble Lord, Lord Hendy, and the noble Baroness, Lady Jones of Moulsecoomb. This could be a golden moment—I do not want to spoil it before it happens—where the Minister and I are on the same page. We will hold our collective breath.

I will make a few points. It was helpful and genuinely interesting to hear the history, context and examples that the noble Lord gave in relation to collective bargaining, but the fundamental concern that we have is that we find it hard to see how many of those—he talked about zero-hour contracts, for example—really apply to public sector employees across our schools and academies.

Our sense is that, in a world in which the Secretary of State receives advice from the negotiating body—the SSSNB, although I noticed that in my amendment on the Marshalled List I cunningly dropped one of the S’s, which makes it easier to say—the principle that the Secretary of State retains discretion is a good principle to stick to. I think the noble Lord explained that there could be ways in which the Secretary of State could overrule, but I feel that that makes it unnecessarily complicated. Perhaps more importantly, it fundamentally changes the relationship between unions and employers, and risks—perhaps more than risks—creating a much more oppositional relationship, where trade unions on one side and local authorities and trusts on the other are directly opposing one another in these negotiations. I also question whether it is practical, given the nature of our schools landscape.

Can the Minister clarify a couple of points? Amendments 153, 159, 160, 162, 167 and 170—the amendments that would leave out “employment”—would make the clause broader, to cover staff who are under contract rather than under contract of employment. Our concern is that that could cover people such as casual exam invigilators, peripatetic music teachers or staff who are under contract to look after the grounds. I would be grateful if she could confirm that the remit of the Bill refers to “terms of employment” as we understand it to mean.

Amendments 155 to 158 say to leave out “or is not”. This relates to the Secretary of State’s ability to prescribe the SSSNB remit through regulations. As the Bill is currently drafted, the Secretary of State can say that something is or is not to be treated as remuneration or a term of employment. For example, at present it could be said by the Secretary of State that an honorarium payment is not to be treated as being within the SSSNB’s remit. Removing “or is not” would mean the Secretary of State would have to be very specific indeed about what is to be considered remuneration. The current wording allows enough specificity about what is—and, importantly, what is not—within the remit of the SSSNB. We would argue that it is very important that that wording remains as is to avoid unnecessary confusion, tension or debate on its scope.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Hendy, the noble Baroness, Lady Jones, and my noble friend Lady Barran for their contributions to this debate. I commend the noble Baroness, Lady Jones, for getting rich people and yachts into a debate on the School Support Staff Negotiating Body. That is no mean achievement and she deserves our congratulations. I very much enjoyed the history lesson from the noble Lord, Lord Hendy. I learned a lot and I am very grateful, but I am afraid I have not necessarily arrived at the same conclusions or been swayed by his arguments.

I turn to the amendments. Amendment 153 seeks to confine the School Support Staff Negotiating Body’s remit solely to matters defined under Section 178(2) of the Trade Union and Labour Relations (Consolidation) Act 1992, effectively transforming the body from a consultative forum into a collective bargaining entity. It seems to us that this is a dangerous and fundamental shift. The negotiating body was designed to provide flexible, pragmatic consultation tailored to the diverse and complex nature of school support staff roles across a variety of settings. As we have heard, these range from small rural primaries to large multi-academy trusts. To impose the rigid and often adversarial legal framework of collective bargaining, as defined by industrial law, is to ignore the realities and needs of schools and academies. It risks bogging down negotiations in legal disputes and inflexible procedures that seem wholly unsuited to education.

Secondly, it dangerously extends the remit to include those working under contracts other than contracts of employment. That would create a vague and problematic category that threatens to blur employment relationships, dilute employer responsibility and foster legal uncertainty. Introducing such ambiguity would lead to confusion, disputes and potential litigation, detracting from the core mission of supporting school staff effectively.

Thirdly, Amendment 154, signed also by the noble Baroness, Lady Bennett of Manor Castle, demands a formal dispute resolution process involving conciliation by ACAS and binding arbitration by the Central Arbitration Committee. While dispute resolution is important, mandating binding arbitration at multiple levels removes essential local discretion and flexibility. Schools and trusts require the ability to resolve issues quickly and pragmatically without resorting to protracted and costly arbitration. This amendment risks entrenching lengthy legal processes that are incompatible with the fast-moving and diverse educational establishment and environment.

Additionally, expanding the negotiating body’s remit to include discipline, grievance procedures and any “other matter” agreed by the parties is dangerously vague. It threatens to overload the body with operational matters that should be handled locally by employers, who understand their context best. It risks creating bottlenecks in decision-making, delaying essential actions and ultimately frustrating both staff and management. In essence, these amendments push for a highly legalistic industrial relations model that is inappropriate for school support staff and the complex, varied environments in which they work. It will increase bureaucracy, create inflexibility and heighten the risk of industrial conflict rather than fostering practical co-operation.

Building on these concerns, I will emphasise the significant risk of unmanageable negotiations that other amendments in this group introduce. If the negotiating parties are free to consider any payment, entitlement or matter without clear limits, the scope of discussions could become unwieldy and unfocused. Instead of concentrating on core issues, such as fair remuneration, reasonable terms and meaningful career development, negotiations would risk becoming mired in peripheral or impractical demands. This would risk slowing down the entire process, making it less efficient and ultimately less effective in delivering tangible benefits for school support staff.

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[Lord Sharpe of Epsom (Con)]

Can I seek a point of clarification on the noble Lord’s clarification, which I am very grateful for? Was his argument that extending and future-proofing—I think those were his words—this for the self-employed is because he feels that there will be more self-employed people as a consequence of this Bill?

[Lord Hendy (Lab)]

No, not at all. Growing self-employment has been a trend for the last 20 years, which has perhaps accelerated a bit in the last 10 years. The worry is that school employers may adopt the device of allocating work to the self-employed, rather than to employed persons. If that is the case, there ought to be room for the negotiating body to deal with that issue and the consequences of it. I beg leave to withdraw my amendment.

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[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Baroness Coffey for her amendment and for her thorough and comprehensive introduction to it. I also thank the noble Baroness, Lady Finlay of Llandaff, for her perspective and experience, which are very valuable contributions to this debate.

This is a measured and constructive idea. As we have heard, the social care workforce is highly mobile, and too often valuable training is overlooked or repeated when someone moves to a new role. A centralised system that records training could easily help ensure that skills are recognised across the sector, improve efficiency and reduce unnecessary duplication. As the noble Baroness, Lady Finlay, pointed out, in many cases a unique expertise would be brought that deserves to be recognised. It would also show respect for the professional development of care workers. It would signal that their time, effort and learning are worth tracking and carrying forward and are not lost at the point when they change jobs.

I of course acknowledge that the practical arrangements for such a scheme would need careful planning, but the principle is sound. Enabling continuity in workforce development would support retention, raise standards and bring consistency to a fragmented sector. I seriously hope that the Minister is listening.

[Baroness Merron (Lab)]

My Lords, I thank all noble Lords for their contributions to the debate on Amendment 200A. I certainly can assure the noble Lord, Lord Sharpe, that I am listening very closely. I am grateful to the noble Baroness, Lady Coffey, for tabling this amendment, which would require social care providers to ensure that their employees have access to any scheme logging training achievements that Social Work England may establish. Let me say at the outset that I understand the intent of the amendment, which is to give care workers development and extend their skills. As the noble Baroness, Lady Finlay, and the noble Lords, Lord Sharpe and Lord Palmer, said, this would contribute to what this Bill seeks to do, which is to improve retention, the quality of work and the regard for care workers, and encourage recruitment, among many other very positive outcomes. However, unfortunately, the amendment does not do the job that I know is intended, because Social Work England does not regulate the work of social care workers, but only that of social workers. The amendment as drafted gives us difficulty, but I do completely understand what it tries to do.

Let me respond to a number of the points that were made. There are currently no plans to add to the existing regulation of care workers in the sector undertaken by CQC, but let me refer to the care workforce pathway, which may be of interest and assistance to a number of the noble Lords who contributed. The care workforce pathway is the first universal career structure for the adult social care workforce. On 9 April this year—not so long ago—my department published the expansion and revision of the care workforce pathway, which includes the crucial role categories for registered and deputy managers and personal assistants, as well as the new enhanced care worker role. That speaks to some of the issues the noble Baroness, Lady Finlay, raised about the social care workforce. When we talk about the social care workforce, this is a wide group; it is a team of people, and they are all working to support whoever is in receipt of their care.

On the issues raised by the noble Baroness, Lady Coffey, and the noble Lord, Lord Palmer—in particular, how we recognise experience and training—I completely take the point. I can give the assurance that the department is already undertaking work on skills and learning and developing a digital skills record, which will provide a permanent and verifiable record of skills and achievements for members of the adult social care workforce. Most importantly, to the point raised by the amendment of the noble Baroness, Lady Coffey, it can be shared with new or potential employers, which can help to reduce unnecessary duplication of training and make taking on new recruits faster, which is key. So, we are all in extreme agreement about the importance of training for the social care workforce, if not about the actual letter of the amendment.

