Draft Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024
Draft Unique Identifiers (Application of Company Law) Regulations 2024
Greg Smith Excerpts(1 year ago)
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Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Stringer.
I will start with the Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024. I am pleased to see that the Government are continuing this legislation, which was first proposed in May 2024 by the previous Government. The legislation will assist Companies House to identify individuals, improve efficiency, and reduce fraud.
The Companies Act 2006 required individuals who set up, ran or controlled a company to verify their identity. Individuals may verify their identity through the registrar directly or via an authorised corporate service provider, such as an accountant or solicitor. The aim of the identity verification requirements is to prevent individuals from creating a fictitious identity or from fraudulently using another person’s identity to set up and run a company.
However, prior to the Economic Crime and Corporate Transparency Act 2023, the legal framework required Companies House to accept information from entities and individuals in good faith, with no checks to confirm that someone registered as a director or person with significant control had given their consent or was a real person. This instrument sets out the procedure that must be followed for an individual to have their identity verified or re-verified by either the registrar or an ACSP. For instance, identity verification applications must contain specific information, and this SI confers a power on the registrar to require further types of information and evidence.
The instrument also provides a framework for the suspension and de-authorisation of ACSPs judged by the registrar not to be fit and proper persons, requires ACSPs to keep particular records relating to identity verification checks they complete, and introduces duties for ACSPs to provide updated information to the registrar. The aim is to prevent nefarious agents from acting on behalf of their clients.
Finally, the regulations introduce offences if the ACSP fails to comply with the duty to keep records or provide information to the registrar upon notice. The instrument makes provisions for the allocation and discontinuation of unique identifiers, which will be allocated to all individuals who have had their identity verified and to ACSPs.
I welcome the measures taken by the Government in this SI, which builds on the work of the previous Government. However, given the importance of the legislation, I would like the Minister to provide further clarity on two areas. First, what assessment has he made of how much this measure will reduce administrative costs in Companies House? Secondly, the impact assessment made no mention of the cost for small and medium enterprises, so will the Minister say what assessment he has made in that regard?
I am pleased to see that the Unique Identifiers (Application of Company Law) Regulations 2024 also build on the good work of the previous Government through the Economic Crime and Corporate Transparency Act 2023. This statutory instrument builds on the Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024, by extending the provisions to individuals associated with limited partnerships and limited liability partnerships. It will assist Companies House in identifying individuals, improving efficiency, and reducing fraud.
I have two questions for the Minister on this statutory instrument. First, once again, what assessment has he made of how much it will reduce administrative costs in Companies House? Secondly—and different from the first instrument—no impact assessment was carried out for this statutory instrument, but one was conducted for the first instrument, so will the Minister explain that discrepancy?
Employment Rights Bill (Seventeenth sitting)
Greg Smith ExcerptsThursday 9th January 2025
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 9 January 2025 - (9 Jan 2025)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
I beg to move amendment 84, in clause 72, page 79, line 15, at end insert—
“(4A) Accordingly, in the case of the exercise by an enforcement officer of an enforcement function of the Secretary of State, any reference in an enactment to the Secretary of State in connection with that function is to be read as, or as including, a reference to that officer or any other enforcement officer.”
This amendment ensures that, where an enforcement officer is exercising an enforcement function of the Secretary of State by virtue of clause 72(4), references in legislation to the Secretary of State in connection with that function will include references to enforcement officers, so that the legislation will apply in relation to the enforcement officer as it would apply to the Secretary of State if the Secretary of State were exercising the function.
It is a pleasure to see you in the Chair this morning, Mr Mundell. I start by making the customary reference to my declaration in the Register of Members’ Financial Interests.
Clause 72 is the first in relation to the fair work agency, and it is one of the building blocks of the agency. I will explain the main elements of the clause, as that will help us to understand the amendment. The clause confers an overarching function on the Secretary of State to enforce certain legislation set out in part 1 of schedule 4, which the clause introduces. The clause provides flexibility for the Secretary of State in how to deliver that overarching enforcement function. It enables them to appoint enforcement officers to carry out the function on their behalf, and it provides that enforcement officers will be able to exercise any of the enforcement functions of the Secretary of State and will have the enforcement powers conferred on them as set out in the terms of their appointment by the Secretary of State.
As I said, the Secretary of State has the function of enforcing the legislation set out in part 1 of schedule 4. The legislation contains references to the Secretary of State having functions and powers in connection with the enforcement of the rights set out in that legislation. It is important that those references can be read as references to the enforcement officers the Secretary of State appoints to act on their behalf; otherwise, enforcement officers may not be able to properly exercise the enforcement functions of the Secretary of State. That would make their appointment, and potentially their enforcement activity, less effective.
Government amendment 84 inserts a new subsection after clause 72(4) to ensure that references to the Secretary of State are read as references to enforcement officers where necessary. The practical effect is that the legislation will apply to enforcement officers as it would to the Secretary of State. This is a technical change, but I hope that Members will see that it is necessary.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to see you in the Chair once more, Mr Mundell.
Government amendment 84 looks to us like a drafting correction. We will not rehearse the arguments we have had so many times in the Committee about drafting corrections, but I would be grateful if the Minister could confirm whether the powers in the Bill, which are directly related to the amendment, for enforcement officers to enter and search business premises are any wider in scope than current enforcement powers and, if so, how and why.
Justin Madders
I am grateful to the shadow Minister for not rehearsing the arguments, as we may end up having them every five minutes, given the number of technical amendments we will deal with today. He raises an important question about the enforcement powers and powers of entry. There are a number of clauses that deal with that. My initial understanding is that, generally speaking, we are not seeking to widen the remit of current enforcement powers. I will endeavour to write to him if there are any changes or exceptions to that. It may be something that becomes apparent when we debate the clauses in question.
Amendment 84 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Justin Madders
What we are doing is transferring existing powers and responsibilities from the existing agency. There are no new police-style powers being created for these officers; it is simply a transfer over to the fair work agency.
Clause 72 is key to delivering the much-needed upgrade to the enforcement of workers’ rights so that it is more effective and fair for workers and businesses. It brings together enforcement functions currently split between several different enforcement agencies and gives the fair work agency the flexibility to respond to a rapidly changing labour market. I commend the clause to the Committee.
Greg Smith
A lot of the detail is in the clauses that follow this one; as the Minister said, this is very much a building-block clause. Although I totally understand and appreciate the rationale for taking enforcement powers that are currently fragmented across multiple different agencies and consolidating them into one, the devil is always in the detail.
Although it might seem sensible to consolidate the powers that are currently so spread out into one agency, this is very much a centralisation of power. The crux of clause 72 is about directly providing the Secretary of State with the overall function of enforcing labour market legislation. Whenever I see such provisions in any legislation, I cannot help but be reminded of the late, great President Reagan’s famous quote about the nine most terrifying words in the English language:
“I’m from the Government, and I’m here to help.”
As my hon. Friend the Member for Bridgwater suggested in his intervention on the Minister, the serious detail is about the practical workings of the fair work agency as it is set up. What will be the total number of enforcement officers, employees and ancillary staff required—admittedly, some will be brought across from other agencies—to form it? What will be the cost to the taxpayer of putting that together? How many people are we actually talking about? I think that, as opposed to the powers that they will hold, was the crux of my hon. Friend’s intervention.
As I said, we accept the rationale for bringing these powers together under one agency, but whenever such powers are granted to a Secretary of State, no matter what the field, there is always uncertainty and scope for never-ending expansion of the new agency, and of the size of the state, to do what is, in many cases, important enforcement work—I do not doubt that. Given the presumption that the Bill will become an Act of Parliament and that the agency will be set up in the way envisaged in clause 72, it would be good to have clarity about the plan for just how big the agency will be and whether the Secretary of State will put any cap on that from the get-go. How far does the Minister envisage the agency going?
Steve Darling (Torbay) (LD)
It is a pleasure to work under your chairmanship, Mr Mundell. I broadly welcome the bringing together of powers under the fair work agency. I note that the Secretary of State is due to publish an annual report, but I am sure that businesses in Torbay would be interested to know where in the Bill the critical friend is to hold the Secretary of State to account and ensure that they are being light of foot and driving the agenda we all want to see in this area, so I would welcome the Minister’s sharing that.
Justin Madders
It is pleasing to hear generally broad support for this measure. As my hon. Friend the Member for Birmingham Northfield pointed out, and as the hon. Member for West Suffolk will know better than most, this was previously a Conservative party manifesto commitment, and we are pleased to be able to move it forward.
Some detailed operational questions were asked. At this stage, how the agency will work in practice is still being fleshed out. The current understanding in the impact assessment is that this is about the consolidation of existing resources and having a single point of leadership. Members will recall that, in her evidence to the Committee, Margaret Beels, the Director of Labour Market Enforcement, talked about how her role would be much easier if she were able to combine the powers of different agencies.
The shadow Minister asked whether we will require extra staff. That will be part of discussions with the Treasury. As he will know, there is a spending review on the horizon and Departments have been asked to look at savings. Clearly, we hope that the combining of resources will lead to some efficiencies, but there is certainly a view from a number of stakeholders that enforcement is not at the level it ought to be—
Greg Smith
I fully acknowledge and appreciate the Minister’s point about negotiation with the Treasury, but even if we take it as read that it is right to bring powers into a single enforcement agency, there is always a cost to creating anything new, even if it is a consolidation. Surely, the Department for Business and Trade has a cost for that. There is legislation live, in front of us right now, that seeks to create the agency, so surely he must know the broad cost of setting it up and consolidating those powers.
Justin Madders
Yes, the impact assessment sets out the one-off set-up costs. I am sure the shadow Minister can spend the lunch break looking at the detail. In terms of the current enforcement framework, as I say, there is a view that more needs to be done. Of course, we will be adding holiday pay and social security to that, and there is a power to add further areas. We know that generally, when resources are combined, we can deliver more—the sum is greater than the parts.
The Liberal Democrat spokesperson, the hon. Member for Torbay, asked about the critical friend. This Government are always ready to have critical friends—more on the “friend” side than the “critical” side. We will come shortly to a clause about an advisory board, which will have a broad range of stakeholders able to take that role.
Greg Smith
Does the Minister not agree that for any power held by any Secretary of State in any Department, the critical friend is a very simple concept? It is called Parliament—it is all of us.
Justin Madders
Indeed it is, and the usual parliamentary scrutiny will apply, but I was talking specifically about the role of the fair work agency. There will be that role, and no doubt as more detail emerges there will be more parliamentary opportunities to talk about the role and functions of the agency.
My hon. Friends the Members for Worsley and Eccles and for Birmingham Northfield talked about the broad support for the agency’s establishment, as indeed did the hon. Member for West Suffolk. I have a list of all the supportive witnesses at the oral evidence sessions, and it is a broad and impressive cast. It includes the CBI, the British Chambers of Commerce, the British Retail Consortium, the Chartered Institute of Personnel and Development, the Recruitment and Employment Confederation, the Food and Drink Federation, the Co-op, Margaret Beels, and of course all the trade unions. There is support across the board for this single enforcement body.
Greg Smith
Amendment 169 clarifies the specific obligations relating to the payment of statutory sick pay that are enforceable under part 5. Similarly, amendment 170 will ensure that those additional obligations relating to statutory sick pay that are imposed on employers by the Social Security Administration Act 1992 are enforceable under part 5. This goes back to our old friend, drafting errors being corrected that should really have been sorted out before the Bill was presented to Parliament in the first place.
Justin Madders
We will probably have this conversation a number of times. It is probably a little harsh to say that this was an error, but it would be fair to say that, given the complexity of social security legislation, not every provision was identified when the Bill was first introduced.
Amendment 169 agreed to.
Amendment made: 170, in schedule 4, page 127, line 30, at end insert—
“Social Security Administration Act 1992
3B Regulations under section 5 of the Social Security Administration Act 1992 (regulations about claims for and payments of benefit), so far as relating to statutory sick pay.
3C Section 14(3) of that Act (duty of employers to provide certain information to employees in relation to statutory sick pay).
3D Regulations under section 130 of that Act (duties of employers), so far as relating to statutory sick pay.”—(Justin Madders.)
This amendment ensures that additional obligations relating to statutory sick pay that are imposed on employers by the Social Security Administration Act 1992 are enforceable under Part 5 of the Bill.
Greg Smith
I beg to move amendment 118, in schedule 4, page 128, leave out lines 11 to 16.
This amendment is consequential on NC20 and removes those regulations from the list of legislation subject to enforcement under Part 5 of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 119, in schedule 5, page 130, leave out lines 16 and 17.
This amendment is consequential on NC20 and removes an enforcement authority within the meaning of regulation 28 of those Regulations from the list of persons to whom information may be disclosed under Clause 98 of the Bill.
New clause 20—Revocation of the Working Time Regulations 1998—
“(1) The Working Time Regulations 1998 (S.I. 1998/1833) are revoked.
(2) The following regulations are also revoked—
(a) the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003 (S.I 2003/3049);
(b) the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004 (S.I. 2004/1713);
(c) the Cross-border Railway Services (Working Time) Regulations 2008 (S.I. 2008/1660);
(d) the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018 (S.I. 2018/58).
(3) In consequence of the revocations made by subsection (1) and (2)—
(a) omit the reference to regulation 30 of the Working Time Regulations in Schedule A2 to the Trade Union and Labour Relations (Consolidation) Act 1992 (tribunal jurisdictions to which section 207A applies)
(b) omit section 45A of the Employment Rights Act 1996 (protection from suffering detriment in employment: working time cases);
(c) omit section 101A of the Employment Rights Act 1996 (unfair dismissal: working time cases);
(d) omit section 104(4)(d) of the Employment Rights Act 1996 (assertion of working time rights);
(e) omit section 18(1)(j) of the Employment Tribunals Act 1996 (which refers to regulation 30 of the Working Time Regulations among proceedings to which conciliation is relevant);
(f) omit section 21(1)(h) of the Employment Tribunals Act 1996 (jurisdiction of the Employment Appeals Tribunal in relation to the Working Time Regulations);
(g) omit the reference to regulation 30 of the Working Time Regulations in Schedule 5 to the Employment Act 2002 (tribunal jurisdictions to which section 38 applies);
(h) omit the reference to regulation 28 of the Working Time Regulations in Schedule 1 to the Immigration Act 2006 (person to whom director etc may disclose information);
(i) omit paragraph 141(h) of Schedule 7A to the Government of Wales Act 2006 (specific reserved matters), but this omission does not confer any jurisdiction on the Senedd or Welsh Government.
(4) The power of the Secretary of State to make consequential amendments under section 113(1) must be exercised to make such further consequential amendments as are necessary in consequence of subsections (1) and (2).”
This new clause revokes the Working Time Regulations 1998 together with other Regulations which give effect to the Working Time Directive in UK law, and makes consequential provision.
Amendment 117, in clause 118, page 105, line 20, at end insert—
“(3A) But if the provisions of section [Revocation of the Working Time Regulations 1998] have not been fully brought into force before the end of the period of 12 months beginning with the day on which this Act is passed, that section (so far as not already in force) comes into force at the end of that period.”
This amendment is consequential on NC20 and provides that the revocation must have effect within a year of the passing of this Act.
Greg Smith
I rise to speak to amendments 117, 118 and 119 and new clause 20, which stand in my name and in the name of my hon. Friends on the Committee. I make it clear that they are probing amendments; it will become clear over the next couple of minutes why we seek to probe the Government on the issue.
The amendments would repeal the working time directive within one year of the Bill’s coming into force. Our reason for tabling them is not that we intend to abolish entitlement to holidays, lunch breaks and so on—far from it, and nobody is suggesting that. However, the working time directive has had a troubled history. One example is the difficulties that occurred between the Commission and member states when the Court of Justice of the European Union ruled that employers—all of them public health and emergency services—did not calculate time spent on call as working time, when they should have done. The CJEU consistently declared that practice incompatible with the directive, arguing that inactive time spent at the disposal of the employer must be counted in its entirety as working time. Then, in 2019, the Court ruled:
“Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.”
The result of that judgment was never formally brought into British law, but as a result of the European Union (Withdrawal) Act 2018, it became part of retained EU law.
Last year, the Conservative Government legislated to clarify that businesses do not have to keep a record of the daily working hours of their workers if they are able to demonstrate compliance without doing so; to amend the WTR so that irregular hours and part-year workers’ annual leave entitlement is pro-rated to the hours that they work; to introduce an accrual method for calculating holiday entitlement for certain workers; to revoke the covid regulations—it seems odd that we are still saying that—and to introduce rolled-up holiday pay for irregular hours and part-year workers. Consultation requirements under the Transfer of Undertakings (Protection of Employment) Regulations 2006 to allow smaller businesses to consult directly with employees would be another measure. That is just the start of how it might be possible to simplify the working time directive. I would be grateful to hear the Minister’s thoughts on how well the working time regulations are working, and on whether any further changes might be made for the benefit of businesses to enable growth in this country.
Justin Madders
The working time regulations have had a relatively long history in our legal framework. They provide vital rights: a maximum working week of 48 hours, rest breaks of 20 minutes every six hours, rest periods of 11 hours each day and at least 24 hours each week, and 28 days of annual leave each year. The regulations implement the EU working time directive; the then Government deliberately designed them to provide maximum flexibility for both employers and workers. For example, workers can choose to opt out in writing from the 48-hour week maximum. We believe that the regulations have benefited millions of workers and their families over the years. They afford workers a better balance between work and other responsibilities, as well as improvements in health and wellbeing.
A 2014 review by the previous Government of the impact of the working time regulations on the UK labour market found that since 1998 there had been a decline in long-hours working in the UK and a general trend towards shorter working hours, which is probably not a surprise. The findings also suggested that the impact of the regulations was mainly through increased employment of workers doing shorter working weeks, rather than through a reduction in total hours worked. Annual leave entitlements have increased since the introduction of the working time regulations; many workers now enjoy a more generous leave entitlement than is prescribed by law.
Limitations on working hours and entitlement to a minimum number of days’ holiday can contribute to improvements in health and safety. Most employers accept that a minimum holiday entitlement contributes to physical and psychological wellbeing. Reductions in stress and fatigue caused by excess hours can provide many benefits, including less pressure on health services and better performance at work, with fewer accidents. By establishing minimum standards, the working time regulations also support a level playing field that discourages competition that relies on poor working conditions and a race to the bottom.
New clause 20 would revoke the Merchant Shipping (Maritime Labour Convention) (Hours of Work) Regulations 2018, which provide for adequate rest for seafarers and support the management of onboard fatigue and the wellbeing of seafarers. Revoking the regulations would negatively affect the ability of the Maritime and Coastguard Agency to enforce safe and healthy working conditions for seafarers.
The new clause would also revoke the Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004, which require the UK to implement the International Labour Organisation’s work in fishing convention, which underpins the safe operation of vessels. Fishing is one of the most dangerous sectors in the UK, with 50 injuries per 100,000 workers compared with a UK average of 0.4. We believe that the 2004 regulations are critical to ensuring that workers take the appropriate hours of rest to prevent fatigue-related incidents.
The new clause would also revoke the Merchant Shipping (Working Time: Inland Waterways) Regulations 2003. The Maritime and Coastguard Agency is in the process of conducting a post-implementation review of those regulations. The initial responses to the consultation have indicated a generally positive view from stakeholders.
The new clause would also revoke the Cross-border Railway Services (Working Time) Regulations 2008, which provide enhanced rights and worker protections for those engaged in cross-border rail services, such as train crew for Eurostar services through the channel tunnel. The revocation of the regulations would erode those enhanced protections.
The Government believe that the minimum standards in the Working Time Regulations 1998 and other sector-specific working time regulations have supported millions of workers and their families by enabling them to better balance work and other responsibilities. The Government have no plans to revoke the working time regulations or any of the other sector-specific regulations.
I understand what the shadow Minister says about whether we consider the regulations to be beneficial to businesses, but he will know that there was ample time under his Government to undertake those reviews. Indeed, one was undertaken just over a decade ago, as I said. We have no plans to erode workers’ rights in this area; indeed, one of the fair work agency’s main functions will be to enforce rights to holiday pay, which evidence to the Committee suggests are not being enforced properly.
The shadow Minister says that he has no intention of revoking the working time regulations and that his amendment is probing, but I can only speak to what is before the Committee. If he had tabled an amendment seeking a review of the operation of the working time regulations, that might have been more appropriate in the circumstances. This feels to me like a dog-whistle amendment, so I am pleased to hear that he will not be pressing it.
Greg Smith
I am always pleased to delight the Minister in these debates. It was a probing amendment, and I can confirm that we will not be pressing amendments 117 to 119 or new clause 20 to a Division. However, I will briefly comment on the Minister’s response. I entirely respect him for it, but it was a full-throated defence of the status quo.
Something that goes deep within my view of politics, of government and of public administration is there is always room for improvement in pretty much everything. I say that as much about measures passed by previous Conservative Governments as about those passed by current or past Labour Governments. I refuse to accept that something is as good as it possibly can be and is working as well as it possibly can in the interests of businesses and workers alike. There is some disappointment from the official Opposition that the Government do not seem to want to look again.
Justin Madders
Does the shadow Minister not accept that his party undertook this exercise, which is why regulations were introduced last year to amend the working time regulations?
Greg Smith
I fully and totally accept that, but it is our job as the official Opposition, here and now in January 2025, to press the current Government on further measures that could be taken to work in the interests of everybody in our country—workers and businesses alike. Perhaps I accept the Minister’s point; perhaps we could have tabled an amendment to call for a review. Who knows? Perhaps on Report we might. But the fundamental position that I come back to is one that does not just accept the status quo, but is always challenging, always reviewing and always seeking to make things better in the interests of everyone.
When the Minister goes back to the Department and prepares for the remaining stages of the Bill in the main Chamber and in the other place, may I gently urge him to consider in the round, with the Opposition’s support, whether there are tyres to be kicked and measures to be improved in the operation of the working time directive? May I also urge him to ensure—now that we are a sovereign country once more, having left the European Union—that this Parliament can make improvements should it so wish? I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Justin Madders
I beg to move amendment 85, in schedule 4, page 128, line 13, at end insert—
“( ) regulations 13 to 15E (entitlement to annual leave, etc);”
This amendment would enable the Secretary of State to enforce the entitlements to annual leave conferred by the Working Time Regulations 1998.
Government amendment 85 will add to schedule 4 the additional holiday pay and entitlement regulations: regulations 13, 13A, 14, 15, 15A, 15B, 15C, 15D and 15E of the Working Time Regulations 1998. It will enable the fair work agency to take enforcement action in relation to incorrect payment or non-payment of a worker’s holiday pay and incorrect payment or non-payment in lieu of annual leave entitlement, ensuring that a wider range of complaints can be dealt with more effectively. I commend it to the Committee.
Greg Smith
This is another example of a tidying-up exercise that we really should not have to be discussing in Committee. It should have been sorted before the Bill was introduced.
Amendment 85 agreed to.
Question proposed, That the schedule, as amended, be the Fourth schedule to the Bill.
The Chair
With this it will be convenient to discuss new clause 23—Review of the effectiveness of enforcement of labour market legislation—
“(1) The Secretary of State must establish an independent review providing for—
(a) an assessment of the effectiveness of enforcement of, and compliance with, relevant labour market legislation requirements as specified in Part 1 of Schedule 4 of this Act;
(b) an assessment of the performance and effectiveness of following bodies in enforcing labour market legislation—
(i) Gangmasters and Labour Abuse Authority;
(ii) Employment Agencies Standards Inspectorate;
(iii) His Majesty’s Revenue and Customs; and
(iv) Health and Safety Executive; and
(c) recommendations on strengthening labour market legislation enforcement.
(2) The Secretary of State must lay before Parliament a report of the review in subsection (1) not more than 18 months after the day on which this Act is passed and before a new single labour market enforcement body is established.”
This new clause would require the Secretary of State to establish a review of enforcement of labour market legislation and to report findings to Parliament before a new labour market enforcement body is established.
Justin Madders
Okay. I have nothing further to say, except that the shadow Minister’s new clause 23 is a duplication of existing requirements that would add nothing to the process.
Greg Smith
I hear what the Minister says about slowing things down, but it would be remiss of me not to comment that if the Government had perhaps taken their time a bit on the drafting of the Bill, we would not be spending so much time in this Committee considering the absolute deluge of Government amendments that tidy things up that should have been right in the first place. Sometimes it is best not to rush things. Sometimes it is better not to dive in head first and just go for the first thing available, but to be cautious, to review and to fully understand all the implications that new legislation such as this will have in the real world.
That is what new clause 23, which stands in my name and those of my hon. Friends, seeks to double-check. It seeks to ensure that the Government are getting this right—not in our interests or those of anyone in the House of Commons, but in the interests of businesses and workers in the real world, trying to get on with their daily lives, get their jobs done and get their businesses growing and providing the growth and prosperity that we all want to see in the country.
As I have said previously, we do not have a problem in principle with the establishment of a new body to oversee the enforcement of labour market legislation. I have made that clear, and hon. Friends who have spoken have made it crystal clear. But we also made a challenge in the previous debate, and that is what new clause 23 is all about. It is about ensuring that we fully understand the scope, cost and effectiveness of this new body.
Any new body, be it a Government body or in the private sector—although the creation of new bodies in the public sector tends to be slower and often cost more than the private sector would manage—will take time and resources, and we would like to be reassured that this is a good use of time and resources. I repeat that our instinct is that it probably is. Our instinct is that it does seem to make sense, but we can never rely on instinct or on that which might look good on paper as the absolute cast-iron test. It is about the real evidence.
Laurence Turner
We heard from the hon. Gentleman earlier in the main Chamber about sustainable aviation fuel; I wonder whether he might share with us the shadow ministerial equivalent that he seems to have discovered, because we are covering a huge amount of ground. I just say this to him. We did have the Taylor review, which looked at these matters, including the functioning of the individual enforcement agencies, so I am just wondering: does he think that something has changed, in terms of their effectiveness, since then? We have already had an assessment of the nature that he is calling for.
Greg Smith
Yes, Mr Mundell. I am genuinely struggling to find the connection between my questions in transport orals this morning on sustainable aviation fuel and this Bill. I will gladly offer to have a coffee with the hon. Member for Birmingham Northfield to discuss my passionate view on synthetic fuel in the future, but it really is not relevant to this Bill.
I accept the hon. Gentleman’s latter point, about previous reviews, but new clause 23 is specifically looking at the creation of this new body and is about ensuring that that is the right thing to do and that the cost of it will actually bring the benefit that the Minister and other Government Members have explained that they believe it will. It is incumbent on all of us, whether we sit on the Government or Opposition Benches or for the smaller parties, that we challenge everything put in front of us. Any culture in any organisation that does not challenge what is put in front of it is often weaker for it. That is what new clause 23 is seeking to do.
Inherent in that, notwithstanding the Taylor review, is the aim to ask and double-check whether the rationale takes into account how effectively labour market legislation is currently being enforced and understand what research this Government—not former Governments, but this one—have undertaken on what will be done more effectively or efficiently with the creation of this new body. We would like the Government to assess how effectively the labour market legislation that will be enforced by the new body is currently working in that fragmented sense that the Minister spoke about earlier, and how effective the enforcement of it is, before setting up any new quango.
Generally speaking, new quangos fill me with dread and fear, but this one may be worth while. However, we need the evidence. Will the Minister expand on how matters will change for businesses through the new labour market enforcement authority? What will feel different for them and what changes might they need to make as they prepare for it? New clause 23 tries to get to the heart of that.
Steve Darling
I know from my surgeries and casework in Torbay that discrimination is sadly alive and well. I ask the Minister to reflect on some of the evidence from the Equality and Human Rights Commission, which talked about the provision leading to fragmentation and the possibility of some of its standard work falling between two stools. What reassurances can the Minister give that the good work will proceed appropriately either through the fair work agency, or in a partnership approach with the Equality and Human Rights Commission?
Justin Madders
Clause 73 specifies which functions are considered enforcement functions of the Secretary of State for the purposes of part 5 of the Bill. It defines enforcement functions widely and then carves out certain functions that are not enforcement functions.
Clause 73(1) specifies that the enforcement functions of the Secretary of State include the following: any functions granted under part 5 of the Bill; functions in the relevant labour market legislation that they are responsible for enforcing; and any other functions that they perform to support enforcing labour market legislation.
Clause 73(2) goes on to set out exceptions. It lists specific functions that are not enforcement functions for the purposes of part 5 of the Bill. These are generally functions that relate to the arrangements for state enforcement of labour market legislation, and the overall governance of the fair work agency. These overarching governance functions include: appointing officers under clause 72; delegating functions under clause 74; setting up the advisory board under clause 75; publishing the annual reports and enforcement strategies under clauses 76 and 77; providing for transfer schemes to move staff into the Department under part 1 of schedule 7; and powers to make subordinate legislation.
The effect of clause 73 becomes clear when it is read in conjunction with clause 72. First, the enforcement functions that are listed in clause 73(1) can be performed by enforcement officers appointed under clause 72. Under clause 72(4), the powers of an enforcement officer include the power to exercise any enforcement function. Those powers can be limited further by the terms of the appointment of those officers.
Clause 74 gives the Secretary of State flexibility about how they carry out the functions of labour market enforcement. It provides the option to delegate functions to another public authority. Clause 74(1) gives the Secretary of State the power to make arrangements with the public authority so that it can exercise the delegable function. It also enables the Secretary of State to make arrangements to appoint a public authority’s staff as enforcement officers. The Secretary of State can delegate the enforcement functions listed in clause 73(1), all of which have been highlighted already. Those functions relate to arrangements for state enforcement of labour market legislation or the overall governance of the fair work agency. The Secretary State can also delegate powers relating to the licensing of gangmasters under sections 7 or 11 of the Gangmasters (Licensing) Act 2004. The arrangements the Secretary of State makes with public authorities can also include an agreement to make payments in respect of the performance of any function by either the public authority or their staff.
Clause 74(5) means that delegating an enforcement function does not strip the Secretary of State of responsibility or control in enforcing labour market legislation. The Secretary of State can still carry out functions even when they have arranged for another public authority to do that on their behalf.
The Bill is about bringing enforcement and employment legislation into one place in order to make enforcement more effective and efficient by ensuring the better use of resources. It is about creating the right powers to carry out investigations and take enforcement action where necessary. However, it does not set out a specific approach to implementing that more joined-up enforcement, because operational flexibility will be the key to the success of the fair work agency. The clause helps to provide that flexibility by enabling the Secretary of State to delegate certain functions to other public authorities or to make arrangements for staff of other bodies to be appointed as enforcement officers. Both clauses are integral to the effective functioning of the fair work agency in the future.
Greg Smith
On the face of it, the clauses are not problematic: they are quite clear, and it is important that those things that are considered as enforcement functions are clearly defined. That is all well and good—until we get to clause 74(5), which states:
“Arrangements under this section do not prevent the Secretary of State from performing a function to which the arrangements relate.”
Therefore, a body with certain powers—admittedly in the Secretary of State’s name—is created; essentially, a quango is put in place, and people are given the clear job of carrying out the enforcement functions in the Bill. However, if the Secretary of State is not prevented from performing one of those functions, what is the mechanism by which they can overrule the quango they themselves set up to perform them? Of course, the ultimate buck must stop with the Secretary of State, but it is a pretty established convention that where a quango is set up and has powers delegated to it—I think of Natural England within the Department for Environment, Food and Rural Affairs and many other quangos—it is very rare for a Secretary of State to intervene, overrule and perhaps come to a different conclusion from that quango.
We will not oppose the clauses, but I would be grateful if the Minister could reflect on the circumstances in which he believes clause 74(5) would come into effect, to make clear the procedures a Secretary of State would need to follow to bring that subsection into effect.
Steve Darling
I broadly welcome the proposals in the clauses, and I look forward to the Minister’s explanation of the issues outlined by the shadow Minister.
Justin Madders
I know you have been eagerly awaiting this clause, Mr Mundell. It concerns an important part of the fair work agency, and something that the Liberal Democrat spokesperson touched on earlier. The agency has a big job on its hands to restore trust among workers that they will get the rights that they are entitled to and that Parliament has laid down. It also important that the agency is trusted by businesses, and that they know they will be treated fairly and that if they follow the law, they will not be undercut by those who seek to avoid it. That is an important job for the fair work agency and it is important that we get it right. It must reflect the concerns of businesses and workers.
The Low Pay Commission has served the country well since the last Labour Government created it to advise on the national minimum wage. That is because it is a social partnership, comprising equal voices of workers, businesses and independent experts, and can reflect the perspectives of all those bodies when making recommendations. We want the FWA to replicate that success.
The clause requires the Secretary of State to create an advisory board for the fair work agency. Subsection (2) specifies that the board must consist of at least nine members appointed by the Secretary of State. Subsection (3) provides that board members must hold and vacate their position in accordance with the terms and conditions of their appointment. Subsection (4) provides for the advisory board to have a social partnership model, requiring equal representation of businesses, trade unions and independent experts.
We know this is a complex area that is constantly changing, but we believe that the model and approach that has proved so successful with the Low Pay Commission should be replicated here. I therefore commend the clause to the Committee.
Greg Smith
I hear what the Minister says in his explanation of the clause. Often, advisory boards are perfectly good and useful bodies, but I return to my earlier point that where a power rests with a Secretary of State, the accountable body to which any Secretary of State must submit themselves is the House of Commons, where they are a Member, or the House of Lords, in the rare case that they sit in the other place. Parliament is the advisory body—the critical friend—that the Secretary of State should submit themselves to.
However, accepting that an advisory board is going to be established, I want to ask the Minister about its make-up. While the Bill seems to be quite clear, there are some gaps, and some unanswered questions that the public, businesses, employees and the trade union movement will no doubt wish to have answered.
Probably the clearest definition in clause 75(4) is that in paragraph (a):
“persons appearing to the Secretary of State to represent the interests of trade unions”.
I think we can all understand that that means representatives of the trade union movement.
Greg Smith
There is my first question, prompted by my hon. Friend: does that include right hon. and hon. Members of Parliament who themselves are members of trade unions? Could that be the case?
We are less clear on paragraphs (b) and (c). Paragraph (b) states:
“persons appearing to the Secretary of State to represent the interests of employers”.
That is a far less easily defined body of people. On the one hand, I can hear some potentially arguing that that is the representative bodies that gave evidence to the Committee, such as the Confederation of British Industry and the Institute of Directors. That would be a legitimate answer, until somebody came forward and made a compelling case that, as an individual employer, they should be considered to sit on the board.
Greg Smith
I will be delighted to in one second, when I have finished my train of thought.
Can someone be classed as independent if they are an academic or a university professor, perhaps with considerable knowledge of and expertise in employment law and matters relating to the Bill—someone we should all respect—but also a member of a trade union? Does their membership of a trade union count towards whether they are independent? Would that be at odds with paragraph (a)?
Michael Wheeler
I apologise for interrupting the egging of the pudding—we were definitely in the “over” area of the egging. Does the shadow Minister accept that despite what we have heard, and despite the picture that he is trying to create, this model works? It is not novel; we have the Low Pay Commission. It is an established fact. Despite the many layers and convolutions that we see being built in front of us, we are actually considering something quite straightforward here.
Greg Smith
I am grateful to the hon. Gentleman for his intervention and for what appears to be his support for the British egg industry. I encourage him to eat as many British eggs as possible and to support our farmers.
Greg Smith
I always bow to your advice, Mr Mundell. I will try to save the Minister the embarrassment of having that recorded in Hansard.
Let me try to return to my point. While I accept that advisory boards of Government Departments often follow this formula, we have a particular definitional problem with this one. The problem is whether, in the example I gave before the intervention of the hon. Member for Worsley and Eccles, the independence of a seemingly independent expert—most reasonable people would say a university academic, professor, doctor or whoever would normally fall into that category—would be influenced if they were a member of a trade union, and whether in that case their membership of the board would be compliant with the provision for an “equal number” of independent experts and those representing the trade union movement on the board.
This is an important problem for the Minister to acknowledge. He must be very clear to the Committee whether the word “independent” in paragraph (c) would disallow anyone who is a member of a trade union from being a member of the board under paragraph (c), for fear of contradicting paragraph (a).
