Employment Rights Bill (Third sitting)

Chris Law Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Laurence Turner (Birmingham Northfield) (Lab)]

Q For context in respect of a previous question, the record shows that “re-unionisation of the economy” was language used in a question by the shadow Minister, not in an answer from a witness.

The Bill covers part of the “Make Work Pay” agenda. Are there other measures in the “Make Work Pay” document published earlier this year that should be included in the Bill?

Liron Velleman: The Bill clearly represents a great step forward in improving workers’ rights. For some of our members, it is in some ways a Bill for employees’ rights, rather than an employment rights Bill. Our members in the self-employed sector are looking for rights and protections to reflect the nature of the work that they do. In the “Next Steps to Make Work Pay” document, there are clear suggestions that there will be greater rights and protections for self-employed members, but that is a priority that we would like to see as part of the Bill, to fully grasp the current employment landscape in this country.

There is also a point around the consultation on new surveillance technology in the workplace. Clearly, technology in the workplace is one of the biggest benefits to lots of our members and to businesses, but it is also one of the biggest challenges when we think about the new world of work. Making sure that workers understand and are trained on, and can get to grips with, technology in the workplace, surveillance or otherwise, is vital to ensuring that they have the best rights and protections at work. Those two things would be our strong priorities for the Bill.

Joanne Cairns: For us, one of the key areas is statutory sick pay. The removal of the three waiting days and the lower earnings limit is extremely important and will make a massive difference to a lot of low-paid workers. However, the Government committed to strengthening SSP, and we would like the level of SSP to be looked at. It is well documented that the current level of SSP is below what people can afford to live on. If you earn the national living wage, you earn only around a quarter of your salary when receiving SSP, which has a significant impact on low-paid workers. That said, the removal of the three waiting days is extremely important and will make a big difference.

In respect of the right to guaranteed hours, which we warmly welcome, it is very important that the way it is implemented covers as many workers as possible. The commitment from the Government was that everyone would have the right to a contract that reflects the hours they normally work. We are concerned about the inclusion of the term “low hours” in the “Next Steps” document, which we feel could have the unintended consequences of making the right apply less widely than it should, and potentially undermining its effectiveness.

[Chris Law (Dundee Central) (SNP)]

Q I want to ask Joanne a little bit about USDAW’s experience dealing with Tesco. Tesco is one of the biggest employers in my constituency and it has a live case in the Livingston distribution centre regarding fire and rehire. I know that USDAW has put a lot of resources into taking Tesco to court over its distribution centres elsewhere—it won and then unfortunately lost on appeal. In our attempt to ban fire and rehire, do you think it is reasonable to include in this Bill a clause that basically allows a “get out of jail free” card? If we look at those who have tried to exploit fire and rehire so far, it is P&O, British Gas, Tesco, British Airways—they are not small companies. The clause says that if the company is in financial difficulties then fire and rehire could be continued. Do you think that should be taken out of the Bill altogether?

Joanne Cairns: We welcome the Government’s commitment to tackling fire and rehire. It is an issue not only when fire and rehire tactics are used, but when they are used by employers in negotiations as a form of threat to try to force unions or individuals to accept terms that they may not be happy with. Around a third of our members have been asked to change their contracted hours to support business need in the last 12 months, and one in five of them said that they felt forced into agreeing to the change, having been threatened with fire and rehire. It is a major issue. You referenced our legal case against Tesco, which demonstrates that this issue affects members in all sorts of workplaces.

Our preference would be for an outright ban on fire and rehire, and we would prefer the provision to be removed. If that provision stays in the Bill, our concern would be about the use of the word “likely”. We would like either for the word “likely” to be removed in reference to financial problems, or, at the very least, for there to be stringent guidance and a high bar set for the definition of “likely”.

Liron Velleman: At Community we had a similar case on fire and rehire back in 2021 with Clarks shoes. Our members at a distribution centre in Street in Somerset were threatened with a huge reduction in their hourly wage and the removal of their sick pay and coffee breaks. After a long campaign from our members in the union, and solidarity from across the UK, we managed to force the company to reverse its decision through ACAS mediation, but it clearly should not have been allowed to happen in that way at all. Our general secretary said at the time that, until fire and rehire is outlawed, no worker is safe from the harms that it can cause.

We hugely welcome the Government’s efforts to end fire and rehire, but we have similar concerns to USDAW about how the language about “likely” financial distress will be used in reality, given that it is rarely good-faith employers that use tactics such as fire and rehire in their workplaces. We do understand that there might be absolutely exceptional circumstances where the business would otherwise close. The question is whether the word “likely” will cast the net too wide and allow bad-faith employers to continue fire and rehire, even if the stated intention is for that not to happen.

[Anneliese Midgley (Knowsley) (Lab)]

Q In our evidence sessions earlier this week we heard concerns about changes to collective redundancy, and particularly the changes to the “one establishment” rules. What are your views on the provisions in the Bill?

Liron Velleman: We rarely deal with collective redundancy on multiple establishments, other than for a few establishments, but it is important for the Committee to understand that collective redundancy is not always a huge battle between employers and unions. It gets into the news that this employer and that union are fighting to the death over something, but usually collective redundancy is an opportunity for employers and unions to sit around the table and try to minimise the impact on the workforce. Even with employers that unions might have a difficult relationship with, collective redundancy is usually an opportunity to do that.

