Employment Rights Bill (Second sitting)

Justin Madders Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[The Chair]

I remind Members that questions are not limited to what is in the brief, but your questions must be within the scope of the Bill. In line with this morning’s session, for each panel of witnesses I propose to call the shadow Minister to ask the first question, then the Minister, and then the Liberal Democrat spokesperson. I will then go back and forth between the Government and Opposition sides. Anyone who wants to ask a question should catch my eye. We must stick to the cut-off times specified in the programme order, so I will interrupt questioning if necessary. I remind Members that they must declare any relevant interests both when speaking in Committee and when asking questions. We are being broadcast.

Before we start hearing from witnesses, do any Members wish to make a declaration of interests in connection with the Bill?

[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 to my membership of Unite and the GMB.

[The Minister for Equalities (Dame Nia Griffith)]

I refer to my entry in the Register of Members’ Financial Interests and my membership of USDAW, the Union of Shop, Distributive and Allied Workers.

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[Greg Smith]

Q Mr Carberry, if I can come to you, looking at those you represent, what is it in the Bill that you think is right, wrong or needs amendment?

Neil Carberry: I will not repeat what Allen said about the aggregate cost of the Bill, but clearly it is an enormous piece of legislation, coming at a time when businesses—particularly consumer-facing businesses—have been through the pandemic, are carrying more debt and are struggling to drive the growth that the Government want. Among my members, as with many business organisations, the tone of the debate about the Bill was changed by the Budget. That was particularly around the shift on the threshold, which directly pushes up the costs of all of the people for whom an employer’s decision to hire is maybe more marginal. I associate myself with Allen’s comments on that.

More specifically, for those who are not familiar with it, our sector places 1 million people into new permanent jobs every year, but it placed 1 million people as temporary workers into workplaces today. So I come at this from the point of view of what do those people need to have good, positive, healthy working lives. Colleagues may remember the attempt to change the conduct regulations to allow agency workers to replace striking workers, which we opposed, because at the REC we believe in protecting temps and putting them in the right space.

The most important thing for our sector is the proposal to apply the same tests and rules on zero-hours contracts to agency workers as to directly employed workers. I will be really frank about that: there is a power in the Bill, we have been through the consultation, and we cannot see how any of the approaches in the consultation work. For some of the reasons that Allen has set out, agency workers are well protected. They benefit from the Employment Agencies Act 1973, from their own set of conduct regulations—the Conduct of Employment Agencies and Employment Businesses Regulations 2003, passed by the last Labour Government—and from the Agency Workers Regulations 2010.

There is a lot we can do to deliver the Government’s commitment to more certainty for agency workers—it is just not by applying the powers in the Bill. We fear that the Government are trying to avoid direct employers moving to agency to avoid the powers in the Bill. A few direct employers doing that is not worth damaging the employment prospects of 1 million people. For instance, if a supply teacher in a school has worked the autumn term to cover a sickness absence, and then the absent teacher comes back, we cannot see how giving that supply teacher a right to a contract from that school is good for the school or the supply teacher. Ultimately, we think that we will just see a move to using more overtime and lengthening the working hours of existing staff. That will be net negative for the workforce.

I think there are things that we can do on the zero-hours rules to protect agency workers, but it is not applying the proposals in the Bill. More generally, I think our members would say that the Bill feels a little undercooked in its thinking. I think it is a very quick Bill, and that there is quite a lot in it that employment lawyers and our members are looking at and thinking, “How would that work?” A classic example would be the collective consultation sections of the Bill. I do not think it is in anyone’s interests for large companies employing thousands of people to be stuck in perpetual collective consultation when they are shutting down one site with 20 people in it. That is just an example of one of the things that maybe need to be worked out through regulation—lots of this is in regulation—but we need to ensure that we are not putting up barriers to employment with the Bill.

[Justin Madders]

Q Mr Simpson, can I take you back to your traffic light? We will go to amber, because you mentioned the notice of shift as an issue in the amber section. I am aware from the UKHospitality workforce strategy that there is a general view that the hoteliers charter is a model of good practice, which does require reasonable notice of shift. Could you explain a little more what your concerns are on that?

