Corporate Insolvency and Governance Bill

Baroness Bryan of Partick Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Baroness Bryan of Partick (Lab) [V]]

My Lords, Covid-19 has made people more aware of the effects that changes in working practices have had on many workers. It is not long ago that the gig economy and zero-hours contracts were defended on the basis that some workers benefited from not having guaranteed hours or being able to plan and budget for rent, food and other expenses. The vast majority of workers know that there is no substitute for a job with a proper contract, holiday pay, sick pay, maternity and paternity pay, and, at the end, a good pension.

This pandemic has made many people even more conscious of how important these things are. There have been any number of scandals involving insolvency by unscrupulous employers playing fast and loose with pensions, which, as has been said, are workers’ deferred earnings.

Can the Minister assure the House that the Government have learned from those high-profile cases and that they recognise that those who suffer most from insolvency are the employees?

Following the collapse of Thomas Cook, many workers, sometimes more than one in the same family, not only lost their wages and long-saved-for pensions but struggled to pay rent and mortgages, putting their homes at risk. These uncertainties increase the likelihood of marriages breaking up and other social, physical and mental health problems. The Bill makes one think that the Government have not learned the lessons about insolvency from the failures of Carillion, BHS and all the others. If they had, they would have included employee representatives in the discussions around insolvency and would have amended regulations so that pension schemes were among the secured creditors.

Another concern about the Bill is that it may not prevent a restructuring plan being used to undermine workers’ terms and conditions. We should be concerned that the legislation has been compared to chapter 11 in the United States. I am more worried than some Peers that this could allow employers to end agreements with trade unions, sack workers, and rehire them on lower wages and poorer working conditions.

Many people hope that some good will come out of this pandemic. They hope that we will do things differently, that our society can be fairer and more equal, and that people’s lives can be made more secure. We must of course welcome the aim of keeping companies in business in such difficult times, but this needs to be done with the co-operation of the workforce. This can happen only if employees feel properly valued. As the Bill stands, it is business as usual. I hope that the Minister recognises that that is not good enough and will consider adopting some of the amendments that will greatly improve the legislation.