Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, during my time as TUC general secretary, I met many employers who value good industrial relations and agree terms far above legal minimums. I also met dedicated care workers who did not earn enough to give their own children a decent start in life; loyal P&O crew who were fired and replaced with labour paid below the minimum wage; Amazon workers whose boss is running roughshod over the basic British liberty to organise collectively and bargain for better conditions; and teenage workers at McDonald’s who faced sexual harassment, and even demands for sex for shifts. On that issue, will the Minister please update us on the Government’s approach to tackling non-disclosure agreements regarding discrimination and harassment? Frankly, it is obscene that NDAs are used to silence victims and that that silence puts workers, especially young women, at risk.

The Bill has strong public support across the political spectrum, and no wonder. The UK is now an outlier among OECD countries for labour standards. On rights for temporary workers, the Work Foundation reports that the UK is bottom of the league of 22 OECD nations, only just above the United States. Statutory sick pay is the lowest in Europe, and the lowest paid have been excluded, which means that many cannot afford to stay home when sick. As we saw during Covid, that endangers public health. Other countries—New Zealand, Italy, France, Germany and many more—banned exploitative zero-hours contracts long ago, but the UK did not.

Under the Conservative Government, rights failed to keep pace with the rise of the gig economy. In fact, the Conservatives worsened protection against unfair dismissal, some sex discrimination rights and the human right to withdraw your labour. The party opposite claims that tilting the balance back towards workers would be bad for business. Nonsense. On the contrary, there is strong evidence that fairness at work boosts both productivity and innovation. In the UK, too many people are stuck in a revolving door of low-skilled, insecure jobs and unemployment. This Bill will promote better quality jobs and positive flexibility, so that more carers and people with disabilities or poor mental health get the chance to get work and stay in work. Of course, individual rights need effective collective enforcement. That is why it is so important that the Bill strengthens rights to organise and be represented by a trade union.

Finally, I will say a word on the UK-EU trade deal—the mother of all costs to business. According to the London School of Economics, trade barriers have hit small businesses hardest, with 14% having stopped exporting to the EU altogether. One reason we ended up with a second-class trade deal is that the EU feared unfair competition and that the UK would undercut it with worse workers’ rights. The Conservative Government’s broken promise to bring forward an employment Bill and its attacks on trade unions only confirmed that suspicion. This Bill can help ease EU fears and support negotiations for a better deal. That is just one more reason why the Bill is good for jobs, good for workers and good for business too.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Baroness Stowell of Beeston (Con)]

My Lords, I am generally somewhat nervous about purpose clauses, but I can see the argument in the case of this Bill, because there is a lot of confusion about what it is trying to achieve. Indeed, it serves to highlight the incoherence of this Government’s approach to generating economic growth, because it places far too much of a burden on businesses and will deter them from innovating, recruiting and investing in skills training, which we know is so very important right now.

That is particularly pronounced within the tech sector, which is one of the Government’s priority sectors because it has the potential to drive a vast amount of growth, but it is also one where we need to do far more to encourage investment so that our homegrown tech firms can scale and compete around the world. We must not forget that investors have a choice as to where they invest, and they will not go to countries where the costs are higher.

Although it is not properly an interest to declare, it is perhaps worth reminding your Lordships that until very recently, I chaired the Communications and Digital Select Committee of your Lordships’ House, and during my term in the chair we looked at the tech sector quite a bit, as noble Lords would expect. Our final inquiry was about scaling up in AI and creative tech.

I am sure the Minister, who is also a DSIT Minister, has seen that techUK, the industry’s trade body, has this morning raised some genuine concerns about the Bill. Its website says:

“With no economic modelling underpinning these proposals, businesses are being asked to shoulder new burdens without a clear understanding of the impact. There is a growing risk that entrenched positions will lead to a worst-case outcome, one that stifles innovation and investment in jobs. This is counter to the government’s pro-growth mission. We urgently call for further discussion and refinement to ensure the Bill supports businesses and protects workers”.


Alongside techUK, the Startup Coalition, which focuses specifically on start-ups, says in its briefing note on the Bill that it is concerned that without careful tailoring, the barriers the Bill currently introduces into hiring and scaling at the early stages of business development could undermine the start-up ecosystem and the economic growth it drives.

I do not know whether I would have succeeded had I tried to do this, given what my noble friend said about the punctiliousness of the Table Office—and I would be interested to hear more from my noble friend about this—but I suggest that any purpose clause also refers to growth and competitiveness. When the Minister winds up, I would welcome her explanation of how this Bill supports the Government’s growth agenda.

I know, from talking to a range of tech firms and businesses from all sectors and of all sizes, that while they all support good employment practices and condemn those firms that do not uphold high standards—as do I—there is frustration that the good employers are paying the price, literally, for the poor conduct of the bad. For them, the Bill represents a desire by the Government to do something to them that makes it even harder for them to create the economic growth that the Government have promised the electorate and, indeed, their workers. Let us be clear: it is business, not government, that generates economic growth.

As I say, a purpose clause has some merit in the context of this Bill, but I would like growth and competitiveness to feature within it. If we were to do that in the purpose clause and get some agreement from the Minister up front today, that would help to shape the Bill as we go through Committee, so that it actually delivers on what I think it is trying to do: to ensure that there are good employment practices that support economic growth and competitiveness.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, I admit that I am a little perplexed by Amendment 1, particularly in the light of the latest TUC-commissioned poll that was published last night. Not only is the Bill popular with the public, including a majority of Conservative and Reform voters, but, when they are faced with robust arguments against its key provisions, the Bill becomes even more popular with voters.

I am not sure that your Lordships or the public need this amendment to know that the Bill is about fairness, security and the right to an independent voice at work. The public are already well aware and, frankly, appalled that, under the previous Government, low pay and insecurity became mainstream in British working life. They want change.

Underlying this amendment—this might be my suspicious mind—is the worry that it is really about undermining the role of independent trade unions in representing workers’ interests. The ILO uses the term “workers’ organisations” for a reason. International law upholds the right to collective bargaining and freedom of association. Independent trade unions are workers’ best chance of getting their rights enforced and built on for better pay, safer workplaces, training opportunities and family-friendly hours, and they provide a democratic voice at work.

Without repeating the arguments from Second Reading, I encourage your Lordships to look at the evidence about just how far Britain has fallen behind other countries in employment protection, and how giving ordinary working people a stronger collective voice can help deliver more responsible businesses and a healthier and more equal society.

I encourage the noble Lord, Lord Fox, to cast his mind back to Labour’s introduction of a national minimum wage. He may remember that the Conservative Party and the business lobby said that a national minimum wage would cause mass unemployment and that businesses would collapse. In reality, the national minimum wage is now widely respected as one of Britain’s most successful policies. It has made a difference to millions of working lives in the teeth of opposition from the business lobby at the time. It is worth remembering that.

I end by saying that it is time to get on with and get behind the Bill, so that Britain takes the high road to improving business productivity by treating workers fairly, as human beings and not just commodities.

[Lord Balfe (Con)]

My Lords, it is a great pleasure to address a quorate meeting of the TUC General Council. I should declare an interest at the beginning: I am the honorary president of BALPA, the British Airline Pilots Association, a union that covers all the people who fly you on holiday and back again. Its motto or strapline for many years was

“every flight a safe flight”.

It regarded its job as to deal not only with the members but with safety. In dealing with the companies that we dealt with and still deal with, aircraft safety and looking after passengers was as much at the front of our mission as anything to do with pay and conditions. Of course, we were interested in them—we were a trade union, after all—but we were a responsible trade union. I stand on this side of the House pretty convinced that probably a majority of the members of BALPA support this party. Let me remind the House why.

Most people do not join a trade union for any political purpose. They often join, as I did at the age of 16, because it is there. Nowadays, most trade unions, particularly the better ones, have a free legal advice service and will get you a discount on your car insurance. I have told this story once before, I think, but at a point when we had a silly dispute between my family and the bursar of our local private school, I rang up the union solicitor and he drafted me a letter to send to the bursar very quickly. I apologised and said, “I am sorry. I dare say this is not what you are normally here for”. I will always remember his reply. He said, “Mr Balfe”, for I was that in those days, “we are not here to judge our membership. We are here to help them”. At the basis of virtually every trade union official and action is the desire to help the membership. Nobody I know regards going on strike as anything other than a defeat, because it means the members do not get paid, you often lose pension entitlement, and you lose your wages. You know, people go to work to get their work done, to get a reasonable wage.