On regulations being able to provide for other matters relating to employment, as we discussed in the previous group in respect of Amendment 185, the Bill already sets out that regulations will be subject to the affirmative procedure in respect of matters that will be included in the negotiating bodies’ remits, which can of course include training and other matters. As a gentle bit of clarification for the noble Baroness, Lady Finlay, I was making clear in the previous group that any regulations in this regard are subject to the affirmative procedure. I was not being as specific as I know she hoped I would be, but it is important to make that position a bit clearer. So, on any matter within its remit, the negotiating body could determine employee entitlements, which could be incorporated into relevant workers’ contracts.

The noble Baroness, Lady Coffey, asked about apprenticeships. Just last week, the Department for Education announced the launch of a health and social care foundation apprenticeship, set to begin from August 2025, which I am sure we will all welcome. This will offer young people a paid route into the health and adult social care sectors; I will not be alone in very much welcoming that.

The noble Lord, Lord Sharpe, talked about professional development and transferring across jobs. That principle is certainly being included in our health and social care sector, in respect of the digital skills record. As the noble Baroness, Lady Finlay, said, this is a teamwork approach based around whoever needs the care. It requires different skills, which can be transferrable across different jobs, so the noble Lord makes a fair point.

With that, I hope that the noble Baroness, Lady Coffey, will agree to withdraw Amendment 200A.

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[Baroness Meacher (CB)]

My Lords, I support the noble Baroness, Lady O’Grady. I am not a trade unionist, but I am very aware that there are sectors of the economy that are not unionised. Can the Minister inform the House whether there are sectors that are disadvantaged in terms of wage levels, and whether there are plans to unionise them?

[Lord Sharpe of Epsom (Con)]

My Lords, I thank all noble Lords for their contributions to this debate, which has been very interesting. The noble Lord, Lord Hendy, talked at some length about delivering a new deal for working people. He ranged fairly freely, so I might, too.

Did noble Lords opposite notice that a report published yesterday showed that there are now 150,000 fewer jobs since the Government took power? It is all very well delivering a new deal for working people, but there will be fewer of them, and this Bill will contribute to that. Noble Lords may not have seen it because it has only just come out, but a British Retail Consortium survey has just been published which shows—I am sure we will return to this theme next week—that half of retail directors now think they will reduce hiring, and 70% say the ERB will have a negative impact on their business.

Frankly, I am slightly staggered at the noble Lord’s Amendment 260, which seeks to return us to various EU standards, given that EU unemployment is, of course, generally significantly higher than it is in this country. Is that what the noble Lord aspires to? I am sure he does not, but that is how it looks.

The proposal to create statutory joint industrial councils raises significant concerns, not least the proliferation of new public bodies at a time when government and regulators are already stretched. Each of these councils would require administrative infrastructure, governance mechanisms, sector-specific expertise and ongoing support from both ACAS and the Secretary of State. This approach risks duplicating existing frameworks. We already have voluntary collective bargaining structures, recognised trade unions and sectoral engagement mechanisms in many industries. Superimposing a statutory model could complicate rather than enhance industrial relations, particularly in sectors where informal or local agreements are working effectively.

There is also the issue of flexibility. The statutory model risks creating rigid sectoral definitions that may not reflect the realities of modern hybrid or cross-sector employment. The labour market today does not always fit neatly into traditional categories, and it is unclear how the Secretary of State, even with ACAS guidance, would determine sectors without inadvertently excluding or misclassifying employers and workers. We must not overlook the potential for conflict or delay. Setting up these councils, negotiating procedures and achieving consensus across large and diverse sectors could slow down progress on pay and conditions, rather than speeding it up.

That is not an argument against collective bargaining. It is an argument for targeted, effective solutions that reflect the complexity of today’s economy, not a revival of structures drawn from legislation that is nearly half a century old. The world has changed. Where stronger bargaining is needed, let us work through existing mechanisms and invest in enforcement, rather than defaulting to the creation of statutory councils that may struggle to function as intended. I look forward to hearing from the Minister.

[Baroness Jones of Whitchurch (Lab)]

I thank my noble friends Lord Hendy and Lord Barber of Ainsdale for Amendments 203, 257, 260 and 322. I hope, despite my noble friend Lord Hendy’s concerns, that he recognises that this Bill is a major step forward in delivering a new deal for working people, exactly in the way our manifesto and the King’s Speech set out. I would also say that this is only the first step in our proposals, as we have made clear all along that the “make work pay” programme will, over time, roll out to a whole set of other issues we have flagged up as we have gone through this debate.

Turning to Amendment 203 in the name of my noble friend Lord Hendy, I am pleased to be having the debate on sectoral collective bargaining and to set out the Government’s commitment to supporting it through the introduction of fair pay agreements in social care and the school support staff negotiating body, which we have just debated in detail. We want to ensure that the labour market works for everyone. A key aspect of this is allowing workers to participate in collective bargaining to improve pay and conditions. However, where labour markets are operating effectively or where existing collective agreements are working well, the Government recognise that sectoral collective bargaining may not be the best solution—I think this was the point the noble Lord, Lord Sharpe, was making.

The amendment would enable the Secretary of State to establish statutory joint industrial councils in unspecified areas without parliamentary scrutiny or appropriate safeguards. We are committed to starting with fair pay agreements in the social care sector to address the stark and specific issues in the vital sector, which we have already debated. As part of our ongoing policy work, we are exploring how future sectors could benefit from sectoral collective bargaining. However, we first want to learn from this process to improve our policy approach and ensure that future sectoral collective bargaining arrangements most effectively respond to the complexities of the modern workforce. In the meantime, I assure my noble friend that we are committed to supporting sectoral collective bargaining and recognise the positive contribution it can make to the British economy.

Amendment 257 in the name of my noble friend Lord Hendy would add duties of promoting collective bargaining to ACAS’s remit. An existing ACAS code of practice provides guidance on the disclosure of information to trade unions for collective bargaining purposes. I have listened carefully to what my noble friend said, and I am afraid we will have to disagree on this. We do not support the amendment; we think it is important that ACAS maintains its independence and impartiality between employers and unions. We are concerned that the current status could be compromised by this amendment.

On Amendment 260 in the name of my noble friend Lord Hendy, we have debated the school support staff negotiating body and the social care negotiating bodies. A benefit of these sectoral bodies will be broad sectoral agreements. We expect that many workers in these sectors will be able to benefit from collective agreements for the first time. We intend to learn from the first fair pay agreement process in social care and the SSSNB, before considering rolling out agreements in other areas, as I have said.

Additionally, this amendment requires the Secretary of State to consult on and bring forward this action plan within six months. It is important that such policy matters have enough time for consideration, and we are keen that employer organisations and trade unions prioritise the consultations committed to in Make Work Pay, which will follow Royal Assent to the Bill.

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[Lord Sharpe of Epsom (Con)]

My Lords, this has been a most interesting debate. It is a pleasure to follow the noble Lord, Lord Goddard, even if he does not agree with my amendment in this group. Not that my noble friend Lady Coffey needs any defending, but I think she developed her theme admirably, which is surely the point of our being here. I thank my noble friend Lord Jackson of Peterborough for introducing our noble friend Lady Noakes’s amendments, and for his excellent historical perspective. I thank my noble friends—perhaps I should call them my noble comrades —Lord Leigh, Lady Lawlor, Lord Moynihan and Lady Coffey for their contributions.

This clause may seem straightforward, and even beneficial at first glance, but its practical and legal implications reveal it to be unnecessary, burdensome, ideologically charged and fraught with uncertainty. For these reasons, it should be removed from the Bill. First, it is important—others have made this point—to acknowledge that workers’ rights to join trade unions are already comprehensively protected by our existing legal framework. These protections are well established in legislation such as the Trade Union and Labour Relations (Consolidation) Act 1992, referred to by my noble friend Lady Lawlor, and the Employment Rights Act 1996.

These rights are well understood by workers, employers and unions alike, and information on these rights is widely available through multiple channels, including unions themselves, ACAS and legal advisers. Mandating a new written statement does not create or clarify any new rights; it simply duplicates what is already clear, adding unnecessary complexity without addressing any real problem.

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[Baroness Jones of Whitchurch (Lab)]

We can have a long discussion about that, but if we are talking about mandates, it may well be argued that probably Baroness Thatcher did not have that kind of mandate either. The fact is that we won that election with a huge majority, and I am very sorry that the party opposite lost so badly. They might want to reflect a little bit more on why that was, because some of the issues that noble Lords have been talking about in relation to the state of our economy are exactly what we inherited from the previous Government. Those issues are absolutely the result of that Government’s economic policies and not ours. We have been taking great steps to improve the situation. While I am on that issue, I should say that, as a result of this Government’s actions, we had the fastest-growing economy in the G7 at the start of this year; we have done three trade deals in three weeks, with India, the US and the EU; interest rates have been cut four times—

[Lord Sharpe of Epsom (Con)]

The Minister is aware, of course, that interest rates are independently managed by the Bank of England.

[Baroness Jones of Whitchurch (Lab)]

I make my case. The only reason those interest rates were cut was that our economy has been improving. Some £63 billion of private investment was announced at the investment summit last year. Introducing this Bill within 100 days will boost protections and quality of work for the lowest-paid, raising living standards across the country and creating opportunities for all.