Alex McIntyre (Gloucester) (Lab)
I refer the Committee to my membership of the GMB and Community unions. The shadow Minister is keen for us all to stress our trade union membership, and we do so at the start of every sitting. He makes the point about trade union membership potentially impacting independent experts, but he will be aware that many university professors are funded by private limited companies to support their research, just as some Opposition Members are supported by private limited companies and employers for campaign purposes, none of which is declared in this Committee. Would he not say that might impact those professors’ independence too? Would that not need to be declared to ensure that the numbers are balanced?
Greg Smith
I understand the hon. Gentleman’s point. I believe in freedom; I have no problem with any hon. or right hon. Government Member being a member of a trade union. The point here is clarity and transparency. We have a Bill in black and white in front of us that refers to equal numbers but fails to define whether a member of a trade union could sit as an independent expert or would have to be categorised under subsection (4)(a) as representing the interests of trade unions. This is a matter of information on which the Committee and the general public deserve to have clarity before we allow this clause to become part of primary legislation in our country. As in all walks of life, there will be points of debate on that. I want to hear from the Minister’s own mouth whether he deems it to contradict the “equal number” provision. We could dance on the head of a pin all day, but when we are seeking to pass legislation, clarity is very important, and I look to the Minister to give it.
Steve Darling
I am concerned about the heavy weather that colleagues on the Opposition Benches are making of this. For me, this measure is about driving a positive culture in employment, and the board’s balance is entirely appropriate. I welcome the clause.
Employment Rights Bill (Sixteenth sitting)
Greg Smith ExcerptsTuesday 7th January 2025
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 7 January 2025 - (7 Jan 2025)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
It is a pleasure to see you in the Chair, Sir Christopher. I wish you a happy new year. As always, I will start by referring to my entry in the Register of Members’ Financial Interests.
I shall attempt to navigate this mega-grouping of clauses, amendments and new clauses. Clause 50 will amend section 168 of the Trade Union and Labour Relations (Consolidation) Act 1992 to provide that an employer that permits an employee to take time off for carrying out trade union duties, including as a learning representative, must, where requested by the employee, provide the employee with accommodation and other facilities for carrying out their duties or undergoing training related to their trade union duties, as is reasonable in all the circumstances. “Facilities” could include office and meeting space and access to the internet or intranet. In providing the employee with facilities, the employer should have regard to a relevant code of practice issued by ACAS.
The clause will also strengthen the existing right to reasonable paid facility time for union representatives, including union learning representatives, by establishing a presumption that the employee’s view on what is considered reasonable time off is reasonable in all the circumstances, having regard to any relevant provisions of a code of practice issued by ACAS. The clause will require that the employer show that it was not a reasonable amount of time off at an employment tribunal, in the event of legal proceedings.
Despite the fact that most union representatives receive paid time off, it is often insufficient to allow them to carry out all their trade union duties, and many union representatives use significant amounts of their own time to do so. This Government want to ensure that union workplace representatives can take sufficient paid facility time and have sufficient access to facilities to enable them to fulfil their union representative duties. That will lead to improved worker representation and industrial relations by giving trade unions and workplace representatives the freedom to organise, represent and negotiate on behalf of their workers and to increase co-operation between employers and unionised workers, leading to beneficial outcomes for the economy.
The Government will not support the shadow Minister’s amendments 114 and 115, which would place an unnecessary restriction on trade union equality representatives’ ability to take time off during working hours to carry out their role as equality representatives. Equality representatives have a key role to play in raising awareness and promoting equal rights for all members, as well as developing collective policies and practices that will enable organisations to realise all the benefits of being an equal opportunities employer. Placing a performance condition on the right to paid time off for equality representatives is at odds with existing rights and protections for other trade union representatives, such as union learning representatives.
In addition, the Bill is clear that the amount of time off that an employee is permitted to take, the purposes and occasions for which it is taken and any conditions subject to which it may be so taken are those that are reasonable in all the circumstances, having regard to any relevant provision of a code of practice issued by ACAS or the Secretary of State. The existing code of practice on time off for trade union representatives will be updated in due course to cover equality representatives. The Government would therefore strongly argue that the additional condition is not required for equality representatives.
Clause 51 will insert new section 168B into the Trade Union and Labour Relations (Consolidation) Act 1992. The proposed new section requires that an employer must permit an employee who is a member of an independent trade union recognised by the employer and an equality representative of the trade union to take paid time off during the employee’s working hours for the following purposes: carrying out activities for the purpose of promoting the value of equality in the workplace; arranging learning or training on matters relating to equality in the workplace; providing information, advice or support to qualifying members of the trade union in relation to matters relating to equality in the workplace; consulting with the employer on matters relating to equality in the workplace; obtaining and analysing information on the state of equality in the workplace; and preparing for any of the things mentioned previously.
The above applies only if the trade union has given the employer notice in writing that the employee is an equality representative of the union and has undergone sufficient training to enable them to carry out the activities listed above, or if the trade union has in the past six months given the employer notice in writing that the employee will be undergoing such training—this can be done only once in relation to any one employee—or within six months of the trade union giving the employer notice in writing that the employee will be undergoing such training, the employee has done so and the trade union has given the employer notice of that. “Sufficient training” is that which is sufficient for fulfilling the purposes of an equality representative, having regard to any relevant code of practice issued by ACAS or the Secretary of State.
Clause 51 will also require an employer to permit an employee to take paid time off during working hours to undergo training relevant to their role as an equality representative and, where requested, provide the employee with accommodation and other facilities to enable them to fulfil their role, having regard to a relevant code of practice issued by ACAS. Should an employer fail to permit the employee to take time off or provide the employee with facilities as required, the employee may present a complaint to an employment tribunal, at which it will be for the employer to show that the amount of time off that the employee proposed was not reasonable.
Trade unions have long fought for equality. Equality reps have a key role to play in raising awareness and promoting equal rights for all members, as well as developing collective policies and practices that will enable organisations to realise all the benefits of being an equal opportunities employer. Clause 51 therefore recognises in statute the role of trade union equality representative, which is defined in proposed new section 168B(12) as a person appointed or elected in accordance with the trade union rules and defined by reference to, and in a manner consistent with, the Equality Act 2010.
I turn to the shadow Minister’s amendments 113 and new clause 18. I should start by stating that sections 168 to 170 of the Trade Union and Labour Relations (Consolidation) Act 1992 are long-standing provisions that require employers to provide facility time for union representatives and union learning representatives of a recognised trade union.
Our legislation also requires employers to make payments to union representatives for time off for carrying out their union duties. Despite the fact that most union representatives receive paid time off, it is often insufficient to allow them to carry out all of their trade union duties, and many union representatives use significant amounts of their own time to do so. We want to ensure that union workplace representatives can take sufficient paid facility time and have sufficient access to facilities to enable them to fulfil their union representative duties. That is why we are strengthening the rights of trade union representatives in the Bill. As part of that, we are also providing—in clause 51, which will insert new section 168B into the 1992 Act—new rights for time off for union equality representatives. Equality reps have a key role to play in raising awareness and promoting equal rights for all members, as well as developing collective policies and practices that will enable organisations to realise all the benefits of being an equal opportunities employer.
The shadow Minister’s new clause 18 would require Ministers to commission a cost assessment of facility time for trade union representatives and for union learning representatives and the prospective costs of time off for equality representatives across all sectors of the economy. It would also require Ministers to lay a report before both Houses of Parliament once the assessment has been made. Amendment 113 would further require that the provisions of clause 51 could not come into force until after completion of the assessment referred to in new clause 18.
New clause 18 is not necessary. We do not need such a time-consuming assessment across all sectors of the UK economy. Also, union representatives under our legislation are already entitled to reasonable paid facility time to enable them to carry out their duties. As I have said already, we know that many union representatives do not have sufficient time; the Bill is intended to rectify that. I also note that no such assessment of facility time, sector by sector, for the entire UK economy was ever carried out by the previous Government.
Clause 52 will repeal sections 13 and 14 of the Trade Union Act 2016 by removing sections 172A and 172B of the Trade Union and Labour Relations (Consolidation) Act 1992. Regulations made under section 172A, inserted by section 13, require relevant public sector employers to publish information relating to facility time for relevant union officials. Section 172B, inserted by section 14, provided a power—although I do not think that it was ever implemented—to impose a cap on public sector facility time. Repealing these sections will help to ensure that trade union representatives have sufficient time to represent workers, negotiate with employers and conduct training.
The removal of the reporting requirements represents a significant step in resetting the relationship between public sector employers and trade unions by recognising the importance of union representatives and the time needed for them to fulfil their duties effectively. The removal of the regulations will reduce the annual administrative burden on many public sector employers, freeing up more time to focus on delivery for the public.
This Government believe that it is for each employer to work in partnership with their own recognised trade unions to determine the facility time needed to ensure that their trade union representatives can properly represent their members and the workforces within which they operate. It is unnecessary to require annual reporting or to introduce an arbitrary cap on facility time. I therefore ask the hon. Member for Mid Buckinghamshire not to press amendments 113 to 115 and new clause 18. I commend clauses 50 to 52 to the Committee.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Sir Christopher. I, too, wish you a very happy new year.
I will start with amendments 114 and 115, which stand in my name and those of my hon. Friends on the Committee. The amendments would prevent facility time from being provided for equality representatives unless—this is the important bit—the relevant public sector organisation is meeting its statutory performance targets.
In workplaces in which a trade union is recognised, trade union workplace representatives have a right to paid time off for the purpose of carrying out their trade union duties or to take part in union training. That right currently applies to workplace representatives, health and safety representatives, union learning representatives, and information and consultation representatives. The Bill will extend that right to equality representatives, who will now be allowed paid time off to carry out
“activities for the purpose of promoting the value of equality in the workplace”;
to arrange
“learning or training on matters relating to equality in the workplace”;
to provide
“information, advice or support to qualifying members of the trade union in relation to matters relating to equality in the workplace”;
to consult
“the employer on matters relating to equality in the workplace”;
and to obtain and analyse
“information relating to equality in the workplace.”
I make no criticism or comment about the value of those activities, but what I would say is that they are straightforwardly set out in the law already, and employers already have a duty to consider them. Creating a duty to allow more facility time for this purpose seems to be at cross-purposes with what employers are already, rightly, under an obligation to consider.
The amendments are an attempt to ensure that the taxpayer gets something out of this latest concession from the Labour Government to the trade unions. We would like to make sure that equalities representatives working for public sector employers are entitled to facility time only if that employer is meeting any statutory targets that it has. We suggest that if the employer is not meeting those targets, that is more important to taxpayers than facility time.
New clause 18 and amendment 113 also stand in my name and those of my hon. Friends on the Committee. As the Minister says, new clause 18 would require the Secretary of State to undertake a sectoral cost assessment of trade union facility time. It would require the Secretary of State to undertake an assessment of the cost, and prospective cost, by sector of that facility time. Amendment 113 would provide that clause 51, which will introduce facility time for trade union equalities representatives, could not come into force until after the completion of the review referred to in new clause 18.
That is an eminently sensible step. I cannot see how anyone could object to a cost analysis and assessment being done before provisions come into effect. People need to know what they are dealing with and how much it will cost them, whether that is in the public sector or the private sector, a Government Department or a Government quango, a council, an NHS trust or a private business. It is not reasonable for these things to be asked for without a true assessment and understanding of the cost.
The Opposition are concerned about the increased impetus that the Bill places behind facility time and about extending it to equalities representatives. We would therefore like to make sure that the Government have done their homework and understood the cost to business of these changes before they implement them.
Laurence Turner (Birmingham Northfield) (Lab)
It is a pleasure to serve under your chairship, Sir Christopher. I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests. I am a member of GMB and Unite.
The shadow Minister has set out a number of new restrictions that he is seeking to impose, but in 2014 he brought a motion to Hammersmith and Fulham council that said:
“Council staff will not be paid for any time they spend on trade union activity.”
Is that still what he believes?
Greg Smith
I am grateful to the hon. Gentleman for bringing that up. He has clearly been doing his homework and researching the wonderful transcripts from my time on that local authority. I have some very happy memories of it—I remember cutting council tax by 20%, which I am very proud of—but he is really going to stretch my grey matter if he wants me to remember that particular motion. However, I am certainly of the view that it is not for taxpayers to fund trade union activities; it is for trade unions to meet their own costs. It is for trade unions, just like any other body, not to require taxpayer subsidy or the state to step in and help them meet their costs. I certainly remember campaigning on the expansion of facility time back then, with many across the Conservative party. From memory, my right hon. and noble Friend Lord Pickles took a particular interest in the issue.
My direct answer to the hon. Gentleman’s question is no: taxpayers should not be funding trade union facility time. That is for the trade unions themselves to fund out of their membership fees and other income streams, where they have them, so that they can go about doing their work. I repeat that it is really not for taxpayers to fund that. There needs to be wider reform to protect taxpayers from indirectly—or directly, in this case—funding third-party organisations such as trade unions.
We have to consider the extra burden to employers in the round. Along with other elements of the Bill, such as the provisions on unfair dismissal, and the growth-stunting hike to employers’ national insurance contributions in the Budget, this is another straw that may yet break the camel’s back for a number of businesses. The Government are carelessly piling cost and red tape on employers with this Bill and other measures, and are just expecting those burdens to be absorbed. We would like to be reassured that it is possible to find a better way that does not burden the taxpayer or private businesses with the provisions that we find in this Bill. We have tabled these amendments to rectify that and to put those protections in place.
Steve Darling (Torbay) (LD)
Happy new year, Sir Christopher. I have a small amount of sympathy with the shadow Minister—I understand the cost to business, so I welcome that element of the amendments—but I have great fears. One need only have listened to the radio this morning to have heard about the issues for McDonald’s workers that have not been sorted out. I accept that that is the private sector, and the amendments are about the public sector, but it demonstrates that if equalities issues are not taken seriously in the workplace, it can cause major harm to employees and to the culture of improvement that we need to see.
Greg Smith
Nobody is suggesting that equalities issues should not be taken seriously. The point that I was making about our amendments is that the law is already very clear about equalities, and employers should be held to that law. There is no need to place this additional burden on the public sector or the private sector. Equalities are incredibly important—nobody in the Opposition is denying that—but we must find the right vehicle to ensure that equalities duties are enforced. This Bill is not it.
Steve Darling
I am concerned that the hon. Gentleman is taking a Panglossian approach that all in the world is perfect. It is far from perfect, which is why I welcome large tracts of the Bill, as long as we are supporting employers on the journey.
Justin Madders
The clause will enable us to strengthen the protections against blacklisting. The Consulting Association scandal, in which thousands of union workers were blacklisted, underscored the need for strong anti-blacklisting laws. Blacklisting persists, yet the rules have not been updated for over a decade. That is why we are taking steps to modernise them.
The clause amends section 3 of the Employment Relations Act 1999. It will enable regulations to be made that extend prohibitions to lists that are not prepared for the purpose of discrimination, but are subsequently used for that purpose. Secondary legislation and guidance can then make clear that blacklisting prohibitions extend to lists created by predictive technology.
The clause also extends the scope of the powers, so that prohibitions no longer have to be limited to employers or employment agencies. First, the reference to employers or employment agencies is removed from section 3(1)(b) of the 1999 Act. Secondly, an amendment to section 3 adds a power for the Secretary of State to make regulations in relation to third party use of blacklists. It is important that the Government continue to make it clear that blacklisting is unacceptable, and updating the law supports that.
Greg Smith
This is one of the less contentious clauses in the Bill. The Minister is right to say that something that has not been updated for a decade probably should be looked at again, especially in the light of some of the technology that we see emerging. We will not oppose clause 53 standing part of the Bill.
Steve Darling
I strongly welcome this modernisation of approach.
Question put and agreed to.
Clause 53 accordingly ordered to stand part of the Bill.
Clause 54
Industrial action ballots: turnout and support thresholds
Question proposed, That the clause stand part of the Bill.
Greg Smith
This is another bumper grouping for us to debate. As the Minister said, new clause 32 would require the Secretary of State to consider whether sufficient measures are in place to prevent workplace intimidation before making any order to allow balloting to take place by any means other than a postal ballot. The Bill liberalises the law on balloting and industrial action, and I am normally very much in favour of deregulation and liberalisation, but on this occasion, there are considerable concerns, which is why the Opposition tabled this new clause.
The Bill lowers turnout and support thresholds and allows electronic balloting on industrial action. It is important that there are protections in place for workers in that. We want to make sure that, before allowing electronic balloting for industrial action, the Secretary of State is reassured that unions have sufficient measures in place to prevent workplace intimidation.
If balloting can take place electronically, it can take place in workplaces, where it is much easier for pressure to be put to bear on union members in terms of casting their ballot—that hand on the shoulder, that peering over to see what someone is doing, or the potential requirement from those up to no good to demand proof of the way that someone has cast their ballot, be that on their mobile phone, iPad, tablet, laptop or computer, or whatever it might be. These are practices that I am sure every Member of this House would condemn and say are totally unacceptable and inappropriate, but that I can see happening without robust measures in place to prevent them.
We want the Secretary of State to be able to reassure the House that sufficient protections are in place to ensure that ballots are free fr.om intimidation and coercion before they are allowed to take place electronically. I listened carefully to the Minister’s appeal to the Opposition not to move our new clauses, but I am yet to hear a compelling and reasoned argument why the Government cannot support new clause 32. Surely, we all wish to ensure that intimidation and coercion have no place in any part of our society, least of all in the workplace. I do not understand why the Government are so reticent to take what I would argue is a very moderate and reasonable step to strengthen the Bill and tackle intimidation and coercion.
New clause 33 would prevent voting in trade union ballots and elections from being done in the workplace. Many of the arguments I made on new clause 32 very much apply here; in a similar spirit, we have tabled new clause 33 to create a little more balance and protection in the Bill. It is important that all those exercising their right to vote on industrial action can do so free from pressure from colleagues or trade union members, and that is why the new clause would stipulate that voting in trade union ballots and elections should not happen in the workplace. We also do not believe that workers should spend time when they are being paid to do their jobs voting on trade union matters. Such voting should be done in members’ personal time outside the workplace, and employers should be protected from having to pay for it.
Before I move on to new clause 43, I want to emphasise that while that last point is important, it is a matter of principle that in this country, we believe in the secret ballot. If there was any suggestion that any of our elections, whether elections to this House, council elections or police and crime commissioner elections, could take place on someone’s phone in front of other people without the protections we all enjoy at the ballot box, there would be outcry—there would rightly be outrage. When it comes to something as significant as voting for or against industrial action in a trade union ballot, it is absolutely the same principle: the integrity of the secret ballot should be upheld, in the same way that we would expect in any other walk of life.
Indeed, we have protections in the 1922 Committee in this House. We have the occasional leadership election, and mobile phones are not permitted into the room in which we vote, to stamp out the very possibility of people looking over others’ shoulders and the secret ballot being compromised. I am not sure what the parliamentary Labour party does. The secret ballot is an important principle enshrined in our democracy that should apply equally to trade union ballots. This moderate, measured request to ensure that those ballots do not take place in the workplace is an important step to protect the secrecy of the ballot.
Laurence Turner
The shadow Minister talks about the 1922 Committee, which I think my predecessor as representative of Birmingham Northfield knows more about than me. A few years back, the Conservative party membership effectively elected the Prime Minister through an electronic ballot. That is a comment on the process and not the merits of the outcome. Why do the shadow Minister’s arguments against electronic balloting in industrial matters not apply to that situation too?
Greg Smith
I think we were still on paper ballot papers, for the large part, the last time there was a change of leader of the Conservative party while we were in government. The election of the current Leader of the Opposition did happen by electronic ballot, but that is not the point of new clause 33. It does not seek to prevent electronic balloting; it seeks to prevent it from taking place in the workplace—the very place where trade union organisers, or other colleagues or employees, could put pressure on those who have a vote. They might bully their way into seeing how someone has voted, or put pressure, either nakedly or slightly less visibly, on someone to vote in what they might consider to be the right way or otherwise. If ballots could only take place outside the workplace, while not a perfect solution, it would take away the pressure that might be brought to bear in the workplace on the way individuals vote. That could—I emphasise “could”—lead someone to vote in a way that they do not want to, for fear of the way that their vote might be perceived by others in the workplace.
Michael Wheeler (Worsley and Eccles) (Lab)
Does the shadow Minister accept that the strikes he talks about happened under an incredibly restrictive regulatory and legislative regime? The measures in the Bill seek to foster a better industrial relations environment, which will lead to fewer strikes, not more. Under the previous Government, we saw an incredibly restrictive environment, which ratcheted up the tension and resulted in more strikes.
Greg Smith
I hear the hon. Gentleman’s argument, but the proof of the pudding is in the eating. I gently ask him how a no-strings-attached bumper pay rise for the train drivers worked out in practice when it came to strikes over the Christmas period. We have heard repeatedly from Labour party politicians that they will prevent or stop strikes. The most visible example of that in our newspapers and on our television screens was the Mayor of London, who made some pretty bold promises about stopping strike action. Londoners and those coming into London for work, pleasure or hospital appointments have suffered multiple times during his tenure. I am not sure I fully accept the hon. Gentleman’s point that the Bill will somehow magically reduce the number of strikes, when the reality on the ground has been very different.
Given the prolonged and repeated strike action made easier by the Bill, it could almost certainly lead to large costs across the economy. We think it is only right that a level of transparency similar to that applied to Government Departments should be applied to trade union decisions. Trade unions should exercise some responsibility and consider the consequences of their decisions to undertake strike action. We would therefore like trade unions to assess the likely impact that their going on strike will have on real people and their lives, journeys, hospital appointments, theatre tickets, enjoyment, pleasure or whatever it might be that the strike action will prevent them from doing—and, of course, on our children’s education, which is so important.
New clause 43 would require trade unions to carry out impact assessments and family tests, to publish the reports of those, and to inform members of the trade union about their contents, before a ballot for industrial action can take place. It is hardly a controversial position that people should know what they are voting for before they are asked to cast a ballot on it, and that they should understand the consequences of the strike action not just for them, but for the wider economy and people’s health, education, and so much more across our great country. We think it is only right that trade union members should be fully informed of the consequences before they cast their votes. Such information would provide some public transparency about the cost and inconvenience that trade unions are willingly inflicting on the British public.
Steve Darling
I have some sympathy with the desire to understand the cost, but to me, the vast majority of the Government proposals before us today are about modernising the system appropriately. I am concerned that this afternoon we have seen the official Opposition one minute say that all in the garden is rosy and there is no need for equality, and the next flip over and catastrophise about the Government’s proposals. We need to get a firm hand on the tiller and see that the vast majority of these proposals simply entail modernisation. I welcome them.
Justin Madders
The shadow Minister asked why we cannot support new clauses 32 and 33. The simple answer is that there are already legislative protections in section 54(12) of the Employment Relations Act 2004, which sets out the conditions that must be adhered to in order to ensure that balloting is done in a secure and safe manner. He made some interesting points about people peering over others’ shoulders when votes are taking place. Clearly, his colleagues in the parliamentary Conservative party cannot be trusted to behave themselves when electronic voting takes place. That is something he will no doubt address with his colleagues in private.
If the shadow Minister is concerned about the impact of electronic balloting in all spheres—I am sure there are sometimes reasons in his own party to question the outcome of the electronic ballot—we can look at that, but there is already clear provision in law about how any trade union ballot is to be conducted. The working group will be considering that. If the Conservative party thought there were concerns about the use of electronic ballots for industrial disputes, they might not have commissioned the Knight review back in 2017 to consider the matter. That they did so suggests that they considered that it is right and appropriate that we modernise trade union practices to allow for electronic balloting for industrial action.
Moving on to the assessments the shadow Minister is requesting, the Government are pretty clear that, through new clause 43, the Opposition seek to add another administrative hurdle for a trade union that wants to take industrial action. There is no doubt that any such tests or assessments that were undertaken would lead to a multitude of satellite litigation, delay resolution of disputes, and divert both parties’ focus from resolving the disputes to arguing about impact assessments. I am not quite sure what the family test is. I think there is a family and friends test that some organisations use. It is a little vague. It is also unclear who would be the arbiter of whether these tests and assessments were being done sufficiently accurately. It is also fair to say that trade union members know, when they take industrial action, that there will be consequences. They are well aware. They do the job every day, they know the impact, and that is why they always take these matters very seriously.
The central point that the Bill will lead to more industrial action is counterintuitive, given that we are, in the main, reversing provisions of the 2016 Act. As we know, there has been more industrial action in recent years than there has been for decades. Perhaps there is not a cause and effect relationship between that and the 2016 Act, but I would suggest that the evidence points to it.
Question put and agreed to.
Clause 54 accordingly ordered to stand part of the Bill.
Clauses 55 and 56 ordered to stand part of the Bill.
Clause 57
Industrial action: provision of information to employer
Greg Smith
I beg to move amendment 167, in clause 57, page 69, line 16, leave out “seventh” and insert “twenty-first”.
This amendment would increase, from seven to 21 days, the notice period that trade unions are required to adhere to when notifying employers that they plan to take industrial action.
The amendment would increase from seven to 21 days the notice period that trade unions are required to adhere to when notifying employers that they plan to take industrial action. As we noted in the debate on the previous group, the Bill liberalises trade union law and repeals legislation passed by the last Conservative Government that brought some balance to the relationship between employers, the British public and trade unions. We think it is fair to require trade unions to provide 21 rather than seven days’ notice to employers that they plan to take industrial action, particularly given that the Bill repeals the minimum service levels legislation passed by the last Conservative Government to ensure sufficient levels of critical public services during strike action.
Given that the British public no longer have that protection, we think it is only fair that employers should have more time to prepare to mitigate some of the damage that occurs during strike action, particularly in vital public services such as ambulance and rail services. When strike action takes place, while of course employers have to prepare to mitigate its effect and put in place other steps to ensure that people still get their healthcare, education or critical services such as transport, the general public also need to make considerable preparations. Preparing properly and putting in place other ways of doing things often cannot be done at the last minute.
I would rather the minimum service levels legislation remained in place and, indeed, was strengthened, but when there is strike action on the railway, for example, it takes place at the drop of a hat—I consider seven days’ notice as at the drop of a hat. I think of the number of children in my constituency who get on at Wendover and Stoke Mandeville stations to travel to Dr Challoner’s grammar school in Amersham, and the number of my constituents who rely on the railway to get to hospital appointments, often in London. Some 7% of Buckinghamshire cancer referrals are to Mount Vernon, which is within London, and most of my constituents who go there for chemotherapy try to travel by train. To put in place a different route to that key chemotherapy appointment, or for parents to mitigate against or make different arrangements for their child to get to school, takes more than a handful of days.
I appeal to the Government to listen to us on what I argue is a moderate and reasonable amendment. Increasing the time limit would give people a fighting chance to put in place different ways of getting to their hospital appointment and getting their kids to school.
Greg Smith
I will come up with another example when the hon. Member for Birmingham Northfield is finished.
Laurence Turner
I thank the shadow Minister for giving way; he has been characteristically generous in the number of interventions that he has taken. Can he name a single country that applies a limit of 21 days or more? Was it his intent to propose a limit higher than that which the International Labour Organisation Committee on Freedom of Association has found is consistent with freedom of association?
Greg Smith
My straightforward and simple reply is that I want to get this right in the United Kingdom’s interest. No, I cannot name another country that has 21 days’ notice, but that does not mean we should not do it ourselves. It would give all our constituents a fighting chance to find a way through the challenges that they face when there are train strikes, doctors’ strikes and industrial action in our schools. It would help them to find alternative provision to ensure that their children are looked after, so that they themselves can still go to work and meet their commitments. It would ensure that life can still go on around strikes, particularly in critical services such as healthcare and education, which I am sure no Member of the House wants their constituents to be denied; I certainly do not. I could easily propose a period longer than 21 days, but I have not done so in the interests of trying to reach a compromise and appealing to the Minister’s better instincts. I want to get on the table something that we can work with and that gives all our constituents a fighting chance.
Justin Madders
As the shadow Minister eloquently set out, amendment 167 seeks to increase from seven to 21 days the notice that a trade union must give an employer of industrial action after it has secured a ballot mandate and before any such action is taken. As we know, the Trade Union Act 2016 brought in a requirement for unions to provide 14 days’ notice to employers. As we are committing to repealing the 2016 Act through this Bill, it stands to reason that if the clauses are agreed to, the seven-day notice period that was required prior to the 2016 Act will apply in its place.
We want to reset the relationship with both employers and unions to resolve disputes through meaningful negotiations. Far from supporting the economy, the effect of the legislation in recent years has been an increase in strikes. In 2023, close to 2.7 million working days were lost to strikes, up from 2.5 million in 2022. Both those figures were the highest since the 1980s.
However, we recognise the importance of striking a balance between allowing for effective strike action and ensuring that employers can reasonably prepare. That is especially important in public services such as the NHS, as the shadow Minister has mentioned, where managers need adequate time to plan for periods of industrial action, and that includes adequate time to agree patient safety mitigations with unions. That is why we have given employers, workers, and trade unions the opportunity, through a consultation, to comment on what notice of industrial action should be provided to employers. That consultation closed on 2 December 2024 and our response will be published in due course.
It seems to me that the shadow Minister’s proposal of a 21-day period is effectively a finger-in-the-air job rather than something considered. If he had tabled an amendment to keep it at 14 days, that would at least have been consistent with his party’s previous position. His statement that it is important to change this in the light of the repeal of the minimum service levels legislation is slightly erroneous given that, to our knowledge, no one has ever actually used the provisions of that Act. When we consider the consultation responses, we will look at whether there is a case for changing the length of the notice period from seven days. I therefore suggest that the amendment is unnecessary, and I ask the shadow Minister to withdraw it.
Greg Smith
I accept the Minister’s point about where precisely the number of days should sit. I slightly take issue with him when he says that the 21-day proposal was a finger-in-the-air job. Most people would describe that three-week window as a reasonable notice period to enable people in many walks of life to make plans, such as alternative provision for childcare.
If the Minister is offering up 14 days, we might well take him up on that, but I suspect he is teasing us rather than making a firm offer. Therefore, we stick with our belief that all our constituents deserve fair and reasonable time to plan and make provision in their daily lives to mitigate against strike action and industrial action, which have such a devastating impact on our economy and on people’s healthcare and their children’s education. We wish to see amendment 167 in the Bill, and we will press it to a Division.
Question put, That the amendment be made.
Justin Madders
I will not detain the Committee long, because we have kind of had the debate already. Clause 57 seeks to repeal section 8 of the Trade Union Act 2016 by amending section 234A of the Trade Union and Labour Relations (Consolidation) Act 1992. This will revert the notice period that trade unions need to provide, after securing a successful mandate, from 14 days to seven days.
As I have said, the Government are committed to modernising employment laws, striking a balance between enabling effective industrial action and ensuring that employers can reasonably prepare for such action. We have sought views on what notice period is suitable for modern working patterns and practices through a formal consultation, which closed last month, and we will be reporting on its outcome in due course. I commend the clause to the Committee.
Greg Smith
The bulk of the argument to be had on the clause was made in the debate on amendment 167. The Opposition still believe that the time period stated in this clause is insufficient to enable real people to plan. I therefore urge the Government to go back and consider this, and to see what more reasonable compromise they might be willing to offer our Great British public on Report.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clause 58
Union supervision of picketing
Question proposed, That the clause stand part of the Bill.
Justin Madders
The clause seeks to reverse the effect of section 10 of the Trade Union Act 2016, thereby removing the requirement under section 220A of the Trade Union and Labour Relations (Consolidation) Act 1992 for trade unions to appoint a picket supervisor and to meet other bureaucratic and administrative burdens in relation to the supervisor, such as taking reasonable steps to provide their name to the police. As the period of disruption between 2022 and 2024 has shown, administrative requirements and bureaucratic hurdles do not prevent strikes; they only make it more difficult for trade unions to engage in good faith negotiations with employers. These changes will bring trade union law into the 21st century and fix the foundations for industrial relations that have not delivered for workers, employers or unions in decades, costing the economy £3.3 billion in lost productivity in the last two years alone.
The Government recognise that regulations governing picketing lines are important, however. That is why the Bill repeals only those measures introduced by the Trade Union Act 2016 in relation to the role of the picket supervisor. Other legislation and an amended code of practice on picketing will remain in place. We are returning the law on picketing to what it was prior to 2016, when I believe that it was working well and was clearly understood by all parties. I therefore commend clause 58 to the Committee.
Greg Smith
I will not take much of the Committee’s time on this. The Opposition do not understand why the Government wish to remove perfectly sensible measures from the statute book, other than that the trade unions have clearly demanded that the change be made. It does not seem proportionate or reasonable to us, and we think that those picket supervisors should instead remain on the statute book, as they are the status quo.
Justin Madders
Our view was that the legislation was not required when it was introduced in 2016. There was no evidence at the time that there were issues with picketing, and there was already a code of practice in place to deal with abuse and intimidation on picket lines. Therefore, we believe that reverting to the pre-2016 position, when in most people’s opinion everything was working as it should, is an entirely reasonable move.
Question put and agreed to.
Clause 58 accordingly ordered to stand part of the Bill.
Clause 59
Protection against detriment for taking industrial action
Amendment made: 83, in clause 59, page 71, line 4, leave out “three” and insert “six”.—(Justin Madders.)
This amendment would increase the time limit for bringing proceedings under the new section 236A of the Trade Union and Labour Relations (Consolidation) Act 1992 from three months to six months.
Greg Smith
I beg to move amendment 166, in clause 59, page 72, line 21, at end insert—
“236E Actions short of a strike: exemption
(1) The right of a worker not to be subjected to detriment under section 236A does not apply in cases where the worker is involved in one or more of the following activities—
(a) intimidation at picket lines;
(b) protests organised by trade unions in furtherance of a dispute—
(i) at the premises of a company;
(ii) at the private residences of senior managers; or
(iii) at the premises of other organisations that are connected with the dispute;
(c) harassment or bullying of non-striking workers, or those who are covering for striking workers;
(d) victimisation or harassment of senior managers; or
(e) action aimed at damaging property or disrupting business contingency planning.
(2) The Secretary of State must ensure that the circumstances under subsection (1), in which the right of a worker not to be subjected to detriment do not apply, are set out in a code of practice.”
This amendment would disapply the right not to suffer detriment as a result of industrial action in certain circumstances.
Amendment 166, which was tabled in my name and those of my hon. Friends the Members for West Suffolk, for Bridgwater and for Mid Leicestershire, would disapply the right not to suffer detriment as a result of industrial action in certain circumstances. This amendment is designed to target what has become known as leverage, which is action taken by a trade union other than traditional industrial action to put pressure on an employer to settle a dispute or meet various demands. When describing leverage in the context of the Grangemouth dispute, Unite said:
“Leverage targets all areas of weakness of an employer, group of employers or sector—both direct and indirect. Leverage is an extension of the understanding that ‘weight of argument’ does not change the position of an employer. Leverage analyses what will change the position of the employer. Leverage is the translation of an organising mind-set into the planning and implementation of a campaign strategy, underpinned by the escalation of pressure to create uncertainty.”
Those are not my words, but the words of a spokesperson for Unite the union. Unite was also of the view that in a leverage campaign
“the employer is routinely treated as a target to be defeated not a friend to be convinced.”
I am not sure that is the good faith relationship between trade union and employer that Labour Members have tried to paint as the normal back and forth between the two. I would certainly condemn as unacceptable any relationship between a trade union and an employer in which
“the employer is routinely treated as a target to be defeated not a friend to be convinced”.
That is not good faith.
Laurence Turner
Even if I accepted the hon. Gentleman’s perspective, which I do not, does he accept that there are some issues with the amendment as drafted? For example, subsection (1)(b)(i) is about protests organised by trade unions in furtherance of a dispute at the premises of a company. I have been part of protests at the premises of a company that were not on land owned by the company but were immediately adjacent, on the public highway. If that were tested in court, that could conceivably fall under the definition of “at”.
