Employment Rights Bill

Baroness Jones of Whitchurch Excerpts

Committee stage
Tuesday 24th June 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Clement-Jones, for his amendment. As we consider this legislation, it is timely to reflect on how it would interact with one of the most significant shifts in our labour market in recent decades: the rise of the gig economy. This sector has delivered considerable benefits, including increased flexibility, new income opportunities and innovative business models. It has allowed many individuals to engage with work on terms that suit their circumstances, whether as a primary or supplementary source of income.

However, with any new form of work comes a degree of legal complexity. Our current employment framework was designed largely in a different era—one where work tended to take place in fixed locations, during fixed hours and under traditional contracts. The gig economy challenges many of those assumptions. For businesses, this complexity can lead to inconsistencies in regulation, administrative uncertainty and litigation risk; for individuals, it can mean uncertainty about rights and entitlements, and for policymakers, it raises the broader issues of whether and how the legal definitions of employment need to evolve to reflect modern working practices.

The Bill, while not focused exclusively on the gig economy, touches on matters such as workplace rights, regulation and the role of secondary legislation that will inevitably affect it. We should therefore consider whether the legislation provides sufficient clarity for businesses operating flexible models, whether it supports fair and predictable frameworks for all parties, and how future regulations will ensure that any changes to employment classifications or entitlements are based on clear, evidence-led analysis.

The question before us is not so much whether the gig economy is good or bad—it is part of the modern labour market, and it will obviously continue to grow and remain so. The more pressing question is whether the labour market is equipped to keep up with that evolution, and whether the Bill provides the right foundation for doing so. In that context, thoughtful and measured discussion about emerging work patterns such as dependent contracting, platform work, freelancing —which we discussed the other day—and other hybrid models are not only appropriate but very necessary. I look forward to further discussions with the noble Lord, Lord Clement-Jones, and others, on this subject.

Before I sit down, I thank the noble Lord, Lord Leong, for the great courtesy with which he has always conducted himself in his discussions and deliberations with our side. I enjoyed his valedictory remarks. I felt that he was perhaps slightly irked by the fact that we have had some relatively lengthy debates—perhaps because he did not agree with the premises of some of them. I would say very gently that that is the point of Committee; we are not supposed to agree, we are supposed to probe. As a former Home Office Minister, I have to say that these debates are not long; they are brief. These debates are like Usain Bolt; ours were like Mo Farah.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling Amendment 318. He raises an important issue. As we have been discussing, the changing nature of work and the gig economy are a real challenge for us, and we recognise the complexity and shortcomings of the UK’s current employment status framework.

I can reassure the noble Lord that the Government have committed to consulting on a simpler framework for employment status, and this remains our intention. We have been clear that, as a result of the complexity, some of the reforms in the plan to make work pay will take longer to undertake and implement. We want to get the potential changes to the framework right, and we will consult on the fundamental aspects of employment law before taking action. I think that in part echoes the comments of the noble Lord, Lord Sharpe, who recognised the complexity and the need to think it through before we get it right. We are determined to follow this through and take action.

I am sympathetic towards the noble Lord’s aims to extend the protection of employment law. The self-employed make a huge contribution to the UK economy. As the noble Lord, Lord Sharpe, said, while many enjoy being their own boss and the flexibility that self-employment brings, others can find themselves highly dependent on one particular client with little choice, which can bring them challenges and problems.

I appreciate that the noble Lord is seeking to address this with his amendment by introducing a new employment status of “dependent contractor” and extending employment protections to those individuals. However, the amendment would further complicate what is already a highly complex area—one where, as I am sure the noble Lord knows, there have been several high-profile Supreme Court judgments in recent years. We want to avoid introducing an additional employment status before we have had the opportunity to reflect and consult further.

In addition, I can assure the noble Lord that the Government are committed to supporting and championing the self-employed. We have already announced a package of measures to help the self-employed thrive in good-quality self-employment, including measures to tackle late payments to small businesses and the self-employed. I urge the noble Lord to listen to our reflections and our determination to look at the whole issues around the gig economy, and to give us a little bit of space to do that. For this reason, I ask him to withdraw Amendment 318.

[Lord Clement-Jones (LD)]

Can the Minister say what the status is of the consultations she mentioned? She offered very reassuring words and said there was a consultation on employment status. Is that under way? Would that mean the idea is to eventually have an Employment Rights (No.2) Bill, which we would all look forward to debating? What is the exact status of what the Minister is reassuring us on?

[Baroness Jones of Whitchurch (Lab)]

This has come up several times in the debates we have had on the different aspects of employment status. We have said that we need to do further work on the employment status elements of the plan to make work pay. I do not think it is intended to come back and put that in this legislation. The consultation has not started yet, but there will be a thorough consultation. We are going to carry out a detailed piece of work on this, and we will come back with further proposals on how we are going to address it in due course. I hope that answers the noble Lord, even if not completely.