Employment Rights Bill (Thirteenth sitting)

Ashley Fox Excerpts

Committee stage
Tuesday 17th December 2024 Public Bill Committees

[Sir Ashley Fox (Bridgwater) (Con)]

The hon. Gentleman says that the great educational experiment has not worked, but would he not acknowledge the significant improvement in our children’s ability to read, write and do mathematics over the past 14 years? Scores in the programme for international student assessment show that standards of reading, writing and mathematics have improved enormously in England—although they have regrettably fallen in Scotland, for reasons we can imagine. I am really proud of the achievements of the coalition and later Conservative Governments in improving educational standards. The freedom granted to academies—the freedom to innovate and to employ staff on the terms and conditions that they wish—has been critical in that, but the Government are rolling back those freedoms. Does the hon. Gentleman acknowledge the educational achievements of the past 14 years?

[Laurence Turner]

That was quite a generous amount of time for an intervention. The hon. Member may wish to go back to the record, because the point I made was that the experiment over pay and terms and conditions has failed. The challenge to the Opposition was: do they recognise that there is a serious problem with school support staff remuneration and contracts? If they do, what are their proposals to fix it? I would be willing to take a second intervention on that point.

--- Later in debate ---

[Uma Kumaran]

The school support staff negotiating body—to stick to the Bill—is an important part of the Bill and will help to ensure standardised fair pay and employment terms across the board, addressing not only local but regional disparities.

School support staff make a massive contribution to the running of our schools. Just last Friday, I visited the Odessa school in Forest Gate in my constituency, which has an above-average intake of SEND pupils, and I saw at first hand the contribution the support staff made. That is why the Bill, and this clause, are so important—because those staff, too, deserve to have their contributions properly recognised through a negotiating body. At present, their job profiles are out of date, opportunities for professional development are poor and the work they do often goes largely unrecognised or unnoticed. The SSSNB can play a major part in tackling the recruitment and retention crisis across our schools.

I do not think anyone could look at our current approach to school staff and say it is a functioning system—that is certainly not what I hear from teachers when I visit local schools. Local support staff have told me the hardships they are under, and the TUC has shared a report with us showing that one in eight workers use food banks, a quarter take second jobs and half are actively looking to leave their role because they cannot make ends meet.

The attitude—which some may call neglectful—that we have had towards school support workers due to the approach taken by the last Government has sent a clear message that they simply are not valued. By re-establishing the school support staff negotiating body, the Bill will change that. I therefore commend the clause to the Committee.

[Sir Ashley Fox]

It is a pleasure to serve under your chairmanship, Mr Mundell. We are discussing clause 28 and schedule 3, and the hon. Member for Birmingham Northfield asked what the Opposition’s proposal would be. Well, nothing needs changing—the clause and schedule are completely unnecessary. I say that because it is my belief that the way the education system in England is delivered—mostly by academies—is a successful model. The Government’s proposals will harm our education system because they will take freedom away from schools and academies. There is a fixed amount to be spent on education, and the governors of schools and academies are best able to decide where those resources are allocated.

The hon. Member for Birmingham Northfield told us it was unfair that some teaching assistants have lower pay than others and that their terms and conditions are not identical. He also said it was difficult to retain and recruit teaching assistants. If that is the case, the governors of a school or the leaders of an academy can pay more to recruit the staff they need.

What we see from the Government is a belief that Whitehall knows best. They intend to centralise terms and conditions and will try to specify how much each teaching assistant in each school will work, because that suits their political agenda and the agenda of the trade unions that pay for their election campaigns.

[Laurence Turner]

Why does the hon. Gentleman’s argument against central direction-setting not apply to teachers? Is he arguing for the abolition of the School Teachers Review Body?

[Sir Ashley Fox]

Teachers are different because teaching is a profession that should certainly agree not to strike on pay and conditions, in return for the provision of the pay review bodies, which should play an integral part in ensuring that children’s education is not disrupted by industrial action. I would be happy to grant academies the freedom to pay a little more or less for scales, although perhaps that is not currently possible. I want the maximum freedom granted to academies and schools because, fundamentally, I believe they are best able to allocate the limited resources.