Similarly, the amendment seeks to carve out an exemption to the protection of protests at the private residences of senior managers. Conceivably, protests could be organised outside the home of a middle manager or someone lower down the organisational structure. I am sure that is not what the hon. Gentleman is seeking to achieve.
Greg Smith
I welcome the hon. Gentleman’s constructive approach. If he accepts the principle of what we are saying, we will work with the Government to polish it, and to ensure the amendment gives the maximum protection and protects junior managers as well as senior managers, and land adjacent to a premise that may not be owned or leased by the company. I will happily work with him and the Minister in a constructive tone to ensure the protections against leverage are as strong as possible. I will happily withdraw the amendment if the Minister commits the Government to working with us and coming up with a stronger amendment on Report that will stamp out the practices I have outlined. I dare say that we will see in a few moments whether he does so.
Justin Madders
I think it would be helpful if I set out why we are seeking to address the issue of detriment within the Bill. The reason is that new section 236A of the Trade Union and Labour Relations (Consolidation) Act 1992 is required because of the Supreme Court’s ruling in April 2024 that section 146 of the 1992 Act is incompatible with article 11 of the European convention on human rights, because it fails to provide any protection against detriments intended to deter or penalise trade union members from taking part in lawful strike action organised by their union. Hopefully, Members will accept as a starting proposition that we cannot continue to be in breach of our international obligations under the ECHR.
The intention is to rectify that situation by inserting new section 236A into part V of the 1992 Act. This will provide that a worker has the right not to be subject as an individual to detriment of a prescribed description by an act, or any deliberate failure to act, by their employer, if the act or failure to act takes place for the sole or main purpose of preventing or deterring the worker from taking protected industrial action, or penalising the worker for doing so. The prescribed detriments will be set out in secondary legislation following consultation, which will take place after the Bill gains Royal Assent.
The shadow Minister made some interesting points in his speech. However, his amendment seeks to prejudge the consultation on this issue. He made some valid points and I am sure that we will discuss this issue again in future, because there is a need for us to clarify what is considered a detriment, for the reasons that I have outlined.
Some of the examples that the shadow Minister gave are of things that are already catered for in the law. The protection from prescribed detriment only applies where the sole or main purpose of an act or a failure to act is to subject the worker to detriment, to prevent them from or penalise them for taking protective industrial action. For example, if a worker is subjected to detriment solely because, for example, they have damaged property, the protection would not apply. That is the existing position.
Of course the criminal law would still apply to pickets, just as it applies to everyone else, so no person involved in activities associated with pickets or organising pickets has any exemption from the provisions of the criminal law as it applies, for example, to prevent obstruction and preserve public order, or to regulate assemblies or demonstrations. There is already a relevant code of practice in place for that. Consequently, although I understand the points that the shadow Minister is making, I say to him that this issue will be dealt with in detail in a forthcoming consultation. I therefore ask him to withdraw his amendment.
Justin Madders
My hon. Friend is correct. That is indeed the purpose of the—well, we will get to the clause stand part debate shortly, when we will hopefully deal with that issue. However, this measure is about dealing with a particular ECHR judgment. Therefore, as I say, I ask the shadow Minister to withdraw his amendment.
Greg Smith
I understand the point that the Minister makes about prejudging any consultation, notwithstanding the points he makes about international obligations, but this is one of those areas where we have a particular identified problem in leverage that is not being challenged. I should be grateful if the Minister would provide further detail, not in Committee this afternoon but perhaps in writing, on where he thinks that protections exist around this.
From our perspective, it looks very much like this practice is happening and there are no protections against it. If there are protections against it, they are not being enforced. If they are not being enforced, there needs to be a mechanism to enable and allow that enforcement to take place. In good faith, I will withdraw the amendment for now and reserve the right to bring it back on Report, but notwithstanding some of the legitimate points made by the Minister, it is incumbent on us to properly stamp down on this practice and see it as very separate and distinct from the more traditional form of industrial action—strike action. The public understand that in a way that means that there would be even less sympathy when it comes to leverage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause, as amended, stand part of the Bill.
Greg Smith
We debated clause 59 at length in the debate on amendment 166, so I will not dwell on it further, but I am grateful for the Minister’s commitment to write to me on the provisions around leverage.
I will focus my remarks on clause 60 and the removal of provision for a 12-week protected period, with the result that the period would be extended indefinitely. I worry about the potential to create a bit of a lawyers’ charter, where someone will for evermore be challenged, if they are dismissed, on whether it was because they once took part in some form of industrial action. There needs to be some protection and commitment around that, to ensure that employers who have a legitimate reason for dismissing an employee that is not related to their participation in industrial action, are still able to dismiss the employee without fear of industrial action and of constantly being dragged back by lawyers, or potentially trade union representatives, seeking to exploit the removal of the 12-week period.
I accept that this is a niche and hypothetical point, but so much of the law and regulation that we pass in this place can be open to pretty wide interpretation. I think it is important, during line-by-line scrutiny of the Bill, that commitments are made by the Minister that the courts can look back on in years to come to see the true meaning of what the Government are trying to bring about with clause 60. Without those commitments, which in my opinion can be given verbally as part of the debate, some might find themselves in a very sticky spot.
Alison Hume (Scarborough and Whitby) (Lab)
It is a pleasure to serve under your chairmanship once again, Sir Christopher. I know that the shadow Minister likes us to draw attention to our union membership, so I again draw attention to my membership of Unison.
I welcome clause 59 because it addresses the critical issue of protecting workers taking part in industrial action, ensuring that they are safeguarded not just against dismissal but against other forms of detriment. As my hon. Friend the Member for Birmingham Northfield has previously mentioned, the case of Fiona Mercer, a care worker suspended after participating in legal industrial action, highlights why the reforms are needed. Like so many care workers, Fiona dedicated her career to supporting some of the most vulnerable in our society—in Fiona’s case, adults with learning difficulties. Yet she faced suspension for standing up for fair pay and better conditions. Her case is a pertinent reminder of the vulnerabilities faced by workers in critical sectors such as social care when their legal rights are not adequately protected.
Therefore, I welcome the clause’s introduction of protections against detriment, ensuring that employers cannot punish workers like Fiona for exercising their right to strike. This provision is essential to safeguard the ability of care workers and others to advocate for fair treatment without fear of suspension, demotion or other retaliatory measures. The removal of the arbitrary 12-week protected period for unfair dismissal means that workers like Fiona can continue to fight for justice without compromising on protections.
Justin Madders
The clause seeks to repeal the Strikes (Minimum Service Levels) Act 2023, which provides powers for the Government to make regulations to set minimum service levels during strike action in some essential services. The previous Government introduced regulations to implement minimum service levels in rail, border security, fire and rescue, and ambulance services. No work notice, however, has ever been issued by an employer to require individuals to work to meet the minimum service level during strike action. This demonstrates the futility and misguided approach of the Act and I urge Members to support its repeal. Minimum service levels unduly restrict the right to strike and undermine good industrial relations. As a result, our plan—it is a clear manifesto commitment—pledged to repeal the Act to give trade unions the freedom to organise, represent and negotiate on behalf of their workers.
The clause amends the Trade Union and Labour Relations (Consolidation) Act 1992. Subsection (1) repeals provisions of the 1992 Act as inserted by section 1 of the Strikes Act, with sections 234B to 234G falling away. A number of further amendments are made by the clause to the 1992 Act to reverse other changes made by the Strikes Act. As a result, all associated powers, regulations, provisions and defined terms related to minimum service levels will also fall away. We want to reset the relationship with both employers and trade unions to resolve disputes through meaningful negotiations, and repealing the Strikes Act will help us to achieve that.
I will now turn to new clause 27 and amendment 133, which were tabled by the hon. Member for Mid Buckingham- shire. The Government will not support his proposals, which unnecessarily ask for an assessment of the ability of essential public services to provide minimum service levels during industrial action, and to lay a report containing the findings before the House. The Government have already produced a comprehensive set of impact assessments, including an assessment covering the repeal of the Strikes (Minimum Service Levels) Act 2023. This was published alongside the Bill at Second Reading and is based on the best available evidence about the potential impact on business, workers and the wider economy. The assessment is hamstrung by the fact that the Act has never been implemented, so we are in some difficulty in seeing whether there was an impact from it.
The analysis we undertook, however, included labour market and broader macroeconomic analysis, including sectoral analysis on industries providing essential services, potential influence on collective bargaining and dispute resolution processes, while also addressing the balance between employer needs and union representation. We want to reset the relationship with both employers and trade unions to resolve disputes through meaningful negotiations, and believe that the Act was a hindrance to doing so. I therefore ask the shadow Minister not to move his new clause or amendment.
Greg Smith
I will focus my remarks predominantly on new clause 27 and amendment 133, which stand in my name and those of my hon. Friends. New clause 27 would require the Secretary of State to assess the impact of clause 61, which, as the Minister outlined, repeals legislation passed by the last Conservative Government that implemented minimum service levels in vital public services during periods of strike action. Amendment 133 would specify that regulations could not be laid to repeal minimum service levels legislation until the reports required by new clause 27 had been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown.
We think that is fundamentally right because, with no justification or explanation, the Government will repeal legislation designed to ensure that, during a strike, levels of service are maintained to ensure public safety. We consulted on minimum levels of service for the ambulance service, fire and rescue services and passenger rail services during the last Parliament. It is an important principle that members of the public, who pay through their taxes for lifesaving public services such as ambulance and fire services, should be able to rely on those services at all times, including when members of those services choose to take strike action. Equally, members of the public depend on rail services and in many cases will have already paid for them through season tickets. They have a right to an acceptable level of service, even when members of unions decide to take strike action.
Therefore, before the Government can commence the repeal of the minimum service levels legislation, we think it is only right that the Secretary of State should demonstrate and reassure the House that, in the sectors that the Conservatives specified as suitable for requiring minimum service levels during strike action—to recap, because I think it is important that we get this back on the record, those are health services, fire and rescue services, education services, transport services, services involved in the decommissioning of nuclear installations and management of radioactive waste and spent fuel, and border security—minimum levels of acceptable service can be provided to the public. I make that point not on a whim, but as a matter of public safety and public convenience, and I would be grateful for reassurance from the Minister on it.
If I may humanise it for a moment, this is not about simply saying that people should not be allowed to strike, or taking away rights or anything, although I am sure it will be painted as that; it is about expanding an established custom and precedent in this country about certain sectors, such as the police, being unable to strike. My father was a police officer for 31 years before he retired. We have always accepted as a country that the police should not be able to strike, because they are there for the fundamental purpose of public safety. We know that when we need them, they will be there and available. The same core public service, which we all pay for through our taxes, is provided by the other professions I outlined, not least fire and rescue services, border security and the niche but important services involved in the decommissioning of nuclear facilities, and there absolutely must be minimum service levels there too. Any one of us could need an ambulance at any point at no notice. Whether or not that minimum service level is in place is quite literally the difference between life and death. This is a serious issue.
The Labour party has always been opposed to minimum service levels. It opposed the legislation in the previous Parliament, and through this clause it is taking the quickest action possible to repeal it. I urge Labour Members to consider the practical, life-and-death consequences of not ensuring minimum service levels for fire, ambulance and border security services. If they have issues with some of the detail of the minimum service levels legislation, they should by all means strengthen it, but it would be simply negligent to allow the minimum service levels to drop and to leave any of our constituents—even just one—in a position of potentially life-and-death danger by repealing the legislation.
Justin Madders
Clause 62 seeks to reverse the effect of section 7 of the Trade Union Act 2016. It will remove the additional reporting requirements imposed on trade unions for their annual returns to the Certification Officer regarding details of industrial action taken during the reporting period. Specifically, trade unions will no longer be required to include information on any industrial action taken during the reporting period, the nature of the trade dispute relating to the industrial action, the type of industrial action taken or when it was taken, or confirmation that the relevant thresholds covering industrial action ballots have been met. Additionally, trade unions will no longer be required to include information regarding the results of industrial action ballots—for example, the number of votes cast and the number of those who voted yes or no.
Subsection (1) removes section 32ZA from the Trade Union and Labour Relations (Consolidation) Act 1992, which sets out the additional reporting requirements on trade unions. Trade unions will still be required to submit an annual return to the Certification Officer. However, the amount of information they will be required to include will be reduced. By removing these additional administrative burdens on trade unions, we are freeing up their time to engage in bargaining and negotiation with employers and allowing them to devote more time to representing their members’ interests.
Clause 63 seeks to repeal amendments made to the 1992 Act by section 12 of the Trade Union Act 2016 and thereby remove the requirement for trade unions to include political fund expenditure in their annual return to the Certification Officer. Currently, this information must be provided where a union spends more than £2,000 per annum from its political fund. Subsection (2) removes section 32ZB from the 1992 Act, which sets out the information to be included in a union’s annual return on political expenditure.
Other subsections of clause 63 make other amendments to the 1992 Act that are consequential on the removal of section 32ZB, including as to its enforcement and its application to employers’ associations. Section 12 of the 2016 Act itself is repealed by subsection (7). Trade unions will still have to report to the Certification Officer on their income and expenditure. That includes reporting on the income and expenditure of the political fund. Moreover, all political parties will still be subject to the reporting requirements in the Political Parties, Elections and Referendums Act 2000, which requires certain donations and loans to be recorded and reported to the Electoral Commission.
Clause 64 seeks to repeal the remainder of the effect of section 18 of the 2016 Act. It removes the power of the Certification Officer to publicise a trade union’s failure to include the required industrial action data in its annual return. Clauses 62 and 63 remove the requirement for trade unions to include details of industrial action and political expenditure in their annual returns, so there is clearly no need for the Certification Officer to retain powers to enforce such a requirement.
Enforcement relating to details of political expenditure is addressed in clause 63, and enforcement relating to details of industrial action in clause 64. Therefore, clause 64(2) removes section 32ZC of the 1992 Act, thereby removing the powers of the Certification Officer to enforce the additional annual return requirements relating to industrial action. The Certification Officer will retain the powers to enforce the remaining annual return requirements in relation to a union’s financial affairs and governance.
Clause 65 seeks to reverse the effect of section 17(1) and (2) of the 2016 Act, which inserted schedule A3 to the 1992 Act. It will repeal the enhanced investigatory powers of the Certification Officer, including the power to launch investigations by inspectors, the ability to compel trade unions to produce documents, and the related powers of enforcement. Schedule A3 to the 1992 Act sets out the details of the Certification Officer’s investigatory powers as introduced by the 2016 Act.
Clause 65(5) removes section 256C of the 1992 Act and subsection (6) removes schedule A3 from the 1992 Act. Subsections (2), (3) and (4) make more minor amendments that relate to the removal of schedule A3. Consequentially, subsection (7) removes section 17(1) and (2) of the 2016 Act, and schedule 1 to that Act, and makes further minor amendments to schedule 4 to that Act and to section 43 of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014.
The enhanced powers created by the 2016 Act were unnecessary. There was no evidence of regulatory failure, and unions have consistently complied with their statutory obligations in relation to their finances, governance and reporting requirements. Since their introduction, the Certification Officer has never used those additional powers. Removing onerous regulatory burdens from trade unions is part of the Government’s commitment to bringing in a new era of partnership that sees employers, unions and Government work together in co-operation and through negotiation.
Clause 66 seeks to remove the powers of the Certification Officer to investigate trade unions proactively without first having received a complaint from a member of that trade union. Those powers were added to various provisions of the 1992 Act by schedule 2 to the 2016 Act. The enhanced investigatory powers created by the 2016 Act were unnecessary. There was no evidence of regulatory failure, and unions have consistently complied with their statutory obligations in relation to their finances, governance and reporting requirements. In fact, since their introduction, the Certification Officer has never used those additional investigatory powers either.
Subsections (2) to (9) of clause 66 remove the ability for the Certification Officer to proactively investigate a range of issues, reverting to the position pre-2016, when the Certification Officer could only consider and act upon a complaint from a member. Trade unions are voluntary associations, run by and for their members. We are returning the Certification Officer’s role to one of adjudicating when it receives members’ complaints in relation to a union.
Clause 67 seeks to reverse the effect of section 19 of the 2016 Act to remove the ability of the Certification Officer to impose financial penalties on trade unions. The previous Government presented no evidence as to why the Certification Officer needed those additional powers. Since they have come into force, no financial penalties have been imposed on any trade union.
Schedule A4 to the 1992 Act sets out the detail of the power to impose financial penalties. Clause 67(2) removes section 256D of the 1992 Act, which gave effect to the schedule, and subsection (3) removes the schedule. As a result, the clause removes subsections (1) to (3) of section 19 of the 2016 Act and schedule 3 to that Act. The Certification Officer will retain the power to issue enforcement orders, and if those orders are not complied with, the union may be found in contempt of court.
Clause 68 will repeal sections 257A and 258(1A) of the 1992 Act, as inserted by section 20 of the 2016 Act. That will remove the levy charged by the Certification Officer on employers’ associations and trade unions. Furthermore, the Certification Officer will no longer be required to report on the levy as part of its annual report to Parliament. The levy is an impediment to the rights of voluntary associations, and it attracted criticism from international bodies, including the International Labour Organisation.
Clause 68(2) removes section 257A of the 1992 Act, which sets out the requirements for a levy to be paid to the Certification Officer by trade unions and employers’ associations. Subsection (3) removes the requirement in section 258(1A) of the 1992 Act for the Certification Officer to report on the levy. The Government believe that we should interfere as little as possible in the activities of social partners, which are voluntary associations.
Clause 69 seeks to reverse the changes made by section 21 of the 2016 Act to the 1992 Act so that the right of appeal against decisions of the Certification Officer to the Employment Appeal Tribunal is on questions of law only, rather than on questions of law and fact. That brings the appeals process back in line with the position before the 2016 Act and with many other enforcement bodies of employment law. For example, appeals against the decisions of employment tribunals are considered only on points of law, not points of fact. I hope hon. Members were keeping up with that; I shall be asking questions later.
New clause 44 would place a new duty on the Certification Officer, the regulator of trade unions and employers’ associations, by requiring it to advance the objectives of the international competitiveness of the economy and its growth over the medium to long term when carrying out its statutory functions.
It is helpful at this stage to set out the role of the Certification Officer. It has been the regulator of trade unions and employers’ associations since 1975 and not only carries out regulatory functions, but has administrative and supervisory functions and a significant quasi-judicial function, where it adjudicates on complaints raised by trade union members and other parties. As part of our repeal of the provisions of the Trade Union Act, we will be repealing the Certification Officer’s enhanced investigatory and enforcement powers and the levy imposed on trade unions and employers’ associations. As such, we will be returning the role much to what it was before the Trade Union Act was implemented.
The Certification Officer’s primary role is to ensure that both unions and employers’ associations adhere to the statutory requirements in relation to their finances and governance that Parliament has decided they are required to observe. Its statutory functions are to maintain lists of trade unions and employers’ associations; determine complaints from union members against their unions relating to alleged breaches of statutory duties and some other types of union rules; determine union independence; ensure that annual returns are made; supervise mergers, political fund ballots and members’ superannuation schemes; and investigate alleged financial irregularities and breaches in relation to trade union membership. The Certification Officer therefore has no locus in relation to industrial action and no role in making assessments of how unions and employers’ associations impact the economy. It has no economists or statisticians on its payroll.
In view of the Certification Officer’s functions and role, the new clause is not appropriate. It is not clear how the Certification Officer, in making decisions on whether a union or employer association has breached its statutory obligations, will act to advance the objectives of international competitiveness of the economy and its growth in the medium to long term. Hopefully the shadow Minister will set out how that would work in practice, because it is not obvious to me how the Certification Officer could take those factors into account when determining the statutory obligations that unions and employers’ associations have to observe under Acts of Parliament. For that reason, I ask him not to press his new clause, and I commend clauses 62 to 69 to the Committee.
Greg Smith
I congratulate the Minister on his marathon run through clauses 62 to 69. I will focus my comments particularly on new clause 44, which, as the Minister has outlined, would require the Certification Officer to advance the objectives of the international competitiveness of the economy and its growth in the medium to long term.
Justin Madders
I am grateful to the shadow Minister for taking slightly less time than I did on this grouping. For the record, I am fully supportive of the Prime Minister’s action plans, milestones, missions and all other types.
Justin Madders
I am afraid that would be out of scope of the Bill Committee. I hear what the shadow Minister says. His essential argument is that we should be able to judge the actions of trade unions in terms of the damage or disruption they cause to the UK economy. Of course, we want to see growth and we want to see industrial action minimised. We believe that by having a more harmonious set of industrial relations, we will see that.
Unfortunately, the shadow Minister’s new clause really mischaracterises the Certification Officer’s role. He is not, as the hon. Gentleman said, there to preside over strikes; he is there to preside over the governance, finances, reporting requirements and statutory obligations of trade unions and employers’ associations—I noted that the hon. Gentleman did not mention employers’ associations. The Certification Officer is not there to preside over industrial disputes and strikes. There are courts to intervene if a party feels aggrieved about the way industrial action has been observed, whether lawfully or not. I can see the intention of the new clause: the shadow Minister wants the Government to succeed in their growth mission. We all do, but I do not think the Certification Officer is the right or appropriate vehicle for that to take place.
Question put and agreed to.
Clause 62 accordingly ordered to stand part of the Bill.
Clauses 63 to 69 ordered to stand part of the Bill.
Clause 70
Regulations subject to affirmative resolution procedure
Question proposed, That the clause stand part of the Bill.
Justin Madders
The clause amends section 293 of the Trade Union and Labour Relations (Consolidation) Act 1992, with which I am sure all Members are now very familiar, to require that regulations made under the following new sections of the 1992 Act are subject to the affirmative resolution procedure. This therefore will apply to the following regulations: section 70ZC, on access agreements, response period and negotiation period; section 70ZE, on access agreements and the period to make an application to Central Arbitration Committee; section 70ZF, on access agreements and determinations by the Central Arbitration Committee; section 70ZI, on the enforcement of access agreements and the maximum penalty; and section 236A, on detriment for taking industrial action. Any other regulations made under section 293 will continue to be subject to the negative resolution procedure. I therefore commend clause 70 to the Committee.
Greg Smith
I will not detain the Committee with a commentary on this clause.
Question put and agreed to.
Clause 70 accordingly ordered to stand part of the Bill.
Clause 71
Devolved Welsh authorities
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
New clause 30—Repeal of Trade Union (Wales) Act 2017—
“The Trade Union (Wales) Act 2017 (anaw 4) is repealed.”
This new clause repeals the Trade Union (Wales) Act 2017.
The Minister for Equalities (Dame Nia Griffith)
We now turn to clause 71 and will resist Opposition new clause 30. Clause 71 is the final of the package of clauses to repeal the Trade Union Act 2016. It makes a consequential amendment to the Trade Union (Wales) Act 2017 following the repeal of the Trade Union Act 2016. Section 1 of the 2017 Act disapplied some of the provisions of the Trade Union and Labour Relations (Consolidation) 1992 Act, as introduced by the Trade Union Act 2016, from applying to devolved Welsh authorities. As the Trade Union Act 2016 and the relevant provisions of the 1992 Act are being repealed, section 1 of the 2017 Act is now redundant. There are also consequential amendments to the 1992 Act to remove the relevant references to devolved Welsh authorities.
New clause 30 seeks to repeal the Trade Union (Wales) Act 2017 in its entirety. Section 1 of this Act disapplies certain provisions of the Trade Union Act 2016 to devolved Welsh authorities. Repealing the Trade Union Act 2016 means that these provisions are no longer necessary. It is for that reason that we are repealing section 1 of the Trade Union (Wales) Act 2017 through clause 71 of this Bill. Section 2 of the 2017 Act is not impacted by the repeal of the Trade Union Act 2016. It prevents a devolved Welsh authority from using agency workers to replace striking workers. This Government support a prohibition on using agency workers to cover industrial action and therefore we are content to leave this in the Trade Union (Wales) Act 2017. New clause 30 is therefore unnecessary and I ask the shadow Minister to withdraw it. I commend clause 71 to the Committee.
Greg Smith
I will focus my remarks on new clause 30, tabled in my name and that of my hon. Friends the Members for West Suffolk, for Bridgwater and for Mid Leicestershire. It is good to see the Minister in her place on her first outing in the Committee of the day, and as she said, new clause 30 would repeal the Trade Union (Wales) Act 2017. Prior to the 2017 Act, there was legal ambiguity in post-devolution case law of the degree to which trade union legislation was a reserved or devolved competence. Following the passage of the Trade Union Act 2016 in the UK Parliament, the Labour-led Welsh Government then passed Welsh legislation—the Trade Union (Wales) Act 2017—to disapply a number of trade union measures in Wales in relation to devolved public services. The Wales Act 2017 was subsequently passed with cross-party and cross-institution agreement, and re-established that industrial relations were a reserved competence.
The Conservative-led UK Government at the time pledged to unwind the Welsh Government’s Act and reapply the full 2016 Act to Great Britain following the passage of the Wales Act 2017. However, re-asserting such common trade union law across Great Britain would require primary legislation in the United Kingdom Parliament. Given that the Wales Act 2017 established industrial relationships as a reserved competence, we would like to understand when the Government intend to resolve the changes implemented by the Welsh Government’s Act, which disapplied some of our 2016 Act. I do not think it is an unreasonable ask of the Government that we seek to resolve through the new clause.
Dame Nia Griffith
The point is very clear, isn’t it? In the legislation we are providing now, we are making the first part of the Trade Union (Wales) Act unnecessary, and therefore it is perfectly appropriate to put through a clause in this Bill to keep things in line with what we are doing across the UK. It is perfectly in order to have a clause that seeks to bring that particular legislation in line with the situation in which we now find ourselves.
On the second part of that legislation, as I have just said, that is already something on which we agree with the Welsh Government. We therefore see no particular reason why there should be a repeal of that legislation in the Bill, and we do not propose to do so. I suggest that the shadow Minister’s new clause is not necessary in the current Bill.
Question put and agreed to.
Clause 71 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Anna McMorrin.)
Employment Rights Bill (Fifteenth sitting)
Greg Smith ExcerptsTuesday 7th January 2025
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 7 January 2025 - (7 Jan 2025)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
Good morning, Mr Mundell. It is a pleasure to see you in the Chair. Happy new year to you and to all members of the Committee. I start by making my customary reference to my declarations in the Register of Members’ Financial Interests.
This, I hope, is a fairly straightforward and uncontroversial clause; it does exactly what it says on the tin. Currently, there is no general requirement for employers to let their staff know of their right to join a trade union. The clause introduces a legal duty for employers to inform all new employees of their right to join a union and to remind all staff of that right at prescribed intervals. Employers must provide this information alongside the written statement of particulars that they are already required to produce under section 1 of the Employment Rights Act 1996. Specific details, including the frequency and manner of notification, will be set out in secondary legislation following consultation.
A lack of awareness of the right to join a trade union may be contributing to declining union membership and reduced worker engagement in collective bargaining. The clause will help empower workers to become active in protecting their rights. This is a step forward in strengthening worker representation and the collective voice in the workplace, ultimately supporting more effective collective bargaining. I therefore commend the clause to the Committee.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Mundell, and I too wish you and all members of the Committee a very happy, prosperous and healthy new year. If only the optimism of that statement were matched by business confidence around the country as we start this new year.
I understand why the Government want to take this measure, and it is pretty clear that it will happen as part of the Bill. As the Minister prepares for the consultation that he spoke about, I ask him to reflect on how quickly we can give businesses certainty on the frequency with which they will have to remind their employees of their right to join a trade union. Of course everyone has a right to join a trade union—there is no issue with that—but this is yet another thing that HR departments of bigger businesses, and individual owners of smaller businesses, who have to do everything from the HR function down to replacing the loo roll in the toilets, will have to remember to do on a regular basis, and presumably they will face consequences if they do not. It might not seem onerous as we talk about it at half-past 9 on a Tuesday morning in Westminster, but once we start ratcheting up all these different things for businesses—particularly those very small businesses—to do, it will become a burden.
The other thing that I gently ask the Minister to consider as part of his consultation is this. Would it not be a fairer, more balanced and better way of doing things to have in the proposed statement, as well as a reminder to employees of their right to join a trade union, a reminder that they do not have to do so—that there is equally a right not to join a trade union if they do not wish to? It would be much more fair and balanced if the consultation focused on ensuring that both sides are equally reflected—yes, a reminder that there is a right to join a trade union, but equally, a reminder that there is no compulsion and no absolute, set-in-stone requirement to do so. If we could have that, the clause would be much more balanced.
Steve Darling (Torbay) (LD)
It is a pleasure to serve under your chairmanship, Mr Mundell. I wish all colleagues a happy and prosperous new year.
I welcome these proposals. Only this weekend, I was speaking with a constituent in Torbay who told me that the unit he worked in had transferred out of the NHS and been taken over by the private sector. He was gravely concerned about sharp practices that he saw being undertaken by the new employer. My best advice to him was, “Have you engaged with the trade union on site? How can the trade union help you? If I can do anything to assist the trade union, I stand ready to help.”
Trade unions are a force for good in the workplace, and many of the proposals that we will discuss today will put us mid-range in the OECD on trade union rights. Far from the extremism that the Conservatives are painting us into a corner with, these measures will actually put us back on an even keel as a nation in our relations with trade unions, rather than something like third or fourth bottom among OECD countries in the rights that we give unions.
Justin Madders
The clause makes provision for trade unions and employers to negotiate access agreements, under which employers will be required to permit trade union officials to enter workplaces for various purposes, such as recruitment, organising, and meeting and providing support to existing members. This is particularly significant for unrecognised unions. Access to a workplace can provide an opportunity to recruit and organise with the aim of gaining formal recognition.
The Bill currently provides that any listed trade unions can apply for access to a workplace. Under the current definition, it is possible that employers could use staff associations and non-independent bodies to frustrate independent trade unions’ access to the workplace. Therefore, proposed amendments 72, 73 and 75 to 79 require trade unions to have a certificate of independence issued by the Certification Officer to qualify for access.
The amendments will ensure that clause 46 is used as intended. The clause will ensure that independent unions can initiate and agree access agreements with an employer, while not affecting the existing ability of non-independent bodies to negotiate voluntary access agreements. Amendment 73 inserts the defined term “qualifying trade union” and defines it as a union that has a certificate of independence issued by the Certification Officer. That will apply to proposed new chapter 5ZA of the Trade Union and Labour Relations (Consolidation) Act 1992 only, and amendments 72 and 75 to 79 update other provisions that refer to “listed” trade unions accordingly.
Greg Smith
As the Minister clearly outlined, the requirement for a trade union to have a certificate of independence to have the rights provided for in clause 46 is a tidying up of the Bill. The Opposition are not entirely on board with the spirit of the Bill in this regard, but we welcome its being tidied up and the clarity that the amendments bring to what the Government are trying to do to prevent even more of a free-for-all in terms of access to workplaces.
I have said many times that it is a shame and regrettable that so many of these tidying-up amendments have had to be tabled. Welcome though they are in bringing certainty to businesses about the Bill’s core provisions, if we had not had that arbitrary 100-day deadline, we probably would not be spending our time going through these sorts of amendments, and could instead be debating much more of the substance of the Bill. As I say, the Opposition are not convinced about some of the core provisions of the Bill, but these particular amendments do at least tidy it up to some extent.
Steve Darling
I welcome the amendments. Driving our economy to achieve the productivity that we need must be a mission for all of us in this House. The culture in our businesses is really important, and I think the amendments will drive a positive working relationship between workers and bosses, so that we can see productivity enhanced across the United Kingdom.
Justin Madders
I beg to move amendment 74, in clause 46, page 51, line 4, at end insert—
“(4A) ‘Workplace’ does not include any part of a workplace used as a dwelling.”.
This amendment would ensure that the right of access does not include access to dwellings.
This important amendment adds some clarity about the right of access to a workplace, providing an exemption so that the right of physical access does not apply to private dwellings such as the private homes of workers who are working either fully from their home or in a hybrid manner between their workplace and their home. Most exemptions will be provided for and set out in detail in secondary legislation, but we think it is important to set out this principle in the Bill.
We will provide in secondary legislation and guidance more detail on how complex physical access cases, such as care homes, where premises are a mix of residential and a workplace, will be negotiated. To protect the privacy of people living in the premises, that could, for example, set out the terms that it is reasonable for the trade union to comply with when exercising access, for example limiting access to parts of the premises that are used by workers only, and specifying that unions should take a specific route to the particular room where access activities are due to take place. That sort of detail will be set out in secondary legislation following consultation.
Greg Smith
As the Minister says, the amendment ensures that the right of unions to access workplaces does not extend to dwellings. Of course the Opposition welcome that the Government have acknowledged that trade unions should not be able to access private dwellings. The fact that the Bill was introduced in such a manner that would have permitted trade unions to do so begs a number of worrying questions about the speed with which the Bill was drafted. The fact that we are debating whether a trade union should have access to someone’s private dwelling is deeply regrettable. I would have hoped that the Government, from first principles, would acknowledge that it was never an acceptable outcome for anyone to have their own home invaded by a trade union or otherwise.
The way people set up their homeworking arrangements within their own dwelling is very much a matter for them. Balancing what they do in their own home with their family life and perhaps their children’s needs or the needs of someone they are caring for, and the way they structure that should, of course, remain entirely private. This is just another example of the damage that can inadvertently be done when legislation that is not ready is introduced to this House. It makes us question what other mistakes, if I may call them that, are lurking in the Bill that are still yet to be spotted by the Bill Committee.
Greg Smith
Ah, the first intervention of the new year! How could I say no to the hon. Member for Birmingham Northfield?
Laurence Turner
What a dubious honour, but happy new year to everyone in the Committee. Will the shadow Minister acknowledge that there is a body of legislation on trade union right of access in comparable jurisdictions, particularly Australia, which goes back many decades and does not contain such provision? There have been mischief-making campaigns and wild warnings of trade unionists suddenly appearing at the foot of somebody’s bed to carry out a health and safety inspection. All that is being done here is that a step is being taken that has not been taken anywhere else in the world, to my knowledge, to make it clear that this set of circumstances, which exists only in theory, not in practice, will never actually arise.
Greg Smith
I am grateful to the hon. Gentleman for his intervention. I understand his fundamental point, but before the Government tabled the amendment a feasible interpretation of the rules would have allowed access to a private dwelling. We can all stand or sit here in Committee Room 10 of the House of Commons and think how preposterous that would be and how that it never actually happen, but there are plenty of examples in history where the preposterous has come to be—where someone’s interpretation of legislation or rules or regulations or whatever it may be has brought about perverse outcomes.
We would have been in a much more satisfactory position had the Government, from first principles and at the very start, laid out in the Bill that someone’s private dwelling is just that: private. Although there has been an explosion in working from home and a fundamental shift, particularly in the post-pandemic world, of people actively choosing to work from home, either all the time where they can, or in a hybrid arrangement where they work from home for a couple of days a week and in the office, factory, warehouse or wherever it might be for the other days, it should be an enshrined principle in this country—the free society the Minister spoke of—that a private dwelling should from absolute, unquestionable first principle remain private, and not be an area to which a trade union or otherwise can freely demand access. It is important that private dwellings remain accessible only by warrant, which has to be granted by a magistrate, for clear purposes, such as where criminality or some such activity is suspected.
The Opposition welcome the core text of the amendment, but we want it firmly on the record that such an amendment should never have been required in the first place.
Justin Madders
I feel that we are going to have a few of these conversations again this year. Heaven forbid the previous Government ever amended anything in Committee! We knew the Bill was issued at a challenging pace and that it was large, so there were always going to be elements that needed clarification at this stage. It is right to do that now before it becomes law and well in advance of any practical application. Like amendment 72, this amendment is an example of us responding to concerns raised when the Bill was published. It is probably fair to say that no one actually envisaged trade unions marching into people’s homes, so it was not something we thought it necessary to spell out in the Bill, but that concern has been raised in feedback, and we are able to provide clarification and reassurance. I therefore commend the amendment to the Committee.
Amendment 74 agreed to.
Amendments made: 75, in clause 46, page 51, line 18, leave out “listed” and insert “qualifying”.
