Employment Rights Bill (Tenth sitting)

Greg Smith Excerpts

Committee stage
Tuesday 10th December 2024 Public Bill Committees

[Steve Darling]

My reflection on the Opposition amendments is that on this occasion my colleagues may be in danger of throwing the champagne out with the cork. The reality is that the challenges for people who face harassment in the workplace are very serious. As Government Members have highlighted, the comedy club example is relatively bogus, as the Bill would actually affect protection for employees rather than for punters.

On Friday, I am due to visit Torquay Girls’ grammar school in my constituency. I invite the hon. Member for Mid Buckinghamshire to join me and hear directly from young women there about their experiences in the workplace. Strangely enough, apart from universities, the sectors that Opposition amendment 131 would exclude from clause 16 are almost all in the hospitality industry, in which those young women would be working. When I visited the school some time ago, one student shared with me how they dreaded a certain day of the week because they knew that a certain individual would be in, who would make them feel physically sick because of their approach to them, and the sexual harassment that occurred within the workplace.

[Greg Smith (Mid Buckinghamshire) (Con)]

As much as I would love to join the hon. Gentleman in Torbay and it sounds like a delightful day out, I have a pretty full diary. I was not making a point against trying to stop sexual harassment; I was very clear that we need to use every power, every law and every mechanism available to clamp down hard on anybody who engages in the sexual harassment of anybody. My point was about the unintended consequences, including to free speech. By no definition, in my world, does sexual harassment count as free speech; that is something totally different. I invite the hon. Gentleman to reflect on my arguments, which were not in any way, shape or form about trying to remove powers to deal with sexual harassment.

[Steve Darling]

I am afraid that the hon. Gentleman and I will have to agree to differ on that point. I am sure that the Government’s proposals will support those who are facing sexual harassment from third parties. As colleagues on the Committee have highlighted, the reality is that the legislation is about taking all reasonable steps. It is not saying that when somebody walks in and abuses an employee it is an immediate red line. The reality is that the employer needs to have taken all reasonable steps. I am very comfortable with the proposals. The Liberal Democrats will vote against the amendment.

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[Greg Smith]

I would be very happy to discuss with the Minister and her colleagues in Government the specific points I made about sectors such as higher education and concerns about the no-platforming of perfectly moderate speakers such as Tony Blair. Would she be willing to engage in that dialogue on safeguards in higher education around no-platforming, so that free speech can be protected?

[Dame Nia Griffith]

Free speech is absolutely a cornerstone of British values, but I remind the hon. Member that harassment is not free speech. They are two different things. The Bill concerns employer liability for workplace harassment, which is a serious issue, not to be underplayed. As with all cases of harassment under the Equality Act 2010, courts and tribunals will continue to be required to balance rights on the facts of a particular case, including the right to freedom of expression. Harassment is a serious matter that involves being subjected to unwanted conduct of various types that, as set out in the Equality Act,

“has the purpose or effect of violating”

the employee’s

“dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment”

for the employee. Those who seek to harass people at work will not be tolerated.

The hon. Member raised a number of potential scenarios relating to potentially offensive or upsetting speech. It is important to note that in employment tribunal claims for harassment, if certain conduct has a humiliating or degrading effect on the recipient but that was not its intended purpose, the tribunal must consider whether it was reasonable for the conduct to have had that effect. It is not a purely subjective test based on the view of the recipient. The reasonableness and the facts of the individual situation must be considered. On that note, I ask the Committee to accept the clauses unamended.

Question put and agreed to.

Clause 15 accordingly ordered to stand part of the Bill.

Clause 16

Harassment by third parties

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[Justin Madders]

I will not speak for long on clause 19, because it is a fairly straightforward clause and there are more detailed clauses and amendments that may generate further debate. Clause 19 introduces schedule 2, which will repeal section 108 of the Employment Rights Act 1996, thereby removing the two-year qualifying period for protection against unfair dismissal.