As my hon. Friend the Member for Mid Buckinghamshire said, if the Government really wanted to raise pay and improve conditions for teaching assistants, it is in their power to increase substantially the amount of money available for schools. They choose not to do that, but instead say that schools must stick to certain parameters on pay and conditions that will not enable schools to deliver the best education for children.

It is important that I talk briefly about the enormous improvement in educational standards for our children, which has been enabled by the freedom that academies have been granted. Clause 28 and schedule 3 start to roll back those freedoms. My fear is that this is the start of a process in which we will see educational standards in England deteriorate.

[Laurence Turner]

I thank the hon. Gentleman for giving way a second time. He describes a picture of extraordinary success. Classroom-based support staff spend the majority of their time supporting SEND learners. Does he regard the SEND system as a success?

[The Chair]

Order. We are starting to stray back into a wider debate.

[Sir Ashley Fox]

I am trying to think of how clause 28 and schedule 3 relate to SEND education, and I am struggling. I do not believe that the SEND system is a success, and I do not think that more central control is the way to solve that. In fact, one of the problems is that every time there is a problem, we in Parliament and Whitehall think, “The solution is a directive from above. That will sort out the problem.” That is precisely the model that the Government are adopting in clause 28 and schedule 3: “There’s a problem with low pay, so we will set up a process in London that will help matters.” That is not true at all.

I hope we can all agree that the purpose of spending money on education is to improve the life chances of our children. How are resources allocated? Are they best managed on a school basis or an academy basis? Or are they best decided in London? I argue that they are best decided on a school or an academy level. As I say, I fear that clause 28 and schedule 3 are the beginning of a process in which we will see more and more central control exerted over schools, and that that will lead to worse outcomes for our children.

[Justin Madders]

I will respond in the strict terms that you have directed, Mr Mundell. I also point out to Members that an education Bill will be presented today. So there will be an opportunity for the wider debate that Members are keen to have, when that Bill gets its Second Reading in due course.

--- Later in debate ---

[Justin Madders]

Of course, the Bill has not been published yet, so we cannot stray into that. We may be able to get on to it this afternoon, but we are trying to help some of the most poorly paid people in our society, who do such an important job. My hon. Friends the Members for Penistone and Stocksbridge, for Birmingham Northfield and for Stratford and Bow all talked about how important teaching assistants are, particularly in supporting those with special educational needs. My hon. Friend the Member for Birmingham Northfield was right that it is shameful that the Low Pay Commission has now deemed teaching assistants to be part of the low pay environment. We are determined to address that, which is why the reinstatement of the SSSNB is an important step.

Let us reflect on some of the evidence that we have had—for example, the GMB evidence. Andy Prendergast said:

“we see increasingly more pupils with special educational needs go into mainstream education, and they need that additional support.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 132, Q136.]

Some of those staff do detailed things such as phonics, supporting pupils with special educational needs and disabilities, and help to deliver classes.

I take the point that has been made about the NJC being an inappropriate way of evaluating and assessing job value. It is clear—indeed a number of other pieces of written evidence have supported our assertion—that the NJC is not the right vehicle for assessing teaching assistants’ pay. We believe that the SSSNB is the way ahead.

The hon. Member for Bridgwater talked about this being a centralising move. Of course, the SSSNB will comprise mainly employers and employee representatives. It will not be a Whitehall-dominated machine.

[Sir Ashley Fox]

But to the extent that the SSSNB will decide the terms and conditions of assistants in Bridgwater, Mid Buckinghamshire and Birmingham Northfield, and those conditions will apply to all teaching assistants, regardless of the school’s or academy’s view on the subject, it is a centralising measure, does the Minister not agree?

[Justin Madders]

It is a necessary measure because, as we have seen, teaching assistants and school support staff have suffered in recent years. The point that the hon. Member for Chippenham and several other Members made about funding is correct. It will, of course, be incumbent on future Governments to ensure that any proposals that come forward are affordable. It should be noted that the recent Budget put some additional funds into special educational needs.

Let us look at why this measure is needed. We know that there is a chronic issue of low pay, a lack of career progression and damaged recruitment and retention among school support staff. A survey of teaching assistants found that 27% were considering leaving education altogether—surely we need them to stay—while 60% cited low pay as a reason for leaving, and 40% said that lack of opportunities for progression was. Eighty-nine per cent of schools said they found recruitment difficult, particularly in respect of teaching assistants, and 78% said they found that group hard to retain. There were similar figures in terms of the difficulties with the recruitment and retention of teaching assistants with SEND specialisms.