I turn to the actual amendments. Amendments 205 and 207, in the name of the noble Baroness, Lady Noakes, would introduce exemptions to this measure based on the size of the business. The new duty on employers to inform all employees of the right to join a union is a key part of the Government’s wider commitment to strengthen workers’ voices in the workplace, enhancing their representation and ultimately improving working conditions through increased trade union membership and participation. Making exemptions of this kind risks creating a two-tier system in which some workers benefit from this important information while others do not, based purely on the size of their employer. We are committed to striking a fair and proportionate balance, ensuring that workers are aware of their rights without placing undue burdens on employers.

The statement will be provided at the start of employment, alongside the written statement of particulars, which employers are already required to give under Section 1 of the Employment Rights Act 1996 and on a prescribed basis. Therefore, I say to the noble Lord, Lord Jackson, that we do not believe that this is a particularly significant extra burden to justify exempting certain employers because of their size, because they already have to give that information anyway.

The noble Baroness, Lady Coffey, and others asked about the frequency. We will consult on the specific details, such as the frequency, manner, form and content of the statement before it is outlined in secondary legislation, and I can let noble Lords know that that will be via the negative procedure. We will particularly encourage input from both businesses and unions of all sizes to share their views.

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[Baroness Jones of Whitchurch (Lab)]

My answer was specifically about Clause 55.

Amendment 206, in the name of the noble Lord, Lord Jackson, would remove the compulsory element of the proposals, making it optional for employers to inform workers of their rights to join a union. To be clear, this is not about necessitating union membership but about ensuring that workers are aware of their rights and can make an informed decision about whether to engage. We want to empower workers to take a more active role in protecting their rights, and, where they choose, to participate in collective bargaining to improve their working conditions. Access to clear and accurate information is fundamental to that. This amendment would seriously weaken this measure by allowing employers to simply ignore the duty, defeating its policy intent entirely. It is vital that the right to union membership is made accessible to all workers as intended, that it is communicated regularly, and that employers are under a firm obligation to do so.

Amendment 208, in the name of the noble Baroness, Lady Noakes, would remove the requirement for employers to issue a statement of trade union rights on a prescribed basis. We are legislating for ongoing reminders of the right to join a trade union to reflect the reality of the workplace. New employers may miss information at the start of employment or change roles over time within the same organisation. Limiting the duty to the start of employment would also exclude existing staff, who equally deserve access to that information.

This statement of the right to trade union membership is important in fostering worker engagement and meaningful dialogue between unions and employers. Ongoing reminders are a key part of this measure. The Secretary of State will be able to set the frequency of this notification. This will be, as I have said, outlined in secondary legislation, subject to public consultation, and we invite interested parties to provide us with their views on this matter when we launch the consultation.

On the wider issue, the noble Lord, Lord Jackson, urged us to consult more. I can assure him that these proposals have been subject to extensive consultation, and we are continuing to consult on them. I can also tell the noble Lord that we had a very constructive meeting with the Federation of Small Businesses.

Finally, I turn to the clause itself. Clause 55 introduces a new legal duty on employers to inform workers of their right to join a union. Employers will be required to issue this statement at the start of employment, alongside the written statement of particulars, which I commented on earlier. There is currently no requirement in law for employers to notify their workers of the right to trade union membership. This lack of awareness may be contributing to the falling union membership and reduced worker participation in collective bargaining that we have been discussing. This duty intends to address this gap, ensuring that workers are better informed of this right and helping to strengthen the collective voice in the workplace and enhance their representation. This delivers on the Government’s commitment to improve working conditions through increased trade union membership and participation. Specific details of this measure, including the frequency, form, content and manner of the notification, will be set out in secondary legislation, as I have said. Therefore, I ask the noble Lord to withdraw his amendment and I urge that Clause 55 stand part of the Bill.

[Lord Sharpe of Epsom (Con)]

Just to press the point on the implementation plan, I am sure the Minister saw yesterday that the OECD downgraded growth forecasts for this country. Obviously, it blamed the global trade picture for a lot of that downgrade, but it also talked about business certainty in this country—or the lack of it. She herself has just acknowledged that businesses need certainty. The OECD is saying this, this is not just us alleging it. Will she please commit to picking up the pace when it comes to delivering this implementation plan and delivering it as soon as possible?

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am fully aware that it would help to see the implementation plan and, as I said, we are working at pace to get it to your Lordships as soon as we can.

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We also, I hope, agree that first and foremost the best remedy would be to ensure that reasonable access actually happens, rather than just introducing financial penalties. I am very conscious that Ministers have been extremely generous with their time. I wonder whether, in this territory, there could be an agreement to have a meeting with unions and other stakeholders so that that confidence can be built.

[Lord Sharpe of Epsom (Con)]

Before the noble Baroness sits down, she has had a go at Amazon twice tonight. I wonder whether it might be of interest to her to know that it employs 75,000 people in the UK. No one who works there is on a zero-hours contract. The minimum annual starting salary is between £28,000 and £30,000. It provides flexible working opportunities from day one, including term-time contracts, which it is currently advertising on the radio. That, obviously, allows parents, grandparents and carers guaranteed leave during school holidays. Since 2010, Amazon has invested more than £64 billion in this country and £12 billion in the last 12 months. It also supports a network of about 100,000 UK-based small and medium-sized businesses. It may not be perfect on unions in the noble Baroness’s terms, but it deserves a bit more respect.

[Baroness O'Grady of Upper Holloway (Lab)]

I am sure the noble Lord opposite would agree that those workers who joined a union and wanted to have a union voice at work to improve their pay and conditions deserve respect, too, and that union-busting techniques and approaches to avoid even meeting unions to come to an agreement is, frankly, unacceptable in a modern, civilised society.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Baroness Kramer (LD)]

I will just say to the noble Baroness, Lady Fox, that the greatest danger we have is that the Bill passes and yet we have groups of people in the workplace who are not in any way protected, or not sufficiently protected, either from violence or from harassment. I thought the case was brilliantly made by the noble Baroness, Lady Smith of Llanfaes, backed up by the noble Lord, Lord Russell of Liverpool, and the noble Baroness, Lady Jones of Moulsecoomb.

I say to the Minister: carpe diem. Here is an opportunity to make sure that there is not a gaping omission in the work that the whole Bill is attempting to do to provide proper protection in the workplace. I find it quite ingenious that the approach here is to try to use the Health and Safety at Work etc. Act. If the Minister has a better way of doing it, I am sure that everyone will be very eager and willing to listen. It contains within it the capacity for both investigation and enforcement. When we talked in previous groups, it was very evident that investigation and enforcement are very often the vital missing elements in the arrangements that we have set in place today. This seems to me to have been a very sensible approach to try to find an organisation that is appropriate and has the relevant kind of teeth.

I will not attempt to expand on the case as it has been made so eloquently. I am sort of filling in on this Bill when others have been called away—in this particular case to a NATO meeting. But I would have been very pleased to add my name to these amendments.

[Lord Sharpe of Epsom (Con)]

My Lords, I join the general congratulations offered to the noble Baroness, Lady Smith of Llanfaes, on her very comprehensive introduction of these amendments; she deployed some incredibly powerful examples.

We are all in agreement that violence and harassment, particularly sexual harassment and gender-based abuse, have absolutely no place in any workplace. Every worker, whether in an office, on a site or working remotely, deserves to feel safe, respected and protected. Tackling those issues must remain a top priority.

The amendment before us seeks to introduce stronger duties on employers to prevent and respond to these harms. Measures such as risk assessments, training and clear reporting systems can be important in building a workplace culture where abuse is not tolerated and victims are supported, so we absolutely understand the intention behind the amendment.

Although we agree that there is a need for action, we do not believe that the Health and Safety Executive is the right body to enforce these new responsibilities. That is not meant as a criticism of the Health and Safety Executive; it is simply a recognition that there are fundamentally different areas of concern that we think require a different kind of regulatory response. That is not the same as saying that we do not support the intentions of the amendment.

We do not support Amendment 100. We need solutions that deliver real protections to address sexual harassment. Finally, I have to say, from a very personal point of view, that I completely agree with my friend, the noble Baroness, Lady Fox, and her reservations about proposed new subsection (3B).

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

My Lords, first, I thank the noble Baroness, Lady Smith of Llanfaes, for her patience and apologise to her that it has taken until our fifth day in Committee for her to introduce her amendments. I thank her again for Amendments 99 and 100.

I assure the noble Baroness and all noble Lords that the Government are fully committed to protecting workers from workplace violence and harassment. This is a top priority for this Government, with our manifesto commitment, as mentioned earlier by the noble Baroness, to halve violence against women and girls in a decade. In response, I am happy to say that we already have a strong and, in the Government’s view, appropriate regulatory framework in place that ensures that workers are protected from such risks.

I refer to the Health and Safety at Work etc. Act. Under the statutory provisions made under the existing Act, employers have a very clear duty to protect their workers from health and safety risks, including workplace violence. Employers are required to assess and take appropriate steps to eliminate or reduce this risk. The Health and Safety at Work etc. Act, along with other related legislation, also mandates employers to take measures to reduce the risk of workplace violence.

