Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021

Baroness Bloomfield of Hinton Waldrist Excerpts

Tuesday 27th April 2021 Grand Committee

[Baroness Bloomfield of Hinton Waldrist]

That the Grand Committee do consider the Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I beg to move that the order, which was laid before the House on 17 March 2021, be approved.

I want to begin with some important background to this statutory instrument. The UK is unique in having three employment statuses for employment rights—self-employed, limb (b) worker and employee—when most other countries, including in the EU, have two: self-employed and employee. Those in the category of workers known as limb (b) workers have a more casual employment relationship than employees and are entitled to a basic set of rights, such as minimum wage and holiday pay. The limb (b) worker employment status allows for much-needed flexibility in the labour market.

Sections 44(d) and 44(e) of the Employment Rights Act 1996, which implements the EU health and safety directive into domestic law, gives employees the right not to be subjected to detriment by their employer for leaving or refusing to return to their workplace. It also gives employees the right not to be subject to detriment for taking steps to protect themselves or others in circumstances of danger that they reasonably believe to be serious and imminent.

Moving on to what this statutory instrument does, in May 2020, the Independent Workers’ Union of Great Britain brought a judicial review against the Secretaries of State for the Department for Work and Pensions and the Department for Business, Energy and Industrial Strategy. Following comprehensive proceedings, the High Court found in November 2020 that the UK had not fully implemented the EU’s health and safety framework directive into domestic law in Section 44 of the Employment Rights Act 1996, concluding that some protections were available only to employees while the court held that they should also extend to limb (b) workers.

The claim succeeded only in part: the court accepted that the UK was not required to extend unfair dismissal to limb (b) workers and had properly implemented the general obligations of the health and safety framework directive. The Government accepted this judgment and are therefore proposing this order, which will extend these protections from detriment in health and safety cases to all workers, not just employees—as had previously been the case. The court also held that the Personal Protective Equipment at Work Regulations 1992 should also be extended to limb (b) workers. I am assured by officials at the Health and Safety Executive that work is under way to consult and extend these regulations to all workers through an additional statutory instrument due to be laid later this year.

These important protections have proved even more essential for employees who have continued to work throughout the pandemic and for those who are returning to work as businesses emerge from lockdown. It ensures that employees have the legal protection that they need to act to ensure their own safety and the safety of others without fear of suffering detriment for doing the right thing. This includes protecting them against being denied promotion or training opportunities.

Having considered the court judgment, we agree that limb (b) workers should also benefit from these protections. This does not represent a major change as limb (b) workers represent a small share of the workforce. However, that does not make it less important, as these workers will undoubtedly have a significant role to play in our economic recovery from the Covid-19 pandemic. That is why the Government would like to clarify the UK’s understanding of the health and safety framework directive by amending Section 44 of the Employment Rights Act 1996.

This Government are committed to protecting workers’ rights and supporting workers through the challenges created by the Covid-19 pandemic, making the UK the best place in the world to work. Clarifying our interpretation of this directive in the light of the High Court judgment will mean that more people are protected by these provisions.

On scope, the changes made to Section 44 of the Employment Rights Act in this SI will apply in England, Scotland and Wales. Employment law is devolved in Northern Ireland. However, we have discussed this statutory instrument with the Northern Ireland Administration; they have laid legislation to the same effect, which will come into operation in parallel subject to the Northern Ireland Assembly procedure.

Given that limb (b) workers represent a small share of the workforce, the direct cost to business of this change is expected to be very low. We also do not expect the amendments to have a significant and disproportionate cost or impact in any region across England, Scotland and Wales.

In conclusion, this change is necessary to clarify the Government’s interpretation of the health and safety directive. It will ensure that all workers are covered by these protections and that we build back better from the pandemic by maintaining the highest standards when it comes to workers’ rights in the UK labour market. I therefore commend this order to the Committee.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank noble Lords for their valuable contributions to this debate. I am glad there is broad agreement in this Committee that the UK has a strong record for setting high standards on workers’ rights. We have always been clear that we will continue to ensure that workers’ rights are protected. We are proud of our limb (b) worker status, which allows much-needed flexibility in the labour market while providing “day one” workers’ rights and protections, which undoubtedly will have a significant role to play in building back better from the Covid-19 pandemic.

This statutory instrument will ensure that all workers are protected from detriment in health and safety cases in the workplace. In particular, this includes having the right not to be subjected to detriment by their employer for leaving or refusing to return to their workplace. It also includes the right not to be subjected to detriment for taking steps to protect themselves or others in circumstances of danger which they reasonably believe to be serious and imminent.

I thank the noble Lord, Lord Blunkett, for his thoughtful and supportive contribution which, as always, was well informed by his experience. There is always a delicate balance to be struck between protecting the rights of workers while retaining the flexibility of the labour market that makes the UK an attractive place to do business.

The UK has a strong record for setting high standards on workers’ rights and we have always been clear that we will continue to ensure that workers’ rights are protected. As laid out in our manifesto, we will bring forward measures, when parliamentary time allows, to establish an employment framework that is fit for purpose and keeps pace with the needs of modern workplaces.