An estimated 9 million employees have been working for their employer for less than two years and therefore have very limited protection against unfair dismissal. By removing the qualifying period, the Government will make basic protection against unfair dismissal a day one right for all employees, ensuring a baseline of security and predictability. It is about tackling insecurity. Unless there are automatically unfair grounds, an employer can lawfully sack a worker just by giving them their statutory or contractual notice pay and telling them not to come back to work. There is no entitlement to a fair process, nor even a right to a written statement explaining why they have been sacked.

Think about what you can do with two years in your life, Mr Stringer—well, maybe we should not think too much about it. Someone can make an awful lot of commitments, including financial commitments. They can get married, buy a house, start a family and take out loans of all descriptions, but they have no protection at work and nothing to stop them being arbitrarily dismissed in that two-year period. We think that that is wrong: it creates a great deal of insecurity in the workplace, and it has to change.

Our changes will not prevent fair dismissal. We will ensure that businesses can hire with confidence. We will ensure that employers can operate contractual probation periods, which are separate from the new statutory probationary periods. During the statutory probationary periods, employers will have a lighter-touch standard to meet when they need to dismiss an employee who is not suitable for the job.

Our changes will ensure that newly hired workers are not arbitrarily dismissed. We believe that that will help to drive up standards in the workplace. It will ensure that there is greater fairness and greater understanding between employees and businesses. It will drive up standards, quality and security—all things that we believe will improve our economy. We do not intend to bring in these measures in until autumn 2026 at the earliest. I commend the clause to the Committee.

[Greg Smith]

It is a pleasure to serve under your chairmanship, Mr Stringer. I accept the Minister’s point that clause 19 essentially just introduces schedule 2. Several amendments in my name and in the name of my hon. Friends will explore schedule 2 in detail over the coming days and potentially even weeks.

However, as we discuss clause 19, I think it is important gently to challenge what is actually quite a big leap, from two years down to day one. It is incumbent on the Government to come up with a rationale and a reason for such a considerable change. This is not a taper or a gradual decrease from two years to a year or six months; we can have a debate about what the right number is.

It is clear that the Government wish to move down from two years, but what we heard in our public evidence sessions shows the very real risk that introducing these day one rights for all employees will mean that employers are reticent, are more risk-averse and do not hire as readily, freely or easily as we might want in order to create jobs in our economy. I remind the Minister what Jane Gratton of the British Chambers of Commerce said about her members:

“Members say that there would be a reduced hiring appetite were this legislation to come in, and that they would be less likely to recruit new employees due to the risk and difficulty, particularly under the day one rights”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 8, Q2.]

She went on to argue for a nine-month probationary period—a period to which it would potentially be feasible to reduce this timeframe.

Whenever a new law comes in and makes a significant change, be it to business, regulation or whatever sector, I gently ask the Minister to reflect on the time period. Is it really necessary to make such a giant leap in one go? Even if in years to come the Government get what they want in terms of day one rights, would it not be better to face this now, listen to industry, listen to the evidence that this very Committee heard a couple of weeks ago and be more measured, proportionate and risk-averse as to what these measures might end up doing to the overall jobs market in the United Kingdom of Great Britain and Northern Ireland? If the Government did that, it would help with some of the stark and staggering business confidence numbers in the economy at the moment. Businesses are worried about where the future lies, and real people out there looking for work are worried that jobs might not be as readily available after the Bill comes into effect.

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

I declare an interest as a member of a trade union. We have seen a change in the labour market over recent decades. Previously, people used to stay in work for much longer; currently, the average tenure is 4.5 years—there has been a slight increase, because it has been bang on four years for the past five or six years. That means that people nowadays spend half their time in a job without any rights, because of the two-year threshold. The proposals in this legislation are updating the labour market to the realities of today’s jobs. People spending half their time without rights leads to a lack of confidence and security. The way to address business confidence and worker security is by bringing these rights in from day one, as this legislation proposes; sticking with the status quo is what leaves people more insecure.

