Employment Rights Bill

Debate between Caroline Nokes and Kate Dearden

Consideration of Lords message
Monday 15th December 2025 Commons Chamber

[Kate Dearden]

My hon. Friend makes an excellent point, as she always does, and I thank her for it.

To conclude, we are seeking the support of the House so that we can finally secure Royal Assent and move towards implementing our long-overdue reforms to make work pay. Today’s correspondence from business representatives to the Secretary of State states that British business believes that

“now is the time for Parliament to pass the Bill.”

I urge Members across the House to reflect on that comment, on our election mandate from last year and on all the work and consideration that has been put into this Bill so far in both Houses. I thank all colleagues for their work, and I commend this motion to the House.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Secretary of State.

--- Later in debate ---

[Madam Deputy Speaker (Caroline Nokes)]

Order. I call the Minister.

[Kate Dearden]

I am grateful to hon. Members across the House for their contributions today and throughout the passage of the Bill. When there is a finding of unfair dismissal at tribunal, it is important that the claimant is fairly compensated for the loss they have suffered. We also believe that the cap on compensatory awards for unfair dismissal incentivises claimants to construct complex cases that allege both unfair dismissal and discrimination so as to access uncapped compensation, as I stated in my introductory remarks—perhaps Conservative Members did not hear that. By removing the compensatory award cap for unfair dismissal claims, that incentive will be lessened.

By removing the cap, the Government will also deter employs from treating the cost of dismissing employees unfairly as part of business as usual, instead ensuring that employees who face significant losses as a result of being unfairly dismissed are fairly compensated. Compensation for unfair dismissal is awarded only where a tribunal finds in favour of the claimant. Claims that do not have merit will not secure any compensatory award with or without a cap.

Lifting the cap will not mean that compensatory awards start from a blank sheet of paper and become impossible to anticipate. Tribunals have well established ways to calculate the compensation that might be awarded for particular types of losses resulting from unfair dismissal. I thank the Liberal Democrat spokesperson, the hon. Member for Richmond Park (Sarah Olney), for her support. As she referenced, and as Members will have heard in my introductory remarks, we will publish an economic assessment in due course, and I am always available for further discussion.

Conservative Members have opposed this Bill at every stage, and no matter what the issue was today, they would oppose it again. Businesses and unions have shown leadership, and Conservative Members and Parliament should respect their voice. The tripartite agreement was forged through dialogue with those who live the realities of our workplaces every day. That agreement included a package conducted in good faith and with good will, and I thank them for it.

This Government’s aim is clear: to conclude the passage of the Bill so that millions of British workers gain new rights while businesses can prepare for change with certainty. Labour Members send a clear message to the other place to now let the Bill—a Bill that delivers on multiple manifesto commitments and has a clear electoral mandate—pass. Any further delay risks leaving workers without protections and businesses without clarity. We now strive to conclude this process and deliver the change that Britian needs to make work pay. We cannot build a strong economy with people in insecure work. We are strengthening the foundations of our economy and improving living standards. The Bill, and all our work across Government, is the foundation for building an economy that works for everyone.

Question put.