Allen Simpson: It is more about the unknown. Again, reasonable notice is an important principle and there should be protections. I think that the challenge will be—I notice, by the way, from what I understand from having read what is, again, a complex and lengthy piece of work, that the Government are intending to leave it to case law and employment tribunal systems to figure out what “reasonable notice” means. In general, with different sorts of work, it is reasonable to say that there are different versions of what “reasonable notice” means. If I were going to go and work on an oil rig for three months, I would want more notice of a change of shifts than if I was going to work in the local pub. Therefore, I think it is partly about figuring out what the right starting position for notice is. It is partly about reflecting differences in things, such as whether it comes with a residential element; there are questions around that.

Then there are some practical things that I think will come out in the wash, but do need considering, such as shift swapping. What if two chefs say, “Do you mind covering Saturday, because I want to go out with my friends?” “Yes, of course; that’s fine.” Is that allowed, or can that decision only be taken outwith that notice period? There are also questions around other things. What if you put out a message saying, “There is a shift available; does anybody want it?” Have you made an offer of employment to everybody you have put that message out to? Is there a time after which you are not allowed to do that? One last thing: what if somebody agrees to move their shifts around—so you say on the Friday, “Do you mind coming in this Saturday and you can have next Saturday off?” “Yes, absolutely. Fine.” Is that acceptable?

Therefore, there are there are some practical questions about, first of all, the principle of different suitable notices of shifts depending on different forms of work, and about some practicalities, which I am sure are solvable, around the management of it.

[Justin Madders]

Q That is helpful; thank you. I appreciate that we have not got much time, so I will ask just one more question, if that is all right, of Mr Carberry. Obviously your organisation prides itself on having members who absolutely comply with the standards set by law. Do you feel that the fair work agency will be a good vehicle to help drive up standards, and is there anything in particular that you would like to see it focus on?

Neil Carberry: I think it is reasonably well noted that we were disappointed that an employment Bill was not brought forward in the last Parliament. It is time to raise enforcement standards. One of the most common worries that I hear about this Bill, for which I will not hold you accountable, Minister, is the experience that businesses have had of being the ones who comply and take on the on-costs—there are quite significant costs associated with this Bill—and then watching people flout the law and not face enforcement, so a fair work agency is a good idea.

If I may, I have a couple of guide points that we have heard from our members. One is that we are great fans of the Employment Agency Standards Inspectorate. We think it does excellent work as our regulator. It sometimes annoys the hell out of me, but that is what it is for. The team there are deeply expert, and, in the creation of the fair work agency, I would be—if you would forgive a Scottishism—scunnered if we lost that expertise. Maintaining expertise as we move into the FWA is really important, and that goes with properly resourcing the FWA and giving it the capacity to maybe draw down some of the claims that currently take two years to go to employment tribunal.

The other thing, which is maybe a bit more challenging, is that, when we have done this in the past, success has been delivered by making these bodies of the labour market, not of the Government. If you go back to the 1970s, the Health and Safety at Work etc. Act 1974 was guided into existence for its first two decades by the Health and Safety Commission.

As a former low pay commissioner, I will say that we hear a lot about businesses’ views of the minimum wage in the ’90s; they were against the minimum wage at £7.20 an hour in 1999, and that is why it was not introduced. They were in favour of one at the introductory rate, which was developed by the Low Pay Commission. I would really like to see the FWA have that kind of tripartite guiding force to make sure that it is as much of us and our union colleagues as it is of the Government.

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[Greg Smith]

Q We heard from witnesses in previous sessions that they worry that some measures in the Bill—on zero-hours contracts and some of the fire and rehire potential unintended consequences—will make some employers more reticent to take on a new hire, or to take a gamble on someone who might need a chance or second chance, or whatever it might be. Is that reflected in either of your sectors?

Jim Bligh: Unfair dismissal and the probation periods are a concern for us. Most of our sector uses three or six-month probation periods now. About 85% of our members have told us that that is what they will use. About 6% use 12 months. There would be, I think, a concern about a nine-month period—the reduction from two years. It is critical that performance management from day one does not put a significant burden on SMEs in particular, and it is important that we keep the flexibility. If something is not right for the employee and not right for the employer—that performance is not there, that quality standards or whatever are not met—there should be flexibility in ending that employment relationship, on both sides.