As part of this, the Management of Health and Safety at Work Regulations 1999 require employers to assess risks in the workplace, including the potential for violence, and to take suitable action to reduce or eliminate this risk. The Health and Safety Executive—HSE—and local authorities are responsible for enforcing the Health and Safety at Work etc. Act and carry out both proactive and reactive measures to ensure that employers are complying with their duties. This includes ensuring that employers assess risks and implement appropriate measures to protect their workers and anyone else affected by their work from workplace violence. The HSE has also published accessible guidance on its website to help employers comply with their legal obligations. It also works very closely with other regulators to promote co-operation, share intelligence and, where appropriate, co-ordinate joint activities.

In the noble Baroness’s proposed amendments, there is a request for HSE to publish a health and safety framework specifically focused on violence and harassment in the workplace. Employers already have duties under the Management of Health and Safety at Work Regulations to ensure they have sufficient arrangements in place to manage health and safety risks in the workplace, including violence and aggression. Although workplace harassment could be addressed under the Health and Safety at Work etc. Act, the HSE does not intervene where there is a more appropriate regulator or where more directly applicable legislation exists.

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[Baroness Verma (Con)]

My Lords, I did not want to intervene on this group, but, listening to the noble Lord, I became slightly worried that we are getting into censorship. This country is a proud country because of its ability to speak out and speak up. I would be incredibly nervous if we felt that we could not demonstrate our political views openly without being penalised for it. The unions do their own work, but it is incredibly important that people are able to demonstrate a political affiliation or a particular viewpoint without having to feel that they are going to be censored. That would really worry people like me, who often are the recipient of things that we do not like to hear, but we tolerate it because we think the country enables us to have the debate.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lord Young of Acton for his expert introduction to the amendments in this group. I agree with the noble Lord, Lord Monks, about common sense, but I fear that went out of the window of an employment tribunal some years ago. As my noble friend Lord Young laid out in an earlier group, this Bill threatens to restrict free expression in some cases with its provisions. It is for this reason that I support the amendments, which seek to safeguard political opinion and affiliation within our employment laws.

At the heart of any thriving democracy lies the freedom to hold and express political beliefs without fear of retribution. In a democratic society, freedom of speech and freedom of belief are not luxuries; they are fundamental rights that underpin our entire system of governance and civil life. The workplace, where so many of us spend a significant portion of our lives, must be a space where individuals can hold and express their political views without fear of unfair treatment or dismissal. As it stands, our existing laws provide only patchy protections for political beliefs, and they leave many workers vulnerable. My noble friend Lord Young’s examples are truly shocking, and I would like to take this opportunity to wish, in particular, Mr Poursaeedi well in his ongoing battles.

We should draw upon the timeless wisdom of John Stuart Mill, who was one of the great architects of liberalism. He argued in his seminal work On Liberty that the truth emerges only through free and open debate, and he warned against the suppression of any opinion, because no one person or group holds a monopoly on truth. Even opinions that we may find mistaken—perhaps such as democratic socialism—or indeed offensive, must be heard and challenged openly, for only through such dialogue can society discern truth from error. Voltaire was right on this. I must admit I find it a bit disappointing that the Liberal Democrat Benches are not more enthusiastic about these amendments.

By protecting employees from dismissal or discrimination based on their political opinions or affiliations, these amendments would ensure that the workplace remains a forum where diverse ideas can be expressed, scrutinised and debated. Suppressing political expression risks silencing valuable perspectives and preventing the emergence of truth through robust discussion.

We in this House pride ourselves on opening our minds to a broad range of political views. Obviously, that involves robust engagement, challenging each other and refining our positions through vigorous debate. If such diversity of opinion is essential to the functioning of this Chamber, why would it not apply beyond these walls, and particularly in other workplaces? Workers, like us, should be free to express their political beliefs without fear of losing their jobs or being discriminated against.

In conclusion, I urge the Government to accept my noble friend’s amendments. To go back to the great liberal John Stuart Mill, he also said:

“A person may cause evil to others not only by his actions but by his inaction, and in either case he is justly accountable to them for the injury”.


This is not the time for inaction. These amendments not only would protect workers from unfair dismissal and discrimination but would uphold our fundamental democratic values. By embedding these protections into our laws, we would reaffirm our commitment to free expression. I am afraid saying just that they are not necessary is not good enough. They clearly are necessary, as we heard in the examples from my noble friend.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I thank all noble Lords who have spoken. I think it would be helpful if I first clarify where the law stands on this.

On Amendment 101B, tabled by the noble Lord, Lord Young of Acton, let me make it clear that religious and philosophical beliefs are already protected by the Equality Act 2010, including in the workplace. However, political belief—in the sense of a party-political affiliation or opinion—was not included as a protected characteristic in the Equality Act 2010. The noble Lord referred to the Grainger case. That case and the definition that the noble Lord read out referred to the issue of philosophical belief, which is already protected by the Act.

In 2015-16, the Equality and Human Rights Commission reviewed whether Great Britain’s equality and human rights legal framework sufficiently protects individuals with a religion or belief and the distinction of a religion or belief organisation while balancing the rights of others protected under the Equality Act 2010. The review found that the definition of religion or belief in the Equality Act is sufficiently broad to ensure wide protection for many religions or beliefs. It recommended no change to the definition of religion or belief or to the approach that the court should take in deciding whether any particular belief is protected under the Act.

We are not convinced that a political opinion or affiliation should be specifically protected by amendment to the Equality Act 2010 in contrast to other religions or beliefs. The extent of protected beliefs has been developed in case law, and we have not been presented with strong evidence that any legislative amendment is necessary. The amendment the noble Lord is proposing would potentially cause legal uncertainty over its relationship to the protected characteristic of religion or belief in Section 10 of the Equality Act, which has a much wider application than just the workplace.

The Government frequently receive calls for new protected characteristics—there have been over 21 suggested to date. While some of these carry merit, it simply would not be practical to include these all in the legislation, which would quickly become unmanageable for employers and service providers to follow, and for courts and tribunals to process and judge.

The noble Lord referred to the European Convention on Human Rights. The courts and tribunals will always be required to balance competing rights on the facts of a particular case, including the rights to freedom of thought, conscience and religion, and freedom of expression under Articles 9 and 10 of the European Convention on Human Rights, as well as academic freedom.

Noble Lords have referred to a number of individual cases. They will appreciate that I cannot comment on individual cases. However, I can assure them that free speech is a cornerstone of British values. We are firmly committed to upholding the right of freedom of expression, which is protected by Article 10. I also absolutely agree with my noble friend Lord Monks that, in many cases—and preferably in all cases—it is ideal for these issues to be resolved by common sense at the workplace.

Turning to Amendment 141A, I seek to reassure the noble Lord that further legislative provision on this matter is not needed. Through the Bill, the Government are creating a day one right against unfair dismissal. As the noble Lord, Lord Young, acknowledged in his explanatory statement, additional protections for employees already exist under Section 108(4) of the Employment Rights Act 1996, which currently ensures that claims for unfair dismissal on the grounds of political opinion or affiliation are not subject to any qualification period. I can reassure the noble Baroness, Lady Kramer, that, while dismissal on the grounds of political beliefs and affiliations is not automatically unfair, if brought to a tribunal, the tribunal could find that it was unfair based on the circumstances at hand.

As we have said, these issues will very often have to be decided by a tribunal, based on the facts of the case. This will obviously also have to apply to the noble Lord’s amendment as well. I agree with the noble Baroness, Lady Kramer, that the delays in employment tribunals are a very real challenge that we are very conscious of, and we have already reported elsewhere in other debates on the Bill that we are taking steps to address this.

Relevant case law sets out the circumstances where political beliefs may constitute a philosophical belief for the purpose of the Equality Act 2010. In these cases, discrimination provisions could apply. Following a judgment from the European Court of Human Rights, the qualifying period for bringing a claim of unfair dismissal relating to political opinions or affiliation was removed, further strengthening employees’ access to justice in instances of unfair dismissal based on political views. The Bill ensures that claims for dismissal on this basis continue to be treated in the same way as claims for automatic unfair dismissal by carving them out in a new Section 108A from the requirement that any employee must have started work before a claim can be brought.

We regard this as the right approach. Making dismissal for political opinions automatically unfair, as this amendment seeks to do, would fundamentally change the way that free speech is considered in relation to dismissal for the holding of views or the expression of views that the employer regards as unacceptable. It could sweep up such a wide range of views as to be unworkable. As sufficient protection against dismissal for political beliefs already exists, I ask the noble Lord to withdraw Amendment 101B.

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[Lord Goddard of Stockport (LD)]

I will reply to that. Yes, it is a technical question, and perhaps that wording sits there, but any person with an ounce of common sense who sees the Bill can see what the Government are trying to do. I do not think that the Bill, with over 300 amendments to it, is geared to do what the noble Baroness is intimating. That is cheap political point-scoring, and I think it is beneath her.