See the explanatory statement to amendment 72.
Amendment 76, in clause 46, page 52, line 13, leave out “listed” and insert “qualifying”.
See the explanatory statement to amendment 72.
Amendment 77, in clause 46, page 52, line 26, leave out “listed” and insert “qualifying”.
See the explanatory statement to amendment 72.
Amendment 78, in clause 46, page 53, line 36, leave out “listed” and insert “qualifying”.
See the explanatory statement to amendment 72.
Amendment 79, in clause 46, page 53, line 40, leave out “listed” and insert “qualifying”.—(Justin Madders.)
See the explanatory statement to amendment 72.
Justin Madders
Proposed new section 70ZF(4)(a) of the Trade Union and Labour Relations (Consolidation) Act 1992 allows the Secretary of State to prescribe circumstances in which it would be reasonable for the Central Arbitration Committee to determine that a trade union is not to have access to a workplace. Amendment 80 is a minor technical amendment to clarify that, if circumstances are specified under proposed new section 70ZF(4)(a) of the Act, the effect of specifying those circumstances is that it is reasonable to make a determination that officials of a union are not to have access, but it does not require the CAC to make such a determination.
Amendment 81 allows the Secretary of State to prescribe in secondary legislation the matters to which the CAC must have regard when determining whether access is to be granted to a trade union. As an example, that would usefully allow the Secretary of State to prescribe that the CAC must, when making determinations about access, have regard to the presence of a trade union with existing access to the workplace to which another union is seeking access. In that scenario, the amendment provides reassurances that an access request will not be rejected by default if there is an existing arrangement with another trade union. The Government have consulted on the exact details of what the CAC is required to consider when making determinations about access, and secondary legislation will follow Royal Assent to the Bill. With that in mind, I commend the amendments to the Committee.
Greg Smith
As the Minister said, Government amendment 80 clarifies that if circumstances are specified under new section 70ZF(4)(a), the effect of specifying those circumstances is that it is to be regarded as reasonable of the CAC to make a determination that officials of a union are not to have access, but does not require the CAC to make such a determination. Government amendment 81 would allow the Secretary of State to prescribe matters to which the CAC must have regard when considering an application for a determination about access. Therefore, these amendments set out that if the Secretary of State has specified circumstances in which it would be reasonable to decline union access to a workplace, the CAC must accept those circumstances.
That is all well and good, but the access principles, as they are set out, are incredibly broad and make it very difficult for an employer to refuse access. For example, subsection (2)(a) of new section 70ZF specifies that
“officials of a listed trade union should be able to access a workplace for any of the access purposes in any manner that does not unreasonably interfere with the employer’s business”.
That accepts that access can and should be allowed to cause interference, but what would count as unreasonable interference? Can the Minister give any concrete examples? How will businesses know what they are or are not expected to put up with in terms of inconvenience and disruption to their operations? This all seems to be still particularly woolly and ill-defined. It will cause a lot of headaches and a lot of businesses to scratch their heads to work out what they have to put up with, bear the burden of, or lose profit to in order to enable some of the access that the Bill determines will take place.
The circumstances in which it would be reasonable for officials of a union not to have access will be specified in future regulations, but this is an area where it is incumbent on the Government to be very clear—indeed, crystal clear—about where the Minister or the Department feels these regulations should sit, or the operating window in which they should sit, moving away from woolly language and into real practical detail to allow businesses to begin to prepare. Can the Minister give any examples of matters that might be specified by the Secretary of State to set some constraints on the access principles envisaged by the amendments? I know he will say that he wishes to consult, which is all very well and good, but as I said a moment ago, this is an area where I do not think businesses will simply accept the offer of future consultation; they will instead want an operating window with practical examples and very clear language about what the amendments envisage will happen in the future. It is just not good enough for us to be left in this position of trying to second-guess and wonder what things will be like when the consultation finally happens.
Steve Darling
I will be concise and echo the shadow Minister’s call for clarity.
Greg Smith
I understand the importance of not predetermining a consultation, but will the Minister not accept that, by definition, the Government have to consult on something? There must be a broad range of circumstances around access being permitted or not that the Government intend to consult on. I believe it is reasonable to ask the Minister to provide some practical examples of the range of options on which the Government intend to consult, so that businesses out there, as they watch this blank cheque of a Bill being signed prior to the secondary legislation coming about at an indeterminable future date, will know what that range is.
Justin Madders
I beg to move amendment 82, in clause 46, page 57, line 37, at end insert—
“(c) dismiss the appeal.”
This amendment would clarify that the Employment Appeal Tribunal may dismiss an appeal under new section 70ZK(2) of the Trade Union and Labour Relations (Consolidation) Act 1992.
The amendment is straightforward, providing clarity that an Employment Appeal Tribunal can dismiss an appeal under the new section 70ZK(2) of the Trade Union and Labour Relations (Consolidation) Act 1992. It is a fairly straightforward and self-explanatory amendment.
Greg Smith
As the Minister said, the amendment clarifies that the Employment Appeal Tribunal may dismiss an appeal under new section 70ZK(2) of the Trade Union and Labour Relations (Consolidation) Act 1992. Of course the Opposition agree that this amendment should be accepted and put into the Bill, but it beggars belief that the amendment was necessary in the first place. Of course the Employment Appeal Tribunal should be allowed to dismiss an appeal if it finds that to be necessary, but how on earth was a Bill put before this House of Commons—this Parliament—that only envisaged that the tribunal might quash the order or make an order requiring the person to pay a reduced amount to the CAC? How was this Bill introduced in a form in which the dismissal of an appeal was not even an option?
It is extraordinary that a Bill could have been allowed through the write-around process—the various processes that Government have—without this anomaly being spotted and rectified before the Bill was presented and had its Second Reading debate. I gently ask the Minister to reflect on that and go back through the Bill’s provisions to double-check for any other glaring omissions, which I am sure he never wished to see in the first place and is now correcting by the amendment in his name. Could he ensure that the Bill contains no more of these, frankly, howling errors that could cause so much damage?
Steve Darling
Bill Committees are here to check for snags in the final construction of legislation. I am pleased that this snag has been picked up and will be sorted out by this amendment.
Justin Madders
Clause 46 formally provides trade unions with the right of access to workplaces where an access agreement is reached between a trade union and an employer following negotiation. This will make it easier for union representatives to recruit and organise and potentially secure a collective bargaining agreement with an employer. It will not impact existing voluntary access agreements between a union and an employer. For unrecognised unions, access to a workplace is an opportunity to recruit and organise with the aim of gaining formal recognition.
In this framework a union can provide an employer with a request for access, to which the employer can either agree or object within a set timeframe. If both parties agree on the access terms, the Central Arbitration Committee is notified to record the agreement and proceed. In the instance that a union and employer cannot agree on access terms, the CAC can impose an agreement. The decision will be guided by prescribed terms which will be set out in secondary legislation. The CAC will have some discretion when making a determination on whether access should occur, and the decision will be subject to principles set out in the Bill that consider both union and employer interests.
The clause also establishes an enforcement mechanism whereby complaints of breaches of an access agreement can be raised with the CAC. The CAC can then vary the agreement, make a declaration that the complaint is well-founded or not, and issue an order requiring specified steps to be taken to ensure that the agreement is complied with. We recently consulted on some specifics of the enforcement mechanism, which various unions and employers contributed to and which we are now carefully considering. Regulations relating to a union’s right of access, such as notice periods for employers and the terms of reasonable access, will be prescribed in secondary legislation after consultation.
Amendments 72, 73 and 75 to 79 require trade unions applying for access to be certified as independent instead of being only listed as a trade union. This will help independent unions initiate and agree access agreements with an employer. Non-independent bodies’ existing ability to negotiate voluntary access agreements will remain unaffected. Amendment 81 will amend this clause to allow for the Secretary of State to set specific matters that the CAC must consider and have regard to. Amendment 74 will ensure that private dwellings are exempt, as we have discussed. Through the provision of a formal right of access, the Government are delivering on our commitment to modernise outdated and ad hoc access arrangements and align them with the 21st century. I commend clause 46 to the Committee.
Greg Smith
We have covered the bulk of the commentary that the Opposition want to make in the debate that we have had on the amendments. All I will say on clause 46 is that there is still so much left for secondary legislation, and I do not think businesses can have any certainty as to what is truly coming down the line until there have been the consultations we have spoken about and the secondary legislation has been laid, debated and, let’s face it, probably passed given the parliamentary arithmetic we have at the moment. While clause 46 as amended is better than what was first presented to the House, there are still many open-ended questions that businesses and trade unions alike will want to know the answers to. I urge the Minister to ensure that his Department moves at pace to get those consultations out there, so that he and the Department can hear from real businesses, trade unions and workers when it comes to the provisions that they are proposing. Then the questions of uncertainty can be ironed out as quickly as possible and nobody is left in the position of not knowing where this is going.
Justin Madders
The shadow Minister is of course right—we do need to get this right and engage with businesses and trade unions about the detail. That is what we intend to do.
Question put and agreed to.
Clause 46, as amended, accordingly ordered to stand part of the Bill.
Clause 47
Conditions for trade union recognition
Question proposed, That the clause stand part of the Bill.
Justin Madders
The clause makes amendments to the statutory trade unions recognition process, which is administered by the Central Arbitration Committee. Hon. Members will possibly not all be aware of the current statutory recognition process, so I will just take a moment to detail that. Where an employer refuses to recognise a trade union voluntarily, that union can apply to the CAC to obtain statutory union recognition. On application, unions have to show the CAC that, first, they have 10% membership of the proposed bargaining unit and secondly, that they are likely to have a majority in the subsequent trade union ballot. Where the majority of workers in the bargaining unit are members of the unions, the CAC can decide to automatically recognise the union without holding a recognition ballot. However, the CAC must still hold a ballot if it receives credible evidence from a significant number of union members that they do not want the union to conduct collective bargaining on their behalf, or membership evidence is produced that leads the CAC to doubt whether a significant number of union members want recognition, or if the CAC believes that holding a ballot would help further industrial relations. For the union to win, it must then obtain a majority in a recognition ballot and also in that ballot, at least 40% of the workforce in the proposed bargaining unit must support union recognition.
We are committed to strengthening collective bargaining rights and trade union recognition. We believe that strong trade unions are essential for tackling insecurity, inequality, discrimination, enforcement and low pay. Our view is that the existing legal framework needs to be simplified so that workers have a more meaningful right to organise through their trade unions. To achieve that, the clause therefore removes the current requirement for a union to have at least 40% of the workforce in the proposed bargaining unit supporting union recognition. In future, unions will only need a simple majority in a recognition ballot to win.
The current requirement for a union to demonstrate, at the application stage, that it is likely that there will be a majority for the recognition process is a significant hurdle in modern workplaces, which are increasingly fragmented. That is why the clause deletes the requirement for a union to demonstrate on application to the CAC that they are likely to win a future recognition ballot. Now unions will only need to show that they have 10% membership of the proposed bargaining unit for their application form recognition to be accepted by the CAC. We are also considering whether the current 10% membership requirement upon application should be lowered in future. The clause therefore provides a power to enable the Secretary of State to make affirmative regulations, which we will of course consult on, to amend the 10% membership requirement in future within parameters of 2% to 10% as set out in subsection (10) of the clause.
Greg Smith
I am grateful to the Minister for his detailed explanation. I will focus my remarks predominantly around the proposed new range of 2% to 10%. I would think, to most reasonable people, 10% is already a relatively low number: 10% is, generally speaking and in most walks of life, not a difficult proportion for anybody to reach if they truly believe that right is on their side, and they have wider support, with wider mandates to get on and negotiate within those bargaining units, to deliver a better outcome. I would argue that any union that cannot be kept to 10% really is not clearing the first hurdle and is certainly not passing “Go” or collecting the metaphorical £200. I question why it is in any way, shape or form necessary to lower that.
Michael Wheeler (Worsley and Eccles) (Lab)
Will the shadow Minister give way?
Greg Smith
One moment and I will, of course, give way to the hon. Gentleman.
If unions cannot reach 10%, what is the rationale for saying, “Oh well, we’ll just lower it to 2%”? Surely, if the union cannot get to 10%, they are on a pretty sticky wicket and in a situation that one might describe as a wing and a prayer in the first place, so lowering it to 2% is exposing them further.
Michael Wheeler
I draw attention to my declaration in the Register of Members’ Financial Interests, in particular my membership of the GMB and USDAW.
The shadow Minister is painting a very rosy picture of reasonableness and neutrality, of businesses that sit by and allow these things to happen, and of unions that can wander around and have a nice chat and recruit people. Does he accept that the reality in the world of work is actually one of hostility, of difficulty, and the types of measures that this Bill is trying to address so as to restore the situation to an even keel?
The reality out there is hostility to recognition and trade union membership. Therefore, 10% has proven to be a high and often insurmountable barrier, and not actually reflective of the will of workers, rather than when a proper choice, in reasonable and neutral conditions, is put to them. The threshold should actually be lower, to allow the process to take place and for it not to become a tool for erecting barriers to trade union recognition.
Greg Smith
I understand the point that the hon. Gentleman makes and I appreciate his contribution, through that intervention, to this debate. Where I would gently push back is that there are many provisions in the Bill around allowing union access for recruitment, for example, or other things we have spoken about this morning, such as the regular reminders of the right to join—or not—a trade union. Therefore, my central argument is that to most reasonable people, 10% is still a very low bar—it is not a high proportion of anything. So, if the other provisions in the Bill still cannot allow the trade unions to have reached that very modest 10% threshold, something really isn’t working.
Whether you are a passionate trade unionist or not, it must be accepted, from the perspective of how the clause sits as part of the package of provisions in the Bill, that something much more fundamental and problematic is happening for unions to be unable to reach that 10% threshold. I do not accept the hon. Gentleman’s point that there is universal hostility. I accept that in some workplaces there is hostility; that is unquestionable and clearly something that does happen. However, I can equally think of many examples where the relationship between management and trade union may be—to put it politely—difficult, where it is still one of good will and a wish to engage, negotiate and try to come to an arrangement that works for everyone, rather than the absolute hostility that the hon. Gentleman described.
Michael Wheeler
I thank the shadow Minister for giving way again, because I would not want my words to be misrepresented. In no way was I suggesting that there is universal hostility; I was just talking about the reality on the ground and the way that recognition procedures are often used. Let us bear in mind that voluntary recognition agreements are a thing, so these procedures tend to be used where there is hostility. There is not universal hostility in the workplace. In fact, I worked in a union that had the largest private sector partnership agreement with a large private sector employer, and it was harmonious and beneficial for all involved, so I would not want my words to be taken out of context or misrepresented.
Greg Smith
I do not wish to misrepresent the hon. Gentleman in any way, shape or form, but I return to my central argument. Although I entirely accept what he says—that there are examples of hostility—and I understand why the Government wish to take measures to overrule them, it is impossible to view clause 47 in isolation. It must be looked at as part of the package of measures in the Bill. If, having become law, they still fail at some future point to counteract the problems that he talks about, there is something much more fundamentally problematic occurring, which the clause alone would not solve. I therefore ask the Minister to reflect on how he envisages the other provisions impacting the need for the clause to be implemented in the first place, particularly if an already low threshold of 10% has the potential, under the Secretary of State’s direction, to become even more absurdly low by the test of reasonability and go down to 2%.
If Members were to go to the average high street to do one of those dreaded media-style vox pops and ask, “Is 2% a reasonable threshold to allow in any of these circumstances?” I think the general answer would be that 2% is absurdly low, and that 10% is already low enough. The test of public opinion is important. I dare say that many more consultations are to come, and it is important that they tease out what is reasonable and what is not.
Steve Darling
To me, the clause is all about resetting the culture within our employment world, and I welcome the proposals within it. It is about driving the partnership approach that we should have in the workplace. The more we can achieve that, the better for our economy.
Greg Smith
I beg to move amendment 126, in clause 48, page 61, line 20, at end insert—
“4A In subsection (1) of section 82 (Rules as to political fund), after paragraph (d) insert—
‘(e) that trade union members who have not opted out of the political fund must signal, in writing, their agreement to continue contributing to the fund at the end of a period of 12 months after last opting into the fund, and
(f) that trade union members must be given an annual notice about their right to opt out of the political fund’
(1B) A notice under subsection (1)(f) must include a form that enables the member to opt out of the fund.”
This amendment would require trade unions to notify their members every year of their right to opt out of the political fund, and to obtain an annual opt-in to the political fund from their members.
Greg Smith
I rise to speak to amendment 126 standing in my name and those of my hon. Friends on the Committee. The amendment would require trade unions to notify their members every year of their right to opt out of the political fund and to obtain an annual opt-in to the political fund from their members.
It is as clear as day that Conservatives believe that it is important for people to have control over the money that they earn, which is why, as part of the Trade Union Act 2016, the Conservative Government made it unlawful to require a member of a trade union to contribute to the political fund if the member had not given that union notice of their willingness to opt in to the fund. The Bill aims to reverse that simple proposition, so that a member of a trade union is a contributor to the political fund of the union unless they have given an opt-out notice to the trade union. It seems that the sentiment underlying this change is that trade unions have more right to their members’ wages than their members do. Otherwise, why would this Labour Government seek to reverse that position?
Our amendment comes in two parts, of which the second part concerns the opt-out process contained in the Bill. It is not clear in the Bill whether there is any requirement for trade unions to remind their members of their right to opt out of the political fund. We think it only reasonable that they should have to do so annually, and that they should provide the necessary paperwork with the opt-out notice, so that those who wish to opt out can do so as easily as possible.
Polling published only this week shows that it has taken just six months—far less than the annual requirement that we are proposing—for a quarter of people who voted Labour last July to regret doing so. That might reflect the number of union members who previously opted in to a political fund but, within a period of months or perhaps a whole calendar year, having seen where their money has been spent and the causes that it has supported, regret having donated to that political fund through their union membership and no longer wish to do so.
I am sure that in the hustle and bustle of our busy daily lives, we have all had the experience of forgetting to cancel that direct debit or unsubscribe from a list or a newspaper—whatever it might be. We need to make that process as easy as possible. Just as companies that are about to increase a subscription on something or change the terms and conditions of a mobile phone contract, for example, are required to inform the customer of those changes in a timely manner, unions should be required to give their members not only a detailed reminder that they have the right to opt out of the political fund, but a clear instructional path through which it is as easy as possible to do so.
I do not see how the Government can object to our simple proposition that union members should be reminded annually of their right to opt out. Should the Minister or any Government Members disagree, I invite them to inform the House whether there will be any requirement on trade unions to remind their members, even in the most vague terms, that they can opt out. If so, how often will they have to remind their members of that right? If there is no requirement for trade unions to remind their members of that, or the Government are not interested in accepting the Opposition’s amendment, it seems to me that the legislation creates a subscription trap—to put it in any other terms would not do it justice.
We Conservatives feel strongly about this issue. In the last Parliament, we passed the Digital Markets, Competition and Consumers Act 2024, which contained two significant and notable proposals on subscription contracts that are directly transferable to the principles of the amendment. First, it contained proposals on reminder notices, which mean that businesses need to provide notices to consumers to remind them that their subscription contract will renew and that their payment will be due unless they cancel. Secondly, it set a precedent to allow consumers to exit a subscription contract in a straightforward, cost-effective and timely way, with proposals that mean that businesses need to ensure that the process for terminating is not unduly onerous and that consumers can signal their intent to end the contract through a single—that is the important part here—communication.
During the passage of that Act, which set the precedent for much of amendment 126, the Labour party, then in opposition, supported those aims—in fact, the Bill did not go far enough for Labour. On Report, the then shadow Minister tabled new clause 29, on which the Labour party divided the House in order to support. It now seems to be arguing the other way on those very principles that apply to consumers, and to all our constituents, when it comes to trade unions and contributions to the political fund.
Greg Smith
I give way to the hon. Member for High Peak, although he now wishes for it to be in Greater Manchester.
Jon Pearce
It is a pleasure to serve under your chairship, Mr Mundell. I refer to my declaration in the Register of Members’ Financial Interests and my membership of the GMB. I am interested in the shadow Minister’s proposition, because the number of members of the Conservative party relative to other parties has been in the press over the last few weeks. Does the Conservative party do what he proposes and remind its members of the opportunity to leave on an annual basis, or do its members just do that of their own volition?
Greg Smith
As I alluded to, the hon. Gentleman seems to want his constituency to leave Derbyshire and join Greater Manchester, so he is opening up a can of worms there.
I am happy to tell the Committee that I pay my membership fees to the Conservative party by direct debit and I get that annual email reminding me that my renewal is coming up. I cannot see any circumstance in which I would ever wish to leave the oldest and most successful—most of the time—political party in the country, but it is very clear in those emails how to do so, just as I am sure it is for the Labour party and for some of the smaller parties that exist as well. That is an important principle. It is only to be regretted if we want to stray into the politics of that, which are relevant to the principles outlined in amendment 126 about opting out of political funds.
Of course it will happen time and again that, when an individual signs up to anything at all—be it a trade union political fund, political party, club, society, lobby group or whatever—they change their mind and wish to leave it. The best example that I can give is when the Labour party changed quite significantly on the election of a particularly left-wing leader after the 2015 general election, and many members of the Labour party, including Labour MPs, chose to leave it. Of course, they should have had that right and that freedom to do so, and I do not see why that right and that freedom should not be as equally applicable, as amendment 126 suggests, to the political fund of trade unions.
Labour’s proposed new clause 29 of the Digital Markets, Competition and Consumers Act 2024 has direct read across to amendment 126, which we are debating today, and it had a two-pronged approach. It required traders to ask consumers whether they wished to opt in to subscriptions renewing automatically, either
“after a period of six months and every six months thereafter, or…if the period between the consumer being charged for the first and second time is longer than six months, each time payment is due.”
The second limb of that new clause would have required:
“If the consumer does not opt-in to such an arrangement, the trader must provide a date by which the consumer must notify the trader of the consumer’s intention to renew the contract, which must be no earlier than 28 days before the renewal date.”
If the consumer did not provide that notification, the subscription contract would not renew.
There seems to have been a considerable shift in the Labour party’s policy position on subscription traps. It seems to believe that consumers should be given every possible opportunity to cancel subscription contracts with businesses, but that it should be as hard as possible to cancel a subscription to a trade union political fund. That is not a coherent position, and that is not something that I think any Labour Member would wish to defend.
It is to keep the Labour party honest that we have tabled the first part of our amendment 126, which would require that, where trade union members have not opted out of the political fund, they must put in writing their continued agreement to pay the fund annually. Given that the Labour party wanted to enforce a more stringent mechanism on businesses taking people’s money through subscriptions, which would have been opted in to originally, I cannot see why the Labour Government would not accept that union members should continue to have to indicate in writing that they wish to continue to be subscribers to the trade union political fund.
This amendment is a simple, straightforward proposition that is entirely consistent with the lines that Labour Members took when they were in opposition in the last Parliament, which they now seem to wish to row back on. When the Minister responds, or when any Labour Member wishes to stand up, it is incumbent on them to say why they believe those subscriptions traps should continue and should be nakedly allowed for trade union political funds.
Michael Wheeler
I might surprise Conservative Members by saying that I welcome the amendment. Before those on the Labour Benches start to panic, I welcome it because it is a reminder that the only place in the country where Conservative Members support increasing red tape is for trade unions.
It is always nice to follow and to be of one mind with my hon. Friend the Member for Birmingham Northfield, so I will try not to repeat too much of what he said—although I agree with it all. The shadow Minister challenged Labour Members who have spoken, but it is fundamental to point out that the analogy he drew is false. A trade union is a member-based democratic organisation designed to protect those who are part of it. It is not a subscription or an entertainment package on TV. It comes with more rights, more democratic involvement and more control over where money and resources go. A fundamentally false analogy was drawn.
We heard earlier about businesses. I gently push back on what the hon. Member for Bridgwater said; I do not think I heard the Minister say it would be an annual notice. It was up for consultation, but even one notice was described by Conservative Members as onerous. Yet here we have an amendment pushing not just for reminders but for annual reconfirmation, from people who have already given their consent to pay into a political fund, that they are happy for that to happen, as a compulsory measure. That is deemed reasonable by Conservative Members, but it is not. The amendment is a continuation of a decades-long attack on the trade union movement by the Conservative party.
Michael Wheeler
I was one sentence from the end, but I will always happily give way.
Greg Smith
Perhaps I can put to the hon. Gentleman a hypothetical scenario. If his trade union, the political fund of which he had willingly opted in to because in some cases it might support the Labour party, decided, like a quarter of Labour voters, that it regretted that political choice and now wished to go even further to the left and support the Liberal Democrats, would the hon. Gentleman wish to opt out of that political fund and have clear instruction on how to do so should that be the case?
Michael Wheeler
For once in this place I will give a direct answer. Yes, I would. As a paid-up member of a trade union I would know exactly how to do that. I do not need the measures in the amendment to do so. Conservative Members talk about trade union members in the hypothetical, trying to understand what they would like. Other than those of us in this place who are trade union members, I wonder how many they have ever met. As someone who worked for one in the background, I think I know the mind of a trade union member.
Justin Madders
We have had a good debate on the amendment. It is fair to say there is a deep divide in our positions. I will address the amendment and the clause stand part debate.
Amendment 126 would make two changes to clause 48. First, it seeks to retain the requirement on trade unions to provide their members with an annual notice of their right to opt out of contributions to the political fund. Secondly, it seeks to require trade union members to opt in to contributions to the political fund annually. As we have heard, that would place substantial and unnecessary bureaucratic requirements both on trade unions and on their members. As my hon. Friend the Member for Worsley and Eccles said, this is one of those rare occasions when the Conservative party seems to be in favour of more red tape, which is clearly something that we want to see reduced.
I will start with the change that would retain the requirement for trade unions to send an annual notice to members reminding them that they can opt out of contributing to a political fund. The amendment targets the wrong section. It would amend section 86 of the Trade Union and Labour Relations (Consolidation) Act 1992, which relates to ensuring that employers do not deduct contributions through check-off from the member where the union member has opted out of the political fund or where the opt-out notice has been given but is not yet in force.
However, I will respond in terms of the spirit of the amendment tabled by the shadow Minister. The Government have been clear in our intention to repeal the Trade Union Act 2016, which was a clear manifesto commitment. We have a mandate to deliver on that. The amendment seeks to frustrate that clear intention by retaining the substantive effect of section 84A of the Trade Union and Labour Relations (Consolidation) Act 1992, as amended by the Trade Union Act 2016.
We should be clear that members are, of course, free to opt out of contributing to a political fund whenever they wish. Clause 48, which I will come to, sets out how that is possible. Currently, alongside the requirement to ballot members on the maintenance of a political fund every 10 years, trade unions must also remind their members of their right to opt out of a political fund. The Government are proposing to remove the ballot requirements. We have consulted on whether to retain a requirement for trade union members to be reminded on a 10-year basis that they can opt out of the political fund.
Greg Smith
I understand the point the Minister is making. On the one hand, he wants everyone to be reminded annually of their right to join a trade union, but he wants them to be reminded of their ability to opt out of the political fund only every 10 years. Surely he can see the inconsistency in that approach. Even though I am sure that he wants the political funds to be as bulging as possible, certainly for those unions that donate to the Labour party, surely he must see that there is an inconsistency between reminding people of their right to join a trade union annually but reminding them of their right to withdraw their support for the political fund on a less frequent basis.
Justin Madders
I thank the shadow Minister for his question. I have not actually said that we will require members to be informed of their right to join a trade union annually—we are simply consulting about the frequency of a reminder. That is the point the hon. Member for Bridgwater raised earlier. We are consulting on that point, and we are consulting on the 10-year reminder about being able to opt out of the political fund. What is sauce for the goose is sauce for the gander. If the shadow Minister thinks we should not inform people annually of their right to join a trade union, presumably he would also agree that they should not be reminded annually of their right to opt out. The arguments work both ways.
Greg Smith
In the spirit of following that debate through to its natural conclusion, no matter where we stand on the politics, surely the happy medium would be to marry up whatever the consultation ends up concluding for the reminder of the right to join a trade union in the first place with the reminder of the right to opt out of the political fund. Surely that would be the fair and equitable way through this—to simply say that the answer is to marry up the reminder of the right to join a trade union with the reminder to opt out of the political fund, with whatever frequency the consultation says.
Justin Madders
Those are of course two entirely separate requirements. At the moment, trade union members can choose to opt out of contributing to the political fund at any time. Clause 48 sets out clearly how they can do that by post, email or other electronic means. As my hon. Friend the Member for Worsley and Eccles so eloquently said, most trade union members will be aware of their rights in this area should they wish to exercise them. The comparisons between trade union membership and political funds and Netflix subscriptions and insurance contracts are bogus, because they are not the same thing at all. Membership of a trade union and a political fund is membership of a democratically organised society and independent trade union. The members have control of the organisation because it is democratically organised, so it is not the same thing at all.
Greg Smith
The Opposition stand by our amendment 126. I do not want to repeat all the arguments that I made in my substantive speech. However, I listened very carefully to the Minister’s response and to the other contributions to this debate and I am still utterly lost as to how Labour Members can argue that all these rights should exist when it comes to consumers, but call them red tape, bureaucracy and getting in the way when it comes to trade unions, saying that they are somehow trying to undermine the Labour party.
It will come as no surprise to Labour Members that, generally speaking, Conservatives do want to beat Labour candidates in elections. However, in no way, shape or form would I take away or argue against their ability to go to trade unions and ask for donations or just to willingly receive donations from trade unions, if that is what those trade unions wish to spend their money on. Of course, the rub, the difficulty, is this: where do the trade unions get their money from in the first place? It is from their members; just as those on this side of the Committee willingly pay to be members of the Conservative party and those on the other side willingly pay, I am presuming, to be members of the Labour party—presumption is a dangerous thing.
As we have heard, the opt-outs exist. There are the reminders that come with the annual direct debit, monthly direct debit or however people pay. The position is clear, so why should not the same principle apply to the trade union political fund? It is beyond comprehension that something can be argued for in respect of one sector of society but not the other.
If the Labour party wishes to be funded by the trade unions, that is fine, democratic and clear. But there must be consent from those who put in the money in the first place, on a recurring basis; it must be clear that that is still where they wish their money to go. Those members may change their mind on their political allegiance. They may decide that they no longer wish to support Labour. They may decide that they wish to support another political party, whichever that may be. I think it is a matter of fairness that they are given not just the right to opt out, which I accept exists, but the regular reminder of how to opt out that every other section of society and every other subscription model, be it political, consumer or otherwise, has.
Laurence Turner
I welcome, for the purpose of the record, what was a brave and interesting admission from the hon. Member for Mid Buckinghamshire: in his words, this amendment is motivated by a desire to beat Labour party candidates.
Laurence Turner
If the hon. Member wants to correct the record, I will of course welcome that. He is talking about Labour-affiliated trade unions, but of course many trade unions are not affiliated or do not have a relationship with a political party. Many of them are studiously non-party political in their approach. Has he considered the impact on those unions of the approach that he proposes, and what consultation has he had with unions such as the National Association of Head Teachers?
Greg Smith
I do not think I need to correct the record, in that I made a statement of the obvious, which is that Conservatives wish to beat Labour in elections, but equally I went on to say that, with the right consent, it is perfectly fair, democratic and legitimate for the Labour party to receive funding from those trade unions that wish it to do so. I went even further by saying that that is perfectly fine; so long as it is done transparently and stated on the record—as Labour Members have assiduously done every time they have stood up to speak during this Bill Committee and, indeed, in other debates—there is nothing wrong with it.
This is about the process for members, whether they are contributing to political funds where the unions do donate to Labour, or to any other cause, be it party political or a campaign on this side or the other— the hon. Member for Birmingham Northfield himself recognised and spoke earlier about the very good campaign in relation to attacks on emergency workers. That is a perfectly good, legitimate and worthwhile use of that money, to which I would anticipate—although presumption is a dangerous thing—that most, if not all, contributors to the political fund that supported the campaign would happily continue to contribute. However, there are circumstances and times when trade union members contributing to political funds may not see that money being spent as they would like it to be. It is the ease of being able to opt out, not just having the right to opt out, that the amendment gets to the heart of.
Before the Committee divides on amendment 126, I urge Committee members to reflect on whether they really want to say to the outside world that, while consumers have the right to be reminded on a monthly or annual basis of how to opt out of their mobile phone contract, magazine subscription or whatever else, such a reminder of how to opt out of political funds—not the right to opt out but how—should be denied to trade union members.
Justin Madders
The shadow Minister talks about this being a rule that applies to every other section of society. Is he saying that the principle should apply to every membership organisation, be it the Chartered Institute of Personnel and Development, the Royal Society for the Protection of Birds, the Royal National Lifeboat Institution or any of the many other membership organisations that exist in the country? There will be millions of members of those organisations, so should the principle apply equally to them all? Is he aware that it applies at the moment?
Greg Smith
For the most part, I would say that it does exist. I am thinking of membership organisations outside the world of politics that I have subscriptions to: at the annual point of renewal—most of the ones I have are annual—I do get either an email or a letter saying, “Your direct debit for the next year is going to be £2 higher a month. It will automatically renew unless you do x, y and z.” The x, y and z to opt out, stop or unsubscribe is always very clear.
Justin Madders
I am not sure that we need to know about the shadow Minister’s memberships. I have two points: there is not legislation requiring this, and when trade unions raise subscriptions they will send a similarly worded letter out. The analogy the shadow Minister has drawn already takes place.
Greg Smith
Well, there is. The Conservative party held our membership at £25 for far too long, which was why the increase was so big a couple of years ago. I appreciate that most Labour Committee members, beyond those on the Front Bench, were not in the last Parliament, but the general point of principle here is that when it came to other legislation in that Parliament, the then Opposition argued vehemently for similar provisions to apply in other parts of business and consumer society that they now wish to deny to trade union members. That is a point that the Government are going to find difficult to defend when going forward with the consideration of the Bill.
To me, it is a simple proposition: the Opposition think it is fair and clear that everybody should get an annual reminder of not just their right to opt out but how to do so in a simple and straightforward way. People change their minds and decide that they no longer wish to support particular causes, parties or campaigns. It is surely right that they get a clear and simple reminder on a frequent basis—annually, or, if we are generous, every two years.
Justin Madders
The clause is relatively simple in that it seeks to repeal section 15 of the Trade Union Act 2016 by amending the Trade Union and Labour Relations (Consolidation) Act 1992 to remove section 116B. Section 15 of the 2016 Act required trade unions to pay public sector employers where they administered payroll deductions for trade union subscriptions—known as check-off. Section 15 further mandated that the service be made available only where workers had the option to pay their union subscriptions by other means.
The check-off regulations were apparently introduced as a cost-saving measure, with estimated annual savings of £1.6 million, totalling £12 million over the next 10 years. However, as last year’s check-off impact assessment acknowledged, the Trade Union (Deduction of Union Subscriptions from Wages in the Public Sector) Regulations 2024 brought a cumulative cost of £17 million to public sector employers and trade unions over that period, which is far higher than the estimated cost savings.
In the spirit of wanting to save businesses and the public sector from burdens, we think that this is an entirely sensible move. I urge members of the Committee to support the clause.
Greg Smith
Of course we wish to save taxpayers money, particularly when it comes to the public sector, but likewise we do not see why businesses should bear the cost of trade union subscription collections. That should be a cost entirely for the trade unions to bear, just as we would never tolerate—on the Opposition Benches for sure—the public purse or the taxpayer’s pound having to subsidise any other body that should be funding itself.
I understand where the Minister is coming from. As he looks across other parts of the Bill, I urge him to have a similar approach to saving businesses and taxpayers money across the piece.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Anna McMorrin.)
Employment Rights: Terminal Illness
Greg Smith Excerpts(1 year, 1 month ago)
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Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. We have heard a good and powerful debate this morning. I thank the hon. Member for Corby and East Northamptonshire (Lee Barron) for securing and leading the debate. As he said, he has championed the Dying to Work campaign for many years, including in his role at the TUC in the midlands before his election to this place.