We are setting up this body to recognise that these people do a critical job in our education system and that they are not properly represented at the moment. They do not have a proper voice, and they do not have a proper mechanism to ensure that the valuable work they do is properly measured, remunerated and recognised. That is why the SSSNB is so important.

Question put, That the clause stand part of the Bill.

Employment Rights Bill (Fourteenth sitting)

Ashley Fox Excerpts

Committee stage
Tuesday 17th December 2024 Public Bill Committees

[Greg Smith]

They are.

[Sir Ashley Fox (Bridgwater) (Con)]

But some are more memorable than others.

[Greg Smith]

Some are definitely more memorable than others.

Amendment 168, tabled in my name and that of my hon. Friends on the Conservative Benches, would change the matters that are within the remit of the school support staff negotiating body in relation to academy staff, limiting it to the creation of a framework to which academy employers must have regard in all but “exceptional circumstances”. I am sure that Government Members will agree to a moderate amendment in the spirit of what they seek to do.

As I said in the debate on clause 28, which introduces schedule 3, in 2010 the then Conservative Secretary of State for Education, Michael Gove, rightly abolished the school support staff negotiating body. The Conservative Government had a clear and principled reason for that: employers should have the flexibility to set pay and conditions locally, rather than having a top-down, centralised framework imposed on them. Instead of giving employers the flexibility to do what works best for them, this Government are establishing a national terms and conditions handbook on training, career progression routes and fair pay rates for school support staff.

These things can sometimes get taken out of context, so I want to be clear: we are not advocating for a race to the bottom on pay and conditions for school support staff, but we believe that the current arrangements are working well and have allowed for innovation that is beneficial for pupils—real children up and down the land receiving their education. Our worries about the re-establishment of the school support staff negotiating body are principally that we believe that school employers must retain a degree of freedom and flexibility to recruit, develop, remunerate and deploy their staff for the benefit of the children in their community—their setting—to achieve their particular aims from a school improvement and inclusion perspective.

Children with special educational needs and disabilities rely on schools’ ability to deploy staff to meet their individual needs, and stifling innovation in staffing to meet those needs would be the greatest barrier to reforming the SEND system. In particular, ensuring that mainstream provision can meet the needs of SEND children requires, in its very essence, an innovative use of support staff resource.

As I have said in previous debates, I salute all support staff, whether they support children with SEND or other- wise. They are great assets to every school who do an enormous amount of good work for every child they work with on a daily basis—I am thinking of the example given earlier by the hon. Member for Birmingham Northfield, and the way in which they interact with and support my own children in their schools in Buckinghamshire. They are hugely important, but this is about ensuring local decision making, local flexibility and the local ability to shape what is right for children’s education, development and future life prospects.

For those reasons, we believe that the statist approach created by the Bill is fundamentally misguided, and that children, particularly those with additional needs, could be worse off because of it. All school employers operate in a competitive market to attract and retain staff. I accept that in the education world it is currently particularly difficult to recruit teachers and support staff—there is no doubt that that has been a challenge for a considerable number of years—but, particularly in relation to support staff, schools compete with other local establishments, including in the private sector, and employers in local markets. Incentives to attract and retain staff are needed.

Our concerns with the re-establishment of the school support staff negotiating body do not end there. Academy trusts sign a funding agreement with the Secretary of State that gives them certain freedoms, among which is the ability to set pay and conditions for staff. What the Government are trying to do with the Bill is therefore to unpick a clear, established and positive freedom that academy trusts have. To take that away from them would be a retrograde step. The Bill explicitly overrides that contract. As for school support staff, it states:

“Where the person is employed by the proprietor of an Academy, any provision of the Academy arrangements relating to the Academy has no effect to the extent that it makes provision that is prohibited by, or is otherwise inconsistent with, the agreement.”

His Majesty’s loyal Opposition worry that this is just the start of the Government’s longer-term mission to unwind academy freedoms, and that it shows that they fail to understand how to support educational excellence.