I have carefully considered the amendments put forward by noble Lords in this group, particularly those seeking to remove Clause 23 and Schedule 3, including Amendments 23 and 334 from the noble Lord, Lord Vaux, the series of amendments from the noble Baroness, Lady Neville-Rolfe, and others relating to probationary periods, including Amendments 105 to 112. While I am not persuaded by those amendments or the case for removing the provisions or fundamentally changing the Bill, I recognise the need for greater clarity on probationary periods. Given the Bill’s current drafting, which relies heavily on future regulation, it is essential that the Government provide clear and firm guidance on how the provisions will operate in practice, especially for small businesses, which will find ambiguity challenging in difficult times.

Amendment 107A from the noble Lord, Lord Lucas, which proposes a default initial employment period but would allow the Secretary of State flexibility to amend that through regulation, offers a balanced concept that could be helpful in providing certainty while retaining adaptability. Likewise, Amendment 334 from the noble Lord, Lord Vaux, which calls for a retention of the current qualifying period until suitable regulations are in place, reflects concerns about the smooth transition, and that deserves attention. However, I am less convinced by the calls for further impact assessments or reviews of the proposals in Amendments 103 and 123, which I believe risk delaying the necessary reforms without providing clarity.

In light of those amendments, I urge the Government to seize this opportunity to give definition and definite practical guidance on the provisions that the Bill will implement. It would be better if the Minister could say in absolute terms the length of time for which probationary periods will be set in future regulation after the passage of the Bill. That would be particularly important for smaller employers that need certainty to comply. Providing that clarity would help to ensure that the reform worked as intended, and it would help to strike the right balance between protecting employees’ rights and allowing employers the flexibility to manage probationary employments effectively. On that basis, I look forward to the Minister’s response.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Vaux of Harrowden, and my noble friends Lady Neville-Rolfe and Lord Lucas for their amendments and their thoughtful contributions in this group. It has been a most interesting debate. I will speak to my Amendments 103, 113 and 123.

I completely agree with the noble Lord, Lord Vaux, that it would be much better to get this right now rather than pursuing Amendment 103 in particular, which returns to the Government’s insufficient impact assessment. The assessment that has been produced states that this provision will have one of the highest impacts, yet, as we have mentioned before, the Regulatory Policy Committee has given the Government’s analysis in this section a red rating. The RPC’s critique is not a matter of minor technicalities because it identifies serious deficiencies in the Government’s case for intervention in the options that they have considered and in the justification for the policy that they propose. The Government’s impact assessment admits that it lacks robust data on dismissal rates for employees with under two years’ service. To answer the question from the noble Lord, Lord Vaux, there is no evidence for that. It proceeds regardless, however, with only superficial reference to “asymmetric information” and without any substantive analysis of any market failure.

The RPC highlights the impact assessment’s failure to consider how long-serving employees might view the equalisation of rights for new joiners—an issue of fairness and workplace cohesion that the Government have ignored. The impact assessment itself mentions that options such as reducing the qualifying period to 18 months or one year were considered and rejected without detailed assessment. No real exploration of probation periods was provided. That is not a balanced appraisal of possible alternatives; it is a justification for a predetermined decision.

On the justification of the preferred option, the impact assessment is again found lacking. The RPC calls for clarity on the costs to businesses—the costs of managing performance, handling disputes and the increased settlements to avoid tribunal risks. It also questions whether the Government have considered evidence from existing unfair dismissal claims and how risks might vary across sectors or job types, particularly in roles where reputational damage from a claim might deter employers from hiring at all.

More significantly, the Government have not addressed indirect and dynamic labour impacts, such as whether day-one rights might lead to more cautious hiring, greater use of temporary contracts or weaker overall job security. These are not abstract concerns as they go to the heart of how this policy might reshape employment relationships across the country. Noble Lords might be interested in a real example. I was talking this morning to a senior executive at a FTSE 100 company. It is an exemplary employer in every way; for example, offering many day-one rights. But this year—partly as a result of the jobs tax but also in anticipation of the Bill—it has reduced its hiring by 84%. I repeat that for the record: 84%. This is not abstract or theoretical. This is real, this is now.

It is important to note that these likely labour market impacts are not accounted for in the £5 billion cost to businesses, so the real cost is likely to be significantly higher. The result is a policy with high ambition but little practical clarity, as the noble Lord, Lord Goddard, has just noted. How will unfair dismissal rights interact with a statutory probationary period? Will employers still have access to the same set of fair reasons for dismissal? Will there be a different threshold for acting reasonably during probation? Can probation be extended if needed? None of those questions has been clearly answered.

The noble Lord, Lord Leong, reminded us of the light-touch, nine-month proposal, but what does that mean in practice? My noble friend Lady Meyer asked that. At the same time, the Government’s own analysis predicts that granting day-one rights for unfair dismissal alone will result in a 15% increase in employment tribunal claims. Using the statistics given by the noble Lord, Lord Barber, that is an additional 750 claims per year, on top of the 50,000 backlog already waiting 18 months to two years. The noble Lord argued that this is, in effect, a statistical irrelevance, but it is not to the 750 business owners who are being dragged through courts. That is a substantial impact. It represents direct costs to businesses in terms of time, legal risk and, of course, the chilling effect on recruitment.

The tribunal system itself needs to be looked at. Without significant new investment it is hard to see how the system will cope with this 15% increase. The result could be longer delays, greater costs and justice deferred for all parties. In an earlier group we heard about a case that is going to take more than two years to come before a tribunal. Yet the Government intend to bring these changes into force in 2026. On what basis? There is nothing in the impact assessment that explains why 2026 has been chosen or how the system will be ready by then. Businesses will need time to revise contracts, restructure probation processes and train managers on the new rules. What assessment has been made of whether 2026 is realistic, with all those things in mind? What engagement has been carried out with employers, particularly SMEs, about what implementation will require?

It is not unreasonable to ask the Government to explain how the timeline was determined and whether it is genuinely achievable, given the lack of clarity in both the policy detail and the supporting evidence. We all agree that employees deserve fair treatment, particularly in the vulnerable early stages of employment, but employers must also have a reasonable opportunity to assess performance, capability and suitability without the immediate threat of litigation.

We have established that there is no evidence for any of this clause. In fact, when the noble Lord, Lord Hendy, was arguing his point, he said that it is very difficult anyway for employees to take a case to an employment tribunal. The noble Lord, Lord Barber, as I just mentioned, said it is, in effect, a statistical irrelevance. If there is no evidence, it is too difficult and it is a statistical irrelevance, why are we bothering at all?

I want to raise a final point that others, particularly my noble friends Lady Neville-Rolfe and Lady Noakes, have referred to. It is not just about the policy itself; it is a more troubling concern. The policy will create unintended incentives, but for whom? It is not just about employers scaling back hiring overall but about who they stop hiring. If we remove the qualifying period for unfair dismissal and provide no workable probationary mechanism, we tilt the hiring incentives away from risk-taking, as we have heard. It will, in effect, stop employers taking a punt.

Right now, a small business owner might be willing to take that chance on someone with no formal qualifications, or from a non-traditional background, or re-entering the workforce after a time away. That chance exists because the employer has a short window to assess their suitability—and vice versa, of course—before facing the full weight of employment litigation risk. If that safety net is removed and exposure begins from day one and the probationary period lacks clarity or legal protection, that same employer will think twice. They will play it safe.

Noble Lords opposite should pay attention to those of us who have employed people. It is a simple fact. Who is going to suffer? It is not the already advantaged candidate with a polished CV. It is the young person with gaps in education, the career switcher with no references, the working parent returning after years out of the labour market, or the person coming back to work after a long period of illness. Noble Lords opposite should reread the speech given by my noble friend Lord Elliott, with his experience of the Jobs Foundation. He explained this much more eloquently than I just have. Those are the people who benefit from flexibility and second chances and who may now find those doors quietly closed.

This goes to the heart of social mobility and genuine workplace diversity. I would like to ask the Government a rhetorical question: have they considered the incentives this policy creates? If they have not—both common-sense experience of real working life in the private sector and, indeed, the RPC suggest that they have not—we risk designing a policy that sounds progressive but, in practice, reduces opportunity for the very groups that we should be helping the most. We need a decent impact assessment, and my amendment would allow for it.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I thank all noble Lords who have spoken in this debate. As there have been a number of questions about our intentions with these clauses, I think it would be helpful to clarify them and put them on the record.

Clause 23 introduces Schedule 3 and repeals Section 108 of the Employment Rights Act 1996, thereby removing the two-year qualifying period for protection against unfair dismissal. Schedule 3 further amends the 1996 Act, including the introduction of a statutory probationary period in legislation. Schedule 3 also removes the two-year qualifying period for the right to request written reasons for dismissal. Any employee who has been dismissed after the statutory probationary period will have the right to written reasons for dismissal within 14 days upon request.

The legislation will introduce a statutory probationary period that will maintain an employer’s ability to assess any new hires. Schedule 3 allows the duration of a statutory probationary period to be set in regulations by the Secretary of State following consultation. The Government’s preference, as we know, is for this probationary period to be nine months in length. Schedule 3 also creates the power to modify the test for whether dismissal during the probationary period is fair for reasons of performance or suitability for the role.

The Government’s intention is to use this power to set light-touch standards for fair dismissal during probation. The power will be limited to the following reasons for dismissal, which, under Section 98 of the Employment Rights Act 1996, qualify as potentially fair reasons: capability, conduct, illegality or some other substantial reason relating to the employee. The Government will consult on the light-touch standards and proceed to set out in regulations what specific reasons relate to the employee and when.