As we have heard from many hon. Members, the campaign was founded by Jacci Woodcock, a sales manager from Derbyshire, who was forced out of her job after being diagnosed with breast cancer in 2012, when she was given 12 months to live. Jacci was appointed a Member of the Order of the British Empire in the Queen’s birthday honours list in 2019, and I commend her hard work over the years.
As a result of Jacci’s work, many people have been protected from unfair dismissal and provided with invaluable support following the tragedy of a terminal diagnosis. It is clear from this debate, and more widely, that there is more to be done to support people with a terminal diagnosis. Being diagnosed with a terminal illness is often sudden and unexpected, meaning those with the diagnosis and their families are forced to adapt to the new reality with little or no notice. People often decline quickly and, by the time the family work out what support is available, their loved one is in desperate need of help or, in some cases, has tragically already passed away.
In other cases, despite the diagnosis, the person may have many months or even years left, and is willing and able to keep working, with some minor adaptations to their workplace arrangements. In my research for this debate, I found some startling statistics. According to the Chartered Institute of Personnel and Development, just a third of UK organisations have specific provision for those with a terminal illness, meaning they have no policy, guidance or line manager or awareness training. It appears that the hesitancy of so many Brits to discuss health and serious illness has created a stigma about raising this issue in the workplace. That means that employers and employees often have to make it up as they go along, rather than follow standardised guidance developed by experts in the field.
As the Dying to Work campaign highlights, terminally ill people often do not have time to adapt to the reasonable adjustments put in place by employers, and are often forced to undergo stressful HR procedures. There are many financial worries left behind for families, as other hon. Members have mentioned. Cancer Research UK projects that one third of Brits will be diagnosed with cancer in their working life. According to a Macmillan Cancer Support survey, 37% of cancer patients have experienced discrimination on return to work.
It is vital to end the employer lottery. Individuals are currently at the mercy of their employer far too much, and often do not know their rights or what support is available. As the population ages and treatment options improve, more and more Brits are going to be living and working with a terminal illness. At present, the legal position of terminally ill employees mainly depends on the written and verbal agreement between employee and employer.
There is little specific law covering terminal illness, when it is clearly going to become ever more present in society. I suggest one of the best ways to help people with a terminal illness is to improve the information available on diagnosis, and to encourage employers to develop best practice guidance and training, so that any employee diagnosed with a terminal illness can receive support as quickly as possible. That would avoid the situation where even compassionate employers are playing a game of catch up or having to make it up as they go along.
It is vital that people understand their rights under the Equality Act 2010, which makes it illegal to discriminate against people with a disability and legislates that employers must make reasonable adjustments so that employees can do their work. That would include flexible working hours, reduced workload, reallocation of duties, time off for treatment and, where appropriate, working from home. Employees must be made aware that they can and should make the most of sick leave, extended special and compassionate leave, annual leave and flexible working.
There is no benefit specifically designed to help people with a terminal illness, but special rules are in place to expedite access to benefits for those with less than 12 months to live. Previously, that was limited to those with less than six months to live; I am proud that the last Government extended that period to 12 months, which in turn has provided quicker access to benefits, higher payments for certain benefits and the avoidance of the need for a medical assessment. Those with a terminal illness can access benefits designed to help with the additional costs of disability and ill health, such as disability living allowance, personal independence payments and attendance allowance. For those with a disability or in ill health, there are also the benefits designed to act as income replacements, such as employment and support allowance and universal credit.
I will end by mentioning the employment rights of not just those with a terminal illness but those who care for them—the spouses, children, brothers and sisters forced to take time off work to care for a terminally ill loved one. I am proud that the previous Government passed the Carer’s Leave Act 2023, which created a new statutory right to carer’s leave that came into effect in April 2024.
Employees are now entitled to take one week of unpaid leave a year if they have caring responsibilities, and that leave entitlement is available from the first day of employment, with no qualifying period. On top of that, employees also have the right to reasonable time off if a dependant is ill or injured or if their care arrangements are disrupted. Carers are protected at work from discrimination by association, and the Equality Act 2010 protects those caring for disabled or elderly people from discrimination or harassment.
I am aware of previous attempts to introduce legislation to address the injustices that come with a terminal illness—most recently, a private Member’s Bill proposed in 2022 by the former Member for Stockton North. For a range of reasons, these past attempts have not succeeded but I am committed to working with right hon. and hon. Members across the House to get these issues back on the agenda and improve the lives of those who, tragically, have a diagnosis of terminal illness, to make sure that in their final months they are supported and cared for with the compassion that they deserve.
Employment Rights Bill (Fourteenth sitting)
Greg Smith ExcerptsTuesday 17th December 2024
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 December 2024 - (17 Dec 2024)
Greg Smith (Mid Buckinghamshire) (Con)
I beg to move amendment 168, in schedule 3, page 115, leave out from the beginning of line 15 to the end of line 31 and insert—
“(1) In the case of staff employed under subsection (3)(b) of section 148C, matters within the SSSNB’s remit are limited to the establishment of a framework to which employers of school support staff must have regard when discharging their functions.
(2) A framework under subsection (1) must include information on—
(a) the remuneration of school support staff;
(b) the terms and conditions of employment of school support staff;
(c) the training of school support staff;
(d) career progression for school support staff; and
(e) related matters.
(3) When taking any action related to the matters in subsection (2), an employer may disregard the framework only in exceptional circumstances.
(4) For the purposes of subsection (3), the definition of ‘exceptional circumstances’ shall be set out in regulations.
(5) In the case of staff employed under subsection (3)(a) of section 148C, the matters within the SSSNB’s remit are matters relating to the following—
(a) the remuneration of school support staff;
(b) terms and conditions of employment of school support staff;
(c) the training of school support staff;
(d) career progression for school support staff.
(6) The Secretary of State may by regulations provide that, for the purposes of subsection 5—
(a) a payment or entitlement of a prescribed kind is, or is not, to be treated as remuneration;
(b) a prescribed matter is, or is not, to be treated as relating to terms and conditions of employment of school support staff;
(c) a prescribed matter is, or is not, to be treated as relating to the training of school support staff;
(d) a prescribed matter is, or is not, to be treated as relating to 30 career progression for school support staff.”
This amendment would change the matters within the SSSNB’s remit in relation to academy staff, limiting it to the creation of a framework to which academy employers must have regard in all but exceptional circumstances.
It is a pleasure to serve under your chairmanship, Ms Vaz, at the Committee’s last sitting before Christmas—let us make it a memorable one. [Laughter.]
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
They are all memorable.
Greg Smith
Some are definitely more memorable than others.
Amendment 168, tabled in my name and that of my hon. Friends on the Conservative Benches, would change the matters that are within the remit of the school support staff negotiating body in relation to academy staff, limiting it to the creation of a framework to which academy employers must have regard in all but “exceptional circumstances”. I am sure that Government Members will agree to a moderate amendment in the spirit of what they seek to do.
As I said in the debate on clause 28, which introduces schedule 3, in 2010 the then Conservative Secretary of State for Education, Michael Gove, rightly abolished the school support staff negotiating body. The Conservative Government had a clear and principled reason for that: employers should have the flexibility to set pay and conditions locally, rather than having a top-down, centralised framework imposed on them. Instead of giving employers the flexibility to do what works best for them, this Government are establishing a national terms and conditions handbook on training, career progression routes and fair pay rates for school support staff.
These things can sometimes get taken out of context, so I want to be clear: we are not advocating for a race to the bottom on pay and conditions for school support staff, but we believe that the current arrangements are working well and have allowed for innovation that is beneficial for pupils—real children up and down the land receiving their education. Our worries about the re-establishment of the school support staff negotiating body are principally that we believe that school employers must retain a degree of freedom and flexibility to recruit, develop, remunerate and deploy their staff for the benefit of the children in their community—their setting—to achieve their particular aims from a school improvement and inclusion perspective.
Children with special educational needs and disabilities rely on schools’ ability to deploy staff to meet their individual needs, and stifling innovation in staffing to meet those needs would be the greatest barrier to reforming the SEND system. In particular, ensuring that mainstream provision can meet the needs of SEND children requires, in its very essence, an innovative use of support staff resource.
As I have said in previous debates, I salute all support staff, whether they support children with SEND or other- wise. They are great assets to every school who do an enormous amount of good work for every child they work with on a daily basis—I am thinking of the example given earlier by the hon. Member for Birmingham Northfield, and the way in which they interact with and support my own children in their schools in Buckinghamshire. They are hugely important, but this is about ensuring local decision making, local flexibility and the local ability to shape what is right for children’s education, development and future life prospects.
For those reasons, we believe that the statist approach created by the Bill is fundamentally misguided, and that children, particularly those with additional needs, could be worse off because of it. All school employers operate in a competitive market to attract and retain staff. I accept that in the education world it is currently particularly difficult to recruit teachers and support staff—there is no doubt that that has been a challenge for a considerable number of years—but, particularly in relation to support staff, schools compete with other local establishments, including in the private sector, and employers in local markets. Incentives to attract and retain staff are needed.
Our concerns with the re-establishment of the school support staff negotiating body do not end there. Academy trusts sign a funding agreement with the Secretary of State that gives them certain freedoms, among which is the ability to set pay and conditions for staff. What the Government are trying to do with the Bill is therefore to unpick a clear, established and positive freedom that academy trusts have. To take that away from them would be a retrograde step. The Bill explicitly overrides that contract. As for school support staff, it states:
“Where the person is employed by the proprietor of an Academy, any provision of the Academy arrangements relating to the Academy has no effect to the extent that it makes provision that is prohibited by, or is otherwise inconsistent with, the agreement.”
His Majesty’s loyal Opposition worry that this is just the start of the Government’s longer-term mission to unwind academy freedoms, and that it shows that they fail to understand how to support educational excellence.
The data on key stage 4 performance recently released by the Department for Education shows that academies and free schools tend to perform better than other types of school. We therefore believe that it would be counterproductive to unwind one of the key tenets that has led them to where they are today. There is always room for improvement, but when things are travelling in the right direction it is foolish to put barriers up. Our amendment would change the SSSNB’s remit so as to create a framework that academies must have regard to but are not compelled to follow. That seems a reasonable compromise, and I ask the Government to consider it carefully.
In this context—we are all creatures of our own experience—I think particularly of examples from my constituency of Mid Buckinghamshire and the county of Buckinghamshire more widely. I think I brought up this example in relation to other sectors in earlier Committee sittings. Because the county of Buckinghamshire borders London boroughs, rigid pay scales make recruitment an even greater challenge, because of the London weighting issue. Many teaching assistants, school support staff and, frankly, staff in any sector—we will come to adult social care later in the Bill, and care workers are equally affected—who live in Buckinghamshire and perhaps want to work there feel compelled to go and get the extra money that the London weighting would bring by applying for a job in, say, the London boroughs of Hillingdon or Harrow. Nobody can blame them for doing that, but it creates a recruitment challenge for Buckinghamshire, Hertfordshire, Essex, Kent, Surrey and other London-bordering counties.
The amendment seeks to correct for what the Government are trying to do with schedule 3, and so to maintain the freedom that allows academies in Buckinghamshire and those other counties to dynamically adapt their pay and offering for school support staff and counter those challenges. It would mean that schools in Buckinghamshire that want to employ people who want to work in Buckinghamshire can get them on board, rather than there being a false incentive that forces people to take jobs in one of the London boroughs and secure the London weighting that goes with them. That is one practical example of why I believe that academies, and free schools for that matter, should have that core freedom and flexibility to get it right for their children.
Laurence Turner (Birmingham Northfield) (Lab)
It is a pleasure to serve under your chairship, Ms Vaz.
I think I am correct in saying that Buckinghamshire is one area that has opted out of the National Joint Council, so I recognise that the shadow Minister brings a particular perspective to the debate, but the final line of the amendment states that
“a prescribed matter is, or is not, to be treated as relating to 30 career progression”.
I assume that is just a typographical error, but it would be good to have that point clarified.
More widely, I do not think the amendment is necessary. In some ways, it is quite loosely worded. It seeks to put in the Bill a reference to a framework, but a framework is not defined and that would not be clarified through later regulations. Therefore, I am not sure that the wording before us would necessarily resolve the Opposition’s aim, and the meaning of “framework” is probably not something that we would want to have out in the courts.
On the wider issues, the shadow Minister said that the proposals in the Bill would overwrite the funding agreements, but part of those agreements is a requirement for academy employers to have regard to the academies handbook, which is altered as part of the normal course of public policy, so such variations are not especially new. As I say, I do not think that what is in front of us would achieve the Opposition’s aim. The reinstatement of the school support staff negotiating body was a manifesto commitment. It would be problematic to say that a manifesto commitment could not be implemented because funding agreements were already in place. It is quite proper for the Government of the day to pursue their public policy objectives in this manner.
I would like to correct the record. In the morning sitting I said that freedom of information requests had established that, where data was held, the vacancy rate for teaching assistants was 10%. The actual figure is 18%. I just wanted to put that higher number on the record.
Sarah Gibson (Chippenham) (LD)
It is a pleasure to serve under your chairship this afternoon, Ms Vaz. I share the passion of the hon. Member for West Suffolk for education—as I stated earlier, both my parents became headteachers before retirement—so I appreciate that he is very concerned about the state of education in our country. However, I am very concerned that this amendment is in danger of creating a slightly two-tiered system between maintained schools and academies, whereby maintained schools would have a certain level of protection for their staff that would not be there in academies.
If this change is so important for the academies, my question to the hon. Members for Mid Buckinghamshire and for West Suffolk would be that, if this is good for academies, surely it is good for maintained schools? In that case, why are we not arguing that this whole Bill should be changed, and that this whole clause should be taken out and the change therefore applied to all schools?
I am also concerned about the separation of requirements for one school and not for the other.
Greg Smith
Does the point the hon. Lady is trying to argue go to the very reason for having different types of school in the system? Academies were set up by the last Labour Government for a reason, which was to have additional freedoms such as those the amendment defends. Free schools were set up by the coalition Government, of which the Liberal Democrats were part, to have a different set of freedoms—in that sense, parental and governing body freedoms that are over and above everyone else. If we were to make all schools the same, surely that is an argument for one style of school alone.
Sarah Gibson
I appreciate the clarification. The point of free schools and academies was to have a diversity of education. A diversity of employment rights, which is what we are discussing, is a different element. If we end up with a situation where I, as a member of support staff, am looking at two jobs in my region, and one is with a maintained school and one is with an academy, and there is protection for one, I can only see that as detrimental to our academies. I am unable to support a provision that separates those two types of school.
Greg Smith
I am grateful to the hon. Lady for giving way once more. She is presuming that the academy would be offering a lower rate, but in fact, it might be the case that, in order to attract staff, the academy offers something much higher.
Sarah Gibson
I appreciate the point, and the shadow Minister is quite right: I was assuming that without support there might be such a situation. However, that does not detract from the fact that in most situations, having a body that someone can go to that is independent from their employer has to be a supporting situation. Nobody would go to that body for support if they were being paid above the average in their area.
Greg Smith
I listened very carefully to what the Minister and the hon. Member for Birmingham Northfield said about amendment 168. I was open to dialogue on it to see if we can make it stronger and improved. Its proposed new subsection (2) sets out all the information we would expect to see in such a framework. There are five parts including the remuneration of school support staff; the terms and conditions of employment of school support staff; the training of school support staff; career progression for school support staff; and—the lovely catch-all phrase that drafters love to put in—all related matters. I would say that it is pretty clear what we have laid out.
To get to the nub of the argument, this is not about some sort of race to the bottom. It is not about, as the Minister asserted, arguing for low pay. That is not what we are doing at all. This is a point of principle about support for the academy system, which was brought in by a former Labour Government, and support for free schools, which was brought in by a coalition of the Conservatives and Liberal Democrats. The three main parties in this House on that basis are broadly aligned, unless anyone has radically changed their mind—perhaps they have, and 2015 probably did focus some minds.
This is a point of principle of diversity in the education system, and central to the diversification of offer is that those establishments, in this case academies, have the freedoms to decide things themselves, locally. In this case, it is on pay and terms and conditions but, wary of the fact that I do not want to go out of scope, it can be on other things as well. To take that away would be the retrograde step that I spoke about. It would undermine academies, and it would undermine the very point of having choice and the diversity of offer in the education system for parents.
Justin Madders
The shadow Minister is talking about choice, but the Bill does not remove any academies from the current system. Will he confirm that?
Greg Smith
No, of course it does not remove academies from the system, but it does take away a freedom and power that all those wonderful academies, many in my own constituency and I am sure some in the Minister’s, currently enjoy to be able to set their educational offer, including the power of who they recruit and on what basis they recruit them. I come back to the point I made when I intervened on the hon. Member for Chippenham; if we are going to just make everything the same again, there needs to be an honesty about actually advocating that from the Government, from the Liberal Democrats or from whoever it might be. I value and welcome the choice that we have in our education system, and this is one of those freedoms that makes that choice possible.
Michael Wheeler (Worsley and Eccles) (Lab)
Will the hon. Gentleman give way?
Sarah Gibson
I could not agree more with the hon. Gentleman about the importance of diversity of education. One of the things that academies and free schools have done very well is cater for children with learning difficulties, whether they are dyslexic or autistic, or doing all the other things that probably many of us in this room have benefited from. However, basic rights as an employee of an institution and the right to protection and a body to go to if somebody feels that they are being unfairly treated have little to do with diversity of education. I cannot help feeling that we are conflating the two issues of employment rights and educational standards, which do not necessarily go hand in hand. Paying staff well does not stop an institution having a diverse and fantastic form of education.
Greg Smith
I think the hon. Lady has potentially misinterpreted my remarks. I am not directly conflating the pay of staff with the educational outcome: I am saying that there are academies that may well be able to structure their own affairs in the way they recruit, pay and set terms and conditions so that that is actually more favourable. That is one of those fundamental freedoms that make academies—and free schools, for that matter—different and able to offer the diversity that we both seem to celebrate, particularly in supporting those children who need additional support to whatever degree in that setting. Someone else was waving at me a minute ago.
Michael Wheeler
I am more than happy to wave in a friendly manner in this festive sitting. As usual, I draw attention to my declaration in the Register of Members’ Financial Interests of my membership of the GMB and USDAW. We have heard the phrase “academy freedoms”, with a lot of emphasis put on freedoms. We have also heard the Minister confirm that diversity is not being lost in terms of educational choice. We have heard that teaching assistants, according to the Low Pay Commission, have unfortunately been defined as low-paid workers. Does the hon. Gentleman accept that the only “freedom” —I use inverted commas there, for the sake of the record—being lost is the ability of academies and free schools to pay poorly?
Greg Smith
I understand the point that the hon. Gentleman makes, but I caution him against this presumption that those academies want to pay poorly, somehow mistreat their staff or set pay rates so low that most of us would think that it was an absurdity. I am not sure that they do; I am not sure that anybody wants to pay their staff as low as they can get away with. Those academies often advertise and appeal for staff, be they teaching assistants, teachers, ancillary staff or whoever, in a manner that actually makes them more attractive than the other offerings. That is part of the freedom to set up the school in the way that they wish and to ultimately deliver the best possible outcome for the children they are teaching and preparing for their future lives.
I come back to the point that if we start stripping away the freedoms and rights of those establishments to have local control, in this case around employment, I do not see any other natural conclusion than trying to bring our entire educational establishment back into being one single style of education. There may be some on the left—I say “the left” broadly; I am not just looking at the Labour party—who would welcome going back to simply having the secondary modern or whatever it might be. To be fair to her, the hon. Member for Chippenham agreed with me on the point of diversity and choice in education. It is a huge strength and a benefit to all children in this country that we have that level of different offering and choice in our educational establishment, and it has made our country fundamentally better. For total fairness, I repeat the fact that it was the last Labour Government who introduced academies.
Nick Timothy
I reassure my hon. Friend that the danger he is talking about is not just hypothetical. Special advisers in the Department for Education have briefed the newspapers, calling free schools a “Tory vanity project”. I find that absolutely appalling, as somebody who believes—
Nick Timothy
Yes, and free schools have the academy freedoms that we are talking about undermining with this and other legislation. I just wanted to draw that example to my hon. Friend’s attention.
Greg Smith
I am grateful to my hon. Friend; he is always reassuring. He raised an important point. Given that, as he highlighted, free schools enjoy the same freedoms —they are specifically referred to in amendment 168—as academies, I am worried that the Government’s attitude to free schools indicates that they are rowing back on support for them.
Justin Madders
The shadow Minister keeps referring to freedoms, but does he accept that the only freedom that would be given to academies by virtue of this amendment would be the freedom to pay their staff—I am not saying that they would—lower than the national terms and conditions?
Greg Smith
I come back to this point of principle: either we have autonomous bodies that can make their own decisions or we do not. If the Government’s answer is that we do not, I certainly understand why they do not want this amendment, but I do not understand why they persist with their support for that which they created in the first place—the academisation of so many schools—and resist making the more straightforward argument for a one-size-fits-all education policy. I hope they do not adopt such a policy, because of the progress that the Labour party made through academisation in the first place. However, that is the natural conclusion of what the Minister is saying.
Alex McIntyre (Gloucester) (Lab)
I refer to my membership of the Community and GMB unions. In the break, the shadow Minister challenged me, saying that I had been very quiet this morning—I was feeling festive, but perhaps I am feeling less festive now. Let us take the analogy about choice that he is trying to set out and put it in a slightly different context. Private limited companies are often seen as the drivers of growth, and we have heard lots about that from the Opposition. Those companies have lots of freedoms to make decisions and to invest where they want, but they are all subject to the national minimum wage. Is the shadow Minister suggesting that a national set of terms and conditions will remove academies’ freedom to make entrepreneurial decisions? I am interested to hear whether the Conservative party’s position is now that the national minimum wage should also be abolished.
Greg Smith
No. I did challenge the hon. Gentleman on his quietness in the morning sitting, and he has not disappointed this afternoon, but of course that is not the position of the official Opposition. The last Labour Government brought in the national minimum wage, but the last Conservative Government brought in the national living wage. We are absolutely committed to that, but it is a rule that applies equally and evenly across every sector in the economy. In schedule 3 and amendment 168, we are talking about a specific carve-out of an existing position for one specific sector.
Justin Madders
Amendments 66 and 67, and 69 to 71, make minor drafting corrections to the clauses to remove the word “education” when referring to local authorities. This is necessary because of an error in terminology used in the Bill on introduction.
I will also speak to amendment 68. We know that academy trusts use a range of innovative practices to support staff in a range of roles. The sector and the workforce have evolved since the previous negotiating body for school support staff existed in 2009. That is why we intend to consult on the definition of support staff in scope and appropriate protections for staff in transitioning to the new arrangements. The consultation may bring to our attention staff in academy trusts who are not captured by the existing definition of support staff, working wholly at one or more academies, but who we think should be. Having the ability to broaden the scope, as well as to exclude staff types in secondary legislation, would give us more flexibility to respond to the consultation.
Greg Smith
As the Minister said, amendment 68 extends the definition of school support staff in the Bill to include people who do not work in an academy, but who are employed by the proprietor of an academy to carry out particular kinds of work, to be specified in regulations—it is our old friend, waiting for future regulations to be laid before the House—for the purposes of one or more academies. The other amendments in this grouping are minor drafting corrections, and we accept that. I merely want to put on record once more that had this Bill not been so rushed to meet the arbitrary political 100-day deadline, we might not be in this place, and we might have had greater clarity from the get-go. We accept, however, that these are fundamentally minor amendments that really should have been included at introduction.
Justin Madders
The shadow Minister’s comments are noted, and I commend the amendments to the Committee.
Amendment 65 agreed to.
Amendments made: 66, in schedule 3, page 116, line 8, leave out “education”.
See the explanatory statement for amendment 65.
Amendment 67, in schedule 3, page 116, line 10, leave out “education”.
See the explanatory statement for amendment 65.
Amendment 68, in schedule 3, page 116, line 13, leave out from “employment” to end of line 14 and insert “which—
(i) provides for the person to work wholly at one or more Academies, or
(ii) provides for the person to carry out work of a prescribed description for the purposes of one or more Academies.”
This amendment extends the definition of “school support staff” in new Part 8A of the Education Act 2002 to include people who do not work at an Academy but are employed by the proprietor of an Academy to carry out particular kinds of work (to be specified in regulations) for the purposes of one or more Academies.
Amendment 69, in schedule 3, page 123, line 31, leave out “education”.
See the explanatory statement for amendment 65.
Amendment 70, in schedule 3, page 123, line 33, leave out “education”.
See the explanatory statement for amendment 65.
Amendment 71, in schedule 3, page 124, line 13, leave out “education”.—(Justin Madders.)
See the explanatory statement for amendment 65.
Greg Smith
I beg to move amendment 123, in schedule 3, page 124, line 39, at end insert—
“(2A) Before making or revising arrangements under sub-paragraph (1), the Secretary of State must publish and lay before Parliament an impact assessment of the costs on the education sector of any proposed arrangements.”
This amendment makes a requirement from the Secretary of State to undertake an impact assessment of the costs on the education sector before making or changing arrangements related to the School Support Staff Negotiating Body.
The Chair
With this it will be convenient to discuss amendment 124, in schedule 3, page 126, line 9, at end insert—
“(1A) The report must include an assessment of the increased costs to the education sector of any pay and conditions agreements made in that reporting year.”
This amendment requires the annual reports of the School Support Staff Negotiating Body to include the cost of pay and conditions agreements.
Greg Smith
Amendment 123 requires the Secretary of State to undertake an impact assessment of the costs to the education sector before making or changing arrangements related to the school support staff negotiating body. I have already spoken, probably at greater length than anybody particularly wished me to, about our reservations over the re-establishment of the body—in particular the way that it will override the traditional academy freedoms that seem to trigger Government Members so much.
I am interested in what assessment the Secretary of State has undertaken about the current arrangements for pay and conditions for support staff, and in whether the Minister can provide concrete evidence about the shortcomings and how those would be rectified by re-establishing the school support staff negotiating body. In other words, is the policy driven by evidence or by ideology? The amendment asks for the Secretary of State to come clean about the costs of the proposed arrangements, not just to the schools budget but to pupils in schools.
We had some back-and-forth earlier about how, if they are to work, the changes made by the Bill need to marry up with the real-life pay settlements and budgets made available by the Treasury. Otherwise, the net result will be that schools will have to obey the rules as set out in the Bill without getting any additional money to pay for doing so. Who will suffer if the school is asked to do that? It will be the children and pupils, because of the number of textbooks, laptops, iPads or interactive screens and boards—all the things that are used in education—that the school can buy.
Laurence Turner
I am trying to understand what the shadow Minister means by cost to the education sector. Does he mean the running cost of the body itself or the cost of an agreement? If he means the latter, how could that possibly be accounted for when, as we have heard, any new pay scale is likely to be some years away and would be subject to negotiation?
Greg Smith
The answer is, of course, both. There will be a cost to the body and a cost to the individual education establishments—the academies, free schools and so on—that still fundamentally rely on a funding settlement. One pot of money can only go so far. I accept that the body itself will be separately funded, but the pay awards that individual schools would have to make will not. If schools are being asked to swallow the cost, they will have to find it within their budgets.
I am sure that I am not alone in having visited schools—other hon. and right hon. Members will have done so in their own constituencies—where headteachers say that they have to have this debate when setting their budget every year. Over the decades, Governments of all political persuasions have given them things to deliver and rules to follow but only one pot of money, so something has to give. If they are to follow the rules, the ones who suffer are children, through the equipment and books that the school is able to purchase.
The amendment is a reasonable one. It requires one of those impact assessments, so that we can all be absolutely clear. When we vote, in whichever way, on this Bill as it passes through Committee, Report and Third Reading, as well as ping-pong with the other place, we can be really clear about what these provisions mean on the ground for real schools and real children going through their education. As I think we all accept, that is so important to their future lives.
Amendment 124 requires the annual reports of the school support staff negotiating body to include the cost of pay and conditions agreements. We believe it is important that there is transparency over the additional costs and burdens that this new body will impose on school employers. What might those costs be? Will the Department for Education appropriately compensate school employers for them? I will not repeat the arguments that I made on amendment 123, but the point is fundamentally the same. The amendments are designed to probe the Government properly on what the measure will mean in the real world.
Laurence Turner
I want to come back on some of the points that the shadow Minister raised. I appreciate his clarification about exactly what information the Opposition are trying to tease out with amendment 124. I hope he does not mind me saying that the cost of any future settlement agreement is speculative in nature. We heard from the Minister earlier that part of the remit that Ministers will give the body will be about affordability and the funding available at the time. It will probably be several years in the future when that new pay scale comes into force, albeit that there is some good work that the SSSNB could be getting on with in the interim that would have very low costs for the sector.
We have some information about how much the body itself would cost. An answer to a written parliamentary question in 2011 put the estimated cost saving of abolishing the SSSNB at £1.4 million over the spending review period. That was about £350,000 a year. In today’s prices, we are looking at close to half a million. That is a very small fraction of a percentage of the Department’s budget, and it is probably an overestimate given that civil service wages have not kept pace with inflation over that time. The former education spokesperson for the Labour party, Andy Burnham, who was involved in the setting up of the original SSSNB, described it as a “low-cost panel”. That is exactly what we are talking about here. I hope that that provides some reassurance that amendment 124 is not necessary.
The SSSNB produced annual reports, which were published by the Government in the normal way. The Department for Education tracks the costs of school support staff pay increases. That information is made available, including to sector representatives, through the schools and academies funding group. I hear what the shadow Minister says, but I do not think these amendments are necessary because the information is unknowable or already available, or it will be made available in the normal course of business.
Greg Smith
I cannot remember a single time in the last Parliament when the then Opposition would have made the case that there was no need for an impact assessment. I put that to the Minister very gently as a point of principle that is specific to amendments 123 and 124. However, I understand the argument that he is making.
The Opposition still think that the Bill’s approach is flawed as to diversity across our educational establishments. We will not press our amendments to a Division now, but we reserve the right to revisit the matter when we come up for air on Report, once the Minister has had time to reflect on the implications of his policy. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the schedule, as amended, be the Third schedule to the Bill.
Justin Madders
As the Committee has discussed, clause 28 introduces schedule 3, which provides for the establishment, remit and functioning of the school support staff negotiating body. Paragraph 1 of schedule 3 will insert into the Education Act 2002 a new part 8A, which contains proposed new sections 148A to 148R.
New section 148A will reinstate the SSSNB as an unincorporated body. Reinstating the SSSNB will give school support staff the voice and recognition that they deserve as a crucial part of the school workforce. It will help to address the recruitment and retention challenges facing schools and will drive standards in schools to ensure that we give every child the best possible chance in life.
New section 148B sets out the remit of the SSSNB for remuneration, terms and conditions of employment, training and career progression of school support staff, and the powers of the Secretary of State to define what is or is not to be treated as falling within those categories within the regulations. This ensures clarity over the remit of the SSSNB and what can and cannot be referred to it by the Secretary of State. The remit will lead to a national terms and conditions handbook, fair pay rates and clearer training and career progression routes for school support staff in England.
New section 148C defines school support staff in relation to who they are employed by and their role. Support staff are defined as all staff, other than qualified teachers, who are employed by local authorities, governing bodies and academy trusts to work wholly at schools in England. The 2009 SSSNB included only those support staff employed by local authorities and governing bodies to work in maintained schools within its scope. Support staff employed by academy trusts are now included in the SSSNB’s remit, despite the shadow Minister’s attempts to persuade us otherwise.
It is crucial that the body have a remit for all state-funded schools in England to achieve greater national consistency, irrespective of the type of school in which support staff work. Roughly half of the 24,453 schools in England are now academies, compared with approximately 200 in 2009 when the body was previously established. New section 148B gives the Secretary of State a power to prescribe in regulations those who will not fall within the SSSNB’s remit.
Amendment 68 will allow the Secretary of State to include, through secondary legislation, those who do not work wholly at academies within the SSSNB’s remit, by reference to the type of work that they do. The Department currently holds limited information about the roles in which support staff are employed in academies or the terms and conditions under which they work. It intends to consult on which roles should and should not be within scope of these provisions. These powers will provide the necessary flexibility to respond to that consultation and amend the remit of the SSSNB as necessary.
New section 148D sets out the power of the Secretary of State to refer matters to the SSSNB that are within its remit, namely those matters relating to remuneration, terms and conditions of employment and training and career progression of school support staff. Referrals by the Secretary of State to the negotiating body will mean that those representing employers and employees can agree and advise on suitable outcomes for school support staff within the parameters set out by the Secretary of State in relation to wider Government priorities and context.
New sections 148E and 148F set out the powers of the Secretary of State when referring matters relating to remuneration, terms and conditions of employment and training and career progression to the SSSNB. The Secretary of State may specify factors that the SSSNB must consider and a timescale for their consideration. The new sections set out the steps that the SSSNB must take, depending on whether it has or has not reached agreement on matters relating to terms and conditions. Where the Secretary of State refers a matter relating to the training and career progression of school support staff to the SSSNB, the SSSNB is required to provide a report on the matter to the Secretary of State, rather than reaching agreement.
New section 148G will give the SSSNB the power to consider matters within its remit that have not been referred to it, with the Secretary of State’s agreement. This will give the SSSNB the ability to raise alternative matters that it wishes to negotiate or advise on. Agreement from the Secretary of State is required from the outset to ensure that no work is undertaken on a matter that could be considered to be outside the SSSNB’s remit. It will also ensure that the body has sufficient capacity to consider referred matters within the required timescale, alongside any additional matters that the SSSNB wishes to consider.
New section 148H sets out the Secretary of State’s powers in relation to agreements submitted by the SSSNB. The Secretary of State may ratify an agreement in secondary legislation in full or in part—if in part, the part not ratified falls away—or refer the agreement back to the SSSNB to reconsider it under new section 148I. This power is necessary to ensure that any agreements are practicable—for example, that they are affordable—before being incorporated into contracts. The ability for the Secretary of State to ratify agreements in part is a pragmatic approach to allow matters with agreement to progress and to avoid delays if there is an element of an agreement that the Secretary of State is not content to agree.
New section 148I sets out what happens where the Secretary of State refers a matter back to the body for reconsideration. The Secretary of State may specify factors to which the body must have regard in reconsidering the agreement and by when it must revert.
New section 148J will apply where the SSSNB has submitted an agreement to the Secretary of State after reconsideration. The Secretary of State has powers to ratify the agreement in full or in part in regulations; to refer the agreement back to the SSSNB for reconsideration; to make regulations requiring prescribed people to have regard to the agreement in exercising prescribed functions; or to make regulations that make alternative provision in relation to the same matter. The new section gives the Secretary of State a range of powers to determine the best course of action based on the agreements from the SSSNB to ensure that the desired outcomes for school support staff are met and are practicable.
New section 148K sets out the process if an agreement cannot be reached by the SSSNB on a matter relating to school support staff remuneration and terms and conditions referred to it by the Secretary of State. The Secretary of State may specify a later date by which agreement must be reached or may make regulations in relation to the matter referred to the SSSNB if there is an urgent need to do so, but the Secretary of State must consult the SSSNB before making those regulations. This will ensure that the Secretary of State is able to regulate as necessary in the event that agreement cannot be reached, for instance on a pay award for school support staff.
New section 148L sets out the Secretary of State’s powers if the SSSNB fails to submit a report on a matter relating to the training and career progression of school support staff by the deadline set by the Secretary of State. The Secretary of State can specify a later date for the SSSNB to report or issue guidance on the matter. This ensures that the Secretary of State can still issue guidance on training and career progression to support recruitment and retention in the absence of a report from the body.
New section 148M sets out the effect of regulations made by the Secretary of State that ratify agreements reached by the SSSNB in full or in part. The terms of the agreement are imposed in a person’s contract of employment so that a member of school support staff must be paid and treated in accordance with those conditions. Any inconsistent terms in contracts of employment or academy funding agreements have no effect. That allows the Secretary of State to make changes to the pay and terms and conditions of school support staff as agreed by the SSSNB, in order to ensure fairer pay rates and greater national consistency, boost recruitment and retention in those roles, and drive improved standards in schools.