I always had a lot of time for a person who is almost unmentionable in modern politics, Edward Heath, because I thought that he came nearer to understanding the TU movement than probably any leader of the Conservative Party and maybe any leader overall. Indeed, I remember when I was a much younger trade union person in the 1960s asking a group of Conservatives who they thought was the best Secretary of State for Labour there had ever been. The result was unanimous: Sir Walter Monckton, Conservative Minister under Churchill, was reckoned to be the one who listened to them the most. You always have to have a runner-up in these things just in case one falls down, and that was Iain Macleod.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Thursday 8th May 2025 Lords Chamber

Nobody gave trade unions the power and influence they have. The power and influence were not enshrined in some three amendments in a Bill being passed through this House. They were based on the efforts of individual workers working together to achieve better conditions of work. The idea that you could substitute other bodies out of the blue when this is based, as I say, on 150 years of struggle is a delusion and a misunderstanding of how we have got here.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, I am very pleased to follow my noble friend Lord Davies because I absolutely agree with what he says. I would add, just from my own experience, that, early in my working life, I worked in a retail organisation where there was a staff forum and where I and colleagues were organising to establish a trade union. The difference is this: that staff forum was set up by the employer. It was not set up by workers. That staff forum was funded by the employer; it was not funded by workers. That staff forum was not democratic, whereas the whole point of a trade union is that it is a democratic organisation of working people. I would hope that one of the aims we could share across this House is to see an increase—an expansion—of genuine collective bargaining, because the evidence is very clear that, internationally, we see that the demise of collective bargaining has been associated with growing inequality, worse conditions at work, a poorer share of the wealth that workers help produce and no independent democratic voice.

I would hope that, in this country, we recognise that there are many, many working people who feel they have been denied a genuine voice—an independent voice—at work and in society, and they are rightly fed up about it. If we want to tackle that—if we want to tackle inequality and the sense of powerlessness that many people feel—it is collective bargaining through the route of independent, democratic trade unionism that we all need to see grow.

[Baroness Fox of Buckley (Non-Afl)]

My Lords, I was not intending to speak in this group and I am torn between both sides. I have some cynicism about the Opposition’s attempt at recognising non-trade unions and staff associations. I entirely understand the point that the noble Baroness, Lady O’Grady, has just made about employer-led staff clubs, which I have been, over the years, invited to join. While they have been very pleasurably good social forums, they are very different from trade unions.

However, I am afraid that there is a danger that we can romanticise what contemporary trade unionism is, based on the very fine history of 150 years of struggle. I do not actually think that trade unions at the moment should take for granted that workers will be loyal to them, because there have been far too many instances of trade unions not being fit for purpose. Indeed, there is often a huge gap between trade union leaders and trade union members. Many members are leaving unions or not joining them, and that is not always because of evil bosses in a kind of caricatured way.

At Second Reading, I made the point—and I am only repeating it here now—that, for example, the Darlington Nursing Union has been set up because the nursing unions have abandoned female members of staff who were nurses and who have been attacked by their HR departments and their employers for their political views in relation to gender and sex. As it happens, we now can appreciate that they were simply reiterating their right to privacy as biological women—something that the Supreme Court has now at least acknowledged is the law—but they have been harassed and bullied and so on, and the trade unions abandoned them.

I made a point about the Free Speech Union. I appreciate that it is not a trade union, and nobody, least of all me, is suggesting that the noble Lord, Lord Young, who is in his place, will become the noble Baroness, Lady O’Grady, of future negotiations. Despite the fact that that is an unlikely role for the noble Lord, Lord Young, the Free Speech Union has been forced into existence and has represented workers who have been done over by their employers when their trade unions have abandoned them. That is the point I am making.

The UCU is one example of a university union. I was a NATFHE rep for many years in the further education sector and I have watched in horror the way that that union has degenerated and sold out its members. So, for the record, I would prefer that we did not caricature each other in a way that does not represent the contemporary time. The trade unions today are not the trade unions of old. They could do with upping their game. Similarly, I do not think the trade unions are the evil enemy of employers, as is sometimes implied by people sitting closer to me on this side of the House.

--- Later in debate ---

[Baroness Penn (Con)]

My Lords, I rise to move Amendment 64 in my name. This amendment makes a simple change to the right to request flexible working. In 2023, the Employment Relations (Flexible Working) Act amended the right to request flexible working so that it applied from the first day of employment. Previously, employees needed to wait for 26 weeks as a qualifying period before making a request. That was a good move forwards, but in practice, this still means that when finding and taking a new job, an employee might need to leave a role that offers them the flexibility they need without knowing whether their new employer can accommodate their responsibilities outside work. If that request is then denied, the employee may find themselves in an impossible situation, forced to choose between their work and their responsibilities outside work. Employers might also find themselves having gone through a whole recruitment process, having waited for their new recruit to work a notice period for their previous employer, only to find that they cannot accommodate their new employee’s request and potentially having to start the recruitment process again. To me, that is a lose-lose situation, leaving both the employee and the employer worse off.

TUC research shows that two in five mothers do not feel comfortable asking for the flexible working they need during a job interview, for fear that they will face discrimination or have their offer withdrawn. Changing the law to allow flexible working requests from the job offer stage would give candidates vital protection. As I have said, the change would also benefit employers. It would create a legal framework for an open, honest conversation about working patterns before contracts are signed, ensuring that both parties can agree on arrangements that genuinely work for them. It does not change employers’ need to consider a flexible working request, nor their right, having given it proper consideration, to say that it does not fit with their business needs. Such a change would and could support fairer hiring, greater inclusion and better long-term retention.

Flexible working can unlock economic opportunities for growth. Indeed, the post-implementation review of the Flexible Working Regulations 2014, which extended the right to request flexible working to all employees, not just those with caring responsibilities, showed that flexible working can reduce vacancy costs, increase skills retention, enhance business performance and reduce staff absenteeism rates. It has the potential to bring people back into economic activity who would otherwise have left the labour market.

The noble Lord, Lord Londesborough, spoke about the importance of bringing older people back into work, along with people with disabilities and those who have been on benefits for a period of time. These are people whom the Government are spending a lot of time and effort trying to re-engage into the workforce for their own good and for the good of economic growth. This change could help do that.

On these Benches, we have emphasised the benefits of having a flexible labour market, and, in my view, that means one where people are able to move easily between employers. I think this amendment would support that, so I would be interested to know what the Minister thinks of this proposal. I beg to move.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, it is a pleasure to follow the noble Baroness, Lady Penn. I shall speak to Amendment 66 in the name of my noble friend Lord Watson, who is unable to be in his place today due to a long-standing family commitment.

Clause 9, on flexible working, will make a huge difference to working people, including those with caring responsibilities. Many of us know all too well and very personally the daily juggling-act miracle that working mums especially are expected to perform. Anything that makes their lives easier has to be welcome. Flexible working has the added benefit to business and for the wider economy of making it easier for carers to both enter the workforce and stay there. This will help close the gender pay gap, reduce child poverty and help keep mothers and babies healthier.

Amendment 66 seeks to address the concern that, to be effective, those new rights must have teeth. I know that my noble friend Lord Watson would want to acknowledge the support of Maternity Action and the National Education Union in preparing this amendment. Amendment 66 would require the Business and Trade Secretary to review and publish a statement on the adequacy of the maximum compensation which an employment tribunal can award where an employer has not followed its obligations in dealing with an employee’s flexible-working request.

Currently, employees have the right to request flexible working, but employers can refuse on a wide range of listed grounds. Clause 9 boosts employees’ rights by introducing a reasonableness requirement, meaning that employers will be permitted to refuse a statutory flexible-working request only if it is reasonable to do so on one or more of the listed grounds. This new requirement is a positive step towards making flexible working the default. The problem is about the maximum compensation which an employment tribunal can award when it upholds an employee’s complaint about how an employer has treated their flexible-working application.

Currently, the maximum compensation that an employment tribunal can award is eight weeks’ pay, capped at £719 per week, which is a total of £5,752. This low compensation cap does not reflect the devastating cost to a worker where that flexible working has been unreasonably refused. Maternity Action and trade unions have documented how unreasonable refusals effectively force employees—particularly many new mothers and other carers—out of their job, often into lower-paid and less secure work or out of work altogether.

Flexibility should be a two-way street for the employer and worker, but in the real world too often it is mothers who are paying a high price. Set against the expense of legal representation, the low level of compensation available deters mothers from pursuing a flexible-working complaint through an employment tribunal. Their only meaningful recourse may be an indirect sex-discrimination claim against their former employer for which compensation is not capped. However, such claims are often long, complicated and extremely stressful. It is much better to send a signal that the Government are serious about enforcing flexible working rights so that employers are encouraged to do the right thing in the first place.

In the Bill’s impact assessment, it is stated that an aim of the changes in Clause 9 is to allow an employment tribunal to scrutinise whether the decision to reject a flexible working request was reasonable. For that to be effective, penalties should be introduced that reflect a substantive failure to act in accordance with a new reasonableness requirement. The Government’s aim of making flexible working the default is very welcome, but I hope my noble friend the Minister will consider bringing forward an amendment on Report or provide reassurance that other routes will be taken to ensure that the new right to flexible working is one that will be enforced in practice and that workers who are unreasonably refused such arrangements get adequate compensation.

[Lord Ashcombe (Con)]

My Lords, I support my noble friend Lady Penn. I declare an interest that I work for Marsh, a very large insurance broker in this country and around the world. I run a team of between 30 and 40 people. Within that team, I have all sorts, sizes and cultures—you name it. Of that team, all the married women—I should say, the women with children—have some sort of flexible way that they work with us. I can tell noble Lords from my own experience that unhappy staff do not do good work; it is 101. Happy staff are very likely to do very good work. One of my main jobs is to keep my team happy, and I am given immense flexibility to do it. Without this amendment, it is less easy. I rest my case.