The data on key stage 4 performance recently released by the Department for Education shows that academies and free schools tend to perform better than other types of school. We therefore believe that it would be counterproductive to unwind one of the key tenets that has led them to where they are today. There is always room for improvement, but when things are travelling in the right direction it is foolish to put barriers up. Our amendment would change the SSSNB’s remit so as to create a framework that academies must have regard to but are not compelled to follow. That seems a reasonable compromise, and I ask the Government to consider it carefully.

In this context—we are all creatures of our own experience—I think particularly of examples from my constituency of Mid Buckinghamshire and the county of Buckinghamshire more widely. I think I brought up this example in relation to other sectors in earlier Committee sittings. Because the county of Buckinghamshire borders London boroughs, rigid pay scales make recruitment an even greater challenge, because of the London weighting issue. Many teaching assistants, school support staff and, frankly, staff in any sector—we will come to adult social care later in the Bill, and care workers are equally affected—who live in Buckinghamshire and perhaps want to work there feel compelled to go and get the extra money that the London weighting would bring by applying for a job in, say, the London boroughs of Hillingdon or Harrow. Nobody can blame them for doing that, but it creates a recruitment challenge for Buckinghamshire, Hertfordshire, Essex, Kent, Surrey and other London-bordering counties.

The amendment seeks to correct for what the Government are trying to do with schedule 3, and so to maintain the freedom that allows academies in Buckinghamshire and those other counties to dynamically adapt their pay and offering for school support staff and counter those challenges. It would mean that schools in Buckinghamshire that want to employ people who want to work in Buckinghamshire can get them on board, rather than there being a false incentive that forces people to take jobs in one of the London boroughs and secure the London weighting that goes with them. That is one practical example of why I believe that academies, and free schools for that matter, should have that core freedom and flexibility to get it right for their children.

Oral Answers to Questions

Ashley Fox Excerpts

Thursday 12th December 2024 Commons Chamber

[Jonathan Reynolds]

Conservative Members know what they left behind, and I have not heard any of them offer an alternative. The specific answer to the right hon. Member’s question is that employment allowance was doubled in the Budget and the threshold was taken off. That is why 1 million, mainly smaller, businesses are paying less or the same in national insurance contributions as they were before the Budget. She should tell the House how the Conservative party would pay for the infected blood scandal—the victims of which we are all committed to compensating—Post Office compensation, support for the steel industry, and the advanced manufacturing plan that we inherited, because none of that was in our departmental budget. We are fixing the foundations with long-term public investment and an agenda based on higher business investment and better, stronger economic growth in every part of the UK.

[Sir Ashley Fox (Bridgwater) (Con)]

The Government have raised national insurance charges on employers and introduced a family farm and a family business tax. The Employment Rights Bill will raise business costs by £5 billion, predominantly for small businesses. As a result of those changes, does the Secretary of State believe that SMEs will employer more or fewer people?

[Jonathan Reynolds]

I have absolutely no doubt that the Government’s agenda is one for employment, business investment and growth. Some of the things that this country needs the most could only have been delivered by a change of Government. I simply do not believe that the Conservative party is capable of reforming the planning system or having a long-term industrial strategy, fixing our relationship with the European Union, and all the rest of it. Yes, there have been challenges, but the Conservatives know what they left behind. They knew what they were doing. There is a reason the Conservative party had no spending plans for the next financial year. We have had to confront that reality, but we cannot have the kind of success that this country needs unless we are willing to fix the foundations and focus on the long term. The Chancellor did that in the Budget, and the agenda of the Department for Business and Trade is extremely attractive for the future.

Employment Rights Bill (Eleventh sitting)

Ashley Fox Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

It is a pleasure to see you in the Chair, Ms Vaz. I refer to my entry in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions.

The shadow Minister has posed some questions that underlie amendment 156, which seeks to include redundancy as one of the reasons for dismissal to which the lighter-touch standards will apply during the statutory probationary period. As he has rightly identified, the Bill sets out that the reasons for dismissal to which the lighter-touch standards may apply are the statutory grounds of capability, conduct, illegality and some other substantial reason.