New section 148N sets out the effect of regulations made by the Secretary of State where she decides not to ratify agreements reached by the SSSNB or where the SSSNB fails to reach agreement on a matter. Where the Secretary of State decides to make regulations imposing terms and conditions into school support staff contracts, for example because there is an urgent need to make changes to terms and conditions and the SSSNB has failed to reach agreement on them, school support staff must be paid and treated in accordance with those terms and conditions. It is important that the Secretary of State has the ability to legislate to provide fair terms and conditions for school support staff in the event that the SSSNB fails to reach an agreement.
New section 148O will allow regulations made under part 8A to have retrospective effect, subject to their not subjecting anyone to a detriment in respect of a period that falls before the date on which the regulations are made. This will allow the Secretary of State to backdate pay awards agreed after the start of an annual pay period to ensure that school support staff may benefit from them for the entirety of the period.
New section 148P sets out how and when the Secretary of State and the SSSNB can issue guidance on matters within the SSSNB’s remit. The SSSNB, with the Secretary of State’s approval, can issue guidance on pay and terms and conditions, as can the Secretary of State. Only the Secretary of State can issue guidance on training and career progression. Local authorities, governing bodies and academy trusts are required to have regard to guidance issued. This will allow the Secretary of State and the SSSNB to support employers in the implementation of new terms and conditions and the promotion of training and career progression opportunities for school support staff.
New section 148Q will provide a carve-out for the SSSNB framework from the collective bargaining provisions in the Trade Union and Labour Relations (Consolidation) Act 1992. The new section is necessary to ensure that agreements reached by the SSSNB can be imposed in contracts only through ratification by the Secretary of State.
Paragraph 2 of schedule 3 will insert a new schedule 12A into the Education Act 2002. New schedule 12A includes provision for the SSSNB to be constituted in accordance with arrangements made by the Secretary of State. School support staff and employer representative organisations on the SSSNB will be set out in secondary legislation; the Secretary of State will be required to consult the TUC before prescribing which organisations represent school support staff.
The membership of the SSSNB will include support staff, employee and employer representatives, an independent chair and a representative of the Secretary of State. It may also include members who do not represent school support staff or their employers. However, only school support staff and employer representatives will have voting rights. The new schedule also provides for administrative support to be provided to the SSSNB, including for the Secretary of State to pay expenses for the chair and for administrative costs incurred by the SSSNB. The SSSNB is required to provide a report for each 12-month period.
I commend schedule 3, as amended, to the Committee.
Greg Smith
After that lengthy oration from the Minister, I can only conclude that when it takes that long to explain something, a bureaucracy is coming that probably nobody wants. As we rehearsed during our debates on amendments to the schedule, it challenges in many respects the freedoms that some of our education establishments enjoy.
As the Bill leaves Committee at some point in January and heads back to the main Chamber for Report, I urge the Minister to reach out to educational establishments—and perhaps to the Department for Education, but real-world schools are probably better—and reflect on the impact that this new bureaucracy will have on them. Is it as streamlined as it can humanly be? The Minister was on his feet for seven or eight minutes trying to explain that bureaucracy. In fairness, he did a commendable job of it, but that does not necessarily make it right. Whether we are in opposition or in government proposing things, we too rarely ask ourselves in the House: have we collectively got this right?
The Opposition believe that this new body—which we in government, along with the Liberal Democrats, removed—should not be brought back in. There is a better way of achieving some of the noble aims that the Government have in this regard and avoiding some of the potential catastrophes that we spoke about earlier. We therefore cannot support the schedule remaining in the Bill.
Greg Smith
I beg to move amendment 121, in clause 29, page 41, line 34, at end insert—
“(5A) No regulations may be made under this section before the Secretary of State has published and laid before Parliament an impact assessment of the costs on the social care sector of any proposed Adult Social Care Negotiating Body.”.
This amendment makes a requirement from the Secretary of State to undertake an impact assessment of the costs on the social care sector of any newly proposed Negotiating Body.
The Chair
With this it will be convenient to discuss amendment 122, in clause 29, page 41, line 34, at end insert—
“(5A) Regulations under this section must, for any Negotiating Body established under subsection (1), include a requirement for annual reports to be published and laid before Parliament.
(5B) Annual reports, required under subsection (5A) must include an assessment of the increased costs to the social care sector of any pay and conditions agreements made in that reporting year.”.
This amendment would require any Negotiating Body established under these regulations to publish annual reports setting out the cost of pay and conditions agreements.
Greg Smith
Amendment 121 would require the Secretary of State to undertake an impact assessment of the costs on the social care sector of any newly proposed negotiating body. Amendments 121 and 122 mirror those tabled in relation to the school support staff negotiating body that we have just spent the best part of an hour and a half debating. That is because our concern is essentially identical: that this is ideologically driven policy, not evidence-based policy.
Can the Minister provide the Committee with the evidence that the adult social care negotiating body is necessary? Has the Department of Health and Social Care made any assessment of the additional costs that may be incurred by the sector? Given that social care is provided across multiple platforms—to use a generic term—from the NHS to local government to many private sector providers, this measure will cross a number of sectors responsible for providing social care, and it is important that there is a cross-governmental impact assessment alongside it that provides a clear understanding of the costs involved to all parties, particularly local government, which is facing extraordinary pressures at the moment.
We have seen what has happened with councils such as Birmingham, which reached the point of bankruptcy, and with other councils that are under considerable financial pressure. When I speak to my council in Buckinghamshire, I hear that much of that pressure is driven by social care. It is a good problem to have; medical advances and technologies are ensuring that people have longer lives, but there is then the requirement for adult social care for far longer than was previously the case. The burden of that is falling disproportionately on local government budgets at the moment, and the Deputy Prime Minister and her Department need a clear understanding of the impact on the local government cost base.
Justin Madders
The shadow Minister will not be surprised to learn that we do not support his amendments. Amendment 121 seeks to require an assessment of the impact of the new negotiating body on the adult social care sector. The Government have already produced a comprehensive set of impact assessments for the Bill, including one on the fair pay agreement for adult social care. That was published on Second Reading and was based on the best available evidence regarding the potential impact on businesses, workers and the wider economy.
The adult social care fair pay agreement will be subject to sector-wide collective bargaining and negotiation. At this stage, our impact assessment provides an illustrative analysis of its potential impact, including the magnitude of the cost to businesses, as well as the benefits for up to 1.6 million social care workers. We intend to refine that analysis over time, working closely with businesses, trade unions, academics and, of course, the Department of Health and Social Care.
As is standard practice, we will publish an enactment impact assessment once the Bill reaches Royal Assent, in line with the better regulation framework requirements. That will account for where the Bill has been amended in its passage through Parliament in such a way as to significantly change its impacts on business. That impact assessment will be published alongside the enacted legislation. In addition, the Government will produce an impact assessment to accompany regulations connected to the establishment of the negotiating body.
The Minister asked why the body is needed—what is the evidence base? He will be aware of the evidence given to the Committee, both orally and in writing, about its importance. The hon. Member for Chippenham spoke of the need for a level playing field, which is certainly a big part of what we are looking at here, because many of us will know from our experiences in our constituencies—never mind the evidence before the Committee—that, fundamentally, the adult social care sector is in desperate need of help. We have known that for a very long time, and if Members care to look at the Low Pay Commission’s recent reports, they will see that it has dedicated a considerable amount of space in them to the challenges in the sector. Trade unions, of course, have also been calling for action in this area for many years.
It is also well known that there are huge recruitment and retention challenges in the adult social care workforce. It is a very large sector, employing about 1.6 million workers, which is about 5% of all people in adult employment, and it plays an important role. The people in those roles are predominantly women and, as was noted during the evidence sessions—and backed up by the analysis in the impact assessment—there are about 130,000 vacancies at the moment. It was also noted that filled posts have reduced by 4% recently, and that the shortfall since 2022 has been plugged primarily by overseas workers, which we know is a topic of great interest.
The turnover rate in the sector is incredibly high: it has been higher than 25% since 2016 and was consistently over 30% between 2017-18 and 2022-23. There were some improvements last year, but that was largely driven by international recruitment, and the turnover rate is generally much higher than the UK average. The impact assessment notes that, while some movement is healthy, the higher rates witnessed can be disruptive and impact not only productivity, but the quality of service, with recipients of care not getting continuity. I think we can all recognise the situation in which a person in receipt of care has a different person turning up every day and how disruptive that can be. It is important to note that recipients of care, and not just the workers, will benefit from the Bill.
We know that low pay is rife, as has been identified by the Low Pay Commission. In December 2023, the average wage was £11, and nearly 70% of workers were paid within £1 of the minimum wage. In the last two reports by the Low Pay Commission, space has been dedicated to underpayment in the sector. In its latest report, the Low Pay Commission said:
“In the social care sector, non-compliance appears persistent”.
The shadow Minister asked a wider point about travel costs. He will no doubt welcome the announcement in the Budget that we are freezing fuel duty, but the cost of travel is a much broader issue than the point he raised. Clause 30 will allow broader questions of terms and conditions to be considered. Clause 39 is also important, because it deals with record keeping. We know from research by Unison that about one quarter of domiciliary care workers are repaid only for travel time, and only 18% of them have the travel time listed on their payslips. Given that these people often earn close to the minimum wage, this is an absolute scandal that needs to be addressed. The shadow Minister made an important point about travel, but we hope that the fundamentals of ensuring that people are paid for that travel time will be addressed by the negotiating body.
Let me turn to amendment 122. The Government are committed to engaging with the adult social care sector on the design of a fair pay agreement, including how the negotiating body will be set up, how it should operate and how negotiations will run. The powers under clause 29 allow for the Secretary of State to create the adult social care negotiating body by regulations and to provide for the smooth and efficient running of that body. The regulations will confirm the type of body being created. The power also allows for reporting requirements to be imposed on the negotiating body, such as producing reports. Engagement with the sector will ultimately influence the type of body that the negotiating body actually becomes. All public bodies have specific reporting requirements to meet transparency standards.
I can confirm that the Department of Health and Social Care has committed to publishing an impact assessment on establishing fair pay agreements in the adult social care sector to accompany the secondary legislation required to establish the negotiating body. It is intended that the assessment will include an analysis of the potential costs and benefits that will arise from a fair pay agreement. On that basis, I invite the shadow Minister to withdraw his amendment.
Greg Smith
I am grateful to the Minister for his remarks, and not least for acknowledging the importance of the points about just travel time and about compensation for using one’s own vehicle and having to purchase the petrol, diesel, electricity, hydrogen or whatever to get around—in a brave new world, who knows what it might be? I invite him to ensure that that can be locked into, whatever the negotiating body has the power to do. I say that not least for rural communities such as mine, where it is not unusual for someone to have to travel for half an hour between many of the villages, and from one person they are caring for to another. That adds up very quickly in terms of not just time, but the cost of the fuel to get them there and the wear and tear on the vehicle’s brakes, tyres and so on.
We will not press these amendments to a Division. However, as the Minister reflects on this issue, I urge him to again ensure that the way in which this new body will inevitably be set up accounts for the multiple different platforms of provision across local government, the private sector and the not-for-profit sector, which the hon. Member for Chippenham talked about. This is a much more complex arena than that of schools, which is much more heavily defined—we spoke about that earlier. I urge the Minister to reflect on that as he potentially brings forward Government amendments or minor surgery to the Bill ahead of Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Greg Smith
As we prepare to begin the 12 days of Christmas, we have the 16 clauses of the adult social care negotiating body. I am not sure which has the better ring to it, but I think only one ends with a partridge in a pear tree.
I have a few questions for the Minister after his impressive run-through of the 16 clauses. I might not have agreed with every word he said, but we have to acknowledge a powerful performance, and he went through such technical detail with such speed. In clause 29, yet again we have the powers to set up a body but only after engaging the sector. There is nothing wrong with engaging the sector, and we encourage regular engagement with any and every sector, but this is yet another example in the Bill of legislate first, consult second. That is always a concern whenever it comes up, and not least on clause 41, where the Minister repeatedly referred to certain retrospective powers.
Greg Smith
I took careful notes, and we can check Hansard later, but I am pretty certain that the Minister himself used the word sufficient in his remarks.
Justin Madders
We may have to write to the hon. Member on that. Having furiously double-checked clause 32 during the other hon. Members’ speeches, I cannot find the word sufficient.
My final point relates to the powerful contribution from my hon. Friend the Member for Scarborough and Whitby about her personal circumstances and how important it is that we get this right. It is people such as her son who have benefited from good support in social care, and at the end of the day, they are the people who will benefit from stability and security in the workforce and better retention rates. This is about the workforce, but it is also about the people who receive the care, and it is about time that we gave them more priority. That is why these clauses are so important, and I therefore commend them to the Committee.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Clauses 30 to 44 ordered to stand part of the Bill.
Greg Smith
Further to that point of order, Ms Vaz. I seek your guidance on how we might put it on the record that we wish a very merry Christmas to everyone involved in this Bill Committee. I might not agree with every word of the Bill, but I appreciate all the work that the civil servants put into supporting the Minister and the Government—and, likewise, for the Opposition, the hard work of all the Clerks, as well as Hansard, the Doorkeepers and security. I wish Members of all parties a very merry Christmas.
The Chair
Thank you, and thank you to all hon. and right hon. Members, the officials and the Clerks, who have been very supportive.
Ordered, That further consideration be now adjourned. —(Anna McMorrin.)
Employment Rights Bill (Thirteenth sitting)
Greg Smith ExcerptsTuesday 17th December 2024
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 December 2024 - (17 Dec 2024)
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
Good morning, Mr Mundell; it is a pleasure to see you in the Chair. As is customary, I refer to my entry in the Register of Members’ Financial Interests and my membership of the Unite and GMB trade unions.
The clause will empower Ministers to reinstate and strengthen the two-tier code on workforce matters where contracts for public services have been outsourced to the private sector. It will ensure fair and equitable employment conditions for public sector workers who have been transferred into the private sector, and private sector workers who work alongside them on public service contracts, while maintaining a high quality of service for the public. It therefore directly supports the Government’s manifesto commitment to make work pay and will tackle the issue of unfair two-tiered workforces where staff working alongside one another to deliver the same contract do not have comparable terms and conditions of employment.
The powers are constrained so that the provisions of the regulations and the code, when developed, will apply only to new contracts entered into once the Bill comes into force, but can and will apply to re-procurements of services already outsourced where the re-procurement leads to a further transfer of workers. Ministers will have the power to make regulations specifying provisions to be included in relevant outsourcing contracts. The provisions may, for example, set out model contract terms that, where incorporated into contracts, will impose obligations on suppliers. Authorities will be required to take all reasonable steps to include those provisions in all relevant outsourced contracts.
The regulations made under the clause will, first, have the purpose of ensuring that transferring workers are treated no less favourably as workers of the supplier than when they worked for the public sector contracting authority and, secondly, have the objective of ensuring that workers of the supplier who are not transferred from the public sector but recruited by the supplier to work on the contract are treated no less favourably than those transferring workers. Alongside that, Ministers of the UK, Scottish and Welsh Governments will be subject to a duty to publish a code of practice addressing similar matters to which contracting authorities will need to have regard.
To ensure that the code is effectively enforced, there will be several forms of redress. Contracting authorities will be required to take all reasonable steps to ensure that suppliers meet their contractual obligations, as set out in the regulations. In addition, the procurement review unit, which will be established under our new Procurement Act 2023, due to commence in 2025, will be able to investigate whether a contracting authority has had regard to the code and taken appropriate steps in relation to provisions specified in the regulations.
These powers are being extended through amendments to the clause, which we discussed last week, to the devolved Governments of Scotland and Wales so that the benefits of a consistent approach to fair and equitable employment terms and conditions on relevant outsourced contracts can be spread throughout the UK. Fair and equitable working conditions are the right of all employees working alongside one other on the same outsourced contracts, and these measures will help to tackle that issue head on.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship once more, Mr Mundell.
Clause 25 has got me thinking about many moons ago, in 2006, when I was part of the team that won Hammersmith and Fulham council for the Conservatives for the first time since 1968. One of our first acts was quite literally to take the red flag down from the roof of the town hall. Part of the symbolism of that, which is why I mention it, was that the council, in 2006, was one of the last to outsource anything at all. Competitive tendering simply had not happened in that London borough. Everything was still a direct service run by the local authority, and we set about contracting out waste, grounds maintenance and many other services. Why? Because we wanted to deliver better value for taxpayers—indeed, we cut council tax by 20% over the eight years that we ran the council—and to improve service standards.
One of the things I learned in that process, and the reason my point is relevant to the clause, is that the first iteration of any contracting out—that first contract, be it for refuse collection, street cleansing, grounds maintenance or whatever—does not tend to result in economies and improvements. It is often in the second or third contract iteration where the cost savings and improvements in service standards start to be seen. That is partly because of the TUPE provisions that rightly exist to ensure that those staff who are being transferred from whatever part of the public sector we might be talking about—in this case, local government—transfer with the same rights, terms and conditions, and pay that they had at the point that they ceased to be direct employees of the council, or whatever other public service, and became employees of whoever won the contract.
The rub comes in the real-world application. In such cases, the staff members who transferred are on favourable terms and conditions, and probably better pay, than some of the staff that the contractor brings into the team. If it is immediately locked in that everybody new has to be on the same terms and conditions and pay scales, we will never achieve value for money for taxpayers, and we will never enable the contractor, be that a refuse collection company or whatever, to find efficiencies and savings at the same time as increasing service standards in the way that we all want to see. It might as well never be done in the first place. That makes me question whether that is in fact the ideological position that the Government want to take. I can see the Minister grinning; perhaps I have hit upon something.
I gently remind the Committee of the time when every refuse service and local government service was provided directly, in house, before competitive tendering and the revolution of the 1980s and the Thatcher Government. We can all remember what delivery of those services looked like in the 1970s: the rubbish piled up on the streets with no one collecting it.
Steve Darling (Torbay) (LD)
It is a pleasure to serve under your chairmanship, Mr Mundell. I just reflect that when I was a unitary authority leader, we were effectively a hostage client of the private sector, since the previous Conservative authority had set up a joint venture with it. That was far from the land of milk and honey. Well, it was the land of milk and honey for the private sector, whereas local taxpayers had to suffer under a system that was set up to benefit the private sector. The reality is that often it is more appropriate for local authorities to run these services so that they are run in the interests of local communities rather than the profits of the private sector.
Greg Smith
The hon. Gentleman is clearly not of the orange book wing of the Liberal Democrats.
Greg Smith
My hon. Friend indicates that perhaps there are not any left. I fundamentally disagree with the point made by the hon. Member for Torbay. It is not about profits for the private sector, although the profit motive is an important element in driving up service standards and ensuring that if a company wants to keep a contract, it has to deliver on it.
Some councils have failed on this front by failing to set the specification of a contract correctly and failing, as the client, to enforce against the contract. That is where we see failure on so many fronts; it has little to do with terms and conditions or the points covered by the clause. Often, an ill-equipped council, be it the members or the officers—I have seen this from both sides—fails to properly specify in the first place, when it goes to market, and then fails to deliver proper contract management. That is where we see gremlins creep into the system and unintended consequences come about.
I gently point out to the hon. Member for Torbay that when I was in local government, we saw many benefits from competitive tendering over multiple iterations of the contract. I can ensure him that in the cabinet portfolios that I held in that local authority, where I was directly overseeing the waste, street cleansing and grounds maintenance contracts, I was pretty tough on those contractors in ensuring that they did drive up standards. But sometimes it is not the right step. The Labour council we took over from had outsourced housing, which we as a Conservative council brought back in house. We ended the arm’s length management organisation to bring it back within direct council control to deliver a better service for the tenants of those properties. So if it is not done properly in the first place, that model does not always work.
The measures in clause 25 are once more a sledgehammer to crack a nut. They do not recognise the practical realities of how competitive tendering has worked, excepting the flaws that I raised about how well contracts are specified and enforced against. If we want to ensure that we are delivering the best possible value for money for taxpayers—the people who pay for public services—at the same time as increasing the standard of services delivered, which I expect is a universal aim that all of us hold, there have to be flexibilities to ensure that efficiencies can be found, and that the fat is taken out of all systems, processes and ways of doing business. If we lock contractors into absolutely having to match every term and condition, with every pay scale being exactly the same, we are never going to deliver that.
Sarah Gibson (Chippenham) (LD)
It is a pleasure to serve under your chairmanship, Mr Mundell. I really welcome the clause. Despite the fact that their uniforms, pensions and contracts said “NHS”, staff at a community hospital in my constituency only realised that they had been effectively TUPE-ed over to a private business when they failed to receive the £1,000 bonus that all their colleagues in the main hospitals got. One may say, “How naive of them; they should have read their contracts better,” but most of them had been NHS workers for 25 years, so they were completely unaware that this had happened to them and that they were no longer entitled. I must thank the then contractor, a charity, for lobbying hard to make sure that eventually they got some kind of bonus, but to be suddenly without those conditions was quite frightening for them. So I welcome these measures.
I take some issue with what the hon. Member for Mid Buckinghamshire said. For many years, I served as part of Wiltshire council, which is a Conservative-led council. It was locked into a service contract for maintenance that was poor and used to lower wages, producing a system where we had very little maintenance. Our town councils are now having to pick up the bill for repairing grounds and play areas because the company, although it had the contract and was paid by the local authority, was not carrying out the works. Therefore, I welcome this measure and I am pleased to support it.
Greg Smith
How does the hon. Gentleman feel that the NHS in Wales is doing—better or worse than in England?
Laurence Turner
I would say better, having had some experience. The hon. Gentleman might want to return to that point.
On the substance of the clause, there were some concerns about the original incarnation of the two-tier code. It was purely voluntary and did not contain meaningful provisions for redress where an employer who had signed up to uphold the standards of the code did not follow through. I hope that that deficiency will be remedied when the associated regulations appear.
It is legitimate to have differences on points of principle. After the current Lord Maude abolished the two-tier code, the Secretary of State—now Baron Pickles—said that the Government of the time had
“Abolished the…two-tier code that…hindered the voluntary and independent sector from delivering better value for money.”—[Official Report, 26 March 2015; Vol. 594, c. 166WS.]
The shadow Minister has made much the same point. This was explicitly about driving down wages for the large number of people who are contracted out to deliver public services. I very much welcome the fact that this Government have a policy objective of making work pay. For a large number of people in the labour market who have been overlooked by politicians for too long, the clause represents an important step forward for remedying that deficiency.
Justin Madders
We have had a broad debate—very broad from my hon. Friend the Member for Birmingham Northfield, who took us on a canter through the history. He was right that it was the coalition Government who abolished the two-tier code, which is why it is welcome that the Liberal Democrats have realised the error of their ways; I welcome their support on this. Their spokesperson, the hon. Member for Chippenham, made the important point that the inherent unfairness of people doing exactly the same job for the same employer finding out that they are on different terms and conditions and are earning less is a big morale sapper. It is also a big issue in terms of workforce retention—one problem that we often see with outsourced contracts.
I will turn to the shadow Minister’s misty-eyed days at Hammersmith and Fulham, and I will raise him Ellesmere Port and Neston borough council, which was a great believer in direct provision of services; we certainly felt that was the best way to deliver value for the taxpayer and good-quality services. In his contribution, the shadow Minister alighted on the illusion of outsourcing—the fact that consultants can demonstrate that savings can be made, but when you drill into the detail, those savings are always off the back of the workforce. They are not some magical way of doing things differently. It is about cutting terms and conditions and it is about a race to the bottom, which we are determined to end.
Greg Smith
I do understand the ideological difference between the two sides on this point, but I take issue with the Minister that this is about a race to the bottom and cutting terms and conditions; it really is not. From my experience, it was not a matter of consultants, but of properly probing contracts, setting the right specification to deliver for the residents in the place that the council served, and requiring the flexibility to ensure that some people would be doing very different jobs in a different way from before in order to deliver that. It was not about wanting to cut anyone’s pay or terms and conditions; it was about service delivery and value.
Justin Madders
I take the shadow Minister’s point. I am not familiar with the machinations of Hammersmith and Fulham council in the 2010s, and it may well be that savings were made by doing things differently. But there is absolutely no reason why that cannot be done directly from a public body: if it is well led, if it is able to have constructive dialogue with its work force, savings can be made.
The difficulty with the shadow Minister’s analysis is that, while he may have been able to find savings for the taxpayer through those kinds of measures, too often the savings are made by cutting terms and conditions for new workers. That is why, as he said in his original contribution, the second or third outsourcing is usually where the savings happen, because it is when those new workers come in on lower terms and conditions that the savings begin to emerge. That is why the whole outsourcing trick is a con, because it is how those savings tend to be made.
When we add in the contract monitoring costs and the profit motivations for the outsourced company to make a living from these things, we can quickly see why it becomes a bad deal for the taxpayer. I certainly make no apologies for putting forward this proposal, because we think it is the right thing to do, to respect and value those who work in public service and ensure that they are paid the same as their colleagues for doing the same work. I therefore commend—
Sarah Gibson
I beg to move amendment 112, in clause 26, page 38, line 35, at end insert―
“(c) supporting employees with menstrual problems and menstrual disorders.”
This amendment would add menstrual problems and menstrual disorders to “matters related to gender equality”, in relation to any regulations made under the Bill to require employers to produce equality action plans.
I am very pleased to move this amendment. First, as the Bill stands, there are provisions for businesses to report on the impact of menopause on women in the workplace as part of the equalities impact assessments. I think the hon. Member for Sheffield Brightside and Hillsborough (Gill Furniss) is right to table this amendment and to remind us all that menstrual problems can hinder women at any point in their working life, not just as they enter menopause. She is the chair of the all-party parliamentary group on women’s health and an officer on the APPG on endometriosis; I feel confident that she has tabled this amendment with the best intentions. It seems an omission that this issue was not included in the original Bill.
Several constituents have contacted me about endometriosis, and specifically its impact on them at work. Endometriosis costs the UK economy £8 billion a year in treatment, loss of work and healthcare costs, and it takes an average of eight years to get a diagnosis. One in six workers with endometriosis leaves the workforce due to their condition—an issue that the Government and employers cannot afford to ignore. Those people could go back to work and stay in work if there was additional flexibility for them.
As one of my constituents told me—she does not wish to be named for these reasons—many employees with endometriosis find that their employers do not believe them about their symptoms, that their flexible working requests are refused and that they are subject to discriminatory automated absence procedures that penalise short but intermittent time off work. The amendment seeks to address that injustice. I want to be very clear that I support it, and I hope that the rest of the Committee will see its importance.
Greg Smith
I hear very clearly what the hon. Lady and the hon. Member for Sheffield Brightside and Hillsborough have said. I do not take issue with anything that has just been said. The endometriosis point is a clear one, and well made. Where I challenge the hon. Member for Chippenham, and indeed the Minister, is that that women’s health issue is not exclusive; there are many health concerns that only women face, and indeed some that only men face. Given that the clause explicitly refers to gender equality, would it not be better, from a pure legislative drafting perspective, to say that gender equality will be the catch-all that encompasses all that?
Is there not a danger that by listing one or two medical concerns, we will lock out other health problems faced exclusively by women, or exclusively by men? Naming one or two things in legislation often creates a problem in the interpretation of the rule. Courts may look back at this debate, or at any other debate on the Bill, and understand that this gender equality provision is intended to be a general catch-all for anything that any man or woman may face. If we name one or two things in legislation, however, it could become dangerous for when a man or a woman presents with something that is not named.
Sarah Gibson
I cannot help agreeing that naming a few conditions in the Bill might well be a concern, and when I first looked at the amendment on its own without looking at where it would fit into the Bill, it did seem slightly incongruous to suddenly mention one aspect. But if we look at where it would be inserted into the Bill, following a direct reference to menopause, it seems far more appropriate to make the point that menopause is not the only ongoing issue that women face. Many women are quite relieved to go into menopause, because it has been so onerous for them to have periods that keep them off work or in bed for several days a month. If we are going to mention menopause, mentioning menstruation makes perfect sense. The amendment makes sense only in the context of the Bill.
Greg Smith
I am grateful to the hon. Lady for that clarification. There is a danger that we will end up dancing on the head of a pin, but I am always concerned about naming individual things in a catch-all provision. If amendment 112 were to be accepted, it might create an interpretive problem for the courts at a later date. Indeed, it might create a problem for employers in navigating whether they have to abide by legislation that mentions one condition but not another.
I would be grateful if the Minister, in his response to the amendment, gave the Government’s interpretation—[Interruption.] With two Ministers on this Bill, it is confusing to work out which one will be responding. I would be grateful if, in her response, the Minister gave clarity on the Government’s interpretation and the legal advice that they have received.
Steve Darling
I beg to move amendment 162, in clause 26, page 38, line 35, at end insert—
“(c) supporting employees who provide or arrange care for a dependant with a long-term care need, as defined by the Carer’s Leave Act 2023.”
This amendment adds caring to the list of “matters related to gender equality”, on which regulations will require employers to produce an equality action plan.
This amendment relates to research showing that by the age of 46, 50% of women have taken on caring responsibilities, whereas the equivalent age for men is 57. Clearly, the impact of caring happens much sooner for women, and that is why it is appropriate to take carers into account under the equality action plan.
There are approximately 10.5 million carers in the United Kingdom, 2.6 million of whom work. That shows that a significant number of carers do not work. In an earlier debate I made the point about the pool of workers for whom there are opportunities in our workforce yet who are not able to access longer-term employment. I strongly contend that the amendment is a way to enhance the pool of opportunity by driving the culture change that I was delighted to hear the Minister say a lot of the Bill is all about.
Carers will often stay in lower-paid jobs or refuse promotion because of caring commitments. It is extremely important to include caring as part of the consideration and clearly flag that to people who consider the action plans, because it is not an obvious matter for an employer to take into consideration, but it affects such a large number of people in the United Kingdom that it would be an error in judgment not to include it in the Bill.
Greg Smith
I rise to address the technicalities of how the amendment would work in legislation and with the Bill’s gender equality provisions. I entirely accept the hon. Gentleman’s point about the disparity between the average age by which a woman might take on caring responsibilities compared with the average for a man, but those are averages and there will be outliers and exceptions across all age ranges and all genders.
I say clearly that the Opposition welcome the contribution of all carers and salute them as the heroes they are, but I am concerned that the amendment would shoehorn a very worthy and important matter into a provision on gender equality. I do not see how it fully fits; it would have been more sensible to have created provisions for the support and recognition of those with caring responsibilities in a new clause or in another part of the Bill. I worry that, like amendment 112, amendment 162 could confuse the Bill’s interpretation as it goes down the line and, potentially, is challenged in court at some point.
I accept the core argument about support for those with caring responsibilities, but it is dangerous to shoehorn provisions into clauses where that is not the primary intent. It is important that the gender equality points remain focused on gender equality issues, on which I think the Government have good intent. If the Bill gets changed too much by us bringing in things that—although clearly in scope, given that they have been selected—are on the edge of scope, that could cause an interpretative challenge later. Provisions on support for those with caring responsibilities would be far better in a new clause or a different part of the Bill, where they might fit more neatly and enable us to avoid judicial challenge.
Dame Nia Griffith
The clause is the first step towards introducing equality action plans, and it provides the power to do so in subsequent regulations. Women are a crucial part of securing economic growth and improving productivity, but the national gender pay gap remains at 13.1% and eight in 10 menopausal women say that their workplace has no basic support in place. This lack of support adds up to a significant loss of talent and skills. Menopause affects 51% of the population, with one external estimate showing that the UK is losing about 14 million work days every year because of menopause symptoms.
Large employers have been obliged to publish gender pay gap data since 2017, with action plans being encouraged, but voluntary. Analysis in 2019 found that only around half of employers that reported data went on to voluntarily produce a plan saying how they would act to improve the figures. That demonstrates that only making it mandatory will push employers to act. The best employers already recognise that providing women with the conditions to thrive is good for their employees and good for business. In taking this step towards introducing mandatory action plans, we are making sure that all large employers in scope of this clause follow their lead.
We are using a delegated power, mirroring the approach taken for gender pay gap reporting. Just as with that requirement, we want to give employers as much detail as possible in legislation—more than would commonly be in a Bill. The use of regulations allows us to do that while maintaining flexibility. When drafting this power, we reflected on what we have learned from gender pay gap reporting and from the hundreds of employers we have engaged with as a result. Most organisations think about equality in the round. They have one diversity and inclusion strategy, recognising what is borne out by the evidence: the most effective employer actions have benefits for more than one group or identity. That is why this clause proposes that employers produce one plan that covers both the gender pay gap and the menopause, reflecting the way they already work, reducing the burden of duplication and ensuring that they can get on with putting the plan into action. I commend clause 26 to the Committee.
Greg Smith
We covered many of the issues relating to this clause when we discussed amendments 112 and 162. I am grateful to the Minister for citing the 2017 changes, which were brought about by the previous Conservative Government. It is morally right to completely close the gender pay gap. That will undoubtedly take some time, but every step taken to close it completely is a welcome one. It is important to make sure that employers are taking proper and serious account of the issue and action on ensuring gender equality in the workplace.
Dame Nia Griffith
This clause is the first step towards requiring employers that already report gender pay gap data also to provide information about where they receive outsourced support from.
A 2019 YouGov survey found that seven out of 10 employer respondents had used third parties to provide key services. We know that the success of a business is down to everyone who contributes, including those who do some of the most demanding jobs but whose pay may be overlooked because they are employed by outsourced service organisations.
By getting large employers to disclose who they have outsourcing relationships with, we are building on what we have learned from gender pay gap reporting. Public accountability is an effective motivator for organisations. Instead of trying to get organisations to share employee data, which risks data relating to outsourced workers getting lost in the wider data, our approach will put those outsourcing relationships front and centre. That will act as a prompt for employers, and so achieve our original aim: getting employers to work throughout their networks and be invested in the pay decisions of those from whom they receive outsourced services.
We are taking a delegated power, mirroring the approach taken for gender pay gap reporting. That will enable us to provide as much detail as possible to employers in legislation, including the definitions and parameters of what will need to be reported. We recognise that outsourcing is not clearly defined and that we will need to work with employers to ensure that the measure works. The use of regulations will allow us to engage on an ongoing basis with experts in the area, provide as much clarity as possible in legislation and still maintain flexibility.
This measure is a step towards valuing and supporting some of the lowest-paid workers; it is a step towards businesses working together, rather than engaging in a race to the bottom; and it is a step in the right direction. I therefore commend the clause to the Committee.
Greg Smith
The clause builds on the gender pay gap reporting introduced by the last Government. Of course, in 2017 we were on the second of four female Conservative leaders, while the Labour party is still yet to show its commitment to gender equality in its leadership. Perhaps the Minister might be the first female leader of the Labour party—who knows? I gently and slightly naughtily make that point; it is the Conservative party that has shown a clear commitment to gender equality, particularly with the changes to gender pay gap reporting.
Expanding reporting to outsourced service providers does not seem a controversial move, but I urge the Minister to ensure that the provisions that the Government introduce do not create loopholes or miss anyone out; I can imagine various scenarios in which someone might argue that something is not outsourced, even though it is contracted. I urge her to double check that the specific language used does not create something that anyone can exploit or legally challenge. That is to ensure that the provisions build in spirit on the previous Government’s 2017 changes and do not create loopholes.
Laurence Turner
I will pick up the point just made about the changes made in 2017. Some of the opposition at that time came from the august institution of the Institute of Economic Affairs, which said that, if the regulations were introduced,
“they may encourage outsourcing of lower-paid jobs which happen to be taken by women (to avoid inclusion in a firm’s own return).”
That point has also been made by other organisations. King’s College London published a study on this matter three years ago, which said that
“focusing on the pay gap headline number can risk organisations seeking to window-dress their figures by outsourcing lower-paid jobs, which in turn worsens overall gender segregation within the labour market.”
Therefore, this extension of gender pay gap reporting to outsourced workers really does close that loophole and remove that perverse incentive—one example of many that we have heard about in this Committee.