--- Later in debate ---

[Lord Katz (Lab)]

I am afraid the noble Lord will not; he will hear from me. I thank my noble friend Lord Watson of Invergowrie in absentia for tabling Amendment 66 and my noble friend Lady O’Grady of Upper Holloway for so ably speaking to it. I also thank the noble Baroness, Lady Penn, for tabling Amendment 64. This has been a broadly helpful debate, if somewhat spicier than expected, on flexible working.

This group and the next deal with flexible working. I agree with many of the comments that noble Lords across the Committee made in highlighting how important flexible working is in helping people to balance work with responsibilities in their personal lives, particularly caring responsibilities. As the noble Lord, Lord Ashcombe, pointed out, flexibility can lead to happier, healthier and more productive employees. He is absolutely right on this point. It is good for employees, good for businesses and, in turn, good for the economy.

As the noble Baroness, Lady Penn, outlined in some detail, along with the noble Baroness, Lady O’Grady, a primary benefit of flexible working for families is that being able to work part-time, or having flexible start and finish times, can make it easier for parents to balance work and childcare needs. Similarly, for those caring for a vulnerable adult or a child with a disability, flexible working can help people to manage their caring responsibilities while remaining in work.

I echo some of the comments of the noble Lord, Lord Fox, about how we regard flexible working. To be clear, flexible working is not solely about working from home—something on which, post pandemic, we have become somewhat focused. Indeed, the ACAS guidance sets out eight examples of flexible working, and working from home is only one of those eight. It talks about compressed hours, staggered hours, remote working, job sharing and part-time hours as well as working from home.

According to the 2023 flexible jobs index, although nine in 10 want to work flexibly, only six in 10 employees are currently working flexibly and only three in 10 jobs are advertised with flexible working. Equally, the Government recognise that business needs vary and that not all flexible working arrangements are possible in all circumstances. That is why the Government are increasing access to flexible working by making it the default, except where not reasonably feasible. I concur with the comments of the noble Lord, Lord Fox: this is not a soft policy but an important economic and human management tool, and we should regard it as such.

Amendment 66 in the name of my noble friend Lord Watson would require the Secretary of State to review and publish a statement on the adequacy of the maximum compensation that an employment tribunal may award to an employee with a successful claim related to flexible working. The maximum compensation award is currently set at eight weeks’ pay for an employee bringing a claim to a tribunal.

Section 80I of the Employment Rights Act 1996 already means that the Government may review the maximum number of weeks’ pay that can be awarded to an employee. If they consider it appropriate to do so, they can then use this power to change the specified number of weeks’ pay by which the maximum amount of an award of compensation is set. It is therefore not necessary to include anything further in the Bill. It is worth pointing out to noble Lords that the maximum has risen every year since its introduction, from £250 in 2002 to £719 now—so this is not something that is caught in aspic. Therefore, we would argue that a statutory review on the maximum compensation award within six months of Royal Assent could create uncertainty across the board and detract from some of the other important reforms that employees, employers, trade unions and the wider economic and business community will need to prepare for.

Before leaving this, it might be helpful to speak to the wider points from the noble Lord, Lord Fox, on tribunals. I cannot speak in any great detail on this issue, but I understand that the Ministry of Justice is undertaking a review of the employment tribunal system. I would hazard that it has not been sufficiently invested in in recent years, and the slowness of that system is certainly something that we should seek to address.

Before leaving Amendment 66, it is worth pointing out that there is a risk in creating uncertainty for both businesses and workers alike by creating the possibility of differing awards for different types of claims. As things stand, a number of types of claims—for example, relating to redundancy and unfair dismissal—face the same maximum award as those relating to flexible working. It might be undesirable to create confusion and undue complexity through in effect having a two-tier system.

I turn to the amendment proposed by the noble Baroness, Lady Penn, Amendment 64, which would extend the right to request flexible working to candidates with a job offer. In practice, the Government believe that this is already the case. The right to request flexible working, which is being strengthened in this Bill, is already a day one right. This means that employees can request flexible working from their first day in a role. We know that, in practice, many employers and employees will begin discussions about working arrangements before the candidate starts work.

As the noble Baroness said, before joining an organisation, informal and constructive discussions can offer a more effective way in which to identify working arrangements that work for employees and employers than a one-off formalised request and response might otherwise achieve. Mandating through legislation a right to request flexible working prior to appointment would not account for the fact that not all job offers come to fruition, for a number of reasons. However, candidates with a job offer have some limited rights. Discrimination and contractual rights are among those. The hypothetical example that the noble Baroness cited in her contribution would indeed be taken care of; discrimination based on protected characteristics is currently outlawed during the recruitment process. However, we would contend that it is not a status that we would want to overformalise at this point.

Additionally, under this proposal, employers would still have up to two months to consider and respond to a request. If the intention of this amendment is to significantly bring forward in time people’s ability to have a flexible working request accepted, it would not succeed in this respect. While the Government encourage employers to start conversations about flexible working with new starters at an early stage, it would not be appropriate to extend the legal framework for flexible working to all candidates under offer.

Lastly, to respond to the point made by the noble Lord, Lord Jackson, on sex discrimination, I contend that this form of discrimination would actually carry a higher risk of penalty and payout than unreasonable refusal of flexible working, so it is probably a little out of place in the debate on this amendment.

To close, I therefore seek that noble Lords do not press their amendments in this group.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, my noble friend is absolutely right that the maximum cap applies to a number of areas, and many people believe that it is too low on those areas as well. Is he at least able to write to me or to the noble Lord, Lord Watson, and explain when the next review of the cap will take place, and the opportunities there will be for organisations such as Maternity Action and trade unions to make their case that the maximum cap should be higher?

[Lord Katz (Lab)]

I thank my noble friend Lady O’Grady for that; I would of course be very happy to write to her and my noble friend Lord Watson on this. The point that we are making is that there is already a mechanism in place to upgrade. That does not mean that it is not something that organisations concerned about the limit of compensation can lobby on, but the amendment as tabled is superfluous; it would not add any powers that are not already in law or in the Bill already.

--- Later in debate ---

I believe these are not small matters. The Government’s decision currently risks undermining the integrity of the statutory sick pay system and could have serious consequences for businesses, workers and the economy. I hope the Minister will reconsider but, in the meantime, I beg leave to withdraw the amendment.

[Baroness O’Grady of Upper Holloway (Lab)]

Before the noble Lord sits down, it would be very helpful if he could confirm and clarify that, in expressing a concern that removing the waiting days would lead to more and sporadic absenteeism, it is not being implied that workers are swinging the lead. If it was being implied, where is the evidence?

[Lord Hunt of Wirral (Con)]

Of course it is not being implied. It is outrageous that the noble Baroness should think so and voice so in this debate, which has seen a very calm and careful consideration by the Minister, who sets a good example for us all. I hope the noble Baroness will follow it. I beg leave to withdraw.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Tuesday 13th May 2025 Lords Chamber

For these reasons, I support the amendments. In view of the fact that employers’ contributions not only continue but have, in a retrograde manner, been increased considerably under the NIC Act, which went through this House earlier this year, and increased disproportionately, with the damage already seen to the labour market, which we continue to hear about in the Committee, and with businesses being more reluctant to employ the very people we need to employ, I suggest it is fair and proportionate that there should be a rebate, as proposed in the modest amendment from my noble friend and the more ambitious one from the noble Lord, Lord Fox.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, I support the noble Baroness, Lady Lister, and Amendment 72, and I add my thanks to the Safe Sick Pay campaign, the Health Foundation and other organisations. I heartily welcome the Labour Government’s commitment to strengthening SSP by removing the lower earnings limit and the waiting period.

A nationally representative survey conducted for the TUC found that around half of employees get their full pay as usual when sick, but that around 28% were forced to rely on SSP alone. It also found a clear class divide when it comes to who gets what: eight in 10 of higher earners—over 50 grand a year—got full pay when off ill, compared with only one-third of lower earners.

The Covid pandemic exposed just how precarious life is for those in insecure, low-paid work, and we do not know how many preventable illnesses were caused by people struggling into work and spreading the virus because they could not afford to stay home. But we do know, as we have heard, that forcing people back to work when they are ill is bad for workers and bad for business, puts pressure on the NHS and is costly for the economy.

I am very grateful to the Minister for taking time to meet me and the noble Baroness, Lady Lister, to discuss our concern that the formula adopted by the Government could leave low-paid workers who earn just above the lower earnings limit worse off. The DWP’s answer has been that abolition of the waiting days before a worker receives SSP ensures that, for the first three weeks, those losses will be offset. But, surely, the policy intention of the Government’s commitment to abolish the waiting days is not to make up for losses caused by its own formula. The policy intention should be to ensure that every worker who relies on SSP is, in fact, better off, and we need to protect those on longer- term sickness who are, for example, receiving cancer treatment.

I note the Government’s concern that the formula must be designed in a way that avoids workers getting more in sick pay than they would in wages, and avoids a cliff edge. I remain unconvinced, however, that it is beyond the wit of the DWP to come up with an approach that protects that position without penalising a group of low-paid workers.