It is important to note that those four areas relate to the individual employee, which is why redundancy is not included. Redundancy can affect entire workforces, whereas the other areas are included because of the overlap between the potentially fair reasons for dismissal in the legislation, particularly suitability for work, and the sorts of issues that might come up in a probationary period. A redundancy situation would not ordinarily come up within a probationary period, because it would be about the wider business condition rather than the individual employee’s performance or suitability for the job. I hope that explains why redundancy has not been included.

I turn to the shadow Minister’s more general points. We are trying to strike a fair balance between strengthening employee protections against unfair dismissal and maintaining businesses’ ability to hire, assess and dismiss new employees. The Government are committed to ensuring that businesses retain the confidence to do so. We do not wish the new procedures to undermine existing fair dismissal processes for redundancy, which already provide a robust, straightforward and fair process for employees facing redundancy.

We will work closely with ACAS, in consultation with businesses and trade unions, to ensure that there is clear, straightforward and easy-to-follow guidance on how to carry out a redundancy process under the new measures. It will be an easily accessible process. One of our concerns about including redundancy is that if an employer decided to make a significant number of their workforce redundant, it would be an additional administrative job for them to identify which employees they did not need to include within a redundancy process because they were part of a statutory probationary period, and which would be subject to the wider process. That would lead to unintended consequences and possibly risk of discrimination claims.

[Sir Ashley Fox (Bridgwater) (Con)]

Can the Minister give me an assurance on how microbusinesses will be affected by the change? A very small business might choose to take on one person, and there might be nothing wrong with that person, but within a couple of months the business might realise that it is not working from an economic point of view. The employee would then be effectively redundant, because that small business cannot sustain their employment. Can the Minister assure me that if that small business cannot dismiss that person for the reason of redundancy during the probationary period, there will not be a separate, complex redundancy process to follow?

[Justin Madders]

The hon. Member may be conflating two slightly different issues. I say to him very clearly that existing laws on redundancy will not be changed as a result of the Bill. We expect employers to follow the same processes, regardless of the length of service of the employee. In that situation, I do not imagine that there would be a particularly lengthy process if it involved only one individual and a small employer. There would not need to be a pool for selection, for example, or selection criteria. We would expect the employer to comply with the law in those circumstances.

Amendment 157 questions whether regulations should be able to set steps that an employer must follow for a dismissal to be considered fair when prescribing lighter-touch standards to apply during the statutory probationary period. We have set out clearly our intention to have a light-touch process, and we know that around 9 million employees will benefit from that. The intention behind setting out those steps in regulations is to ensure that we take account of further consultation, which we will undertake not just with employers but with trade unions and civil society, to ensure that we have the right balance of process and fairness in a statutory probationary period. We will be developing that in due course. As is often the case with the ACAS code of practice on disciplinary and grievance procedures, there are already lots of examples of really practical guidance out there, which we intend to replicate. I invite the shadow Minister to withdraw the amendment.

Employment Rights Bill (Twelfth sitting)

Ashley Fox Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

While this is a probing amendment, I gently suggest that it would be entirely counterproductive to the core purpose of the measures, scuppering them completely. I appreciate that it probably will be withdrawn, but I want to gently push back because it is not related to the core thing here, which is preventing fire and rehire.

[Sir Ashley Fox (Bridgwater) (Con)]

It is a pleasure to see you in the Chair again, Ms Vaz. My hon. Friend the Member for Mid Buckinghamshire has explained that this is a probing amendment to find out the Government’s intentions, but I put it to the Minister and Labour Members that each of the Government’s proposals seems to be based on the premise that we need to legislate against the worst possible outcome.

The hon. Member for Worsley and Eccles referred to P&O, and that was in fact a scandal. But the problem with this approach, of course, is that a regulatory burden is imposed on each and every other employer, and the labour market is made less flexible and employing people is made more expensive. Therefore, every time the Government see a problem with one employer and say, “We have to regulate for everyone,” the whole labour market is made more expensive and less attractive to foreign investors—less like Britain and more like France. As we look across the channel, we see a country with a similar-sized economy, but an unemployment rate approximately double our own.

Combine that, for example, with the proposal on unfair dismissal, and employers could be less likely to employ that marginal worker. In this case, as Matthew Percival from the CBI said, it becomes more attractive, perhaps, for employers to make their workers redundant than to try to renegotiate terms and conditions.

