Employment Rights (Miscellaneous Amendments) Regulations 2019

Baroness Gardner of Parkes Excerpts

Thursday 28th March 2019 Lords Chamber

[Baroness Burt of Solihull (LD)]

My Lords, I am grateful to the Minister for outlining the main provisions in this suite of SIs. I have to say, it is a great pleasure not to be talking about Brexit, and to be talking about improvements in employment rights following the Taylor report. I record my thanks to the TUC for its briefing, although I do not necessarily agree with all its conclusions and comments.

It is very important that we move with the times, ironing out some of the unintended consequences of previous legislation and adapting to some of the issues developing through changes in the ways that we work. The Swedish derogation is one of the unintended consequences. I well remember introducing the Agency Workers Regulations 2010 when I was in another place. We introduced the right for agency workers to receive the same employment and working conditions as permanent staff after 12 weeks of service. The Agency Workers (Amendment) Regulations seek to remedy this loophole, which meant that some employers were getting out of giving full employment rights to agency workers by using Regulations 10 and 11 to waive the right to the same pay as a permanent worker if they signed a “pay between assignments”, also known as the Swedish derogation, which promised to pay in between assignments. Some employers were abusing this regulation, not paying material pay between assignments by keeping their staff on artificial, minimum hours contracts or deducting their “between assignments” pay from their “on assignment” pay. This Swedish derogation is to be revoked on 6 April 2020. Nothing good is lost—businesses will still be able to contract to pay agency workers between assignments after revocation. However, workers will not be able to opt out of equal pay rights after 12 weeks, which is a welcome protection for potentially vulnerable agency workers—so all good there.

The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019 introduce the welcome reform that employment agencies must give the worker information before a contract is agreed—on pay, benefits, costs, deductions and fees. It must also include the minimum rate of remuneration payable to the work seeker and the nature and amount of any deductions made to their remuneration. It must also include a worked example of a payslip. The first payslip often comes as a bit of a shock to employees, let alone an agency worker, when they see all the deductions. This key information sheet should improve transparency around pay arrangements; it is very welcome.

The final, and also very welcome, SI is the Employment Rights (Miscellaneous Amendments) Regulations 2019. These increase the maximum level of penalty available for,

“aggravated breach of a workers employment rights",

from £5,000 to £20,000. I am not entirely sure what “aggravated breach” would entail. In his remarks, the Minister talked about the minimum wage. Is it wider than that? I understand that it would persistently be breaching employment law, but how many breaches would there need to be before it becomes aggravated? This opens up the question of how many breaches are happening at the moment. The Explanatory Memorandum says that, since introducing the penalty for aggravated breach, 31 penalties have been issued. Can the Minister confirm that this 31 relates to total time since the Employment Tribunals Act 1996? That would indicate to me that there must have been more persistent breaches of employment law than that. I think it is absolutely fair to raise the limit of fine for an aggravated breach, but this will not be much of a deterrent to an employer if there is very little risk of detection. The Minister may not have the figures relating to how many companies have been inspected since 1996 and what that constitutes as a proportion of the total number of companies, but would he be so very kind as to write to me with the statistics that the Government collect regarding inspections and prosecutions for non-aggravated penalties issued since 1996, or whichever is the correct date of the legislation coming in?

A second welcome part of this SI is the extension of the right to a written statement to “dependent contractors” as well as employees. Here I would appreciate some clarification from by the Minister. I am taking “dependent contractor” to include individuals in the gig economy, but I was hoping for a little more in the explanatory notes. I would be grateful if he could write to me, or point me in the right direction, to help me understand a little better the issues facing dependent contractors. I do understand that the Government are consulting on employment status, and that there has certainly been a lot of controversy over the employment status of employees in the gig economy. Could the Minister inform the House what progress is being made on this?

The third provision was to lower the percentage requirement for a valid employee request for the employer to negotiate an agreement on informing and consulting employees, from 10% to 2% of the total. In his remarks, the Minister said that it was important to consult. I agree, but can he give a little bit of context on this, please? I am not sure if this is a very minor issue or, potentially, a big one. Could he give any examples of what employees might need to be informed and consulted on which they are not at present? The 2004 regulations, which originally imposed this application, related to employers with at least 50 employees. I presume that the same threshold number of employees would apply to this amendment. Can the Minister confirm this?

In conclusion, although the TUC felt that many more protections and issues should have been covered in these SIs, I think there is some good stuff in here. There is always a balance to be drawn between all the partners in any enterprise. More can always be done, and, as the economy develops, more will be needed, but I believe we are at least headed in the right direction.

[Baroness Gardner of Parkes (Con)]

My Lords, I raised the issue of care agencies earlier, regarding carers who do one hour in one place, one hour in the next and so on, all of them potentially quite far apart. There was a court decision, at a very high level, that they must be paid for their time travelling between places. I have followed this up, and have been told that, in general, they are not being paid. It is local authorities that pay for carers, but they do not seem to be paying them for this, which is very wrong, as there has been a court decision. Where in these regulations will this be covered? It seems highly relevant. I have had a great deal to do with the people who are not getting this money; when they point it out, their companies say they have no intention whatever of paying it. This is wrong since there has been a trial case. I hope the Minister can tell me where it will be covered in these regulations.