Secondly, as we have heard, this amendment seeks a review of the rate of statutory sick pay. As the Resolution Foundation has pointed out, unlike many other European countries, the rate is not linked to earnings. Currently at £118.75, SSP equates to 27% of the national minimum wage. In 1999, SSP was equivalent to 43% of the national minimum wage. That is a big drop. For a decade and more, SSP has failed to keep up with the cost of living or increases in the living wage.

The Work and Pensions Select Committee has confirmed that the SSP rate is not enough to live on. At the Covid public inquiry hearing in December 2023, Matt Hancock was quizzed by Sam Jacobs, who is counsel for the TUC. The former Health Secretary agreed that the rate of SSP should be higher. How could he argue otherwise, when the UK languished at the bottom of the OECD league for statutory sick pay under the previous Government and when we know that such a low rate of SSP is a danger to public health?

I understand that perfection must not be the enemy of the good, but an SSP rate that works out at around £3 per hour is some way short of either perfection or good. This amendment implicitly recognises that this woeful legacy of neglect in tackling it will not be remedied overnight. It would, however, be welcome if the Minister could reassure us today that both the formula and the rate of statutory sick pay will be reviewed before the Autumn Budget, and rightly so.

[Baroness Cash (Con)]

My Lords, I start by declaring interests. I am an employer, the founder of a listed business, MindGym, which is a behavioural science business, and an expert in corporate training to improve employee well-being and productivity. I am also a commissioner at the EHRC.

I support the Opposition’s amendments in this group: Amendments 71A, 71B, 73, 74A, 74B, and 74C. At the outset, I would like to note for the record that everyone here is driven by compassion for those who need protection. I pay tribute to the speeches by noble Lords from the Benches opposite, but I am very concerned about these proposals by the Government.

I am grateful to the noble Baroness, Lady O’Grady, for drawing our attention to the Resolution Foundation report, which has identified some of the points that support the amendments from this side of the Committee. I will return to those.

The Government have said on record that they want growth. We support that goal. They want businesses to succeed. We support that goal. They have also said on the record that they want to reduce the number of people who are out of the workforce on long-term sickness—currently running at 2.8 million. We support that goal. What we do not understand is how on earth the Government believe that this legislation and these proposals are going to achieve any of that. They are based in compassion, I have no doubt, but the Government are pursuing a culture of incapacity and dependency that will impede the stated aims.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Tuesday 13th May 2025 Lords Chamber

[Lord Gascoigne (Con)]

My Lords, I support Amendment 127 from my noble friend Lady Penn. I declare an interest—which I am increasingly discovering to be a growing financial interest—in the form of my two daughters, who are the most precious things to me.

I confess that I am glad that it is my noble friend Lady Penn who is leading the charge on this amendment, and the noble Baroness, Lady Lister, leading the group. I rise with some trepidation. I am not alone in being conscious that, in speaking to this amendment, as a man I am putting myself slightly in the firing line by somehow implying that a man should have exactly the same as the woman who has just carried and given birth to the child. As has been said, this is not about more rights for the man. It is more than that. It is about ensuring a dad can be at home to play their part for the child and, crucially, be there for the mum.

I am lucky and immensely grateful that, on both occasions when my wife gave birth to our children, I had two supportive bosses, one of whom I am delighted to say is still my boss, in the form of the Opposition Chief Whip. When the time came, my noble friend worked to give me the support and time I wanted to be with my family. When I was in the Government Whips’ Office, I worked with colleagues—two of whom I am pleased to see here, in the form of the noble Lords, Lord Evans and Lord Harlech—to ensure that we all got the time at home that we wanted, especially me. This is not unique, but I was lucky: lucky that it was offered, lucky that it was an open dialogue, lucky that I could ask for what I would like without recourse and was completely understood, and lucky that the support extended beyond the time I was at home. I was also lucky that my child was healthy and lucky that I had my in-laws around to help out.

Like so many in the country, I wanted to be at home to help, but also to share those early moments—the precious moments in a young child’s life that were mentioned earlier. I was there to help, tidy, ferry, feed, give cover and support my wife, who was recovering after surgery. To explain my personal circumstances, both of my children’s births were not simple. The first required emergency surgery, and then a return to hospital for another stay a week after coming home. Our second child’s birth was also complicated. Despite being a planned caesarean, the surgery did not go well and it required weeks of hospital visits. There is no way at all that my wife, on her return, could have looked after a newborn child, never mind our eldest or, indeed, herself.

I say this not for sympathy, or to suggest that I am special or unique, or deserve better support than others. General statistics show that, on average, a labour can last up to 18 hours. While around 46% of women who give birth in England spend one day in postnatal care, around 40% of women spend two days or more. Caesareans have increased over the last decade, amounting to over 40% of births. It is worth reflecting that the advice on caesareans is that for weeks the mother should not lift anything heavier than her own baby.

Not everyone is able to have a wider family network to rally in support. While I was lucky that I had support at work, some are not so lucky. They do not have a choice and have to return to work sooner than they would like to, as the noble Baroness, Lady Smith, said. Indeed, I read online that one dad was back at work 24 hours after their child was born.

I am a realist and I know that money does not grow on trees, and many businesses are already providing longer and better parental leave. Some may say that they have concerns about the impact on business and the economy, and I will not comment on the Bill as a whole, but it is obviously right that each and every day we should be supporting and helping businesses to grow—they pay the taxes and employ people.

Research shows that three-quarters of employers who offer extended leave see an increase in productivity and engagement, and almost 100% of fathers said flexibility is a deal breaker when looking for employment. As my noble friend Lady Penn said earlier, extended leave is good for parents, so that they can help and support one another; it is good for the child, to ensure that support is there for them, and to build bonds as part of a new unit; and it is good for forming another special bond, the one between employer and employee. I hope that all noble Lords, especially in my own party, recognise the merits of this amendment as something that is good for both business and families.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, I will speak very, very briefly. It is heartening to hear support for the amendments in this group right across the House. I will speak in particular to those from the noble Baronesses, Lady Lister and Lady Penn. I have already shared with the noble Baroness, Lady Penn, that, when I was at the TUC, I very, very vividly remember having conversations with young men who were working as riders and delivery drivers, and they really, really wanted to be good dads. They had young babies and children, and what was most important to them—and I hope others will reflect this in paying attention to how we make working families’ lives better—was predictability of shifts and guaranteed hours, so they would know how much money they could earn, but they also wanted paid paternity leave.

To keep this really, really brief, I have a couple of questions for my noble friend the Minister before she responds. First, can we accept that the starting point for a review would be to recognise that, compared with other countries, the UK is so ungenerous in its paid paternity leave? We do not need a huge review to know that; it is our starting point. If we are to move into the 21st century, we also need to recognise that new dads from all sorts of backgrounds want time to bond with their babies and be involved more equally in their care. Secondly, will this review focus specifically on paid paternity leave, working from the simple premise that, unless it is paid, there are whole swathes of new dads who simply cannot afford to take it?

I have been encouraged by the discussion around the House. I think there is a cross-party consensus that we all want to see new dads having that opportunity. We all know it will bring benefits for women—including closing the gender pay gap—and opportunities for children to have a better life, too.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lady Penn for her very thoughtful amendments in this group. I acknowledge the valuable contributions from all noble Lords, in particular the noble Baroness, Lady Lister, for introducing her amendments, and the noble Lord, Lord Palmer of Childs Hill, for introducing his amendments and, perhaps more importantly, reminding the House of the Conservative-led coalition Government’s work in this area—although I note that he did not heap praise on the then Secretary of State for Work and Pensions, my right honourable friend Iain Duncan Smith.

We fully recognise and support the intention behind these proposals, which is to strengthen support for families and in particular to enhance the role of paternity leave in allowing fathers to spend essential early time with their children. This is a laudable aim that clearly finds broad sympathy across the House.

However, while the objective is clear and commendable, we must also consider the practical implications of how such policies are implemented, particularly in relation to the impact on businesses. Many employers, large and small, continue to face significant challenges in the current economic climate, as we have discussed at length this evening. The introduction of new requirements, even when limited to large employers, must be approached with caution and care, and I acknowledge that my noble friend Lady Penn addressed many of those concerns directly in her speech.

As for the reporting obligations set out in Amendment 128, tabled by my noble friend, these would apply to businesses with 250 employees or more. While this threshold helps to focus the requirement on larger organisations, we should still be mindful of the potential administrative and financial burdens such reporting could entail. Even within that category, resources vary significantly, and not all may be equally equipped to take on new reporting functions—a point that was addressed by my noble friends Lord Bailey and Lord Ashcombe. That said, transparency and data collection can play a valuable role in shaping effective policy. If it can be clearly demonstrated that these measures would bring mutual benefits, improving employee well-being and retention, for example, without imposing disproportionate costs or complexity on employers, it is certainly something that we should be prepared to consider further.