Schedule 3 amends the delegated power to set the maximum compensatory award for unfair dismissal so that a different maximum can be set for dismissals during the probationary period and when the light-touch standards apply. It is our intention to consult before the introduction of any new cap on awards.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

Again, we are being promised a blizzard of consultations, but can the Minister give me any idea when those consultations will take place? Can we also have some assurance that all the employer organisations will be consulted on this occasion? From our conversations with many of them, they do not feel particularly consulted up to now.

[Baroness Jones of Whitchurch (Lab)]

First, on the issue of consultation, I assure the noble Lord that there have been a considerable number of consultations, not only with the main employer organisations but in terms of working parties working on particular aspects of the Bill, and those will continue. That consultation will continue—and I have now forgotten his other question.

[Lord Sharpe of Epsom (Con)]

Will the Government consult with employer organisations?

[Baroness Jones of Whitchurch (Lab)]

Yes, I can confirm that that is the case.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Lord Murray of Blidworth (Con)]

I was—I was sitting over there. I apologise to the noble Lord, Lord Fox, for speaking after him. I am sure he is welcome to speak after me if he disagrees with anything I have to say.

Obviously, I am a barrister, as are many of the contributors this evening. I practised in the employment tribunal and in human rights, and I am a member of the Joint Committee on Human Rights. The Joint Committee wrote to the Government in respect of the Bill, expressing concerns that were reflected by the Equality and Human Rights Commission: in particular, the potential for a conflict between the right to freedom of expression, guaranteed by Article 10—as we have heard from various noble Lords—and the Article 8 right to a private and family life. That balancing exercise would be difficult for many employers to carry out.

The previous iterations of measures of this type included safeguards which have been omitted from the Bill, as the noble Lord, Lord Young, pointed out. In the Worker Protection (Amendment of Equality Act 2010) Act 2023 there was a measure that sought to place a duty on employers to take reasonable steps to prevent sexual harassment of their employees, and which is now Section 40A of the Equality Act. During its passage through Parliament, that Bill included provisions which sought to introduce a duty on employers to prevent non-sexual harassment of their employees by third parties. That was Clause 1 of that Bill, as brought from the House of Commons. That provision failed. It would have required all reasonable steps to have been taken to prevent harassment of the employee, solely because they did not seek to prevent the expression of an opinion in circumstances where the conduct constituting harassment involved a conversation in which an employee was not a participant.

In short, the Government have so far failed to answer the question from the Joint Committee about their reasoning for not including a similar carve-out for overheard opinions in the new duty in Clause 20. That was echoed in the original iteration of the Equality Act 2010, passed by the previous Labour Government, under Section 40(2) to (4). That would have required an employer to be liable for third-party harassment where they had failed to take such steps as would have been reasonably practicable to prevent the harassment. However, to be liable, the employer would have had to have known that the employee had been harassed by a third party on at least two other occasions.

The Government have decided not to adopt the same three-strike policy taken in the equivalent provisions or in the earlier potential measure proposed in the 2023 Act. Instead, we have a rule-making power that is said to provide what steps are to be regarded as reasonable. To my mind, that sits uneasily with the mandatory terms set out in new subsection (1A). For those reasons, it should not be part of this legislation.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friends Lord Young of Acton and Lady Noakes very much for their expert, valuable and important introductions to and insights into this group. I also thank my noble friends Lady Meyer, Lady Lawlor, Lady Cash, Lord Strathcarron, Lord Ashcombe and Lord Murray for their practical, legal and philosophical objections to Clause 20, which, as noble Lords will perhaps not be surprised to know, I do not regard as straw-man arguments. It was also wise of my noble friends to note that these amendments have the support of UKHospitality. They also have the support of the British Beer and Pub Association.

These amendments are vital in ensuring that we do not inadvertently restrict fundamental rights of free expression in the workplace and beyond. We all recognise the importance of protecting employees from harassment. It is not about not caring about their plight, as the noble Lord, Lord Fox, implied; it is about also ensuring that we are not creating a framework that stifles open and honest conversation. That is especially true in matters of political, moral, religious or social debate.

Clause 20 as it stands is, as my noble friend Lady Cash pointed out, poorly drafted and therefore risks leading to unintended consequences. In fact, I agree with the comments of the noble Baroness, Lady Deech, about the speech from the noble Baroness, Lady Carberry, who made a very persuasive case that Clause 20 is superfluous in its current form.

The inclusion of speech or conversation that simply expresses an opinion on a political, moral, religious or social issue would lead to significant restrictions on individuals’ freedom to speak openly. This could lead to employees feeling that they cannot express their thoughts and ideas or, perhaps worse, would be penalised for expressing an opinion that someone else may find uncomfortable or offensive. As my noble friend pointed out, we must be mindful of the unintended consequences that could arise from an overbroad definition of harassment. Both he and the noble Lord, Lord Londesborough, gave strong examples from the footballing world. If I may speak as a fellow West Ham United fan, I am very aware that being a supporter of that august club can be a very testing experience that can drive one to the occasional profanity.

It is not just in sports that these concerns arise. Think about public spaces such as pubs, about which we have been hearing. If an individual overhears a conversation that they find offensive or upsetting, where does the line lie? What happens if somebody misunderstands something that is said and it is taken to an employment tribunal as a case of harassment? In such situations, the burden placed on employers would become unreasonable. Would they be required to intervene every time someone overhears an opinion that they find discomforting or just dislike?

If I may ask a genuine question, how are people supposed to judge, to quote the noble Baroness, Lady Carberry, whether a conversation is obviously fake or not? As my noble friend Lord Young and the noble Lord, Lord Londesborough, argued, are we expecting publicans to make finely calibrated judgments on ECHR Article 10 in particular? We should remember that even senior police officers, who are trained in these matters, often struggle to make such judgments. Employers will inevitably err on the side of caution and that is chilling.

I believe that we must ensure that harassment in this context remains focused on behaviours that are truly indecent or grossly offensive, not on speech that is merely uncomfortable or challenging. People must have the right to engage in conversations, to express differing opinions and to debate issues of public importance without the fear of being accused of harassment. To allow an employer to be forced or encouraged into silencing this kind of expression would be a serious violation of freedom of speech, which is a cornerstone of our democracy and society.

The amendments before us offer balance. They ensure that employers are not required to protect their employees from hearing or overhearing expressions of opinion, provided that those opinions are not indecent or grossly offensive. This is a reasonable and sensible approach. It respects individuals’ rights to express their views without creating an environment where every opinion has the potential to be deemed harassment.

Moreover, these amendments recognise the specific context in which such protections should apply. By excluding certain sectors, such as the hospitality industry, sports venues and higher education, we acknowledge the diverse nature of these environments where debate, disagreement and the expression of differing opinions are often the fabric of daily life. To apply the same strict rules in these settings as we would in an office environment or a more controlled space would be misguided. The noble Lord, Lord Fox, may well say that this is not the purpose of Clause 20. However, as my noble friends Lady Cash and Lord Murray pointed out, the drafting means that that is unlikely to be the effect.

The requirement for repeated instances of harassment before an employer must take action, as outlined in Amendment 86, aligns with the principle of proportionality. We should not expect employers to become the arbiters of every comment or opinion expressed, especially when such comments are made in good faith. The amendment rightly recognises that harassment should be defined as something that occurs repeatedly, not something that might result from a single isolated incident of disagreement or discomfort. I agree with my noble friend Lord Young of Acton that this is a solution in search of a problem or, based on his statistics, a sledgehammer in search of a nut.

When the Minister responds, can she please answer my noble friend Lady Noakes’s point on territorial extent? These issues are clearly not going away, so I urge the Government to take them very seriously. As it stands, Clause 20 is garbled and needs rewriting.

[Baroness Jones of Whitchurch (Lab)]

I thank all noble Lords who have spoken. I hope I can reassure the Committee of the Government’s approach, as well as set straight some considerable misunderstandings on how the provisions will operate. I stress at the outset that the provisions in the Bill will protect employees while preserving existing human rights, such as freedom of speech, which I hope we can all agree are core British values. Also core to our identity is the belief that with rights come responsibilities.

I will first address the noble Lords, Lord Young of Acton and Lord Strathcarron, and the noble Baroness, Lady Fox, who oppose Clause 20. I am grateful to the noble Lord, Lord Young of Acton, for meeting me to share his views. When we met, he pushed his position that our proposals are anti-banter, and he has reiterated that today. I make it clear that we are anti-harassment, not anti-banter, and this is what Clause 20 delivers.

I agree with the noble Lord, Lord Fox, that I feel that we have been subjected to a wave of synthetic rage by many on the other Benches this evening, who have given examples that simply would not be covered by the harassment provisions in Clause 20. Removing Clause 20 would not only go against the manifesto on which this Government were elected but deprive employees of protection from all types of harassment by third parties under the Equality Act 2010. This Government are committed to tackling all forms of harassment in the workplace. In order to make workplaces safe, we must require employers to create and maintain workplaces and working conditions free from harassment, including by third parties.