I ask the Minister to consider the cumulative effect of each and every one of his proposals. It is easy for him to stand up and say, “This proposal on its own is modest and reasonable and good,” but the whole Bill will add £5 billion of costs to industry, and the majority of that falls on small and medium-sized enterprises. My fear is that the Minister, through the very best of intentions, will end up with unemployment higher at the end of this Parliament than when he started.

[The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)]

It is a pleasure to see you in the Chair this afternoon, Ms Vaz. For the benefit of the Committee, I again refer to my entry in the Register of Members’ Financial Interests and my membership of the Unite and GMB trade unions.

It has been an interesting debate. I think we are on the opposite end of the spectrum from where we were in the earlier debate about where the balance lies with our measures to end fire and rehire. I think that the fact that we have two arguments from other ends of the spectrum suggests that we are in about the right place—but if the shadow Minister expects us to believe that cows queue up to be milked in the morning, I just say to him: pull the other one!

[Sir Ashley Fox]

They get worse.

--- Later in debate ---

[Greg Smith]

I have a couple of brief questions. I am grateful for the Minister’s clarification that the clause does not provide for a consultation of the whole workforce. That was a legitimate concern for many as they looked at the drafting of the Bill. The clarification will be welcome.

My bigger question is about the practicalities where an organisation has in excess of 20 employees. For example, a small chain of five or six pubs could easily have that volume of employees across bar and kitchen staff—chefs—cleaners and perhaps security, but in that sort of setting it is very rare for staff to be unionised, or even organised among themselves. In that scenario, where a smaller business employs that number of people across multiple sites, how does the Minister expect the requirement for the involvement of a trade union or employee organisation that does not exist to be engaged with? What is the mechanism for that? I appreciate that many Government Members would quite like everybody to be in a trade union—

[Sir Ashley Fox]

They all are.

[Greg Smith]

Indeed, we know from their declarations of interest that they all are. I hope the Minister takes the question with the good intent with which it is asked. Not everybody is in a trade union and not everybody organises in that way, so how would the mechanics of the measure work in those circumstances?

That leads to the wider question, “Why 20?” Why not 19, 18 or 15? Why not 25? It seems like an arbitrary number. I accept that a number needs to be put down. In some ways, in specifying a number, this clause is more detailed than most in the Bill, and it gives certainty, but I would like to understand why it is 20. It seems like a number picked from thin air. It could negatively impact an organisation if it led the employer to decide, “Well, we’ll just get rid of 19 of them, and we won’t have to comply.” That seems at odds with the other provisions in the Bill, where the Government seem to want to move all rights back to day one, yet they do not seem to want to apply that to organisations where, for whatever reason, 20 people are, sadly, being consulted on being made redundant. I would like clarity on that point.

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.

--- Later in debate ---

[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?

--- Later in debate ---

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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?

Employment Rights Bill (Sixth sitting)

Ashley Fox Excerpts

Committee stage
Tuesday 3rd December 2024 Public Bill Committees

[Michael Wheeler (Worsley and Eccles) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I will speak to these Government amendments collectively, because although they are incredibly technical, we must not lose sight of their purpose, which is to promote good employment. If there are loopholes and readily available routes by which employers can avoid the measures laid out in this Bill, we will see good employers undercut and workers not feeling the benefits. I welcome this as part of the Government doing their job to strengthen the legislation by introducing well thought out amendments to close loopholes and ensure that it is as strong as it can be. I commend this and the other amendments as being not simply technical—although they are—but part of what really gives the Bill teeth in achieving its purposes.

[Sir Ashley Fox (Bridgwater) (Con)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I would like the Minister to deal with these points when he concludes, because I am concerned about the effect of an amendment that is as complicated as Government amendment 12 is on the small businesses that make up the bulk of business in my constituency. They will not have the benefit of an employment lawyer, such as the hon. Member for Gloucester, and they will not have an HR department. I ask the Minister to glance at the wording of the amendment and imagine that you do not spend your day job in a solicitor’s office, or a trade union office, or perhaps in the Palace of Westminster. You are wondering whether to employ someone and then you read that

“it is to be presumed, unless the contrary is shown, that it was not reasonable for the worker’s contract to have been entered into as a limited-term contract if the work done by the qualifying worker under the worker’s contract was of the same or a similar nature as the work done under another worker’s contract under which the qualifying worker worked for the employer—

(i) where the period in question is the relevant reference period, during that period;

(ii) where the period in question is the offer period, during that period or the relevant reference period;

(iii) where the period in question is the response period, during that period, the relevant reference period or the offer period.”