What concerns us about the Bill’s proposals is that young people or people re-entering the workforce—which rightly is a priority for Government as well, and I note that Liz Kendall is speaking about this in the House at the moment—could be shut out under the changes that are coming through in the Bill. Our proposal would be to revert to a 12-month probation period. Obviously, people automatically qualify for unfair dismissal on some elements. It is right that those elements are retained, but it is important to us that you keep that flexibility from 12 months, that you have a light-touch approach and a process there as well, but also that we have enough time to implement.

What concerns us is that we are talking now about changes that will come in, I think, in two years’ time—that is a commitment from Government. That period is welcome, but we are not certain what the final provisions of the Bill will be. There is a long commitment to consultation, which we also welcome. Our proposal would be to implement two years after Royal Assent, to make sure that that concrete security and guarantee is there and that the goalposts are not shifted for employees and employers as they start.

Jamie Cater: I would echo that and agree with those comments. Stepping back slightly to look at the bigger picture, it has become difficult for us, with members, to separate out the impact of the legislation and the impact of the autumn Budget—the increase in employer NICs in particular, but in general the tax burden on businesses. That, taken together with the measures in the Bill, increases the cost and the admin associated with taking on people. There is a risk that that disproportionately impacts people on the edges of the labour market, I suppose.

It is very welcome that the Work and Pensions Secretary is today talking about how to reduce economic inactivity, particularly focusing on skills and health. We really support that focus, but there is a danger that the measures in the Bill, combined with the total cost impact, will make employers less likely to take that risk on someone.

On the protection for unfair dismissal in the statutory probation period, we typically hear from members that the usual approach would be to have a six-month probation period in an employment contract. They might then have a bit of additional flexibility for someone who is a borderline candidate if they need to be kept on probation for a bit longer, perhaps if they need a bit more skills training, experience or additional guidance in something before a firm decision is made about permanent recruitment.

Members often talk to us about effectively a six plus three model, where there is a contractual six-month probation period with the flexibility for an additional three months’ probation if there is a bit of uncertainty. The Government’s stated preference for a nine-month statutory probation period feels about right. That is probably the minimum; we would not want to see it go any lower than that. I think our preference would be 12 months, just to give that additional leeway, but nine months is probably about right for what we see reflected in standard practice from our members.

[Justin Madders]

Q Good afternoon. I think you have generally been positive about the Bill, albeit with some caveats. How do you see the implementation of the Bill being of benefit to the businesses that you represent?

Jamie Cater: To come back to the impact of things like statutory sick pay, I think that will help with productivity and retention. We see a huge amount of feedback from member companies about their own investment in health and wellbeing, and the positive impact of that in keeping people in work, helping with productivity and reducing presenteeism. I think the measures on statutory sick pay will help with all those things, including reducing long-term sickness absence, reducing presenteeism and improving people’s productivity. I think all those measures are really positive.

However, what we need to be careful of, and what we are concerned about—going back again to the impact of the Bill alongside the autumn Budget—is that it does not reduce or restrict employers’ ability to continue to invest in all those other things that also improve productivity. We have heard concerns about impacts on training budgets, internal budgets for things like occupational health and wellbeing, and investment in technology and new machinery that can help workers to become more productive and efficient. There is a risk that some of the costs associated with the Bill and the autumn Budget mean that those internal investment budgets will be squeezed. There is an opportunity, through some of the measures in the Bill, to improve productivity and improve security for people in the labour market, but we need to ensure that some of those other measures are not undermining those benefits.

Jim Bligh: I agree with that as well, and I endorse everything that Jamie just said. I think that the statutory sick pay clarifications are particularly helpful, and the clarity on parental leave should be helpful too. Flexibility is also important, and we need to ensure that the flexible working practices that are already widespread in our sector, as I know they are in other sectors as well, are protected and clear. I think there are concerns that potentially outweigh some of those benefits, which we are very keen to explore with the Government through the consultation periods.

[Justin Madders]

Q You have both talked a little about the statutory probation periods, and I think you are more or less in the same place as us on how long they should be, albeit there is a bit of argument either side. Based on that, can I take it you agree that, as a matter of principle, removing the qualification period for unfair dismissal from two years is a good thing?

Jim Bligh: I think we would accept that your manifesto had a pledge to remove it from two years and take it back down. We are aware, and we are grateful for the fact, that Government have moved it from day one up to nine months—I think that is really important. Pragmatically, we should look at a 12-month window instead, which worked well before and we think could work well again in future.