For example, if a woman is sexually harassed by a customer at work today, she has very few effective options by which to seek legal redress, even if her employer has made no effort whatever to address the issue. The only possible employment law action in this scenario at present is for the Equality and Human Rights Commission to exercise its unique enforcement powers against the employer. However, such powers can be used only very selectively and strategically by the commission, and would be unlikely to be used in anything other than an exceptional case.

Sexual harassment is, sadly, not the only type of harassment that is experienced in the workplace. Employees can experience racial harassment or harassment related to their disability or other protected characteristics. In the case of non-sexual harassment, not even the possibility of enforcement exists at present. As such, Clause 20 is required for employees to be able to seek legal redress where they have experienced third-party harassment, and to ensure that employers are clear about their responsibilities.

Employment Rights Bill

Lord Sharpe of Epsom Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

[Lord Fox (LD)]

My Lords, this has been an important debate. As the noble Baroness, Lady Goudie, said—I apologise if I have mispronounced her name—most if not all speakers have worked on these two important and connected issues for years. That has been reflected in the quality of the speeches we have heard. It also reflects the fact that progress has not been made. We need to make progress here.

The traditional approach from Ministers in situations such as this is to say, “These are important issues and we agree something needs to be done”, and then either “We need more consultation”, as my noble friend pointed out, or “This is not the right vehicle for these issues”. Those are the two excuses that will be given. The point on consultation has been well made by my noble friend and the noble Lord, Lord Cromwell. As for whether this is an appropriate vehicle, just look at this Bill. It is well over 300 pages and covers almost every aspect of employment. To say there is no room in this Bill—I am pre-empting what may or may not be said—would be wrong. There is more than enough space in this Bill to cover these issues.

As the noble Baroness, Lady Morrissey, said, this was debated in the Commons and my honourable friend Layla Moran also had an amendment on this issue, but the Bill came here without it. The safe way of making sure that this can survive contact with a very large majority at the other end is for the Minister to take this on and put it in the Bill on the Government’s behalf. We have heard a lot of excellent speeches from the Minister’s own Benches, as well as across the Floor. Clearly, we can all agree on both these issues. The Minister should stand up and say “We will take this on, work with all interested parties and produce two amendments for both of these issues” to address what has clearly been going on for too long without being resolved in legislation.

[Lord Sharpe of Epsom (Con)]

My Lords, I agree that this has been an extremely interesting debate. I thank all noble Baronesses—they are mostly Baronesses, with some noble Lords—for their contributions. In particular, the noble Baroness, Lady Kramer, deserves singling out for her very thought-provoking introduction to this group.

As my noble friend Lord Hunt of Wirral pointed out in the previous group, every individual should feel safe and supported in their working environment. We recognise that NDAs have deviated from their original purpose, which was to protect trade secrets and intellectual property, as the noble Baronesses, Lady Kennedy of The Shaws and Lady Goudie, pointed out. They have been abused in some circumstances, particularly where they are used to silence the victims of misconduct, which includes sexual harassment.

However, we must also acknowledge there are some cases where NDAs may serve a legitimate purpose. Some individuals may wish to resolve disputes privately, without the need for public disclosure. It is important, therefore, that we do not take a blanket approach but instead consider the context in which NDAs are being used. Many of the amendments acknowledge those simple facts. Having said that, we also need to consider the wider impact that NDAs might have—for example, in cases of medical malpractice. How can society and the medical profession learn from mistakes that are not made public?

It is clear that further scrutiny of NDAs is essential. The potential for abuse cannot be ignored, and we must ensure that any agreement entered into is fully informed and entirely voluntary. I will briefly speak as a non-lawyer, because I was particularly taken by Amendment 281, in the name of the noble Baroness, Lady Chakrabarti. Like the noble Lord, Lord Cromwell, I was rather shocked that such an NDA might exist even under the current regime. How can one sign a legally binding document that prevents the disclosure of a breach of the law? With apologies to my noble friend Lord Hunt of Wirral, I say that only the legal profession could manage the perverse logic to invent such a thing.

As we have seen, particularly in the NHS, whistle-blowers are often the individuals who bravely speak out against wrongdoing, misconduct or unethical practices that might otherwise go unnoticed. Their courage in raising concerns is critical to maintaining trust and ensuring that the organisation remains committed to the highest ethical standards.

Both noble Baronesses, Lady Kramer and Baroness Jones of Moulsecoomb, referred to the NHS. I looked into this earlier, and in one high-profile case, the NHS spent over £4 million on legal action against a single whistleblower, including a £3.2 million compensation settlement. This sparked criticism from Professor Phil Banfield, the chairman of the British Medical Association, who argued that whistleblowing is often not welcomed by NHS management. He emphasised that NHS trusts and senior managers are more focused on protecting their reputations than addressing the concerns of whistleblowers or prioritising patient safety. That is clearly a very unacceptable state of affairs, and that example alone suggests that the Government should take these amendments extremely seriously.

I am sure that the Minister is about to stand up and offer to have further discussions on this subject. We will pre-empt her and volunteer to take part in those discussions. There is clearly much more work to be done in this area. I look forward to hearing the Minister’s remarks.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I genuinely thank all noble Lords—they have mainly been noble Baronesses—who have taken part in this excellent debate, in which we have addressed some important, salient and highly concerning issues about the misuse of non-disclosure agreements. We have heard some very moving and completely unacceptable examples that have no place in the modern workplace.

I thank the noble Baroness, Lady Kramer, and my noble friends Lady Kennedy of The Shaws and Lady Goudie, for their Amendments 98, 101 and 101C, which seek to restrict the use of non-disclosure agreements that prevent workers disclosing certain misconduct. My noble friend Lady Kennedy’s amendment looks to apply this to a broader category of misconduct, including harassment, retaliation and discrimination. I also acknowledge that the amendments tabled by the noble Baroness, Lady Kramer, and my noble friend Lady Kennedy make it clear that workers should still be able to request confidentiality protections in agreements between a worker and employer, if they so choose. A number of noble Lords have reiterated that that is an important principle.

I also thank my noble friend Lady Chakrabarti for her Amendment 281, which makes express provision for a court to void an NDA in the public interest if it seeks to prevent the disclosure of illegal conduct by the employer. I agree with the noble Lord, Lord Sharpe, that my noble friend made a very compelling case on that issue.

I also thank the noble Baroness, Lady Morrissey, for Amendment 101A and her contribution today. Her amendment would void any provision in an NDA that prevents a worker making a disclosure about sexual harassment. However, it would allow NDAs in settlement agreements to stand where the victim of sexual harassment requests them and where they have received independent legal advice. I am also grateful to the noble Lord, Lord Cromwell, for his comments in support of that amendment.

Today’s debate on NDAs demonstrates the best elements of your Lordships’ House. Points have been well made by all noble Lords, and we have listened carefully to their arguments. I was grateful to have the opportunity to meet with a number of noble Lords in recent weeks to reaffirm the Government’s position on the misuse of NDAs and to understand the intention behind these amendments. Let me be clear: NDAs should never be used to silence victims of sexual harassment and other forms of misconduct in the workplace.

My noble friend Lady O’Grady asked whether the proposals extend beyond sexual harassment. The whistleblowing measures in the Bill cover only sexual harassment. However, the whistleblowing framework already covers disclosures about criminal offences, breaches of legal obligations and endangerment of health and safety. In many cases, harassment and discrimination in the workplace will fall within those categories.

While the Government agree that NDAs should not be misused by employers to conceal misconduct in the workplace, any restrictions on their use must be carefully considered to avoid unintended consequences. For example, confidentiality can allow employers and workers to resolve a dispute and move on without publicity and expensive legal proceedings. It is vital that we take the time to consider any impacts on a worker’s ability to choose the right outcome for themselves, including the option of an NDA.

--- Later in debate ---

[Baroness Jones of Whitchurch (Lab)]

My Lords, the answer to both noble Lords—and I think I said this during my response—is that the amendments are all raising really important issues. There is an issue about the breadth of the issues and the extent to which we need to legislate or perhaps amplify things that are already the law but are not understood to be the law. We have more work to do on this, but we are working at pace on it. We still have time before the Bill passes through your Lordship’s House, so I hope we can make some progress during that time.

[Lord Sharpe of Epsom (Con)]

I am sorry to intervene on the noble Baroness once more. Does that mean she intends to talk to interested Peers before Report?

[Baroness Jones of Whitchurch (Lab)]

I have already had one meeting and, as noble Lords will know, I seem to be in perpetual meeting mode. I certainly am very happy to carry on having those discussions.

Trade Negotiations

Lord Sharpe of Epsom Excerpts

Wednesday 14th May 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the Minister for the Statement. The economic prosperity agreement between the United Kingdom and the United States is a welcome but limited first step towards a comprehensive free trade agreement. As such, it signifies a positive move towards strengthening the special relationship with our most important ally. Indeed, it was particularly refreshing to see that the special relationship was explicitly acknowledged as one of the three core objectives. If the relationship is to endure, it must be based, as the document says, on fairness and reciprocity.