Ultimately, we have to strike the right balance, ensuring meaningful support for families while safeguarding the viability and flexibility of the businesses that employ them. That is the lens through which we should view not just this amendment but the broader provisions of the Bill.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Monday 19th May 2025 Lords Chamber

On Amendment 281, we should make it clear that these are discretions that sit rightly with the court, but the public need to know that this is the position, so that victims, whistleblowers and other employees can have confidence that these arrangements cannot be abusive, and employers will be on notice. On that basis, I commend this approach and put it into the mix for discussion. It is a big Bill and my noble friend the Minister, notwithstanding her patience, has a lot on her plate, but there is a real possibility here for the Government to come up with something that has broad consensus, and that might actually help and work.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, it is a pleasure to follow my noble friend Lady Chakrabarti and to support Amendment 101 in the names of my noble friend Lady Kennedy and the noble Baronesses, Lady Kramer and Lady Morrissey. I think that many of us are speaking in support of all the amendments that are trying to achieve the same result, and it is a real tribute that the strength of support is so broad across the Committee.

I have warmly welcomed the whole Bill, including the Government’s commitment to ensuring that employers take reasonable steps to prevent sexual harassment. I thank the Minister for meeting with me to discuss the issue of non-disclosure agreements. My concern is that the Government’s current proposals to deal with the scandal of abusive non-disclosure agreements under whistleblowing legislation fall short of the fundamental principle, for me, that every victim/survivor should have the right to speak up and seek support.

The use of NDAs to cover up abuses of power, we all know, happens in every walk of life. This is not just about Westminster, the City of London, the media and entertainment industries, trade unions, the church or higher education. Let us not forget the all-male Presidents Club charity dinner for captains of industry at the Dorchester Hotel, and the 130 young women, paid £150 for a 10-hour shift, who were handed five-page non-disclosure agreements just moments before they went out to serve. According to a CIPD survey, one in five employers have used NDAs in cases of sexual harassment.

My worry is that the public interest test contained in whistleblowing legislation sets a very high bar for protected disclosure, and that most victims will remain silenced. What about, for example, if the perpetrator is not prominent in public, business or cultural life? Can the Minister confirm whether a disclosure by workers would meet the public interest test in those circumstances? Or what about one individual worker who is harassed and does not know whether other workers are at risk? Will that satisfy the criteria for public interest under whistleblowing law? Perhaps the Minister can also confirm whether government proposals cover only sexual harassment? Or do they also cover racism and all forms of harassment faced by those with protected characteristics under equality law? Will misconduct such as bullying on those grounds be included?

I thank the Minister for that meeting and for writing to me afterwards. I agree that there will be lessons to learn from new legislation in Ireland and elsewhere, but I cannot agree that that is a reason for holding back. If ever there was a case for going further and faster, then this is it. Women and all those suffering in silence have waited long enough.

The TUC—I should declare that I am a former general secretary—has long held a position that NDAs should not be used in any case of harassment, discrimination or victimisation. According to a report published this year, again by CIPD, nearly half of employers would support a ban on the use of NDAs, with only 18% opposing such a ban. Can’t Buy My Silence and other campaign groups enjoy huge public support. There is a broad cross-party consensus for action that unites both sides of industry.

Will the Minister reassure us today that the door is still open for the Government to strengthen the Bill along the lines proposed by my noble friend Lady Kennedy and, importantly, send a message to all those who have suffered alone and in silence, and to all those who, as a result of that silence, have been put at risk, that real change is on its way?

[Lord Cromwell (CB)]

My Lords, as the first boy to speak tonight, I want to say what a pleasure it is to follow such a powerful and persuasive group of speakers. I support all the amendments in this group.

I turn first to the NDA amendments. NDAs can be appropriate in sectors where intellectual property, commercial confidentiality or security issues apply. In fact, I should declare that I have recently signed one in a commercial context. These documents are typically pre-contract or part of terms of employment and signed up to by a worker at the start of their employment. Usually, they apply to everyone in a relevant area rather than being targeted at an individual.

By contrast, the NDAs these amendments address are very different; they generally arise during employment and act retrospectively—in other words, when something happens that should not have done.

I was always taught that you cannot contract out of the law: that an agreement or contract that enables or conceals something illegal is potentially itself illegal, and at least void and unenforceable. Under the Protection from Harassment Act 1997, harassment is a crime. Therefore, it seems to me that an NDA in respect of —as Amendment 101 points out—harassment, sexual misconduct, retaliation and discrimination or any other crime comes very close to trying to contract out of the law.

I would broaden the definition, as the noble Baroness, Lady Chakrabarti, has done in her amendment, to void any NDAs that cover any form of illegality. Indeed, a wrongdoer requesting an NDA in such circumstances feels tantamount, to me, to an admission of guilt. NDAs being put forward by the powerful to protect themselves from publicity around a wrongdoing is, at the very best, contrary to the HR policies of any decent employer.

While these amendments seek to prevent the misuse of NDAs, they also provide—as others have spoken about—for workers themselves requesting an NDA. Consequently, NDAs do have a place with proper advice to both parties: what Amendment 101 calls “fully-informed consent”. In short, voiding NDAs that amount to an abuse of power while recognising that a worker may themselves seek an NDA feels like the right balance.

Finally on NDAs, to date there has been a superabundance of consultations and inquiries— as the noble Baroness, Lady Kramer, pointed out— into the misuse of NDAs from a very wide range of organisations. Now, and I hope the Minister will agree, we need action—no more discussions and consultations. We know what the problem is; we just need to sort it out. I therefore ask the Minister to confirm that the Government will either present or support a suitably consolidated amendment on Report, as others have requested.

I also support the amendments on whistleblowing. Amendment 125 would close what amounts to a loophole. On Amendment 126, something that has bedevilled whistleblowing for a very long time is the overly tight definition of who can be a whistleblower. The amendment is therefore a welcome step in expanding that category, though it does not go as far as it needs to, as the noble Baroness, Lady Kramer, has shared with us tonight.

Amendment 147 concerns the crucial point of a duty to investigate. Many companies—particularly larger ones—have on paper, somewhere in their files, a well-drafted policy intended to support whistleblowers. However, many people who become whistleblowers typically do not see themselves as such initially. Often, they are simply trying to point out where something is wrong and needs addressing. It is what happens next that turns them into a whistleblower.

The corporate reaction to highlighting problems or concerns is often viscerally and personally hostile. Such people are seen as troublemakers, snitches or even traitors. They are often, almost from the outset, isolated, stigmatised and persecuted. To deal with that reaction, there is a need, as Amendment 147— another great amendment—sets out, for an automatic duty to investigate properly, which means having well-delineated and well-understood processes recognising and incorporating whistleblowing that are actually followed in practice with action, and to pick up issues and deal with them constructively and, if possible, before they escalate into a whistleblowing incident.

On Amendment 130, an office of the whistleblower would have both a systemic role in improving and monitoring whistleblower treatment, standards and processes, and a much-needed personal role in supporting whistleblowers as individuals, as again the noble Baroness, Lady Kramer, so eloquently laid out.

I will touch quickly on two related points. First, investors have a role here, although they often get forgotten in these discussions. They have a clear interest in knowing what is going on inside organisations they are entrusting with their money. I know from talking to them that they support better engagement and using their considerable leverage to get matters improved. Secondly, in the UK we do not compensate or reward whistleblowers. Being a whistleblower is expensive, sometimes ruinously so. Legal bills, loss of income and being made completely unemployable often follow. Yet the UK attitude to date has been that doing the right thing should not be rewarded—as if it was somehow vulgar—or even the personal losses incurred recouped. That correlates with the lower reporting of problems in the UK compared with the US and other jurisdictions. This has changed a little recently, and both the current director of the Serious Fraud Office and his predecessor have spoken in public in favour of paying whistleblowers. The FCA has stated that it is not in principle against this—a very British statement—and HMRC and the CMA already give modest payments for information on, for example, tax fraud.

The UK needs to catch up. I hope that the role of investors and whistleblower compensation are things that we can come back to, but for now I support all the amendments in this group and I sincerely hope that the Minister will do the same.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I rise to speak to Amendments 105 to 107 and 109 to 112 in my name, and I am delighted to have the support of my noble friend Lady Noakes and the noble Lords, Lord Morse and Lord Vaux of Harrowden, who has already spoken so eloquently as the mover of the first amendment in the group.

I agree with the noble Lord that this is the most damaging part of the Bill, which is why I have joined proceedings today. I support all that he has said, including his Amendment 334. The approach in Amendment 334 may reflect the Government’s intention on timing, so I look to the Minister to support this clarificatory amendment. I also thank the noble Baroness, Lady Jones of Whitchurch, for a very useful online meeting and for a speedy response to my queries from her excellent office.

My main current concern is the promotion of economic growth. It is also the Government’s stated main objective, with the Prime Minister saying that:

“Growth is the defining mission of this Administration”.


Yet, the need to drive growth conflicts with their manifesto promises on employment rights. These will slow growth and increase bureaucracy and inefficiency across the economy, especially the proposal to specify reasons if employees are let go in the period immediately after appointment, which is the subject of this group.

The Government cannot have it both ways, and with growth prospects so poor next year, changes must be made to the Bill. There is evidence to support this. The noble Lord, Lord Vaux, has already quoted from the impact assessment. Careful reading of the DBT economic analysis of 21 October, written to support the Bill, admits in section 16, on unintended consequences, that:

“There is some evidence that employment reforms make employers less willing to hire workers, including evidence specific to the strengthening of dismissal protections. For example, the OECD”,


an external body,

“noted that more stringent dismissal and hiring policies involve an inherent trade-off between job security for workers who have a job, and firm adaptability to changes in demand conditions or technology”.