It is very well known that Tata Steel recently announced collective redundancies at its steelworks in Port Talbot in south Wales. The original stated redundancy figure was around 2,500, but after work between the unions and the employer, that number has been heavily reduced through cross-matching and through finding training opportunities. Unions are not there just to say, “We are going to keep our members’ jobs for the sake of it,” and scream from the rooftops. Collective redundancy is an opportunity to allow mitigations to protect workers. Any improvements to rules around collective redundancy—whether that is reducing the number of employees needed to start a collective redundancy scheme, increasing the timeframe for that to happen, or looking at the establishment rule—are hugely welcome.

Joanne Cairns: On the establishment rule, we are very pleased that the loophole is now being removed. We took a significant legal case on behalf of our members who were employed in Woolworths, where 27,000 employees were made redundant in a single redundancy exercise when the company went into administration. In 200 stores with fewer than 20 employees each, there were 3,000 employees who were not entitled to any protective award even though collective consultation had not taken place. That was purely because they were employed in establishments with fewer than 20 people, even though the decisions were being made far above that level and affected 27,000 employees. It is just common sense that that is now being corrected.

We are aware that the issue of scope has been raised in this Committee. We went back and looked at the Trade Union and Labour Relations (Consolidation) Act 1992. Clause 23 of the Bill would not alter what section 188 of the 1992 Act says about

“the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.”

It would not mean that workers are being consulted over redundancies that do not affect them; it would just mean that workers who are affected by the redundancies, or their representatives, would be consulted regardless of the size of the establishment that they are working at. We do not see people being involved in consultation exercises that do not affect them; that will not be a result of the Bill.

--- Later in debate ---

[Laurence Turner]

Q I was struck, in the impact assessments, by the statements that a number of the costs, but particularly more the benefits, or potential benefits, of these measures cannot currently be quantified. There are, of course, well-advertised problems with UK labour market statistics at the moment. Realistically, what more could the Government do in respect of future measures to better capture the full range of costs and benefits associated with employment law?

Nye Cominetti: You are right: labour market statistics are not currently in a good place. The Office for National Statistics’ labour force survey is in the doldrums in terms of response rates; so if you wanted to increase the resources going into that, I would welcome that, as a researcher. Realistically, many of these knock-on benefits are incredibly hard to estimate. Personally, I think we have to accept a world where we say, we know that workers will benefit in terms of wellbeing from some of these measures. I do not think you need to put a monetary value on that to say it is worth doing, personally, but I know that is not necessarily the way that Government Departments think about these things.

In terms of the costs—businesses will be saying, “If you do this measure, I will have to reduce hiring by this much”—I think we could be moving from relying on what businesses say. I know that many businesses will be engaging with these processes in good faith, but the history, for example with the minimum wage, is for businesses to say, “If you raise this cost there will be dire consequences: job losses will look like x and y,” and in the end that does not turn out to happen because businesses find ways to adapt. That does not mean that will happen this time—there is no guarantee that you can keep pulling off the same trick of raising labour costs and not triggering an impact on employment—but looking for evidence on what has actually happened in response to similar changes in the past or in other countries, rather than relying on what businesses say, might be a better guide. But that might be controversial.

[Chris Law]

Q I am sure you welcome some of the proposed changes to statutory sick pay. One key problem with it is the level of sick pay. People still go to work ill because the level of sick pay is simply not enough: £116.75 averages 18% of the average weekly wage at the moment. That is half the equivalent percentage when it was introduced in the 1970s, and it is the lowest of all OECD countries. Would you like to see a threshold put into the Bill by which that is measured, so that we can get statutory sick pay that stops people going to work when they are ill?

Nye Cominetti: Thank you for the question. I was hoping to get the chance to talk about sick pay specifically. That is one area where the Government have gone halfway to addressing an area of insecurity. Removing the lower earnings limit is great; the lowest earners, mainly women working few hours, all have access to SSP now, which is excellent.

Removing waiting days is an important change as well. It will no longer be the case that you have to wait four days to receive anything and, as you know, for most people who are off sick for a few days with a cold, that is a one or two-day situation, not a week. Those measures are good, but what they do is extend a very low level of coverage to more workers. As you say, we have not resolved the fundamental problem that if SSP is what you rely on, as is the case for a majority of low-paid workers, you will still face a very serious income shock if that is what your employer ends up paying you when you do that.

Raising the level of SSP comes with a much bigger cost. First, it would be employers that would pay it, and then the Government would face a decision about whether to reimburse, perhaps, smaller employers facing the largest cost, as has happened in the past. It is a more costly measure, which is why the Government have not done it, but I hope that they have it on their list to address it soon because, as you say, it remains the case that for our low-paid workers, falling sick means earning less and facing an income shock. I do not think that is right.

You can either look at high-paid workers who do not experience that shock, or you can look at the vast majority of rich countries who have set in place a statutory minimum much higher than we have in the UK. That is not the case in the US, but almost all European countries—not just the Scandinavian countries that we look to as the far end of the scale in terms of welfare state provision, but the vast majority of countries across Europe—have a sick pay system that is much more generous and offers much more protection to workers than does the system in the UK. So yes, I would agree that that remains a glaring unaddressed problem.