There are all sorts of technical legal terms used. The point is that you want this to apply to all small businesses, no matter how small—whether they have one, or two, or three employees. This point applies generally to the Bill. When the assessment of the Bill put the costs at £5 billion, the majority of which would fall on small businesses, I think it had exactly this sort of legal gobbledegook in mind. Very small businesses are going to have to deal with this, and they will probably not be able to understand it.

[Alex McIntyre]

I am grateful to the hon. Gentleman for touting out my services as a legal adviser, but I have committed to not taking any second jobs, and certainly none that involves legal services in the Cayman Islands. What I will say is that all of us here, as individuals, are governed by laws in our day-to-day lives. I doubt that many Members will be familiar with, on a detailed basis, the provisions of the Consumer Rights Act 2015, for example, but there are guidance documents and the Money Saving Expert is fantastic. If you ever have an issue with one of your financial products, there is always a guide that can be provided. I am sure that alongside the Bill there will be updated guidance—from ACAS, for example. Does the hon. Member for Bridgwater agree that although small businesses may not be able to take legal advice, there will be guidance documents? They are not expected to read the whole Bill line by line. There will be guidance, on websites such as that of ACAS, that is readily available to all employers, in which they will be able to get an explanation of some of these provisions.

[The Chair]

Order. There are just two points I wish to make, as lightly as I can. First, if hon. Members refer to “you”, they are referring to me. We use the normal debating protocols that apply in the Chamber. Secondly, if hon. Members wish to do so and catch my eye, they can speak more than once in a debate, so interventions should be kept as precise and short as possible.

[Sir Ashley Fox]

I am grateful for your guidance, Mr Stringer. To answer the intervention from the hon. Member for Gloucester, I am sure that small businesses will receive guidance from Money Saving Expert, ACAS and Citizens Advice, but the problem is that if they get it wrong, they will be sued and it will cost them money. That will be a real fear in their minds. Then a small businessman, faced with this sort of gobbledegook, asks himself, “Are you going to take the risk of employing that extra person, faced as you are with the fact that they get their rights from day one?” It all adds up to the cumulative effect of small businesses being less likely to employ people. It adds to the cost and the burden. It is a great shame that the Government are bringing in such vast amounts of detailed amendments and expecting small business owners to make sense of them.

[Steve Darling (Torbay) (LD)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I would like to amplify the issues raised from the Opposition side of the room. There are serious concerns, and we need to ensure that the regulations are as simple as possible and easy for employers to understand. I fear that this is a charter for HR consultants and lawyers, rather than driving the agenda that I am sure most people in the room genuinely wish to see being driven forward. I ask the Minister whether, before we reach the end of this Bill stage, further simplification could be brought forward.

[Jon Pearce (High Peak) (Lab)]

It is a pleasure to serve under your chairship, Mr Stringer. The Agency Workers Regulations 2010 came into force in October 2011, under the leadership of David Cameron and the coalition, and there is similar wording in the agency worker regs. Regulation 9(4)(a) states that

“the most likely explanation for the structure of the assignment, or assignments, mentioned in paragraph (3) is that H, or the temporary work agency supplying the agency worker to H, or, where applicable, H and one or more hirers connected to H, intended to prevent the agency worker from being entitled to, or from continuing to be entitled to, the rights conferred by regulation 5”.

The legislation that we are considering is not out of the ordinary in its complexity. This is just necessary—

[Sir Ashley Fox]

Would the hon. Gentleman accept that this legislation will be imposed on businesses with perhaps one employee? There will be no exemption for any minimum size.

[Jon Pearce]

Yes, I would, and it is entirely right that it should be. We have to have a level playing field within the UK; otherwise, we see all the perverse incentives that hon. Members, including the shadow Minister, the hon. Member for Mid Buckinghamshire, are keen to avoid. We cannot have a two-tier workforce.