In other words, it implies lower growth.

Noble Lords will know of my own background in retail and wholesale, working for many years at Tesco, a company that had a unique partnership with the trade unions. Indeed, the noble Lord, Lord Hannett of Everton, and I worked together, and I am delighted that he now sits on the Labour Benches and only sorry that he is not here today.

Retail is a sector that leads the way in employing the economically excluded and those who need flexibility in their hours and location of work.

The noble Lord, Lord Hannett, is sitting there, just not in his usual place.

However, I understand from the BRC, which has recently surveyed HR directors, that there could be a significant impact on hiring decisions, particularly for those starting in or returning to the workforce after a period of leave or inactivity. That includes those coming back from parental leave or those who have been unemployed for an extended period. The changes could reduce opportunities for entry level jobs—27% of the retail workforce is under 24—and for those from disadvantaged backgrounds.

As our birthday boy, my noble friend Lord Hunt of Wirral has already explained, it also jeopardises the vital increase in our apprentice population, which is desperately in need of a simpler and more flexible system —another reason to think again.

All this uncertainty is bad for the Government’s wider objective of growth and, very important, for getting hundreds of thousands off benefits and into work. Without a genuine probation period, employers, especially smaller employers, will no longer be willing to take a chance on people for fear of being stuck with bad or unsuitable employees or facing unaffordable compensation bills after a very short time.

[Baroness O’Grady of Upper Holloway (Lab)]

The noble Baroness mentioned the OECD. Is she aware of the OECD’s employment protection index, which shows that countries such as Germany, Poland and Japan have stronger protection than the UK on dismissal, yet they have lower unemployment? I think it would be helpful if she agreed that there is no direct association between employment protection on dismissal and unemployment.

[Baroness Neville-Rolfe (Con)]

I am not sure that I agree. I have sat on a German company. Growth is very poor in Germany at the moment. A company I worked in exited France because of the difficulty with employment protections. Employment protection is not the only issue we are talking about. In my opinion, we are trying to find the right employment protection mix to make sure that the economy continues to flourish.

Before closing, I highlight two of the less obvious perverse effects. The provisions will require significant extra internal resources to ensure compliance, in addition to the cost of the various measures in the Bill. If anyone has been through the sad process of sacking someone, they will understand this point. It is necessary to be extremely organised and have a cast-iron paper or email trail to avoid losing in a tribunal. This approach will now be necessary for the 9 million employees who currently work for less than two years in a job. Even if the Government introduce a lighter touch probationary period—now expected to be nine months—it will still be necessary to implement cumbersome administrative procedures across all businesses for all employees, including in the public sector. It will make the introduction of Making Tax Digital, deferred a number of times because of the difficulties businesses faced, look extremely easy in comparison. Above all, it will increase costs, thereby reducing investment and growth.

The second perverse consequence, as the noble Lord, Lord Vaux, has already said, will be the increase in traffic through employment tribunals. There is already a tremendous backlog of 50,000 cases in the system. I met someone yesterday whose case has been listed in 2027. The changes look as if they will plunge the employment sector into the sort of chaos we saw in the past on passports and in several other areas as a result of Covid.

I am extremely keen to find a way out of this unfortunate set of circumstances and am open as to how the problem is resolved. The fact is that sometimes appointments do not work out and it is no one’s fault. I accept that that should normally be clear within nine months. If the changes on unfair dismissal are to be workable, let alone a success, the Government must listen and come forward with firm proposals before Report. These can be consulted on in parallel, as has already happened in other parts of the Bill. This House cannot agree to delegate this vital matter to the Executive in a statutory instrument that we have not even seen in draft.

The proposed nine-month probation period is a welcome start. However, so far, the only way forward I can see is to amend the Bill to allow the termination of employment during a probation period without giving rise to an unfair dismissal claim, as proposed in our amendment.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

[Viscount Colville of Culross (CB)]

My Lords, I declare an interest as a freelance TV producer. The noble Lord, Lord Holmes, whose amendment this is, has waited and waited to be able to debate it, but now, when the big moment arrives, he is prevented from taking his place in the Chamber by an unbreakable commitment—so the Committee has me.

This amendment is an attempt to address the wretched, exploitative workplace faced by far too many people wanting to enter work. It attempts to create a new definition of “work experience”, which would ensure that participants are educated, and not exploited, as they attempt to join the workforce. I am sure that noble Lords would agree that it is important for new entrants to spend time in a workplace, finding out whether they like the work environment and, even better, whether they are seen as a possible fit for the company.

Much energy has been spent focusing on how to get young people, and people returning to employment, back into the workplace. I am glad that there has been reform and improvement to the apprenticeship schemes, but that is for those who want training in a specific sector. However, many people do not know what they want to do and, for them, internships have been a way to discover whether they can engage with a particular industry and whether it can engage with them. Unfortunately, so many of these internships have turned out to be exploitative.

I have worked in the creative industries all my career, so I have first-hand experience of young people coming in to find out about the industry, only to discover that they are expected to work for either no pay or well below the minimum wage. This is happening not just in the creative industries but across the economy. I have been told about a strengthening coach, working for a major professional sporting body, who was initially on a short-term internship, which became a two-year, daily commitment. During all that time, he was not paid. He loved what he was doing so was afraid to ask for payment and was forced to take a second job to sustain himself.

Internships are essential, and they are covered by the National Minimum Wage Act, so any intern who qualifies as a worker, under the criteria laid out in the Act, should be paid. A new survey by the broadcasting union BECTU reveals that 49% of people joining the creative industries have been pressurised to work for free. In their desperation to get into this competitive industry, many succumb and work for free. The highly respected Sutton Trust found last year that 61% of internships undertaken by recent graduates were underpaid or unpaid. The largest percentage of these jobs are in the south-east, where accommodation is notoriously expensive. It means that those people from the regions and nations, or from more socially disadvantaged families, who cannot afford the accommodation, are prevented from taking up those places. For a Government who are determined and dedicated to getting people into work in well-paid jobs, this is a failure that must be rectified rapidly. Social mobility realises the talent of the whole population; it is the only way to ensure that our nation succeeds economically.

The body charged with enforcing the minimum wage Act is HMRC. Part of the problem is that if the intern is not paid, they do not appear on HMRC’s radar. This is not helped by the fact that so many small companies do not have anybody focusing on personnel issues and, even when they have an HR department, surveys show they are not well enough informed about the law. I ask the Minister: how many prosecutions against employers have there been under the National Minimum Wage Act for unpaid internships?

Amendment 129 is an attempt to sort out the complicated and often exploitative system for those trying to get into the job market. It is crucial to ensure that there is a difference in law between interns, who should be paid, and those undertaking work experience, who should not. Proposed new subsection (4) in the amendment sets out a new legal concept of “work experience”, defined by

“observing, replicating, assisting with and carrying out any task with the aim of gaining experience of a particular workplace, organisation … or work-related activity”.

The most important criterion for what constitutes work experience is that it is voluntary, and participants are not under the control of anyone else. It has to be a learning experience, and must ensure that participants are shadowing and not actually doing the job. Work experience is already part of many T-level courses for young people. Some universities facilitate work experience, but not nearly enough of these places are available. It is a crucial pathway into work life. At a time when we are hearing of so many people who are out of the workforce, it is important that this stage of their career is clearly established and legally defined.

I am pleased that the amendment has a time limit on what counts as work experience. A maximum of four weeks seems like a good duration. It would allow the participant sufficient time to get a grip on what happens in a specific workplace and to decide whether they want to embark on a career there, but, in my view, is not enough time for them to become established as an unpaid intern. So many underpaid or unpaid internships carry on for many more than four weeks, and this amendment would ensure that that does not happen.

The highly respected Sutton Trust says that access to the workplace is a central obstacle to social mobility. I beg the Government to take the suggestion in this proposed new clause seriously. I ask the Minister to examine it as part of a possible solution to the crisis facing new entrants to the creative and other industries. I hope your Lordships will discuss this further when the Committee gets to my noble friend Lord Clancarty’s Amendments 286 and 287 on establishing a freelance commissioner.

Meanwhile, this amendment is focused on the many thousands of young people who want to get into work but do not know what they want to do. If the Government take up the work experience category laid out in this amendment, it will give those people a taste of the workplace, which is crucial to engaging them and crucial to getting them engaged in the job market. I beg to move.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, as somebody with long experience of campaigning against unpaid internships, I have a huge amount of sympathy with the motivation behind this amendment.

Certainly, it is true that a key reflection of the reversal of social mobility in this country has been the growth of unpaid internships. It started with the creative industries, where, in the past, a young person from a working-class background used to be able to start as a runner in broadcasting, or as a cub reporter on their local newspaper, and then found their path to national newspapers or progression within broadcasting blocked by the parachuting in of very often young people from wealthy backgrounds, often to senior positions, on an unpaid internship that nobody from a working-class background could afford to take. It costs thousands of pounds, particularly if the position is located in London and you do not live in London. I absolutely agree that unpaid internships have been a block and a major barrier to young working-class people’s progression.