[The Chair]

Order. I remind hon. Members that they can catch my eye to make significant points in the debate. Interventions should be short and to the point.

[Greg Smith]

Thank you, Mr. Stringer. I am grateful to the hon. Gentleman for his points. He is right that the labour market has changed significantly in recent decades. In fact, it is constantly evolving and has been since time immemorial, and certainly since the industrial revolution, although I suspect I will be trying the Committee’s patience if we go through all that history—the hon. Member for Birmingham Northfield might be keen to do so, but that is perhaps one for the bar some time, rather than the Committee.

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[Michael Wheeler]

I thank the shadow Minister for giving way, and I will keep my intervention short, Mr Stringer. We are hearing a lot of grandiose threats when it comes to the economy, and I would like to drag us back to the specifics. This measure is not a ban on dismissal; it is not even a protection from dismissal. It is a protection from unfair dismissal, so it is quite narrow. It still allows for dismissal, disciplinary procedures and all of that. Does the shadow Minister have a timeframe in which he thinks it would be acceptable for workers to be unfairly dismissed?

[Greg Smith]

The hon. Gentleman is right about the unfair dismissal point. Nobody wants to see anybody unfairly dismissed, but it is impossible to see each measure in the Bill in its own silo or its own column; each is part of the cumulative impact of many measures reverting to day one rights. So, too, is the measure before us, and the Committee has heard direct evidence from representatives of real businesses out there that it could have a damaging effect.

I am not arguing against the principle of what the Government are trying to do here—to protect workers against unfair dismissal. I am trying to test the waters on the operability of the Bill, and on the unintended consequence that it may have in terms of overall numbers in the job market and the rate at which companies out there make new hires, or indeed choose not to. It is a worthwhile exercise for the Committee to really test these things to see how this measure will work out in practice.

[Laurence Turner (Birmingham Northfield) (Lab)]

Throughout these proceedings, we have talked a lot about evidence bases and the likely impact of particular measures on business. The clause might be short and to the point—I do take the points made by the shadow Minister that we will come on to more detailed discussions, and it is right to debate the general principles here—but it does have precedents. In terms of the dilemma or decision over whether the qualifying period should be two years, one year or, as in the Bill, day one—but with that important provision for a probationary period—the issue has been road-tested.

The period was set at two years for many years. Then it was reduced to one year in the late 1990s, and economic growth continued. When the qualifying period was raised from one year to two years in 2012, the impact analysis that the then Government produced said that one year was easily sufficient in the overwhelming number of cases. On this aspect of the Bill, the businesses I have spoken to in my constituency and in the general Birmingham area have told me that, in almost all roles, employers are not still talking about whether someone is suitable for the job 12 months in; it is usually apparent within weeks. That circumstance is still covered by the initial period of employment provided for in the Bill.

According to the impact assessment, the estimated saving to business across the entire the economy, after the familiarisation cost period, was relatively small—I believe it was around £2 million to £3 million in 2011 prices, so probably somewhere around double that today. I think my hon. Friend the Member for Worsley and Eccles used the word “grandiose”. We are really not talking about that, but about a relatively small number of cases that could fall under that initial period of employment provision.

Let me return to an argument that has been made previously in the Committee, but that is relevant here. One undesirable effect of that change in the qualifying period was that because a worker who faced detriment and unfair treatment in the workplace had no recourse to an unfair dismissal claim through the employment tribunal system until they reached their two years, they found themselves relying on equalities arguments instead—a day one right in law as it stands. The effect—another perverse outcome—has been to overload that part of the employment tribunal system.

This change is sensible. It will help with the undesirable effects in the court system as it stands. The Chartered Management Institute, which we heard evidence from, surveyed its members and found that 83% of managers agreed that improvements in family-friendly policies and day one rights, including in respect of unfair dismissal, would positively impact workplace productivity.

In some of the related provisions in the Bill, particularly around the initial period of employment, there is promise that we will see a light-touch regime, and we are all looking to see what the details will be. I know that the Government are due to come back on that.