Employment Rights Bill

Baroness Morrissey Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Baroness Morrissey (Con)]

My Lords, it is an honour to follow the noble Baroness, Lady Chakrabarti, whose work I greatly admire. I add my hearty congratulations and warm welcome to the four who gave such brilliant maiden speeches earlier.

I will make two contributions to the debate, one general and one specific. There is much that I, as a business leader, welcome in the Bill. My current roles are detailed in the register. Previously, I was CEO of an investment firm for 15 years, during which time pre-tax profits grew almost eightfold, or 15% a year, including over the financial crisis. That success and resilience was thanks to a talented team who were loyal and committed to the business—largely, I believe, because they were treated well. It was not a large business but, for example, we offered enhanced maternity leave from day one and staff could request flexible working fully 12 years before that was required by law.

Of course, as a business leader, I am very conscious of the need to limit burdens on firms, but high employee commitment and engagement is also key to the bottom line. UK annual employee turnover is currently 34%, according to the CIPD. One-third of workers are so disengaged that they leave within 12 months, and the cost of replacing them is huge—up to twice the outgoing employee’s annual salary. So I do not agree with the objections, including from various business lobby groups, that the Bill will layer on costs without benefits. It requires a raising of standards in how employees are treated, especially the low-paid and vulnerable, such as pregnant women. Treating people decently is something that should be the norm on day one but, sadly, not all firms currently do that or show any inclination to do so voluntarily. If employees feel treated fairly then, in my first-hand experience, they will more than repay this in loyalty and increased productivity—things that this country badly needs.

Just one example of where a long-term vision, not a short-term spreadsheet, paid dividends is that of Aviva, which introduced six months of equal paid parental leave in 2017 for both men and women. I asked Aviva how it budgeted for this ground-breaking policy, and it said that it did not actually know what the cost would be, but knew that employees with happy family lives would be more likely to stay and develop their careers there, so it decided to do it. The policy has been a resounding success. Men take an average of five months of paternity leave and there is great talent attraction and retention. The costs to the firm have been more than off-set by benefits, including lower recruitment expenses.

My second point is specific and concerns the protection from harassment clauses, Clauses 19 to 22. Your Lordships will be familiar with the high-profile sexual harassment cases that we read about in the press. Those are the tip of the iceberg. I chair the Diversity Project, and we have a confidential safe space for people to report poor behaviours. It has been going on for about two years and more than 30 reports have been submitted, 90% from women. Their accounts show that sexual harassment remains a problem. All too often, non-disclosure agreements—or NDAs—are used to buy silence, rather than address behaviours.

At the Diversity Project’s International Women’s Day event, I asked the audience, who were women in the City, whether NDAs for sexual harassment cases should be banned. The response was split 50/50. There are situations where a victim may decide she has to leave a company after what has happened, and an NDA can provide confidentiality and finance while she looks for a new role. I then asked whether people would prefer a more nuanced approach, one that allowed NDAs for sexual harassment cases only in certain circumstances. In Irish law, NDAs are banned for sexual harassment cases, except where the victim requests one and has taken legal advice. In addition, I suggested independent investigation into serious instances and a standard template for board oversight. At present, boards do not even receive this information; they surely should. This proposal met with a vote of 85% in favour. The consensus was strong around requiring regulators to ensure that bad apples are not put back in the system, which we know happens. At our event, 100% of the audience said that the FCA and PRA should give clear examples of unacceptable behaviours.

I will propose amendments to restrict the use of NDAs for sexual harassment. There has been debate on this and support for it in the other place. Your Lordships now have the opportunity to create stronger protections from sexual harassment in the workplace. That is something that I hope all Members of the House—men and women, whatever their political affiliations—can agree on.