Employment Rights Bill (Fifth sitting)

Ashley Fox Excerpts

Committee stage
Tuesday 3rd December 2024 Public Bill Committees

[Alex McIntyre]

Well, the individual would be able to raise a grievance, but discrimination requires it to be related to a protected characteristic, and there is no protected characteristic saying that just because someone disagrees with a manager, he would be able to bring a claim under the Equality Act 2010 for discrimination. He might be able to raise a grievance about that, but that requires an employer to have a fair grievance process and to actually follow through. Is that individual, who is already on very low pay and struggling to pay his rent and feed his kids, going to take that grievance through a tribunal system that the previous Government allowed to really suffer? Eighteen to 24 months is the standard waiting time to get any form of justice, so I do not think it is appropriate to say that he would be able just to go to a tribunal. What he really needed was guaranteed hours and small businesses being prevented from abusing people by saying that they can continue to work 60 hours but not offering them a regular-hours contract.

My second point is on sexual harassment or harassment by third parties. When I was 15 years old, I worked at a Christmas party for midwives at that same hotel, and during that party I was sexually assaulted in the workplace. I was groped by the midwives and told that because I was only 15, they would be able to teach me a thing or two. When I approached my manager about it, he said I should enjoy that kind of attention because I was a man. I am really conscious that female colleagues suffered way worse than I did. Just because businesses are smaller, that does not mean that the impact on victims and people working there is any less.

However, the wording of the Bill is “all reasonable steps”, and the “reasonable” test is taken into account when tribunals consider such matters and what reasonable steps need to be taken by businesses. The size of a business is often something that tribunals will take into account when they look at what “all reasonable steps” would mean. In my example, there were reasonable steps that could have been taken, but I was told that I had to get back in there and carry on working with that party. Excluding small businesses would prevent them from having the duty to look after their employees when they are suffering harassment in the workplace.

To come back to the point made by the hon. Member for Mid Leicestershire about competing evenly, my hon. Friend the Member for Birmingham Northfield has already talked about some of the perverse outcomes that the amendment might lead to. Unscrupulous employers who want to get around the legislation in whatever way they can might end up setting up umbrella companies in order to do that if this amendment were passed. A two-tier employment system would be a barrier to growth for companies, because it would say, “If you grow your company and continue to do well, you are going to put additional regulation on to the company.” There would be a perverse incentive for businesses to grow to 499 employees and stop there.

[Sir Ashley Fox (Bridgwater) (Con)]

On the hon. Gentleman’s point about employers wanting to set up separate entities to keep below a limit, he will be aware that in the Budget the Chancellor increased the employment allowance, to protect small businesses from her otherwise devastating increase in national insurance charges, and there is no indication that the Exchequer is incapable of managing that. Equally, with small business rate relief, there is no indication that local councils cannot distinguish between employers that are setting up different business and those that are taking advantage of that. Why does the hon. Gentleman think that employers would be able to exploit what he describes as a loophole—but what we would say is there to protect small businesses—and yet the Government are perfectly happy to have similar allowances for national insurance and through rate relief?

[Alex McIntyre]

If we are looking at the numbers, I am glad that somebody on the Opposition Benches is finally acknowledging that we have massively increased employment allowance, taking many small businesses out of paying national insurance contributions altogether. It is nice to finally have some recognition of some of the good stuff this Government are doing for small businesses.

To return to the point, though, there is a big difference between having four employees, which would allow somebody to employ people on the national living wage, and having 500 employees. It would be much easier for a large business to exploit the kind of loopholes that are being suggested by reorganising itself into blocks of 499 employees than it would be for a business of a couple of thousand employees to be split into organisations of four employees or fewer, so I think that that is what is much more likely to happen.

I will not name names, but I have been in the trade for a long time, and whenever there is employment legislation, businesses will be considering how best to deal with it, and some are more aggressive than others. In this case, aggressive employers would potentially exploit that loophole, as my hon. Friend the Member for Birmingham Northfield suggested. We are creating a level playing field, which is an important part of this Bill. We heard in evidence last week that many employers are already doing so many of the good things in this Bill. This is a levelling of the playing field, to stop people undercutting good employers with what are, quite frankly, shoddy employment practices.