Jamie Cater: This depends on the detail of what comes in secondary legislation and on further consultation about exactly how that statutory probation period works, particularly the light-touch process for fair dismissal during the nine-month period.

From our perspective, the lighter touch the better. Businesses will want to know that they will have what they need in terms of following the correct process. I am thinking about ACAS having the capacity to update things like their disciplinary and grievance procedures. If and when there are claims going to an employment tribunal around unfair dismissal, the tribunal system must have the resources to deal with the potential uptick in the number of claims going through that system. So it is about how that fair dismissal process works following the consultation process, and then ACAS and the employment tribunal having the right resources to cope with that.

[The Chair]

I call the Liberal Democrat spokesperson, Steve Darling.

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[The Chair]

I call the Minister, Justin Madders.

[Justin Madders]

Q Thank you, Ms Vaz. Good afternoon, everyone. Obviously we were all horrified at the way people were treated by P&O, and I think we share your critique that the previous Government’s response to that was not sufficient. Clearly, we are trying to address those issues in the Bill. Do you feel that it will be a good deterrent against employers basically calculating a financial issue as a way of trying to avoid their legal obligations on consultation?

Mick Lynch: I am hoping it will be, Minister. I am hoping that bad employers will have to think twice about being badder again, in P&O’s terms. I have to emphasise that we were on good terms with P&O. We— both unions—were negotiating their new vessels. They deceived us deliberately. They took legal advice that, rather than negotiate with us the new-technology vessels that were coming in, they would rather sack all their people and break the law, and use security guards to get our people out.

We need good enforcement, a powerful agency that knows what it is doing and has a clear remit, and the right deterrents. I think that goes into company law in some ways. I do not think any of those people were worried about being disbarred as directors, as fit and proper persons and all the rest of it, and I do not think they were worried about their profits being affected by any fine they would get. As it happens, I do not think anything has happened to them at all. As a director, you have got to think about whether you are going to pay your VAT, whether you are going to pass on the national insurance, and whether you are going to pay the rates and all the bills from your suppliers. You should be thinking very seriously about the consequences for you in employment law, and other laws related to employment.

But as trade unions—as representatives of the workers —we have got to have the power to intervene where we know employers are breaking the law. That is a real shortcoming. The power is all with the employers. They can injunct me personally. They can injunct my trade union. They can close us down for making clerical errors on ballots—just misnaming or misbranding the grades in a dispute—and they will do it if they get any chance. We have no power to injunct them on behalf of our members, it seems. I think that needs to be considered. The fair work agency and its enforcement powers should be at the level of injunction to stop these rogues getting away with it in the future.

Martyn Gray: I agree with that. I would add that what is quite helpful is the Bill’s removal of vessels being treated as individual establishments. That is particularly helpful when it comes to redundancy consultations, and what we saw with previous case law under previous legislation. In the case of Seahorse Maritime v. Nautilus International it was determined that each individual vessel had to be treated as a single establishment. That removed the right for operators with significant GB links anyway—in those particular circumstances—to circumvent the need to consult with recognised trade unions on what amounted to mass redundancies. There were more than 20 people being made redundant from that particular employer, but they were able to circumvent that, because each individual vessel was treated as a single establishment. That is a really helpful feature of the Bill, and something that I think should be celebrated and praised. It is going to be very helpful in our being able to defend our members’ rights and hold companies to account for their responsibilities when going through a redundancy process or collective consultation on business restructuring in organisations.

Linking that point to P&O Ferries, it would not have made a difference there; each of the P&O Ferries establishments was more than 20, so there would have been a requirement for the collective consultation anyway. Indeed, two of the P&O Ferries operations would have been more than 100 people, so they would have required slightly lengthier consultation periods under the legislation. However, this Bill will be helpful in a wider maritime context, where there are smaller numbers of seafarers engaged, in being able to defend their rights and interests and really hold a company to account over the need to make those redundancies. The change to fire and rehire is quite helpful as well, with businesses needing to demonstrate a clear and identifiable need instead of seemingly being able to operate on a whim.