We also heard from the Women’s Budget Group; Dr Mary-Ann Stephenson, giving evidence, said:
“We welcome the move to include outsourced workers in gender pay gap reporting…We are very conscious that you will quite often see that the lowest paid workers, particularly in the public sector, are now outsourced.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 163, Q176.]
The measures as proposed would effectively link the outsourced employer’s reporting to the reporting of the primary contracting authority. I hope that, when the regulations are drafted, they will shed some light on the extent of outsourcing across the economy; these workers are often invisible in official statistics, which is a wider problem for our understanding of the labour market. However, this move within the Bill is welcome.
I will just come back on one point; the shadow Minister referred to elected leaders of the Labour party. He is quite right to point out that the Labour party has not elected a woman leader—I very much hope that that will happen—but, for completeness, under the Labour party rulebook there is no role of “acting” or “interim” leader. It is therefore important to say, for the record, that in the eyes of the rulebook the noble Baronesses Beckett and Harman were as much leaders of the Labour party as any men who have fulfilled that role, and they served with distinction.
Justin Madders
Clause 28 introduces schedule 3, which inserts proposed new part 8A into the Education Act 2002. Paragraph 1 of schedule 3 contains proposed new sections 148A to 148R of the 2002 Act and will be discussed separately.
The reinstatement of the school support staff negotiating body will give school support staff the recognition they deserve for the crucial role they play in children’s education and development. Establishing the SSSNB through the Bill will help ensure that schools can recruit and retain the staff needed to deliver high-quality, inclusive education and support the Government’s work to drive high and rising standards in schools, so every child has the best life chances.
The body will bring together representatives of school support staff employers, representatives of support staff, an independent chairperson and a representative of the Secretary of State. The SSSNB will consider the remuneration, terms and conditions of employment, training and career progression opportunities for school support staff. Its remit will lead to the creation of a national terms and conditions handbook, fair pay rates and clearer training and career progression routes for school support staff in England.
Most school support staff are currently employed on National Joint Council for local government services pay and conditions. The NJC is a negotiating body made up of representatives from trade unions and local government employers. Existing NJC arrangements are not statutory or school specific. Moving to a school-specific body where pay rates and pay awards for support staff are negotiated by school support staff employer and employee representatives and ratified by the Secretary of State will both help to ensure fair pay rates for school support staff and allow central Government to have a strategic view of pay across the school workforce.
It is essential for the SSSNB to have a statutory remit so that all prospective and current support staff in state schools nationally benefit from a transparent, guaranteed core pay and conditions offer. The Bill re-establishes the SSSNB as an unincorporated body on a similar footing to the previous body from 2009 that was abolished by the coalition Government in 2010.
As education is a devolved matter, the extent of these measures is therefore England and Wales and the measures will apply to England only. This is consistent and in line with the remit of the School Teachers Review Body being England only.
The 2009 SSSNB included only those support staff employed by local authorities and governing bodies to work in maintained schools within its scope. Roughly half of schools are now academies, compared with around 200 in 2009 when the body was previously established. Support staff employed by academy trusts are now included within the SSSNB’s remit. It is crucial that the body has a remit for all state-funded schools in England in order to achieve greater national consistency, irrespective of which type of school support staff work in. That is a point that we may come on to debate in due course.
Greg Smith
The Opposition have tabled a number of amendments that probe what is introduced by clause 28 and schedule 3, which we will come on to in subsequent debates today. I will reserve the bulk of my remarks for those debates, although, as clause 28 introduces schedule 3, I will preview those debates now by noting our strong opposition to these provisions. There was a very good, solid and rational reason that the former Secretary of State for Education during the coalition years—now editor of His Majesty’s Spectator magazine—abolished SSSNBs, which was to give that flexibility and freedom to the quite right and good, educational standards-raising revolution in education that came through the creation of the academies by the last Labour Government and in particular the creation of free schools by the last Conservative Government, including in the coalition years. Clause 28 and schedule 3, which we will come on to shortly, seek to undo a lot of that. For the reasons I will outline when speaking on those amendments, I think this part of the Bill requires a rethink.
Dr Tidball
I draw your attention to my declaration of interests, Mr Mundell. I am a member of the Community union, Unison and GMB.
I found it difficult to hear, in anything the shadow Minister just said, any rationale for getting rid of this body all those years ago. I missed three years of school as a child because of the surgeries I needed. Incredible classroom teaching assistants helped me to build my confidence and learn to mix with other children again when I returned—making education and learning an escape, a way to express myself, to overcome people’s assumptions about my disability and to feel free.
I stood in my constituency because I wanted to use my skills and experiences to give back to the communities that gave me so much. To know that, because of this Bill and the clause before us now, teaching assistants and other school support staff like the ones who made school a less daunting place for me will once again have a collective bargaining system for pay and conditions—which will ensure that those staff are finally valued and recognised for their vital work—is a very great privilege indeed.
The reinstatement of the school support staff negotiating body in England, previously scrapped by the coalition Government for reasons that still remain unclear, will be key to providing professional recognition for a group of staff who have been overlooked for far too long. As Unison, of which I am proudly a member, has highlighted, the proposals in this clause
“demonstrate that the Employment Rights Bill isn’t just tackling worker’s rights—it holds the key to tackling long standing public policy failures that have been ignored because they affect workers and service users whose voices are too often neglected by decision makers. Tackling this neglect and allowing trade unions to engage in constructive social partnership and better represent their members is long overdue”.
This clause therefore empowers that group of working people, who have been so long overlooked by the Government, to have a better life at work. It will help trade unions to raise standards and pay across the labour market.
Laurence Turner
That was quite a generous amount of time for an intervention. The hon. Member may wish to go back to the record, because the point I made was that the experiment over pay and terms and conditions has failed. The challenge to the Opposition was: do they recognise that there is a serious problem with school support staff remuneration and contracts? If they do, what are their proposals to fix it? I would be willing to take a second intervention on that point.
Greg Smith
Much as the hon. Member for Chippenham said, this is about political choices. If this new Labour Government, six months in, wish to make a political choice to fund schools to pay support staff more, why do they not make that political choice and make that money available? We all want people to earn more, to get more in their pay packet and to be richer.
Laurence Turner
I think we have it there: the Opposition do not see this as a political priority. They chose not to take steps or to put forward meaningful proposals to raise the employment standards of school support staff. My challenge was: do they have any proposals for this group of workers, particularly in light of the Low Pay Commission decision? We have not heard an answer.
Greg Smith
I am glad the festive spirit is alive and well, but I remind the hon. Gentleman—there is no sugar coating it for Opposition Members—that the Labour party had a thumping victory in July. There is no general election on the horizon, and there is little chance of any change of Government before 2029, so it is on the Labour party to make political choices for the next four and a half years. Will the hon. Gentleman do that, or is he just going to deflect back to the Opposition?
Laurence Turner
I doubt I am going to do it personally; as with all these things, it is a collective endeavour. The hon. Member asked whether the Government are going to do this, but they are doing this—it is in the Bill. I ask again: what is the Opposition’s alternative? We are yet to hear it.
It is worth reflecting on the nature of these review bodies—not that this is a pay review body; it is a negotiation body—and the way in which we establish new agreements, because these things do not happen quickly. I think that the establishment of “Agenda for Change” in the NHS took seven years from initiation to completion. That exercise took a long time, but I do not think anyone would seriously argue for going back to the plethora of terms and conditions, and the mismatch between different grades of workers, that existed before, which created serious equal pay liabilities. That is the situation that we inherit in respect of school support staff.
These things do take time. If the shadow Minister goes back to the record of the original school support staff negotiating body—from 2009 to 2010—the progress made in that relatively short time was not on establishing the new pay system, but on drawing up model role profiles and moving towards a national handbook for terms and conditions. Those measures would be hugely welcome today. In fact, the Conservative Government acknowledged that some the school support staff negotiating body had done some important work during that time. They were on record as saying that there was a clear case for carrying forward some of it, but that never happened, and we have been left with an absence in that area of policy for almost 15 years. The changes to pay will be hugely welcome when they come. It will be a negotiation, so the outcomes will be a matter for the parties represented on the negotiating body, including the Department for Education.
We must go back to the problem: schools are finding it increasingly difficult to recruit and retain skilled school support staff. A number of private sector employers, including supermarkets, are increasingly offering term-time only contracts, with the intention of attracting people out of schools and into alternative roles. Freedom of information requests show that, where data is held, teaching assistant vacancy rates run at around 10%. That is having a real impact on the ability of schools to deliver inclusive education, which is a shame.
Draft Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) (Extension to Switzerland etc.) Regulations 2024
Greg Smith Excerpts(1 year, 1 month ago)
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Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Sir Roger. His Majesty’s loyal Opposition welcome this update. It is good to see the Government bringing into force an agreement made by the Department for Business and Trade when my right hon. Friend the Member for North West Essex (Mrs Badenoch), the Leader of the Opposition, was Secretary of State under the last Government. This legislation will reduce labour costs but will not impinge on Britain’s autonomy over immigration or regulatory policy. It is required to prevent a cliff edge after the previous agreement expires on 31 December.
Switzerland is the United Kingdom’s fourth-largest trading partner. The total trade in goods and services between the UK and Switzerland, in the four quarters to the end of quarter 2 in 2024, was worth £46 billion. According to the Department for Business and Trade,
“The agreement also safeguards the autonomy of UK and Swiss professional regulators to…set and maintain standards…assess against these standards…decide who is fit to practise the profession”.
The UK-Switzerland recognition of professional qualifications agreement, which this legislation implements, was welcomed by the Law Society for continuing the regime under the previous UK-Swiss citizens’ rights agreement.
I have just three questions for the Minister. Does he have plans to extend the mutual recognition scheme further with Switzerland, such as to include financial services, and with other countries, such as the United States? Will he confirm that the legislation will be enacted in Switzerland on the same date? Has he considered a data exchange for qualifications that regulators deem not comparable?
Mr Alexander
The questions one always fears are the short ones that come with no thinking time, but I shall endeavour to answer the hon. Gentleman.
Mr Alexander
Exactly—and I am getting used to the challenges of being in government, as distinct from in opposition.
First, in all seriousness, I thank the hon. Gentleman for what I anticipate will be his support for the measures. He is entirely right to recognise that the work was undertaken under the previous Government and he can rest assured that the lodestar for the incoming Government in the last six months has been continuity where it makes sense in the interests of the United Kingdom economy. In that spirit, I hope that we can find common ground this evening.
As I set out, the regulations implement the UK- Switzerland recognition of professional qualifications agreement and require regulators to operate routes to recognition for comparable Swiss professional qualifications in accordance with that agreement. On the issue of extending mutual recognition, we will take a phased approach to make sure that we avoid the cliff edge that the hon. Gentleman eloquently described.
The hon. Gentleman can rest assured, however, that one of the early negotiations that we have initiated is on a Swiss FTA, which again reflects work that was undertaken under the previous Government. We have looked carefully at the mandate and negotiators have begun that process. When one looks for equivalent countries around the world where there are clear synergies in the character of the economy and the economic opportunities, Switzerland is high on that list. In that sense, whether in relation to the mutual recognition of professional qualifications or other aspects of our regulatory arrangements more broadly, we continue to look carefully at opportunities for UK-Swiss co-operation.
On the date of introduction for the Swiss legislation, I do not have that to hand. As I said, Switzerland is passing legislation to require Swiss regulators to recognise UK qualifications to ensure that the benefits are mutual. I will write to the hon. Gentleman about what we understand the Swiss parliamentary timescale to be.
As I have emphasised, the regulations continue to uphold the principle of regulator autonomy as set out in the Professional Qualifications Act 2022. My officials have also engaged extensively with regulators and the devolved Governments on the implementation. I trust that hon. Members understand and recognise the need for the regulations, as the hon. Gentleman set out, and the benefits that they will bring to the UK services trade. I thank hon. Members and commend the regulations again to the Committee.
Question put and agreed to.
Employment Rights Bill (Twelfth sitting)
Greg Smith ExcerptsThursday 12th December 2024
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 December 2024 - (12 Dec 2024)
Greg Smith (Mid Buckinghamshire) (Con)
I beg to move amendment 127, in clause 22, page 33, line 12, leave out from “that” to end of line 21 and insert—
“the reason for the variation was to provide for improved employment practices and to update and reform outdated working practices, in order to allow for the more effective running of a business or organisation.”
This amendment would provide an exemption to unfair dismissal for failure to agree to a variation of contract.
It is a pleasure to see you back in the Chair for the afternoon sitting, Ms Vaz. The amendment, in my name and those of my hon. Friends, is a probing one—I want to be clear about that from the outset—that would provide an exception to unfair dismissal for failure to agree a variation of contract.
The premise underpinning the Bill’s provisions on fire and rehire is that the only reason for an employer to want to re-engage employees on varied terms is to exploit them by giving them worse terms and conditions. I am in no way, shape or form suggesting that that does not occasionally happen, but I come at this debate from the other direction, presuming that most employers are good employers who care about their workforce and want to see a happy staff getting on, being productive and doing the things they do to make the business a success, be that making things, giving advice or providing a service.
The Bill basically says that a business needs to be going bust for the process of varying a contract to be justified. Again, I am not certain that that is the right starting point. What if there were a legitimate reason for wanting to vary certain terms and conditions? We touched on this in our debate on SNP amendments 160 and 161 before the break, and I gave some examples thinking about the pace of change in a business. Let us say a manufacturing business moves from a very manual process for putting a product together—be it a car, a piece of furniture or some smaller product—to invest in robotics or something.
I can think of a farm in my constituency that was a traditional dairy farm but, thanks to a not insubstantial grant from the previous Government, has built a robotic dairy. That means that the people who work on that farm are doing a fundamentally different job. They no longer have to get up at 4 am to manually hook the cows up to the milking machines; believe it or not, the cows now form an orderly queue for the milking robots. I am not joking, Ms Vaz. I invite anyone to come and see it with their own eyes. There is a vending machine where people can buy the milk direct. The point at which staff intervention is needed is if an alarm indicates that a machine has clogged or broken, the pasteurisation room has hit the wrong temperature, or whatever. It is a fundamentally different job. Sometimes, that happens in a workplace where the employer wants to keep the staff—they do not want to let anyone go and they do not want the robots to replace them—but it involves different terms, different conditions and a different physical thing to do on a daily basis. I offer that as a practical example of how businesses change.
Alex McIntyre (Gloucester) (Lab)
I refer the Committee to my membership of the GMB and Community unions. I have two short questions for the shadow Minister. First, if the changes are so positive for employees, can they not simply accept a change to their terms and conditions? Secondly, let us take the scenario that he describes, where there is a change in processes, and put that in a business-to-business context. Say a business moves from wooden cogs and to metal cogs, and it has a contract with the wooden cog supplier. Is he aware of any circumstances in which that business would be able simply to break that contract without any notice or legal recompense to the other business?
Greg Smith
I understand the point that the hon. Gentleman makes. He is right that the businesses in the situation he describes would have to go through a legal process, probably involving very expensive contract lawyers, to alter such a contract. I do not think it is helpful to directly compare those supply chain contracts with employment contracts, because on one level we are dealing with human beings and on the other we are dealing with the flow of parts, services or whatever.
The hon. Gentleman is also right that a change in terms and conditions can sometimes be very positive for the employee. Perhaps it involves fewer hours for more money—that sometimes happens—or longer holidays. Of course, if something better is being offered, employees should have the flexibility to accept that, having exercised due diligence and looked it over properly—dotted the i’s, crossed the t’s and all that. What I am trying to get at is where the business model, and the day-to-day operation of the job, has fundamentally changed, through robotics or whatever.
Laurence Turner (Birmingham Northfield) (Lab)
I want to continue on the shadow Minister’s theme of milk. It used to be common in factories where there were particulates in the air to include a clause in someone’s contract that said they were entitled to a glass of milk during the day, because it was believed at the time that a glass of milk would remove those particulates from someone’s airway. It was completely misguided, but those contracts still exist, and I have been in situations where I have looked over similar, very outdated terms and conditions. If it is raining on a site, someone might be entitled to a 2p payment, for example. Such contract conditions are very easy to remove; it can be done by agreement.
Does the shadow Minister accept that if a contract is worded appropriately, such variations can be made by an employer—the key factor is whether there has been genuine consultation—and that the circumstances that clause 22 will remedy are really quite separate? It is for those extreme examples that Grant Shapps, the Conservative Business Secretary at the time, spoke out against.
Greg Smith
I am grateful to the hon. Gentleman, although he was possibly milking it with the length of that intervention—[Hon. Members: “Oh!”] It is nearly Christmas.
I accept the hon. Gentleman’s points about some of those very outdated provisions. I really hope that my children do not find a job out there that involves free milk, because they might jump at it a little too quickly. This probing amendment seeks simply to understand a little further where the flexibilities lie, and to get underneath some of the detail around when a variation of contract might be a good thing on both sides, or when things have just changed and there needs to be a variation in order for the jobs to be saved. I would hope that Members on both sides of the Committee would come at this from the perspective of the real world and wanting to save jobs, create more jobs, grow the economy and grow employment.
There may be legitimate reasons for wanting to vary terms and conditions, such as to provide for improved employment practices, or to update and reform outdated working practices—as the hon. Member for Birmingham Northfield referenced—in order to allow for the more effective running of a business or organisation. The amendment seeks to understand the Government’s position should such a situation arise, and to understand why they are legislating to prevent businesses from acting in such a way.
Michael Wheeler (Worsley and Eccles) (Lab)
On a point of clarity, is it the purpose of the amendment or an unintended consequence of the drafting that it would completely delete the subsection, rather than adding to it? If the purpose is to completely delete the subsection it is amending, are Opposition Members trying to remove the protections for those going concerns?
Greg Smith
The hon. Gentleman asks a perfectly legitimate question. I repeat that this is a probing amendment: we are not going to press it to a vote or try to put it in the Bill. The purpose behind it is to get the evidence base, the justification and some clarity of thought from the Government about why the clause is necessary and proportionate. Sometimes we have to suggest getting rid of something to get a good example or a good justification for going there, doing it and putting it in primary legislation.
The Opposition certainly do not want to see exploitative fire and rehire in any workplace. From talking to businesses, and from the evidence we have heard, we know that there needs to be solid grounding and an evidence base to show that the wording in the Bill is justifiable and does not justify shutting down many businesses that are growing, adapting and changing—hopefully, for the better, so they are more successful. They should be able to keep and grow their staff, rather than go down the redundancy route or other scenarios whereby jobs are lost.
Matthew Percival from the CBI said:
“In the fire and rehire proposals, there is a risk that we might be making it easier to make people redundant than to change contracts”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 7, Q1.]
That is the absolute nub of the matter. It would be nothing short of a total disaster if the unintended consequence of the exact wording of the clause or the Bill perversely incentivises companies to make people redundant, so people lose their jobs and have to go home and have that difficult conversation with their loved ones and say that they need to find a new job, with the devastation that that brings to real people’s lives. I cannot imagine that the Government want that to happen. With this probing amendment, we are seeking to kick the tyres. We want an explanation, or at least to encourage the Minister and the wider Business and Trade team to find a better way that does not have that unintended consequence.
A recurring theme of our debates in recent days, and from the Bill Committee witnesses—other than trade union representatives—is that the measures in the Bill on dismissal and re-engagement will be too restrictive for employers. I gently ask the Minister to reflect on that and think about whether the measures will actually work and will not have unintended consequences, so that people’s jobs are protected and saved. We do not want people to be unintentionally forced down the route of job losses.
Michael Wheeler
I agree with the comments of my hon. Friend the Member for Gloucester. I appreciate that this is a probing amendment, but I want to talk to its specifics. It appears to me that there are plenty of consensual mechanisms for achieving most of what the shadow Minister is suggesting about the variation of contracts to reflect working practices. If anything, they are inherently better than anything that is imposed. Quite often, when working practices, organisations and business practices are modernised, communication between those doing the work and the managers and owners leads to a much better outcome.
I suggest that we need to remember that we are talking about fire and rehire, which is inherently quite extreme. The amendment seems to refer to the particulars of normal working practices, looking at updating mechanisms to account for modern technology and suchlike, that are much better handled by the existing consensual mechanisms. While I appreciate that it is a probing amendment, it seems entirely unnecessary and does not necessarily speak to the heart of what the clause is about: ending the extreme practice of fire and rehire.
Justin Madders
Yes, they do get worse—it is Thursday afternoon.
The shadow Minister did raise some important points, though. He gave the example of a dairy and its changing practices. Of course, a change in job function does not necessarily mean that terms and conditions have to change or indeed become worse. History is full of examples where technology has come in and made jobs different. As we look forward to the advent of automation and AI in our economy, I hope that people find new jobs and new roles and that those jobs are more fulfilling as a result of technological development.
I will say a few words about the comments from the hon. Member for Bridgwater. We are talking about overall impacts in this Bill of 0.4% of employers’ total costs—a very small price to pay for a comprehensive set of reforms that really are needed for workers. It is about rooting out bad practices and making sure that those bad employers, who we all rightly condemn, are not able to exploit existing loopholes. It is about stopping the race to the bottom. It is about creating a level playing field. One reason why P&O said that it took the action that it did was that its competitors were undercutting it. We do not want to see that race to the bottom continue. We want to see good employers rewarded for respecting and rewarding their employees well by being able to compete on a level playing field.
The general thrust of the shadow Minister’s remarks was interesting. There is nothing to stop an employee agreeing to changes to terms and conditions. Indeed, proposed new section 104I(2)(b) of the Employment Rights Act 1996 makes it clear that these provisions will not apply if the employee agrees to the changes. Changes and discussions happen every day of the week in industry—that is called negotiation, and that is what good industrial relations looks like. That is the sort of thing that we want to encourage.
We are trying to stop a situation that we have seen far too often, where an employer might just say, “Well, here are your new terms and conditions. If you don’t like it, there’s the door.” That, I am afraid, has become far too prevalent in our country. We have heard plenty of evidence about how many employers have been doing that. It is about recognising that there is a loophole in the law. This may be a probing amendment, but it would certainly make this clause ineffective, and arguably, it would make the situation worse than the status quo, because it would effectively legitimise some of those actions by employers. They could point to this legislation and say, “Well, the law says that we are able to do it.”
The way the amendment worded is quite broad. There is a reference to “outdated” terms and conditions. My hon. Friend the Member for Birmingham Northfield gave a good example of where reasonable dialogue between the trade union and the employer would see that change. The shadow Minister’s old colleague, Jacob Rees-Mogg, might have a different view about what “outdated” means. He might think anything after 1874 could be considered modern—[Interruption.] He probably does, yes. There would be very broad latitude for an employer to say that something was outdated. That is why I am concerned that the amendment would make things worse than they are now.
The Bill as drafted makes it very clear what the obligations of a responsible employer are. They are the sort of things that responsible employers do already. We recognise that there will be unfortunate situations in which an employer has no alternative but to change terms and conditions, but the Bill makes sure that, if there is a positive for the employees—there often is from a change in terms of conditions; that is what negotiations often involve—there is a way for that to continue. We are not going to stop that. If employees consent to changes, they will be able to be made under this Bill. I urge the shadow Minister not to press the amendment to a vote.
Greg Smith
I understand the argument that the Minister has set out, and I appreciate that this particular probing amendment was at the extremer end of the spectrum in trying to probe that response from him. I accept that there are many mechanisms whereby employees can consensually work with their employer to change contracts, and that is clear. I am still a little nervous—the proof of the pudding will be in the eating, as the Bill progresses and no doubt becomes legislation—about the nightmare scenario of businesses simply saying, “Rather than trying to engage in this process, as we were warned by the CBI, we will just make everyone redundant instead.”
There needs to be a clear, previously set out mechanism from the Government so that, if that disaster-zone eventuality comes to pass—I hope I am wrong; I do not want to see people being made redundant—there is a quick snapback or sort of provision to allow secondary legislation to throttle those measures down, or to fix them in some other way that still stops the exploitative practices without tying businesses’ hands behind their backs, because the net result will be job losses. I would be incredibly disappointed and sad if these issues, which both the Opposition and businesses have warned about throughout the passage of the Bill so far, became a job killer. The Government need to be ready, if they have got it wrong, to have a process that will give businesses the confidence again to properly engage in negotiations, such as those good industrial relations that the Minister spoke of, and not just make people redundant. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Justin Madders
We are back on fire and rehire again; I should probably count up how many times I have spoken in debates on this issue in the last few years. It has taken a lot of parliamentary time, and rightly so. We all remember the obloquy directed towards P&O when it took those actions, several years ago, and I am afraid that fire and rehire has become far more prevalent in our economy than anyone would want to see.
Investigations by the Trades Union Congress found that around 38,000 employers were using fire and rehire as a tactic. Research from the Chartered Institute for Personnel and Development found that, between August 2021 and 2023, the proportion of firms that had used fire and rehire had almost doubled. The impact assessment estimates that there are around 178,000 workers facing the threat of fire and rehire at this very moment, so the problem is not going away—indeed, because of the way that P&O has been allowed to get away with it, employers see it as a golden opportunity to take a sword to hard-fought terms and conditions.
Other Members have spoken about the household names that have attempted to do that, and USDAW’s written evidence included some notable household names. Once upon a time, fire and rehire was a seldom-used part of the employment law and industrial relations landscape but, as part of the wider pattern of insecurity at work, it has become a much more common tool. I am afraid, as we have seen, it is far too often an act of first—rather than last—resort, and the Government are committed to ending that practice.
The solution to dealing with many of the concerns raised by the shadow Minister and others is to point to what good and bad industrial relations look like, and to say, “This is what bad employer practice looks like.” Good employers and industrial relations will take workers with them. Again I refer to USDAW’s written evidence, which noted occasions where negotiations had begun with fire and rehire on the table almost from the start. That is not a healthy place to have sometimes very difficult discussions about changes to terms and conditions. The impact assessment notes that the power asymmetry can provide incentives for the more powerful party, in this case the employer, to act in a strategic manner to suppress wages and conditions. Such tactics are why we have seen such a slump in wage growth over recent years.
Greg Smith
Most of my concerns have been outlined in the amendments to the clause, but I want to ensure that it is placed on the record that the Opposition want to see employers engage in good faith and believe that most employers do. I accept the Minister’s point about the scandal of P&O Ferries—I was on the Transport Committee at the time, so possibly looked into it in more detail than most colleagues from the previous Parliament.
Where we perhaps still have a difference is that taking that unacceptable, scandalous situation at P&O and legislating for everybody on the back of it is not necessarily the best starting place. As I said in the previous debate, working on the presumption that all businesses are trying to exploit their workforces is not healthy or, I would suggest, reflective of the real world. Although there have to be measures to shut down things like what happened at P&O so that it does not happen again, there must equally be flexibility and understanding so that, when employers have engaged in good faith and really are trying to save the business—to save the jobs in the first place—we do not find ourselves in that nightmare scenario of people saying, “It’s too difficult—we’ll just have to make everyone redundant.”
I fully accept that this clause will pass in a few moments, but perhaps the Minister could consider, before we come to Report, some additional safeguards on that so that we do not end up with job losses and employers slamming their heads down on the desk, unable to find another way to save the jobs and the workforce. That would keep giving people the living they need to get on and prosper as part of our country, part of the business they are engaged in and part of our vibrant UK economy.
Laurence Turner
I will not speak for long, because most of the points have been made in the debate, but I want to come back to the point made by the shadow Minister and the hon. Member for Bridgwater. There is perhaps a legitimate difference in principle between the two sides: when there are extreme examples, should there or should there not be legislation in response? It is important to respond to that, because we have seen extreme examples of abuse across different parts of the labour market. To go back to the example of blacklisting, I suggest that that was a failure of successive Parliaments to tackle a practice that had been thought to be relatively rare, but proved to have been carried out on an industrial scale. It was right for Parliament to enact the blacklisting regulations.
I go back, too, to the Grunwick dispute, the ancestor of the statutory recognition regime. At the time, it was thought that the abusive patterns of employment behaviour on full display in that particular employer would be unlikely to recur. The Government of the day commissioned a public inquiry under Lord Scarman in the belief that, if the inquiry concluded that there should be trade union recognition, it was inconceivable that any employer would not abide by that—but that is exactly what happened.
Where we see those extreme abuses, other employers—by no means the majority, or even a substantial minority, but enough to have a seriously deleterious effect on the lives of many workers—will follow. Since P&O, we have seen other examples; hon. Members have referred to particular employers and sectors, and I could add parts of the retail, utilities and even the public sector, where such tactics have become more common. The previous Government made strong statements—I could quote some—about the practice, but I suggest that the action that was subsequently taken, the code of practice, was not sufficiently strong. In the case of P&O, where the employer made it clear at the time that it intended to ignore the existing legislation, it did not prove sufficient remedy.
We do need stronger action. The measures in the Bill will only ever affect a tiny minority of employers. It is important to stress that, but it is necessary to put this action into the Bill. P&O will always loom large in discussions of this topic, but the practice is by no means confined to that particular employer, and it is right to take the action that was not taken in the previous Parliament.
Justin Madders
I beg to move amendment 58, in clause 23, page 34, line 27, at end insert—
“(3A) In section 197 (power to vary provisions), in subsection (1)—
(a) in paragraph (a), for “188(2)” substitute “188(1A)”;
(b) in the words after paragraph (b), for “188(2)” substitute “188(1A)”.”
This amendment would correct incorrect cross-references in section 197 of the Trade Union and Labour Relations (Consolidation) Act 1992.
This is a purely technical amendment to fix an incorrect cross-reference in section 197(1)(a) of the Trade Union and Labour Relations (Consolidation) Act 1992. Section 197(1)(a) provides that the Secretary of State may make secondary legislation to amend the minimum time period for collective consultations in section 188(2) of the same Act. However, as I am sure the shadow Minister had already noticed, that reference is incorrect: “section 188(2)” should read “section 188(1A)”. A consequential amendment was missed when section 188 was amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995. That instrument renumbered section 188(2) as section 188(1A). Of course, it should have also made a consequential amendment to section 197(1)(a), but did not.
The amendment will not change the law, which can already be interpreted to refer to the correct cross-reference by way of the Interpretation Act 1978. The 1978 Act provides that where an instrument repeals and re-enacts a provision then, unless the contrary intention appears, any reference in any other enactment to the repealed provision is to be read as a reference to the re-enacted provision. The amendment will improve the clarity and accessibility of the law, which I am sure we will all be relieved to hear.
Greg Smith
I can be very brief on this amendment, Ms Vaz; in fact, I will channel the questioning style of my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). This is what happens when a Bill gets rushed to meet an arbitrary political deadline, is it not?
Justin Madders
The shadow Minister will be pleased to hear that we have picked the error up at this stage, so that when the Bill is enacted it will of course be absolutely correct.
Amendment 58 agreed to.
Question proposed, That the clause, as amended, stand part of the Bill.
Greg Smith
I have a couple of brief questions. I am grateful for the Minister’s clarification that the clause does not provide for a consultation of the whole workforce. That was a legitimate concern for many as they looked at the drafting of the Bill. The clarification will be welcome.
My bigger question is about the practicalities where an organisation has in excess of 20 employees. For example, a small chain of five or six pubs could easily have that volume of employees across bar and kitchen staff—chefs—cleaners and perhaps security, but in that sort of setting it is very rare for staff to be unionised, or even organised among themselves. In that scenario, where a smaller business employs that number of people across multiple sites, how does the Minister expect the requirement for the involvement of a trade union or employee organisation that does not exist to be engaged with? What is the mechanism for that? I appreciate that many Government Members would quite like everybody to be in a trade union—
Greg Smith
Indeed, we know from their declarations of interest that they all are. I hope the Minister takes the question with the good intent with which it is asked. Not everybody is in a trade union and not everybody organises in that way, so how would the mechanics of the measure work in those circumstances?
That leads to the wider question, “Why 20?” Why not 19, 18 or 15? Why not 25? It seems like an arbitrary number. I accept that a number needs to be put down. In some ways, in specifying a number, this clause is more detailed than most in the Bill, and it gives certainty, but I would like to understand why it is 20. It seems like a number picked from thin air. It could negatively impact an organisation if it led the employer to decide, “Well, we’ll just get rid of 19 of them, and we won’t have to comply.” That seems at odds with the other provisions in the Bill, where the Government seem to want to move all rights back to day one, yet they do not seem to want to apply that to organisations where, for whatever reason, 20 people are, sadly, being consulted on being made redundant. I would like clarity on that point.
Michael Wheeler
I will keep my contribution relatively short, but I did not want to let the clause pass without warmly welcoming its inclusion in the Bill. In a previous life, I worked to represent shop and retail workers. While P&O and the scandal of fire and rehire entered the collective consciousness, the Woolworths redundancy situation was burned into the consciousness of the workers I represented at that time. That is exactly the loophole that this measure is trying to close. Thousands of workers affected by the Woolworths redundancy missed out on the compensation they deserved as part of the lack of consultation because they worked in individual establishments that were small and fell below the threshold. The interpretation of the law at that point meant they were isolated, divided and not included as part of what was clearly, to everyone—
Greg Smith
Perhaps I can test the hon. Gentleman a little bit on that. I remember many happy hours as a child in Woolworths in the town where I grew up. They were fantastic stores, and they are greatly missed. Given where he is coming from, is he content with the number being set at 20? While Woolworths was a substantial business, I can think of smaller businesses with separate sites, retail outlets, pubs, restaurants or whatever that might employ 19 or 15 people.
Michael Wheeler
The hon. Gentleman invites to me to say whether I am content. I draw his attention to the fact that the clause removes the single establishment loophole while leaving in place the thresholds that are already part of the law around consultation and the time period. I have not examined and, despite the invitation, I will not speculate on where those thresholds should be, but I warmly welcome the removal of the single establishment loophole, so that where the numbers in a redundancy cross those thresholds—legitimately and apparently to everyone looking at it—there are not legalistic mechanisms for those workers to be left out.
Having warmly welcomed the removal of the loophole, let me reassure the shadow Minister. In a previous, previous life I was in a different job—we have all had many jobs—where trade unions were not recognised. I speak for myself alone when I say that I would love for every worker in this country to have the benefit of trade union representation. I confirm for the shadow Minister that I would love to see that, because I think it has genuine benefits.
Michael Wheeler
I am sure it is not. I worked in a retail establishment that did not benefit from trade union representation and that went through consultation, not on redundancy but on a variation of contracts, so it is relevant to what we were talking about before. It was actually a relatively smooth and easy process for employee representatives to be appointed and elected from among our number, despite the lack of an existing structure, and to engage with the company in those consultation exercises. While I would love there to be a trade union fighting the corner for every worker, when it is absent it is not a burdensome process to have employee engagement in these processes.
Justin Madders
I recognise that the shadow Minister welcomed the clarification I provided. No doubt there will be debate to come, as is often the case with legal issues, but the Government are fairly clear and confident that the clause will not have the unintended consequences we heard raised in evidence.
The shadow Minister asked, “Why 20?” He will pleased to know that that was a product of EU regulation. It is in existing law as part of the Trade Union and Labour Relations (Consolidation) Act 1992, which has been amended many times, so I could not say exactly when it came into force, but—
Greg Smith
The Minister can of course look back in history at when these measures were put in, but the Bill seeks to change all sorts of things across all sorts of sectors. We are free from the European Union! He could change it if he wished.
Justin Madders
I will remember that next time the shadow Minister tells me that we are trying to do too much in this Bill. With the Retained EU Law (Revocation and Reform) Act 2023, the Bill Committee for which I had the great pleasure of serving on, his Government could have done something about this before they left office.
The figure of 20 is long established, and we have no current plans to change it, but we are keen to ensure that the scenario my hon. Friend the Member for Worsley and Eccles described cannot continue. As he said, Woolworths made 27,000 people redundant, and about 3,000 of those were completely exempt from collective redundancy consultations because of this issue. There has been a number of high-profile retail redundancies where people have missed out on collective redundancy obligations because of this law, which we are pleased to be able to change.
On the question of smaller employers where there may not be trade union representation readily available, the regulations already provide for employee representatives to be engaged and elected in those circumstances, so there is no change to the law in that respect. There is already provision to deal with that situation.
Question put and agreed to.