My noble friend Lord Bourne of Aberystwyth asked about government plans to ensure the change is publicised. We have plans to engage organisations to publicise the amendment and help businesses and individuals understand the new regulations. In particular, we have plans to engage ACAS and Citizens Advice. We have also engaged the CBI, TUC and IWGB following the laying of this legislation.

The noble Lord, Lord Hendy, asked about legislation to resolve employment status and when the employment Bill will be introduced—a question asked by a number of noble Lords. The rationale for having a separate limb (b) worker status for rights is that it allows, as I have said, for increased flexibility in the labour market. A limb (b) worker has fewer obligations and responsibilities to their employer and, as a result, they are entitled to a basic set of rights, including national minimum wage and holiday pay et cetera, rather than the full suite that employees get.

We are clear that any reforms we bring forward will require us to consider the needs of our labour market today. This is why we continue to work with stakeholders to understand the needs and challenges of modern workplaces to ensure that our vision of a labour market is fit for purpose. The reforms will form part of the Government’s plan to build back better, enabling a high-skilled, high-productivity, high-wage economy that delivers on our ambition to make the UK the best place in the world to work and grow a business. We intend to bring forward the employment Bill when parliamentary time allows.

The noble Baroness, Lady Ritchie of Downpatrick, asked about the Government’s legislative plans. I thank the noble Baroness for her useful contribution on the important topic of TUPE. I will have to write to the noble Baroness on this topic because I do not have enough briefing to give a sensible response at this stage. I have laid out our commitment to the employment Bill already, which we will bring forward when parliamentary time allows.

My noble friend Lady McIntosh of Pickering asked to what extent other rights would be extended to limb (b) workers and how limb (b) workers could be equated to or differentiated from zero-hours contract workers. Zero-hours contract workers have a part to play in a modern, flexible labour market. They help support business flexibility and provide choice and opportunity of employment for young people, students, those with caring responsibilities or those wishing to retire early.

These contracts are useful where work demands are irregular or where there is not a constant demand for staff. Some types of work are driven by external factors that are out of the employer’s control. This can happen in a range of sectors, including, for example, hospitality, leisure and catering. However, they should not be considered an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable. An individual’s employment rights are determined by their employment status and not the type of employment contract they have, such as a zero-hours contract.

My noble friend Lady Gardner of Parkes asked what else can be introduced to help workers as we emerge from the pandemic. The Government are committed to bringing forward an employment Bill that will help us to build back better. This will enable a highly skilled, productive workforce and ensure that the flexibility of the labour market is not impeded by any encroachment on workers’ rights.

Since the publication of the Good Work Plan, the Government have made good progress in taking forward a range of commitments that support our flexible labour market while ensuring the protection of workers’ rights. These have included measures such as: extending the right to a written statement of core terms of employment to all workers; quadrupling the maximum fine for employers who treat their workers badly; closing a loophole that sees agency workers employed on cheaper rates than permanent ones; introducing key information documents that give agency workers more information about how they may be engaged and paid before they join an agency; and reforming rules to align the incentives of employers and workers when applying for and taking annual leave.

We have also banned the use of exclusivity clauses in zero-hours contracts to give workers more flexibility. This means that an employer cannot stop an individual on a zero-hours contract looking for or accepting work from another employer. It also prevents an employer stipulating that the individual must seek their permission to look for or accept work elsewhere.

We have provided unprecedented support to workers throughout the Covid-19 crisis. So far, the furlough scheme has helped 1.2 million employers to pay the wages of 9.9 million jobs across all sectors of the economy.

The noble Baroness, Lady Bennett of Manor Castle, asked about plans for further protections for workers, especially those in insecure employment in the light of the pandemic. The Government recognise concerns about employment status and are considering options to improve clarity, making it easier for individuals and businesses to understand which rights apply to them.

The noble Lord, Lord Lennie, asked about the IWGB case in the High Court, including how much the case cost the taxpayer and when the Government were first made aware of it. He also asked about the PPE regulations. It is right that the courts were able to consider all details of the case before coming to a conclusion. The claim succeeded only in part: the court accepted that the UK was not required to extend unfair dismissal to limb (b) workers and had properly implemented the general obligations of the health and safety framework directive. The Government chose not to appeal the judgment and are clarifying their understanding of the EU directive when transposing into domestic law.

The amendment to the PPE at work regulations contains a legal duty to consult, which is why we are not bringing the SI forward just yet. The Health and Safety Executive and the Department for Work and Pensions expect to lay this legislation later in the year. Covid has had a profound effect on the labour market, so it is only right that we take time to consider the impact of our reforms to ensure that they address the challenges of today and achieve change that works for all. We will continue to work with stakeholders, and we will bring forward detailed proposals in due course.

As I mentioned, officials at the Health and Safety Executive have assured me that work is also well under way to extend the protections of the PPE directive to limb (b) workers, as well as to employees, to align with the court ruling. This work is on schedule.

To close, I underline once more that these regulations will help workers across the country during this coronavirus pandemic and beyond, providing all limb (b) workers and employees with the right not to be subjected to detriment in health and safety cases. I commend these draft regulations to the Committee.

Motion agreed.