My concern is that, from my perspective, the problem is not the law but the enforcement of the law. As trade unions, we have campaigned to get HMRC to take this seriously. There was a flurry of action around cracking down on unpaid internships, but, since Covid in particular, there has been an uptick—you have only to scan any recruitment agency website and you will see that they are brazenly advertising unpaid internships that lock young working-class people out of the professions, and doing so in flagrant abuse of the law.

Sadly, I cannot support this amendment. I fear that bad employers would be able to offer rolling unpaid internships, shoving young people through a revolving door of not getting paid as they are entitled to be for the productive work that they do. They should be paid at least the national minimum wage. What I would support is the proposed fair work agency launching a major crackdown on young people being robbed of their dreams and opportunities through the exploitative practice of unpaid internships.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

Finally, it was a Conservative Government, eight years ago in 2017, who brought in the regulations on the gender pay gap under the famously Trumpian right-winger, the noble Baroness, Lady May of Maidenhead. Our proud record includes creating, for instance, the national living wage in 2015 and other progressive policies for working people. We all have done well for working people over the years, and the Labour Party does not, in any sense, have any kind of monopoly on that.

[Baroness O'Grady of Upper Holloway (Lab)]

I hardly know where to start.

[Lord Katz (Lab)]

Give it a go.

[Baroness O'Grady of Upper Holloway (Lab)]

Certainly, I believe that everybody at work—whatever background they come from and whatever their class, sex, gender or sexuality—should have the right to be treated fairly. I believe that our legal system, our Equality Act, precisely provides that protection for people, but that we can build on it through equality action plans and so on. But I have to say that maybe some noble Lords opposite also need to consider people’s real experience.

I was elected as the first ever woman general secretary of the TUC. Clearly, we were not a movement that rushed things, because it took an awful long time to get to that point. I have enough self-awareness to know that it was not because there were not talented women, black or white, who could have been elected and who had the talent, skills and ability. There was something else going on, and I hope that there would be enough honesty in this House to recognise that black people and women face real barriers that will not be overcome unless we take positive action.

The other point I would just like to reflect on is that, whenever I spoke about seeing more women playing active roles in not just the trade union movement but in public life, including, by the way, lending my support to women who were arguing that we needed more women in the boardroom—I supported that principle—I was always fascinated that, whenever I raised those issues, people, largely men I have to say, would start talking about merit. Well, I have to say, when I look at the upper echelons, I do not always see in those male-dominated and white-dominated ranks people who got there on the basis of merit. I have never seen an advert for a position on a board. I have never known any board member to go through an open recruitment process to get that position. It has very often been a case of a tap on the shoulder.

If we look at how many judges and newspaper editors we have, and specifically at race, sex and gender, yes, the picture has progressed, but we still have a very long way to go. Therefore, I think this amendment is a little disingenuous in trying to suggest that people who have been held back for years because of their class background, race or gender, if given a helping hand and a bit of encouragement to go for it, will somehow cause a meltdown of society.

Achieving what my noble friend said is, quite rightly, part of my history and our history. I hope that it is part of our progress as a country that we value equality. We know that ultimately it is good for all of us, and long may we keep struggling to achieve that goal.

[Baroness Carberry of Muswell Hill (Lab)]

My Lords, my noble friends on this side of the House have commented on this amendment in far better terms than I could, but I will make a supplementary point. I was very surprised to see this amendment, because one of the perennial themes that we have heard throughout all stages of the Bill in this House has been a complaint about the alleged level of extra bureaucracy that it is supposed to impose on employers. Yet here we see a veritable feast of form-filling and requirements to report on those forms at regular intervals. I suggest that this amendment is not needed; it is surplus to requirements because it places unnecessary burdens on employers.

Employment Rights Bill

Baroness O'Grady of Upper Holloway Excerpts

Committee stage
Thursday 5th June 2025 Lords Chamber

I have stressed both the internationalness and the length of time this has been an issue because, very often, when we hear from the Government on all these issues to do with so-called artificial intelligence, we hear that we have to wait to see what happens. I am afraid that is not good enough and not an appropriate circumstance. How these tools are deployed and where they are used and not used are matters of political decision-making. We can make choices; we can make laws. They are not independent actors outside our control, and neither should be the giant companies that largely promulgate them. We need to—dare I coin a phrase?—take back control and say there are places where this is inappropriate or needs to be extremely tightly controlled.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, following the invitation from the noble Baroness, Lady Bennett, I do feel obliged to say some very brief words on this group of amendments. I was at the helm of the TUC when we produced an AI manifesto for workers and that manifesto was AI-positive and optimistic about the potential for AI to help us create more satisfying work for workers and also boost productivity if we share those gains fairly. But it was also realistic, because the real experience of workers at the sharp end in terms of technology more generally is that it has often been used to drive, for example, the gig economy that this Bill proudly is looking to tackle in terms of insecurity and low pay.

Workers also experience oppressive surveillance, with Amazon being right at the top of the rogues’ gallery in that respect. And, of course, technologies such as facial recognition have been developed that bake in race discrimination. So, of course workers are right to be wary and concerned. That is why one of the key demands in that AI manifesto was, as the noble Lord has talked about before, the right to a human review when it comes to decisions about hire and fire. The right to a human review is a fundamental human right. Critically, the manifesto called for a voice for workers in agreeing new technology, including AI agreements, so that workers’ concerns are addressed directly and agreements are made with employers about how AI is introduced and used.

Given that, in a very welcome sense, there has been such broad interest and concern expressed in this short debate, can the Minister reassure us that we will be addressing not just problems such as the gig economy that we saw growing in the 20th century but the new challenges of the 21st century, where workers urgently need protection?

[Lord Sharpe of Epsom (Con)]

My Lords, I thank my noble friend Lord Holmes of Richmond, the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Bennett of Manor Castle, for their amendments in this group and for their thoughtful introductions and contributions to what is clearly a vital and timely discussion around the future of artificial intelligence in the workplace.

Amendments 148, 149 and 150, tabled by the noble Lord, Lord Clement-Jones, seek to define AI systems in statute, mandate a workplace AI risk and impact assessment, known as a WAIRIA—I was not sure how to say it—and impose statutory consultation duties on employers prior to the deployment of such systems. In my respectful opinion, these measures go a bit too far at this stage.

To begin with the proposed definition of an AI system, I fully accept the need for clarity in legislation, but the definition offered here is overly expansive and risks capturing a vast range of tools, from predictive text and email sorting to payroll systems and basic data analytics. Technology evolves rapidly, and we think that any attempt to lock such a broad and fluid concept into rigid statutory language at this point risks hindering innovation and forcing employers into compliance regimes for systems that may pose no meaningful risk at all.

On the proposal for workplace AI risk and impact assessments, the intentions behind this are understandable. However, the execution here reads a little more like a blueprint for a full-scale regulatory regime rather than a light-touch safeguard. Employers would be expected to carry out detailed documentation, consult staff, assess and monitor impacts on mental health, contractual terms, pay and more, and then repeat that process at least annually or upon any system change—and that is no small task. For large employers it might be possible, but for SMEs it would surely be burdensome and, in many cases, entirely unworkable. Our concern is not with the principle of transparency or fairness but with the disproportionate bureaucratic weight that these provisions would place on businesses, particularly those outside the technology sector, which simply may not have the capacity or technical knowledge to meet such a standard.

The third proposal, which is a statutory duty to consult employees or trade unions at least one month before deploying AI systems, again assumes a degree of foresight and technical certainty that may not always exist in practice. The development and use of AI systems is often iterative, and definitions, use cases and impacts evolve over time. Requiring formal consultation at every turn risks paralysing technological progress and may well deter even the cautious adoption of beneficial systems.

I recognise that the amendments are rooted in a desire to protect workers and uphold ethical standards, but we have to resist the temptation to reach immediately for sweeping, front-loaded legislation in a domain that is still very much in its infancy. Regulation in this space, as I am sure all noble Lords would agree, must be agile, proportionate and grounded in practical reality.

We are entering a new phase where AI is no longer confined to research labs or boardrooms. It is appearing across ordinary workplaces, public and private alike. There are tremendous opportunities to improve productivity, streamline operations and foster collaboration between human workers and AI tools, yet we think many of the proposals in this group—including those seen elsewhere, such as the mandatory appointment of AI officers, rights to personalised algorithmic explanations, opt-in clauses, and statutory principles of fairness and explainability—share a common shortcoming, which is that they attempt to legislate about highly technical and fast-evolving systems with a degree of rigidity that may prove counterproductive.

We on these Benches share the Government’s ambitions to become a world leader in this space, and therefore we must remain mindful of all those factors, as well as of existing protections. Several of these proposals risk duplicating duties already present under UK GDPR, data protection law and various existing employment safeguards. The creation of overlapping, inconsistent or duplicative regimes could confuse employers and regulators alike, all while doing little to prevent truly harmful practices.

While we acknowledge all the opportunities that are potentially offered by AI, we must remain vigilant to the risks that it poses, including algorithmic bias, opacity and decision-making—which we have heard a lot about—and the misuse of personal data. But that vigilance must be coupled with regulatory restraint. We ought to be cautious to not impose premature, overly burdensome rules that stifle innovation and overwhelm well-intentioned employers, particularly in low-risk use cases, such as rota planning, document handling or payroll automation.