Clause 23, as amended, accordingly ordered to stand part of the Bill.
Clause 24
Collective redundancy notifications: ships’ crew
Question proposed, That the clause stand part of the Bill.
Justin Madders
The clause will address the loophole that allowed P&O Ferries to avoid prosecution when it dismissed 786 seafarers without notice in March 2022. It will require operators of frequent services to British ports to notify the UK Government when making 20 or more redundancies even if those affected work aboard ships registered in another state. The clause means that if an operator of frequent services to a British port chooses to copy P&O Ferries and make collective redundancies without providing notice to the Government, it could face prosecution under the Trade Union and Labour Relations (Consolidation) Act 1992 and ultimately be liable for an unlimited fine.
The clause will apply to services calling between Great Britain and another place in the UK. It will also apply to any services entering Great Britain from a place outside the UK on at least 120 occasions in a 12-month period before the redundancy notification, or to new services that have been operating for less than 12 months and have called 10 times or more per month while they have been operating. We estimate the number of operators in scope of the measure to be around 2,000. The cost to businesses will be minimal; it is estimated to be around £20 per notification. We hope that the prospect of an unlimited fine will deter operators from making mass redundancies without the appropriate notification.
While this measure may not prevent redundancies from being made, it will mean that the Government and any employee representatives must be notified before any dismissals take effect. It will prevent the sort of disruption seen following the P&O Ferries dismissals and will mean that the Government will be able to provide valuable support to seafarers facing redundancy. I therefore commend the clause to the Committee.
Greg Smith
I understand where the Minister is coming from, particularly on the expansion of the requirement to notify the flag state. I spoke earlier about my time on the Transport Committee watching the P&O scandal unfold; we held some pretty tough evidence sessions as part of that. I understand that the clause is very specifically to protect seafarers from that sort of engagement. I very much hope that it works to protect those seafarers, and we will not oppose it.
Justin Madders
Amendment 59 will expand and restructure the provisions in clause 25, which amends the Procurement Act 2023, to reinstate and strengthen the two-tier code for relevant outsourced contracts for public services so that the powers and duties in clause 25 extend to Scottish and Welsh Ministers. Amendments 60 to 64 make changes that are consequential on those made by amendment 59, including by updating various definitions in the Procurement Act 2023 and by providing that regulations made by Scottish and Welsh Ministers must be made using the affirmative procedure of the Scottish Parliament and the Senedd.
We are making the amendments at the request of the Scottish and Welsh Governments. They are necessary because to get the benefits of a consistent approach to fair and equitable employment terms and conditions on relevant outsourced contracts, it is essential that a reinstated two-tier code applies throughout the UK.
We continue to engage with our counterparts in Northern Ireland about whether the powers should also extend to Ministers there. The regulations and code of practice created in our provisions will apply to reserved Northern Irish authorities. I commend the amendments to the Committee.
Greg Smith
I am reminded of the old chestnut about rushing out a Bill in 100 days and forgetting about the devolved settlements as part of the process. Given that devolution was largely the product of the previous Labour Government, I am slightly surprised that the current one would forget about Holyrood and Cardiff Bay. However, it is good that we now have clarity. We will of course want to test how things are actually going to work. Indeed, the question of Northern Ireland—which is just as important a part of our country as England, Scotland and Wales—really should be resolved sooner rather than later, so that there can be clarity that the Government are seeking to legislate for the whole of our United Kingdom of Great Britain and Northern Ireland, and not doing it in a piecemeal fashion.
Justin Madders
I gently correct the shadow Minister: we did not forget to engage with the Scottish and Welsh Governments. We were making sure that we had agreement before we tabled amendments, which is why they have appeared as they have today.
Employment Rights Bill (Eleventh sitting)
Greg Smith ExcerptsThursday 12th December 2024
(1 year, 1 month ago)
Public Bill CommitteesRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 12 December 2024 - (12 Dec 2024)
The Chair
Welcome back. Will everyone please ensure that all electronic devices are turned off or switched to silent mode? We will continue line-by-line consideration of the Bill. The grouping and selection list for today’s sittings is available in the room and on the parliamentary website. I remind Members about the rules on declarations of interests as set out in the code of conduct.
Schedule 2
Right not to be unfairly dismissed: removal of qualifying period, etc
Greg Smith (Mid Buckinghamshire) (Con)
I beg to move amendment 156, in schedule 2, page 112, line 19, after (b) insert “, (c)”.
This amendment makes the reason that the employee was redundant a reason in relation to the dismissal of an employee during the initial period of employment.
The Chair
With this it will be convenient to discuss amendment 157, in schedule 2, page 112, leave out lines 32 to 34.
This amendment removes the provision that may be made by regulations that the dismissal of an employee is to be treated as fair only if the employer has taken any steps specified in the regulations.
Greg Smith
It is a pleasure to serve under your chairmanship, Ms Vaz. This pair of amendments on unfair dismissal stand in my name and those of my hon. Friends from the official Opposition.
Amendment 156 would make the fact that the employee was made redundant a reason in relation to the dismissal of an employee during the initial period of employment. The Bill stipulates that the modified protections against unfair dismissal in relation to the initial period of employment mean that an employee can be dismissed for the reasons listed in section 98(2) of the Employment Rights Act 1996, which include
“the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do…the conduct of the employee”
or
“that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.”
The 1996 Act also includes a fourth reason,
“that the employee was redundant”,
which is not replicated in the Bill. This is a probing amendment—we do not intend to press it to a Division—to try to tease out from the Government a little more detail and to establish why that fourth reason is omitted from the Bill.
Amendment 157 is also a probing amendment. We want to understand what steps will be specified in regulations that an employer must follow in order for the dismissal of an employee to be treated as fair. That will come back to the test of subjective reasoning rather than specific guidelines or regulations in the Bill. It is only right that the Committee and businesses out there in the real world can fully understand the scope with which the Government are defining “fair” or “unfair”. Inherent to that is the question, why is it not in the Bill? Why is it not as clear as day in the words printed in this quite substantial tome? I know that the Government want to table more amendments, so perhaps those could be a little more specific. Critical to amendment 157 is the question how burdensome the Government intend this measure to be and how proportionate that burden will be on businesses in relation to the problem that the Minister thinks the Bill in its current form—its current vagueness—will solve.
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
It is a pleasure to see you in the Chair, Ms Vaz. I refer to my entry in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions.
The shadow Minister has posed some questions that underlie amendment 156, which seeks to include redundancy as one of the reasons for dismissal to which the lighter-touch standards will apply during the statutory probationary period. As he has rightly identified, the Bill sets out that the reasons for dismissal to which the lighter-touch standards may apply are the statutory grounds of capability, conduct, illegality and some other substantial reason.
It is important to note that those four areas relate to the individual employee, which is why redundancy is not included. Redundancy can affect entire workforces, whereas the other areas are included because of the overlap between the potentially fair reasons for dismissal in the legislation, particularly suitability for work, and the sorts of issues that might come up in a probationary period. A redundancy situation would not ordinarily come up within a probationary period, because it would be about the wider business condition rather than the individual employee’s performance or suitability for the job. I hope that explains why redundancy has not been included.
I turn to the shadow Minister’s more general points. We are trying to strike a fair balance between strengthening employee protections against unfair dismissal and maintaining businesses’ ability to hire, assess and dismiss new employees. The Government are committed to ensuring that businesses retain the confidence to do so. We do not wish the new procedures to undermine existing fair dismissal processes for redundancy, which already provide a robust, straightforward and fair process for employees facing redundancy.
We will work closely with ACAS, in consultation with businesses and trade unions, to ensure that there is clear, straightforward and easy-to-follow guidance on how to carry out a redundancy process under the new measures. It will be an easily accessible process. One of our concerns about including redundancy is that if an employer decided to make a significant number of their workforce redundant, it would be an additional administrative job for them to identify which employees they did not need to include within a redundancy process because they were part of a statutory probationary period, and which would be subject to the wider process. That would lead to unintended consequences and possibly risk of discrimination claims.
Justin Madders
The hon. Member may be conflating two slightly different issues. I say to him very clearly that existing laws on redundancy will not be changed as a result of the Bill. We expect employers to follow the same processes, regardless of the length of service of the employee. In that situation, I do not imagine that there would be a particularly lengthy process if it involved only one individual and a small employer. There would not need to be a pool for selection, for example, or selection criteria. We would expect the employer to comply with the law in those circumstances.
Amendment 157 questions whether regulations should be able to set steps that an employer must follow for a dismissal to be considered fair when prescribing lighter-touch standards to apply during the statutory probationary period. We have set out clearly our intention to have a light-touch process, and we know that around 9 million employees will benefit from that. The intention behind setting out those steps in regulations is to ensure that we take account of further consultation, which we will undertake not just with employers but with trade unions and civil society, to ensure that we have the right balance of process and fairness in a statutory probationary period. We will be developing that in due course. As is often the case with the ACAS code of practice on disciplinary and grievance procedures, there are already lots of examples of really practical guidance out there, which we intend to replicate. I invite the shadow Minister to withdraw the amendment.
Greg Smith
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Greg Smith
I beg to move amendment 155, in schedule 2, page 112, line 23, after “period” insert
“of no less than six months”.
This amendment makes the initial period of employment at least six months in length.
The Chair
With this it will be convenient to discuss amendment 5, in schedule 2, page 112, line 23, leave out from “period” to the end of line 24 and insert
“of not less than 3 months and not more than 9 months from the day on which the employee starts work.”.
This amendment will ensure that the initial period of employment is between 3 and 9 months.
Greg Smith
Amendment 155 would make the initial period of employment six months, to align with a standard probationary period. The Government have admitted that they do not have robust data on instances of dismissal for those under two years of employment; in other words, we do not know if there is even a problem with unfair dismissal that the Bill is seeking to solve. Without knowing the problem, how can the Government identify a solution or even know that one is necessary? This is a flimsy basis for enacting a measure that the Government estimate will cost businesses in excess of £40 million a year overall.
Laurence Turner (Birmingham Northfield) (Lab)
It is a pleasure to serve under your chairship, Ms Vaz. I draw attention to my declarations in the Register of Members’ Financial Interests and to my membership of the GMB and Unite trade unions.
Before we move past the hon. Gentleman’s point about information, which we have talked about a lot, is the core problem not that there is a wider issue with UK labour market statistics? We heard during the evidence sessions from the Resolution Foundation, which said:
“The Office for National Statistics’ labour force survey is in the doldrums”.––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 119, Q125.]
This is not a party political point. The ONS’s collection methods, which broadly worked until the pandemic, have not worked subsequently. The statistics body is going through a period of transforming the labour force survey, but the criticisms that the hon. Gentleman makes of the information available to this Government would have held true for the Government between 2020 and 2024. This is a much wider issue. We could look at that problem and say, “We didn’t even really know what the UK unemployment rate was for some time,” and if that was an absolute barrier, all employment legislation would be on hold. It is important that those practical challenges are acknowledged.
Greg Smith
I do not disagree with what the hon. Gentleman says, but where we do disagree is on the conclusions that we draw from that. I would strongly argue that to introduce primary legislation without an adequate evidence base is foolish, whereas he seems to be arguing that it is fine to do that.
I fundamentally agree with the hon. Gentleman that there is often a problem with data collection, particularly on complex things such as overall employment numbers, the number of people in multiple jobs or whatever. He certainly hit the nail on the head about the post-pandemic understanding of the labour market. The pandemic brought about almost a fundamental reset in a lot of working patterns; nobody seems to work quite in the same way as they did before the pandemic. I acknowledge his point, but I suggest that this was actually the time to take a bit of a pause and a step back to think through new measures more carefully, rather than to rush ahead with a Bill in order to publish it within 100 days of the Government’s taking office.
I return to my questions to the Minister. What estimate has he made of the additional cost to business, including salary costs during performance management or disputes, retention costs from tribunal risk aversion, and increased settlements offered to avoid legal claims? Are those costs worth it for a problem that, as we have just discussed, nobody can actually prove exists in the UK market right now?
Greg Smith
Where does the Minister think the cost to businesses will be borne? Will it mean lower wages for employees, no Christmas bonuses or perhaps pay rises that are not as great as employees might be expecting? Or will it ultimately get passed on to customers, consumers and purchasers of the services that those businesses provide? Where will the cost actually be borne?
Greg Smith
As I hope I made clear in my opening remarks, amendment 155 is a probing amendment. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Justin Madders
I beg to move amendment 55, in schedule 2, page 112, line 36, at end insert—
“3A In section 15 of the Enterprise and Regulatory Reform Act 2013 (power by order to increase or decrease limit of compensatory award), after subsection (5) insert—
‘(5A) The power conferred by subsection (1) includes power to provide that, in the case of the dismissal of an employee that meets the conditions in section 98ZZA(2) and (3) of the Employment Rights Act 1996 (dismissal during initial period of employment), the limit imposed for the time being by subsection (1) of section 124 of that Act is a different amount from that otherwise imposed by that subsection.
(5B) Subsections (3), (4)(a) and (5) do not apply for the purposes of specifying the amount of the limit in such a case.’”
This amendment would enable the Secretary of State to specify the maximum amount of the compensatory award available where an employment tribunal finds that an employee has been unfairly dismissed during the initial period of employment provided for by new section 98ZZA of the Employment Rights Act 1996.
Justin Madders
Amendment 55 will expand an existing delegated power to enable the Secretary of State to specify a different maximum compensatory award where an employment tribunal finds that an employee has been unfairly dismissed under the new light-touch standards during the statutory probation period. Amendments 56 and 57 will make consequential changes to the provisions for uprating maximum awards for inflation.
In the event of any successful unfair dismissal claim, an employment tribunal will consider compensation as a remedy. Compensation will usually consist of a basic award and a compensatory award. The tribunal will determine the compensatory award by considering what it thinks is just and equitable, having regard to the financial loss suffered by the claimant that has been caused by the employer’s actions. This will include reference to salary and benefits, including pension, until the claimant finds alternative employment. The maximum compensatory award is currently the lower of 52 weeks’ pay or £115,115.
The Government have listened to concerns that changes to unfair dismissal law could lead to an increase in unfair dismissal claims, even where there is no merit, and to an increased burden on businesses and tribunals in having to deal with those claims. We have heard that uncertainty of outcome makes it hard for businesses to judge how much to invest in either defending or settling a claim. The introduction of a lighter-touch standard for fair dismissal during the statutory probationary period aims to reduce burdens on businesses and to create certainty, but it will not apply to all dismissals during the statutory probation period.
Having listened to those concerns, the Government committed in our “Next Steps to Make Work Pay” document to consulting on what a compensation regime for successful unfair dismissal claims during the statutory probation period should be. Although we want employers to pause and make considered decisions about dismissing employees during probation, the Government do not think that employers should face the full potential liabilities of unfair dismissal remedies when dismissing an employee for reasons related to performance or suitability for the role during the statutory probation period.
To have the option of implementing reform once we have consulted, it is necessary to introduce this delegated power. The power is limited to making changes to the compensatory award for unfair dismissal claims during the statutory probation period only, and only where the new lighter-touch standards apply. The Government recognise the importance of employers being able to assess new hires. We are committed to introducing a statutory probationary period in which there will be lighter-touch standards for an employer to meet in order to dismiss an employee fairly if they are not suitable for the job.
The power will not enable the Secretary of State to make changes to the level of compensation for other day one unfair dismissal rights, such as automatically unfair reasons including maternity-related dismissals, or for “ordinary” unfair dismissals such as redundancy. The power will not enable the Secretary of State to make changes to reinstatement or re-engagement as a remedy available to tribunals for unfair dismissal during statutory probationary periods, nor will it allow changes to be made to the additional compensatory award where an employer does not comply with an order of reinstatement or re-engagement by the tribunal. There may be some concerns that the power could be used to undermine enforcement of the day one right to unfair dismissal, but I assure the Committee that this is not the intention.
The Government are making basic protections against unfair dismissal a day one right for employees. They will be able to enforce their rights and take a claim to the tribunal if they have been unfairly dismissed. It is important, however, that employers are able to assess new hires and see whether they are suitable for the job without facing the full potential liabilities of unfair dismissal remedies during this period.
Greg Smith
I have a straightforward question. We are back once more with our old friend of not having full clarity and having consultation after legislation. The Minister gave a figure, but it is not clear exactly what the Secretary of State might consider specifying as the maximum compensation that can be awarded under this measure.
I acknowledge that there is a consultation to come, but the reason that we need greater clarity relates to the point about business confidence in making new hires, putting new job adverts out, seeing who applies and trying to recruit. If there is a risk that the figure will be disproportionately high, it will make businesses more risk-averse about growing their businesses and thereby growing the economy and creating more jobs in our country. My only substantive question is “Where is the ceiling going to be?”
Sarah Gibson
I share some of the shadow Minister’s concerns. Consultation to find out what most concerns businesses is obviously commendable, but if a large amount of the Bill is left to secondary legislation, a lot of it will not come back before the whole House for scrutiny. Can we be assured that decisions that are not taken before the Bill is passed can at least be considered by a Committee when they are finally made?
Justin Madders
I take on board the comments that the Opposition spokespersons have made, but if we put something in the Bill now, we would be pre-empting the consultation. It is very important to get this right, acknowledging the balance that needs to be struck and the points that have been made. It is worth bearing in mind that this measure will not be implemented until autumn 2026 at the earliest, which is still a considerable time off. The reason we want to take the time between now and then to engage and consult with businesses is to ensure that we get that figure to a spot that gives justice to individuals and certainty to businesses about the potential liability they may face.
Greg Smith
I am grateful to the Minister for that clarification. I understand the point about autumn 2026, but would he acknowledge that the vast majority of businesses are probably already working on their 2026 business plans? They are not just planning for tomorrow, next week and January; they are making medium and long-term plans. Those decisions about creating a new role, filling a vacancy or whatever it might be will already be baked into business planning for 2026, 2027 and maybe through to 2030, so it is not good enough to say, “It’s not coming in until 2026, so don’t worry.” Businesses are already in that planning space.
Justin Madders
I take the shadow Minister’s point, but that presupposes that businesses bake into their business plans compensation for unfairly dismissing their staff, and I do not think any business would want to proceed on that basis. This is about a potential liability that might come in at a future point.
Of course, we all want employers to retain their staff and have a productive working relationship, but if they do not, we want them to comply with the law and dismiss employees fairly. There will be a small number of cases where that does not happen, but I would not expect a business to be able to anticipate what might happen in two or three years’ time with an individual employee and whether a process was followed or not. That is probably not on a business’s desk at this point.
Amendment 55 agreed to.
Amendments made: 56, in schedule 2, page 114, line 20, at beginning insert—
“(1) The Employment Relations Act 1999 is amended as follows.”
See the explanatory statement for amendment 57.
Amendment 57, in schedule 2, page 114, line 23, at end insert—
“(3) In section 34 (indexation of amounts, etc)—
(a) in subsection (1)(c), for “124(1)” substitute “124”;
(b) omit subsection (4);
(c) in subsection (4A), for “124(1)” substitute “124”;
(d) in subsection (4B)—
(i) for “124(1)” substitute “124”;
(ii) after “1996” insert “in relation to cases of any description”;
(iii) for the words from “such a sum” to “that date” substitute “, with effect from a day within 12 months before that date, a sum specified in that section in relation to cases of that description”.”—(Justin Madders.)
This amendment and amendment 56 are consequential on amendment 55.
Question proposed, That the schedule, as amended, be the Second schedule to the Bill.
Greg Smith
The Minister tempts me, but I will set out our rationale for new clause 28 and amendment 134. I acknowledge that he has published a series of impact assessments, but the Regulatory Policy Committee has not exactly given the Bill a glowing bill of health, and there are a significant number of red ratings in its assessment. I gently push back and suggest to the Minister that the impact assessments need to be looked at again across the piece, so that we can be absolutely certain that the Bill will do what the Government want it to do.
As the Minister rightly said, new clause 28 would require the Government to report on the impact of the Bill’s provisions on unfair dismissal on employers and the economy. That goes beyond the impact assessments that the Government have already conducted, in the sense that the assessment we are calling for must
“include labour market and broader macroeconomic analysis… examine the impact of the measures in section 19 and Schedule 2 …on employment, wages and economic output…consider the likelihood the dismissal measures leading to lower employment, and greater use of temporary contracts, and…examine the likely effect of section 19 and Schedule 2…on productivity…wage growth…equality of opportunity…job security…economic activity, and”—
last but not least—“employment.”
All that work should have been done before the Government proposed this legislation, so the Opposition think it is only right to try to ensure that the Government present the House with the necessary information before the changes to unfair dismissal come into effect. That is the bedrock of a democracy, and it is only right that all Members of this House and, indeed, the other place can see that information before they permit the Bill to complete its passage and gain Royal Assent.
We heard from several witnesses that the provisions will tip the balance of risk for employers, who will choose to not hire people, rather than take a chance on whether a new hire will work out. We also heard that people on the edge of the labour market represent a riskier proposition for employers and are most likely to be disadvantaged by the changes. I do not believe that any Member of this House—of whatever political party or none—wants to see people on the edge of our labour market denied a second or third chance. They deserve the ability to get on in life if, for whatever reason, they have not been able to get on the job ladder and into gainful employment.
All the evidence indicates that the Bill’s provisions on unfair dismissal will have a chilling effect on business growth. How will the Bill support the Government’s first mission of economic growth, when all the evidence—written and oral—and the reports in the press and from other bodies point to the contrary? Even the Government’s own impact assessment cannot provide reassurance that the measures in the Bill will lead to growth. The new clause would introduce safeguards and provide the clarity and detail that all Members no doubt want on whether clause 19 is even necessary for the intent of schedule 2.
The Minister for Equalities (Dame Nia Griffith)
Clause 20 amends an existing power in section 49D of the Employment Rights Act 1996, which allows the Secretary of State to make regulations
“about redundancy during, or after, a protected period of pregnancy.”
Regulations made under that power took effect in April, bolstering the protections against redundancy for pregnant women. However, redundancy is just one of five reasons for which an employee can be fairly dismissed. The changes delivered by clause 20 are required so that regulations can be made in regard to dismissal more broadly beyond redundancy, both during and after pregnancy.
The existing provisions for redundancy allow regulations to set out three things. The first is how the protected period of pregnancy is to be calculated. The regulations can provide that the protected period begins after a pregnancy has ended, which means that protection can be extended to a woman who has miscarried but has not yet told her employer that she is pregnant. The second is that employers must offer alternative employment to pregnant women at risk of redundancy. The last is the consequences of a failure to comply with any protections, including stipulating that this will result in the dismissal being treated as unfair. Those provisions for redundancy will all be extended, and therefore made available for dismissals for reasons other than redundancy, through this clause. This approach is necessary to then deliver enhanced dismissal protections in the regulations for pregnant women.
A 2016 Equality and Human Rights Commission survey found that 1% of mothers were dismissed following their pregnancy each year. Analysis by the Department for Business and Trade estimates that that equates to around 4,100 mothers—that is how many women could benefit from the new dismissal protections annually. Using secondary legislation to set out the policy detail is a standard approach in this area of employment law and supports working with stakeholders to further shape the policy before confirming the final approach in the regulations.
Clause 21 amends existing powers that allow the Secretary of State to make regulations concerning dismissal during several kinds of family-related statutory leave. The amended powers will continue to allow for regulation of dismissal during the period when an employee is away from work on maternity leave, adoption leave, shared parental leave, neonatal care leave or bereaved partners paternity leave. The amended powers will also apply to a period after the employee has returned from one of those types of leave.
Additionally, clause 21(5)(b) clarifies that parents looking to take bereaved partners paternity leave who have adopted from overseas or had their children via a surrogacy arrangement can be included in regulations creating protections against redundancy, as well as the new protections against dismissal for other reasons. It also makes it clear that the cohort of parents taking bereaved partners paternity leave can be included in the regulations allowing access to keeping-in-touch days, which allow an employee on statutory leave to be able to do some work for their employer without that leave coming to an end.
Our primary focus with the enhanced dismissal protections is supporting pregnant women and new mothers during and after maternity leave. However, as is the case with clause 20, we want to consult and work closely with stakeholders on whether new parents more generally should be covered by the enhanced dismissal protections. The final policy design will then be reflected in the regulations, as is typical in this area of employment law.
Before I commend the clause to the Committee, I put on record my entry in the Register of Members’ Financial Interests, including my membership of USDAW and the National Education Union.
Greg Smith
I think this is one of the least contentious parts of the Bill, and we do not seek to oppose in any way the important protections for pregnant women and new mothers. I note that what the Government are really doing with these clauses is building on the regulations that, as the Minister rightly said, came into force in April off the back of legislation brought forward by the hon. Member for Barnsley North (Dan Jarvis) and my noble Friend Baroness Bertin in the other place.
Again, we have the challenge of consultation after legislation. It is important that the Government move quickly to ensure that the protections for pregnant women and new mothers are not left to drag out as part of that consultation. Although consultation is important, the objective that the Government are trying to meet is quite clear. The desire to build on existing legislation should make it less controversial, and it should make getting it right quickly less of an open-ended question. That will enable pregnant women and people who are trying to conceive and start a family—or to have a second, third or fourth child, or whatever it may be—to plan with the confidence that those protections will be in place. I am not in any way speaking in opposition to this measure; I am just urging the Government not to let the consultation drag on.
Chris Law
It is a pleasure to see you in the Chair, Ms Vaz. Fire and rehire is one of the most contentious issues that we have heard about over the last years, and I will speak to it in some depth.
First, I want to welcome the measures within this Bill, specifically those in clause 22, that tackle fire and rehire by considering a situation to be an unfair dismissal where an employee is dismissed for refusing to accept contractual variation, or where they have been dismissed to enable the employer to employ another employee, or to re-engage a dismissed employee on inferior terms. Over recent years, there have been several egregious examples of fire and rehire from large and very successful companies in the UK. In January 2021, the TUC found that
“nearly 1 in 10 workers…had been told to re-apply for their jobs on worse terms and conditions since the first lockdown in March”—
that is, March 2020. That is 10% of the working population. Notably, almost twice as many black workers faced fire and rehire as white workers.
The SNP completely opposes fire and rehire, which is an appalling and abusive practice, and I am sure that most members of the Committee feel the very same. It must be outlawed. We have long campaigned to ban fire and rehire tactics and ensure that workers are not the victim of bosses looking to cut costs. I pay tribute to my former colleague, Gavin Newlands, who twice brought forward Bills in previous Parliaments to outlaw the practice, which had the support of over 100 MPs and the backing of all major trade unions, including Unite, the British Airline Pilots’ Association and GMB Scotland. I also commend the work of Chris Stephens who, on a regular basis, stood up for workers against the previous Tory Government and called for an immediate end to fire and rehire.
However, there appears to be a loophole, and amendments 160 and 161 seek to remove it. Amendment 160 would delete subsection (4) to proposed new section 104I, which provides an opportunity for fire and rehire to continue where
“the reason for the variation was to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business as a going concern or otherwise to carry on the activities constituting the business, and…in all the circumstances the employer could not reasonably have avoided the need to make the variation.”
Along with many others, I have reservations about that. If employers can point to their likelihood of financial difficulty, they will deploy fire and rehire tactics.
Let me ask some questions. Does the Minister agree with Martyn Gray, who gave evidence to this Committee just a couple of weeks ago? He is the director of organising at Nautilus International, and he made it clear to the Committee how high the bar should be set when he said:
“Quite simply, if directors can sign off the business as still remaining as a going concern, fire and rehire should not be an option…I would set a really high threshold and then allow for scrutiny from the relevant bodies.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 65, Q61.]
Employers’ unions have encountered those who have threatened or implemented fire and rehire to reduce workers’ pay and/or conditions, including companies such as British Airways, Heathrow Airport, Argos, Weetabix, Tesco, Asda and British Gas. All members of the Committee know all those names and are very familiar with them. In fact, more than half of those are in my constituency of Dundee and employ a large number of people.
I want to give an idea of the scale of the profits that those companies have made just this year. Asda made £1.1 billion—we are right in the middle of a cost of living crisis, and that is over £1 billion profit for a retail store. Tesco made £2.3 billion profit, and British Gas’s parent company has said that its profits have fallen to a humble £2.8 billion. Those are just three examples and the others—Heathrow Airport, Argos and Weetabix—are also all in profit. One simple cereal company made £368.8 million. Those are hardly companies in dire financial straits. Can the Minister explain how many of the high-profile fire and rehire cases known since 2010 would fall foul of the requirements within the Bill, and how many would be exempted under this loophole?
I think we all know that although the Bill is well-intended—and we fully support it—if it is not revised, it will fail under that loophole. As Andy Prendergast, the national secretary of GMB, explained in his evidence to this Committee:
“We have seen lots of financial engineering. We see inter-company debt. I think there is a concern long term that we may find cases where companies have engineered a financial position that allows them to do something they otherwise would not. That will have to be dealt with on a case-by-case basis.”––[Official Report, Employment Rights Public Bill Committee, 28 November 2024; c. 131, Q135.]
That is twice this Committee has heard evidence that should make us really think about the purpose of the Bill, which I totally agree with on fire and rehire, to ensure that it is watertight.
Can the Minister outline what changes the Government will make to the Bill and what regulatory regime will be put in place to prevent the provision from being exploited in the manner described? For example, will employers have to evidence the financial difficulties before making any decisions on firing and rehiring, or will they need to be evidenced only if an unfair dismissal claim is brought forward? We can clearly see now who holds all the cards. If it is the latter, and claims of financial difficulties are discovered at a tribunal to be unfounded, will employees who have been affected be reinstated on their original terms? These are important questions we need to ask.
In the absence of the detail and guarantees sought, the amendment seeks to remove the loophole altogether. We cannot allow this aspect of the Bill to pass without cast-iron protections against fire and rehire. We cannot wait and see how it plays out in reality, with people’s jobs and lives at stake.
If the provision is to remain—I can clearly see and many others so far have seen that it is a loophole—it is important that further amendments are proposed, not just to clarify definitions of financial difficulties and processes on establishing their veracity, but to ensure that there are further protections to strengthen an employee’s position in relation to any consultations and negotiations that take place when the employer is in financial difficulty. Does the Minister agree that the employer should take all reasonable steps prior to cutting workers’ wages and altering other terms and conditions? Does he agree that all material information should be provided to each union and that as much time as possible must be made available to consult? Does he agree that the employer must comply with any procedural requirements for varying contracts of employment or collective agreement?
Critically, does the Minister agree that the employer should have reduced the remuneration of partners, directors and managers at least to the extent equivalent to that which applies to the workers subject to variation of contract? After all, if an employer is struggling with his company, we cannot have the managerial class carrying on as if it is not affecting them while others have their contracts reduced and their terms and conditions worsened. Does he agree that the employer should have stopped paying dividends to shareholders, buying back shares, or making loans to partners, directors or shareholders, as soon as the financial difficulties became apparent, and renegotiated, to the greatest extent practicable, loans to third parties?
If the Minister does agree, will he give assurances that he will support such amendments being made to the Bill?
Greg Smith
I will speak briefly to amendments 160 and 161, standing in the name of the hon. Member for Dundee Central and the Scottish National party. These amendments seek to make the fire and rehire provisions more restrictive, saying that employers cannot vary contracts or re-engage staff on different contracts
“to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business as a going concern or otherwise to carry on the activities constituting the business,”
and remove the ability for the employer to do so if in the circumstances
“the employer could not reasonably have avoided the need to make the variation.”
I appreciate that it is quite a convoluted position, but it is clear to me that the SNP is siding with the trade union position that Martyn Gray set out, which is that
“if directors can sign off the business as still remaining as a going concern, fire and rehire should not be an option.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 65, Q61.]
But we heard from almost every witness—
Chris Law
I will re-declare that I have been an employer in the past, as well as an employee, and have employed staff; this is not just a union position. I have talked about companies. I can appreciate small businesses and even microbusinesses being really concerned about such issues, because they would impact them directly.
Typically, small businesses keep a very keen eye on where things are going in the future. If people want a good team in their employ, they make sure that their employees know very well what is going on with such issues. We had this debate earlier. I will list again, just to remind people, the relevant companies: Asda, Tesco, British Gas, Argos, Weetabix and Heathrow Airport. They are big companies, with billion-pound profits, that are taking advantage of the current situation. They have already taken advantage up until now—why will this loophole mean that they will not do it in the future?
Greg Smith
I understand the hon. Gentleman’s point. He likes to point to the profit lines of many of those businesses. Just because a business is making a substantial profit does not necessarily mean that it does not have to go through significant change in businesses practices in meeting market demands, manufacturing processes as technology moves on, or whatever it might be. I am really not seeking to advocate for anybody to be abused in the way he talks about. I am trying to acknowledge that things change in lots of businesses all the time. No one should be unfairly treated as part of that process, but sometimes, even for the very largest companies, significant change happens—as I say, to manufacturing processes or whatever—that requires a fundamental shift in job descriptions.
I am sure that most of those businesses want to keep their workforces on, but if the contract under which the employee was originally employed talks specifically about processes or ways of manufacturing, or uses of particular bits of equipment, that just do not exist anymore because technology has moved on, there is a requirement for contracts to change. Ideally, that will always be done in a consensual, negotiated manner, but the amendments put forward by the hon. Gentleman and the SNP go too far in shutting down that restriction. I agree with his point about small and microbusinesses, which really will struggle, in an ever-changing world with technological advancement and so on, to meet the conditions he is putting down.
Chris Law
We are not talking about technological changes, though, are we? We are not talking about advances that would mean changes to the structure of a business. We are talking about the language that is being used about the likeliness of financial difficulties. To any lawyer, the word “likely”—how long is a piece of string? Someone could argue the case that “likely” means this, while someone else could argue it means that. The language is lax, which is part of the issue.
In terms of financial difficulties, what is a financial difficulty? Does it mean, “We can’t afford the loo roll in the staff toilets so we will fire and rehire,” or something more structural? What I seek from the Minister is assurances that the purpose of the Bill on fire and rehire is very specific: we want to end fire and rehire. Given the current loophole, we have already heard not just from trade unions, by the way, but from businesses—
Greg Smith
Of course there will always be some who look for loopholes, but I gently suggest that the vast majority do not. They are good employers who care for their workforce, because, as we have discussed many times over, no business is anything at all without both parts—the workforce and those who risk their capital and so on to make those jobs happen, and to produce the products and sell the services in the first place.
The intervention from the hon. Member for Dundee Central neatly leads on to where I was going anyway. The Committee heard from almost every witness who was an employer or who represented employers that the dismissal and re-engagement provisions in the Bill were already too restrictive and would lead to staff being laid off. The SNP amendments make those even more restrictive, so it is not hard to work out where those witnesses would have gone on this front. Given that risk of lower employment and higher unemployment, I gently ask the hon. Gentleman to consider how the SNP would actually answer that challenge were the amendment to go through.
Michael Wheeler (Worsley and Eccles) (Lab)
As ever, it is an absolute pleasure to serve under your chairmanship, Ms Vaz. As usual, I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests, and particularly to my membership of the USDAW and GMB trade unions.
I am sure it will not surprise the hon. Member for Dundee Central to hear that I share some of his concerns about the practice of fire and rehire, and I welcome the significant steps taken in the Bill to outlaw the practice. However, I disagree with his amendment 160. What might be seen by some as a loophole is actually an important safeguard against the perverse potential for the law to mandate redundancy when there might have been other options on the table. I am sure that none of us would want to be party to including that in the Bill.
As I said, I share some of the hon. Gentleman’s concerns, and I hope the Minister will look closely at proposed new section 104I(4) of the 1996 Act, because the words
“likely in the immediate future”
are doing some precariously heavy lifting. However, if the amendment were accepted, the focus on a business being a going concern, which is the most important part of that subsection, would be removed completely. When we are passing legislation that protects jobs and promotes good employment, we absolutely cannot allow the unintended consequence of mandating redundancy when there are other options.
I look forward to the Minister’s comments. I understand the concerns of the hon. Member for Dundee Central, but this is a sledgehammer of an amendment to crack a nut of a possible loophole, with significant potential consequences.