The United States is the UK’s largest bilateral trading partner outside the EU, with trade in goods and services valued at over £310 billion in 2023. Following the costs imposed by the increase in employers’ national insurance contributions, this agreement brings some relief to sectors in our economy. For example, tariffs on UK vehicles have been reduced from 25% to 10%, benefiting up to 100,000 vehicles annually, as well as attendant auto parts. With UK car exports to the US worth £7 billion last year, this is an important development and will provide some relief. As Mike Hawes of the SMMT noted:

“The agreement announced today to reduce tariffs on UK car exports into the US is great news for the industry and consumers. The application of these tariffs was a severe and immediate threat to UK automotive exporters so this deal will provide much needed relief, allowing both the industry, and those that work in it, to approach the future more positively”.


We take Mr Hawes’s words at face value.

Similarly, the removal of tariffs on steel and aluminium, which had disrupted £400 million-worth of exports, is welcome news for our manufacturing sectors. But can the Minister say what exactly will the fact that the US is constructing a quota at most favoured nation rates for UK steel and aluminium products mean in practice, and particularly for the troubled British Steel?

In agriculture, US beef export quotas to the UK have increased from 1,000 to 13,000 metric tonnes, and negotiations are expected to continue on pork, poultry, rice and seafood—sectors where the United States has significant export interest and capacity. The US Agriculture Secretary has made it clear that these areas are priorities in their trade agenda. As further discussions progress, it will be important that they take into account the structure and needs of the UK’s own farming sector. Although there is broad support for open and competitive markets, we know that some British producers, particularly in poultry and seafood, have raised questions around production practices and the cost implications of different regulatory approaches.

The agreement acknowledges that both countries will

“comply with the importing country’s sanitary and phytosanitary … standards”.

Can the Minister therefore update the House on the nature of conversations held with domestic farming representatives so far, and on how the Government expect ongoing negotiations in this area to progress? Are there any major areas, apart from the frequently trailed chlorine-washed chicken, which may cause difficulties?

There is also very limited detail on digital trade, despite the Government’s ambition, set out in their AI opportunities plan, to position the UK as a global leader in emerging technologies. We would welcome clarity on how this agreement supports the goal in practice but acknowledge the commitment to negotiate an ambitious set of digital trade provisions. Can the Minister update the House on what discussions are under way regarding the future of the digital services tax?

Moreover, the agreement states that the UK will receive preferential treatment if new tariffs are not imposed as part of the US Section 232 investigation into pharmaceuticals and other products. It is perhaps worth reminding ourselves what that means. Section 232 of the Trade Expansion Act 1962 provides the President with the ability to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce that the products under investigation are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.

So preferential treatment sounds positive, but we are awaiting clarity on what it means in practice. Will it mean lower tariffs, exemptions or more lenient treatment than other countries may receive? This is crucial for the UK’s pharmaceutical sector in particular, and we need transparency on the details of this arrangement. How will that impact our relationship with Ireland, which is home to a number of pharmaceutical companies with extensive operations here? On the subject of Ireland, can the Minister enlighten us as to exactly how Northern Ireland will be affected by this deal?

Note that security of supply chains in our exports is explicit in this agreement. China has expressed concern, suggesting that it could lead to the exclusion of Chinese products from British supply chains, and it may risk breaching international trade norms. In light of the Government’s stated intention to reset and stabilise relations with China, it is important to understand how these concerns are being managed. What steps are the Government taking to ensure that progress with one strategic partner does not inadvertently compromise engagement with another?

Furthermore, in the context of the UK’s economic and financial dialogue agreement with China, which includes co-operation on pharmaceuticals and financial services, how do the Government assess the potential impact of this new US deal on future negotiations in those same sectors? I appreciate that the Statement refers to other sectors, including copper, lumber, film production, semiconductors and critical minerals, but the themes of national security and defence run through this document, and obviously they represent the foundation of the special relationship. However, I note that no mention is made of the defence sector, so could the noble Baroness perhaps update us on discussions in that space?

The agreement states that:

“Both countries intend to build on an existing set of Mutual Recognition Agreements … by negotiating additional agreements … across certain industrial goods”.


How does that square with the Product Regulation and Metrology Bill, which is currently in the Commons? Superficially, this would suggest that the Government should have accepted some of our amendments in this area, but I say to the noble Baroness opposite that it is not too late.

While tariffs on UK exports have been reduced, the US baseline tariff of 10% remains higher than pre-President Trump levels. We should acknowledge the progress but also recognise that this still represents a return to a less favourable environment for UK exports. What this country needs is a comprehensive free trade agreement with the United States to alleviate these challenges to our businesses.

It would be remiss at this point not to mention that small and medium-sized enterprises, which are the backbone of our economy, need clarity on how they will benefit from this agreement. Tina McKenzie from the Federation of Small Businesses pointed out that practical measures to boost SME access to the US market remain unclear.

In conclusion, while this agreement represents important progress, it is clear that much remains to be done. The Government must now focus on expanding the deal to include services, investment and small business support, ensuring all sectors are given a fair chance to thrive. I have one last question, which has been asked and evaded every day this week. Will Parliament have a say?

[Lord Fox (LD)]

My Lords, as a vice-chair of the All-Party Motor Group, I must say that this agreement was good news for the UK car industry or, perhaps more importantly, it was less bad news—coming in where the noble Lord, Lord Sharpe, left off. In truth, manufacturers will still see a rise from pre-Trump tariffs of 2.5% to post-Trump ones of 10%, but that is much more manageable than the 27.5% that was being faced and jobs will be saved, which is good news. As a key shareholder in the industry, I am sure the Government will welcome the moves on steel as well.

But on those and on the wider perspective, there is much detail still to resolve and I think it would be helpful if the Minister could set out a timetable for when businesses will start to know the detail of what this agreement will actually deliver. To date, the Government have not published the documents we need, such as impact assessments on key British industry. That leaves us in the dark at the moment as to what Ministers have really given up in exchange for these lower tariffs.

I was a little intrigued by the ethanol concession. Secretary of State Jonathan Reynolds said in the Commons:

“On ethanol, we … are working closely with our domestic sector to understand its concerns and any potential impacts to businesses, including what more Government can do to support the sector”.—[Official Report, Commons, 12/5/25; col. 35.]


This seems a little late. Some weeks ago, when I met staffers of senior senators and asked them what their number one red line was, the most popular response was “Ethanol”. If I knew six weeks ago, I assume the Government knew a long time before that, which means there was plenty of time to work through the implications on domestic suppliers. Yet it seems only now is that process under way. How can negotiators know the value of what they are conceding without having done the work that seems now to be under way?

The deal also allows more American beef into the UK market. The Secretary of State was at pains to say that imports would not compromise our standards, so can the Minister confirm that this is being achieved by uprating the tariff rate quota for so-called “high-quality” beef? To put this into context, can the Minister share the Government’s analysis of how much high-quality beef the US produces per annum and what is the annual expected level of imports of that beef into the United Kingdom? Finally on this, can she set out in detail what border inspection regime will be planned to make sure that this indeed meets the standard of high-quality beef?

Given the urgent need for phytosanitary agreement between the United Kingdom and the European Union, can the Minister tell your Lordships’ House what conversations the Government have had with their EU counterparts about this decision to allow US beef into the United Kingdom?

Overall, how certain is any of this? For example, Trump 1 signed a full trade deal with Canada and Mexico, the USMCA, in 2018 and then Trump 2 threw this self-same deal out in his first week of this presidency. This UK-US agreement may have been endorsed by President Trump this month, but what confidence do the Government have that new demands will not be made next month, or the month after that—or at Christmas? Does the Minister agree with the Liberal Democrats that the best long-term defence is to build our trading relationships with long-standing partners which do not change their views all the time, including the European Union and dependable allies such as Canada? Can the Minister explain to your Lordships’ House the Government’s analysis of how this US deal impacts the furthering of relationships with those reliable potential partners?

A further unanswered question, touched on by the noble Lord, Lord Sharpe, surrounds our position with China. The deal with the US includes strict security requirements, particularly around the British steel and pharmaceutical industries. These requirements have already caused China to complain that this could be used to squeeze Chinese products out of British supply chains. How will the Government manage their relationship with China when President Xi knows that Trump is leaning on us in every way with our relationships? What is the Government’s message to China as a result of this deal?

The level of uncertainty over the details in this agreement begs many questions, but again, it seems the Government will duck proper scrutiny. If this was a full-blown trade agreement, we would expect it to be put before your Lordships’ International Agreements Committee, of which I am a member. But so far, we have been starved of the involvement of the Grimstone agreement and we have not really been taken in on this. Can the Minister confirm whether the International Agreements Committee will scrutinise this agreement?

Even if we did make a report, the key to a debate in the Commons is still held by the Government. The shortcomings of our scrutiny process of trade deals are laid bare. At the very least, can the Minister confirm that this agreement will have a full Commons debate? If the Government do not follow this course, that will indicate that this agreement is not a treaty that needs to be fully ratified and lodged with the WTO. If it is not a fully ratified treaty, under the WTO most favoured nation rules the UK will have to offer similar tariff-free entry to all other countries, not just the United States. Unless Keir Starmer wants to join Donald Trump in breaking a fundamental international agreement that supports world trade, this should be treated as a trade deal and lodged with the WTO. That requires a full CRaG process in your Lordships’ House.