--- Later in debate ---

[Lord Barber of Ainsdale (Lab)]

My Lords, I have Amendment 322 in this group, which requires the Secretary of State, after the establishment of the new arrangements to deliver fair pay in the social care sector, to set out a timetable and process for an assessment of whether this approach could deliver similar benefits in tackling labour market problems in other sectors of the economy. The assessment should also take account of the process of establishing the school support staff negotiating body, in effect restoring arrangements abolished in 2010 by the coalition Government.

Setting up this new machinery in social care will be a major step forward in addressing the crisis in this sector. Low pay and poor working conditions are endemic across the sector, contributing to record levels of staff turnover and unfilled vacancies. This badly affects those who need care services and those who provide them. But this will be no simple matter establishing an entirely new bargaining structure for the first time in this part of the economy. All the parties—the Government, the employers and the trade unions—will need to navigate a number of significant complexities to establish this new body.

How should the membership of both the employer and the trade union sides be constituted? What should be the practical working arrangements to bring the parties together to work constructively to address the huge challenges faced? Will there be resistance in the sector to the changes coming out of this initial process? If so, how can they be overcome to establish the new body with the credibility and authority it will need if it is to become an enduring positive part of the social care landscape? This will be a learning process for all involved, and this amendment is intended to ensure that the learning is effectively captured from the process to inform the consideration of whether similar fair pay agreements could deliver benefits and tackle labour market problems in other sectors.

Agreements covering the terms and conditions across a sector exist in our major public services. In the private sector, as recorded in my register of interests, I also serve on the board of the JIB, the Joint Industrial Board, in the electrotechnical part of the construction industry, which brings together the employers’ body, the Electrical Contractors’ Association, with Unite the Union.

Working together, they maintain the core collective agreement setting out the terms and conditions in that part of the economy. They also work together in delivering a hugely valuable card scheme, recognising the key skills of the individuals working in the sector. This was referred to in the earlier debate by the noble Baroness, Lady Coffey. In addition, they provide an effective dispute resolution process for member firms and workers in the industry with a very high success rate.

Lessons can be learned in considering the possibility for other sectors from all these different arrangements. This is not to suggest that establishing new sectoral bargaining arrangements more widely in the economy is some kind of magic bullet, but in sectors with low pay, high turnover, recruitment and retention difficulties, and demonstrably inadequate investment in skills, they have the potential to play a part in transforming sectors that currently appear to have a labour market characterised by a race to the bottom to ones that build success based on decent pay and high labour standards. So, once the new social care body has been successfully established, let us develop a considered process, consulting all the relevant parties—employers, unions, ACAS—to learn the lessons and assess whether there are other sectors that could achieve similar benefits from such an approach. I hope that the Minister will be able to respond positively to this proposal. I beg to move.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, I will speak to Amendment 322 in my name and those of my noble friends Lord Barber and Lord Monks, who regrets he cannot be in his place. It addresses the same principle as the amendments of my noble friend Lord Hendy: extending collective bargaining is a common good.

I strongly welcome Labour’s commitment enshrined in the Bill to introduce a fair pay agreement in social care. As we have heard, social care staff put their health on the line during the pandemic to care for our loved ones, and it is only right that they should be front of the queue for a fair pay agreement. But that cannot be the sum total of our ambition. This amendment seeks to ensure that the Government make a timely assessment of other sectors that could benefit too.

There are around 4 million low-paid and insecure workers in Britain today. During the pandemic, many of these workers were classified as key workers—the people who kept Britain running in the toughest of times. They remain essential to our collective security, but their terms and conditions do not always reflect this. Very often, dominant companies in the sectors where they are employed could and should pay more but instead look to squeeze and undercut smaller companies that want to do the right thing.

There is little incentive to invest in new tech or equipment, which is essential to boosting productivity when labour is so cheap. As we know, young people are on the sharp end with over one-third of UK graduates employed in jobs well below their qualification level, representing an enormous waste of talent. Organisations from the Resolution Foundation to the Low Pay Commission have already documented which jobs and industries are both holding down workers’ aspirations and holding back productivity gains. The Government can use their convening power to bring employers and unions together to bargain for a better deal, not just on pay but with progression, training and skills too.

Collective bargaining is based on the simple premise that workers can achieve more together than we can ever achieve alone. In the UK, we have a national minimum wage. There is also an independent and voluntary real living wage, calculated on the real cost of living. In my book, though, the definition of a fair wage is different: a wage is only fair when workers have a collective say over it and agree it.

--- Later in debate ---

[Baroness Coffey (Con)]

My Lords, I shall speak in particular to the amendments regarding communication with workers. I think it was Amendment 207 but, whichever one it is, I think noble Lords will know. The reason I bring this up is that my noble friend has just referred to aspects of cybersecurity. By the way, I am not suggesting that any trade union would be seeking to cause this havoc, but we know this is a particular challenge. I am struggling to understand how, under wider confidentiality, how anybody would have access to this or be expected to. It may be that the employer is required to pass on an email, I do not know.

I am also struggling to find the justification for this. In introducing the Bill, the Government did not make any reference to digital communication or this other communication; they referred only to physical access. I cannot find any justification put forward by the Minister for this. I cannot find the amendment in Committee, and I am struggling to find the amendment on Report, in the Bill documents on the parliamentary website. I am sure they are there; I am just struggling to find them. I certainly cannot find any reference by the Minister in the other place to why this is deemed necessary. I appreciate that it is not necessarily the job of the Government to do my research for me, but that would be very useful to hear, because it certainly was not in the Bill introduced to the Commons.

I would be grateful if the Minister could give this House a justification, because one of the things that is causing concern among employers’ representatives is this sort of process. It is fairly well established that trade unions are often invited in; that is all part of good industrial relations. The legislation talks about being able to organise. I think the Minister in the other place talked about using it as an opportunity to recruit new trade union members, to organise, to have meetings and so forth. I want to clarify something. The Bill states, in line 15 on page 75, that

“the access purposes do not include organising industrial action”,

so I would be grateful to understand this better. How is the Minister in the other place saying that you can organise different from organising industrial action?

I am genuinely concerned that anyone can just be told, “Please email all your employees with this material”. Fortunately, at the moment, it does not seem that we have prescription that the Secretary of State will write the words that need to be said—I expect they would not be writing on behalf of the trade union—but, again, I am trying to understand why employers would need to allow that to happen. On that, I will draw my comments to a conclusion.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, I too shall be very brief. I strongly welcome this new right for workers to have reasonable access to their union representatives at their place of work—that is very important. It is also worth stating the good news that there are many voluntary access agreements already in place. I have had the pleasure many a time of visiting companies, big and small, walking the floor with the managing director and the union representative and having really good discussions, with an opportunity to meet workers and talk about the success of the business.

However, as a union official, I have also been in the position where I have had to meet workers in cafés, pubs, church halls, homes or anywhere, because they were too scared to be seen speaking to a union official outside their workplace with CCTV cameras trained on them. That is the reality that we are also dealing with, but there is plenty of good, practical practice to build on.

--- Later in debate ---

[Lord Sharpe of Epsom (Con)]

Before the noble Baroness sits down, she has had a go at Amazon twice tonight. I wonder whether it might be of interest to her to know that it employs 75,000 people in the UK. No one who works there is on a zero-hours contract. The minimum annual starting salary is between £28,000 and £30,000. It provides flexible working opportunities from day one, including term-time contracts, which it is currently advertising on the radio. That, obviously, allows parents, grandparents and carers guaranteed leave during school holidays. Since 2010, Amazon has invested more than £64 billion in this country and £12 billion in the last 12 months. It also supports a network of about 100,000 UK-based small and medium-sized businesses. It may not be perfect on unions in the noble Baroness’s terms, but it deserves a bit more respect.

[Baroness O'Grady of Upper Holloway (Lab)]

I am sure the noble Lord opposite would agree that those workers who joined a union and wanted to have a union voice at work to improve their pay and conditions deserve respect, too, and that union-busting techniques and approaches to avoid even meeting unions to come to an agreement is, frankly, unacceptable in a modern, civilised society.

[Lord Goddard of Stockport (LD)]

My Lords, I will be brief. This group of probing amendments relates to new provisions in the Bill concerning trade union access to the workplace. Amendments 208A, 209A, 210 and 210A would narrow the definition of access by removing or limiting references to communication with workers, including through digital channels. These changes would raise questions about how access is intended to operate in practice, particularly in light of evolving workplace models. It would be most helpful to hear from the Minister how these changes are expected to support the overall objectives of the Bill and whether they risk narrowing the scope of access in ways that may affect its effectiveness.

Amendments 209, 211 and 213 in this group would also address the application of provisions to small and medium-sized enterprises. Others, including Amendments 213AA and 213B, introduce specific considerations for sectors including healthcare—all very laudable and quite reasonable—or for the timing and method of access for those applications. These amendments appear to probe the balance between ensuring orderly access and managing operational pressures. Could the Minister clarify how the framework, as currently drafted, is expected to work in different types of workplaces as I have alluded to, and how it ensures that both the employers’ and employees’ work interests are taken into account?