To sum up, I fully support the Bill, and I do not support the amendment. We should not create a two-tier employment system, where instances such as those that I and my colleagues suffered, like others working on zero-hours contracts in small and medium-sized enterprises, are allowed to go unchecked. We should continue to create a level playing field, as the Minister has suggested. It is important that we encourage all small and medium-sized enterprises to be good employers because, as the hon. Member for Chippenham said, staff retention in small and medium-sized enterprise is difficult. Being good employers—offering flexible working and ensuring that people have regular hours, if that is what they are working—can only benefit small and medium-sized enterprises, as they grow and expand their businesses.

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[Sir Ashley Fox]

The hon. Gentleman makes a serious point that 250 employees is the current legal definition. If the Opposition were to show flexibility in accepting that 250 definition, would he and the Labour party accept the amendments for small and medium-sized businesses with up to 250 employees?

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[Michael Wheeler]

Well, I agree on my newness, and maybe as I gain more experience, I will encounter more ridiculousness in this place than I already have—in fact, I am sure I will. I wish to speak to the amendment, despite its probing nature. In my view, and I hope the Minister would agree, the clause is designed to promote stability and financial security for those who currently lack it because of the number of hours that are baked into their contracts. To set the bar as low as two hours would run counter to that purpose.

The measure has been widely trailed and debated in the run-up to the election and in this Committee. I highlight a few things that I hope the Minister will speak to with a view to that purpose. I hope that we would all agree that tackling the insecurity that millions of people in our economy face is a worthy aim, and that that is not limited just to those on zero-hours contracts but includes those on low-hours contracts who regularly work more than their set hours.

I spoke of a rebalancing earlier, and that is about fairness and the quality of employment. As part of that, it is only right that, where need is demonstrated, employees are offered—not given; there is still an element of choice—the opportunity to have those hours baked into their contracts, as is set out in the Bill. That would improve their financial security, their work-life balance, the predictability of their hours, and their ability to live their lives, to which their income is incredibly important.

I am looking forward to hearing the Minister roundly reject this amendment, but I also want him to address some other parts of the clause, specifically the inverse of the amendment, the phrase,

“not exceeding a specified number of hours”.

I hope we would want to see this measure apply to as many workers—

[Sir Ashley Fox]

The hon. Gentleman spoke of the need for employees to have stability and security, but would he not agree that the Bill causes great instability and insecurity for many small business owners precisely because it is so vaguely and badly drafted? The Government have submitted 109 amendments of their own. There are two new schedules and large parts of the Bill that have been left to be amended by future regulations. The Minister spoke earlier about the probation period, but we do not know how long that will be. What is a low-hours contract? It has taken the Opposition to say, “How about two?”—a ridiculous number, we admit—to show that there are enormous parts of the Bill that are not properly drafted. Would it not be better for the Government to just take this Bill away and start again?

[Michael Wheeler]

I would not agree, which will not surprise the hon. Member. I gently suggest that the number of Government amendments will possibly provide the clarity that he asks for—they will be baked in, and will provide that clarity. This is part of the process of getting the provisions right for all involved. I would suggest that it reflects exactly the opposite of what the hon. Member suggests.

I return to the point about stability and instability. If the basis of the provision is to have hours regularly worked included in contracts, having that contractual term would provide not only stability for the employee, but predictability and stability for the employer. I am sure we can agree that stability all round is beneficial.

However, I come on to possible unintended consequences. The term,

“not exceeding a specified number of hours”,

could do with some clarity, in order to provide that stability and to ensure that the measure applies to the widest number of people within our workforce, to fulfil the intended aim. There is also the phrase “regularity”. Will the Minister consider how to clarify that term to provide the clarity that we would all welcome? Finally, I come on to the term, “excluded worker”. As I have said, we want to see as many people as possible covered by the Bill, so that they feel the benefits of it. The provisions are measured, for both workers and employers. I would welcome the Minister’s commitment to consider those points, as well as his roundly rejecting the ridiculous premise on which the amendment is based.