Returning to my original point, law is often complex in the way it is written, but that does not mean it will be complex in its application. It will only be complex where there are attempts to avoid it. It is absolutely right that the law is tight on this so that we do not have huge amounts of avoidance within the business sector from unscrupulous employers. Most employers, as we know, do not exploit zero-hours contracts, for example, so it is entirely right that we make sure that those who wish to exploit them cannot.

--- Later in debate ---

[Uma Kumaran]

Thank you, Mr Stringer. I am glad Members got some steps in and I hope they have come back reinvigorated.

Members across the Committee have spoken eloquently today about why they support the bold measures in the Bill, which is the best upgrade to worker’s rights that we have seen in a generation. I pay particular tribute to my hon. Friend the Member for Gloucester for sharing his personal story. That is why we are here; it is about the people behind those stories. The Bill is about making a difference to people’s lives.

We started this month by marking World AIDS Day. The National AIDS Trust supports the amendments to increase the time limit for claims from three months to six, to bring the Bill in line with the Law Commission’s 2020 recommendation. With a diagnosis such as HIV/AIDS, three months is nothing. When a person is diagnosed, they have to go to their doctor, assess the impact the diagnosis will have on their life, and in some cases discuss how to break it to their family, friends and employers. Adding a ticking time limit of three months for their job and their livelihood can be so distressing. That is why I remind Members to remember the people behind the stories—the people we seek to serve and to help.

This is not just about the people; it also impacts business, as we have heard from Opposition Members. We have seen inclusive employers standing with the National AIDS Trust, not just in the UK but around the world, to support the asks that were brought forward to mark World AIDS Day. That is why I urge Members to support the amendments to increase the time limit from three months to six.

[Sir Ashley Fox]

There is one point that I would like the Minister to clarify. Some of his colleagues have said that, by extending the limit from three months to six, we will avoid a large number of claims, as there will be more time to negotiate and they will be concluded in good time. Other colleagues have said that this is an access to justice point, since lots of claims are being missed out because the time limit is too short. Can the Minister clarify, for the benefit of small businesses, whether they will face more or fewer claims? It seems to me that the Government have not decided whether this is a reform to reduce the number of claims that small businesses will face, or whether it will significantly increase the number of claims. Whatever the justice of each individual claim, small business owners will have to deal with its legal consequences and devote time to it. I think they would appreciate knowing whether there will be more or fewer claims.

[Uma Kumaran]

Statistically, less than 1% of women who have been subject to pregnancy or maternity discrimination pursue a claim in an employment tribunal. While making the case for business, it is important to realise that we are talking about a very small percentage of people. As we heard from my hon. Friend the Member for Penistone and Stocksbridge, these things can make a huge difference to people’s lives, and we are talking about very specific amendments that will make a real difference to the lives of working people.

Oral Answers to Questions

Ashley Fox Excerpts

Thursday 5th September 2024 Commons Chamber

[Gareth Thomas]

My hon. Friend is absolutely right to say that there are policies across the whole of Government that impact on small businesses and particularly on high street businesses. One of the most significant issues is the need to see a fairer business rates system that creates better incentives for businesses to invest in the high street, in comparison with the competition from online giants, so we are working with colleagues in the Treasury on that. We are working with colleagues in the Home Office to address retail crime—there has been a huge surge in shoplifting—which my hon. Friend knows has scarred too many high streets. We are also working with other colleagues, as I referenced in response to the previous question, to try to bring forward a stronger offer to small businesses.

[Sir Ashley Fox (Bridgwater) (Con)]

Small and medium-sized enterprises are the lifeblood of our high streets, and there are many such businesses in my constituency of Bridgwater. I understand, though, that SMEs now face paying thousands of pounds in fines if they do not uphold the Government’s new French-style employment reforms. Will the Minister consider exempting SMEs from any financial sanctions by the new fair work agency?

[Gareth Thomas]

I congratulate the hon. Gentleman on his election to this House. I gently say that he will have heard from my right hon. Friend the Secretary of State that we have already consulted widely with the business community about our plans to improve rights for employees. We did that when we were in opposition and we have continued to do it in government. I am struck by the support that our plans have from small businesses and high street businesses, but we will continue to work with small businesses on the details of those plans.