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[Justin Madders]

I am grateful to the shadow Minister for tabling these amendments. He will again be unsurprised to learn that we will not be accepting them.

The Bill fulfils our pledge to end exploitative zero-hours contracts. We are introducing a right to guaranteed hours to eligible workers on zero and low-hours contracts, to give them the greater security and stability that all workers deserve. Although workers may choose agency work because they value flexibility, they can also experience the one-sided flexibility and insecurity that we have talked about already. If we do not include a power to include agency workers, there is a risk that employers wishing to evade the Bill will simply shift their workforce on to agency work to avoid giving them rights.

[Sir Ashley Fox]

What is more important in relation to this amendment is that the Government are granting themselves a Henry VIII power to amend their own Bill. The Minister really should say whether agency workers are intended be within its scope. He must not just say, “We will make this up at a later date.” We need clarity on that point. In previous Parliaments, the Labour party rightly criticised Conservative Governments for introducing Henry VIII clauses, but it is doing precisely the same thing because it has not actually made a decision. Will the Minister please answer this question: does he intend agency workers to be covered or not?

[Justin Madders]

I am grateful for the hon. Member’s question. It is our intention to include agency workers, which is why we have been consulting. The consultation finished yesterday on how best to apply the Bill to agency workers, because we understand it is a different relationship. There are a range of considerations, which is why the power has been taken in this way. I am sure that the hon. Member would criticise me if we had set out the scope of the Bill without having taken that consultation first. We are concerned about ensuring that there is a level playing field and not creating another loophole. We will now engage with the responses that we have had to the consultation.

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[Sarah Gibson]

Like previous amendments, the amendment highlights a serious concern among quite a lot of local businesses to which I have spoken, especially SMEs, which is that a considerable amount of detail has not been included in the Bill and is being left to secondary legislation. Although consultation is highly welcome, it needs to happen as fast as possible, because the interim period between seeing the Bill and getting the detail is causing a huge amount of stress and uncertainty for businesses working in ever more complicated conditions.

[Sir Ashley Fox]

I want to talk about the reference period in relation to the hospitality and tourism industry, which is particularly important to my constituency of Bridgwater and to many other constituencies in the south-west of England. Clearly a lot of seasonal workers are employed, and although I would prefer there to be no reference period, the Government have a mandate to introduce one. Any reference period of less than 26 weeks will cause great difficulty for businesses that may start engaging people just before Easter and are looking for employment to end in September or October, according to their business need. The fact that that detail is left to secondary legislation causes concern to those businesses.

[Alex McIntyre]

Does the hon. Member not agree that most businesses in hospitality know their seasons very well? They come every year and they tend to operate on a relatively regular basis—that is how seasons work. As has been highlighted, businesses could use fixed-term contracts to ensure that they have appropriate staffing for the season. Those contracts would end at the appropriate time, negating the need for a longer reference period.

[Sir Ashley Fox]

I am grateful to the hon. Member for making that point, but in Burnham-on-Sea in my constituency there are many very small businesses, with perhaps two or three employees, that take on an extra person or two during the summer season. This summer has been particularly bad because there has been an awful lot of rain. Business needs change. The danger is that if there were a short reference period and we were fortunate enough to have a very hot and sunny April, May and June but a very wet July, August and September, businesses would be employing more staff because they had to, rather than because it was justified by the business conditions.

This is just not necessary. It is Government regulation for the sake of it, and it will make life more difficult for small business owners. Every time Government Members have risen to speak, they have declared that they are a member of one union or another, but very few have actually run a small business. I did run a small business. I was self-employed before I came to this place. It is challenging, because you are on your own: you take the decision whether to employ someone or not. Dare I say it, there are too few Government Members who have set up small businesses and who have actually employed people and experienced that challenge. That is part of why they do not understand how difficult this regulation would make life for some very small businesses.

[Justin Madders]

The amendment tabled by the hon. Member for Mid Buckinghamshire seeks to amend clause 1 to specify in the Bill that the initial and subsequent reference periods for the right to guaranteed hours will be 18 months long. I do not think he is prepared to concede that it is a ridiculous amendment, but shall we say that it was ambitious? Can we agree on that?