Gemma Griffin: I do not disagree with any of that. Talking about significant ties to the UK, this is something that you have to keep in your mind. Often in shipping there are myriad different employers based outside the UK—the flag of the vessel can be EU, in many cases, or UK or whatever. When you look at the Dover straits, yes, DFDS has both UK and French flagged vessels, but our vessels are doing 42 sailings a day in and out of Dover port, and up to 54 in the summertime. Other operators are doing more or less the same. If that is not a clear link to the UK, I would like to know what is. It is not the same as one sailing every day out of a port in the North sea.

As an operator that holds our seafarers in good stead as the absolute backbone of our organisation, I would like to be able to see a way of capturing that in UK law, so that we will not find yet another loophole, with the flag state being responsible but doing nothing and the port state, in this case the UK, wanting to do something but not capable of doing it. That sounded like a bit of a riddle—I do apologise.

[Justin Madders]

Q No, it is all very useful—thank you.

Let me pick up on something you said earlier, Mick, though others can answer as well if they want. You talked about injunctive relief as a potential solution to the threat of fire and rehire. We are consulting at the moment on measures including interim relief as a potential action that unions can take on behalf of their members. Can you say a little bit about why you would prefer injunctive relief, rather than interim relief?

Mick Lynch: Interim relief can take time, and I am not convinced that tribunals will have the power and the kudos to achieve it. I am not a lawyer, as you know, Minister, but I want the ability for unions to make an intervention on behalf of workers. It would have to be based on law and something that the company has done wrong, but it seems to me that injunctions are immediate and carry the weight of a higher court. When we get injuncted under the anti-trade union laws, it is at the High Court and it is immediate, and there is no doubt about the effect of that injunction. If you want to defy it, it is on your organisation’s head, whether that is a trade union or a multinational company.

If it is not called injunctive relief, I do not mind—I do not mind whatever way the Bill comes out—as long as it has the power of immediacy and enforceability through proper channels. That is what we want to see. We do not just want a slap on the wrist that the company factors in; if you have added another £10,000 to the fine, but they are sacking 2,000 people, they do not really care. What we want is for them to be forced to stop the activity, subject to the full force of the law, not just a minor blip on their spreadsheet. Whether it is called an injunction or interim relief, I do not mind. If the tribunals are beefed up so that they can do that, that is fine, because that can be a good channel as well. I am open to suggestions on that, but I hope we get the power to do it.

[Justin Madders]

Does anyone else want to respond?

Martyn Gray: We have spoken about unintended consequences, but an intended consequence of this Bill is addressing an imbalance between the rights of employers and of employees and workers in the UK. As a trade union, we are subject to much higher bars and thresholds when it comes to being prevented from enforcing the rights of our members or the rights of workers, and from standing up for what is right, what is appropriate and what is fair. It would be good to have a mechanism where an employer can be held to the same scrutiny, can be held to account in the same way and with the same preventive immediacy, without the consequences that we would have to face—because employers do not face the consequences if that injunction is granted and it then turns out not to be fair or appropriate, or if it is done on appeal; that is just dealt with.

This measure is about fairness and being appropriate. It is right that unions can make interventions on behalf of the members they represent, and can do so without needing to worry about having to put significant amounts of members’ money at risk. Should that then turn out to be something that needs to be resolved at a later date, unions tend not to pick those particular fights and arguments without having first looked very carefully at what is within the realms of the law and what is not. It would be extremely unusual that that mechanism would be abused, should it be granted. It is really important to ensure that the intended consequences of placing the rights of workers and of employers, and of trying to increase the rights of workers to a point at which they can address some of the imbalance, are supportive here. That would be a big help in being able to defend the rights of workers.

Gemma Griffin: I agree. The very nature of the thing is that employers and organisations are larger than employees. If employees are not able to collect themselves to a sum total where their voices can be heard, then they have no chance. There is something fundamentally wrong in this day and age that a union agreement can just be put to one side and actions taken—just completely and utterly taking the voice away from employees. When we look at how the United Kingdom operates on an international level, we are quite happy to sit with the unions and employers to negotiate at International Labour Organisation level and International Maritime Organisation level and so on—but when we come home into our own shores, those rules do not apply. The unions are not the enemy of our organisations.

It is a really poor message that we are sending out: that organisations that do the right thing and, like DFDS, recognise employees’ rights are disadvantaged, because before we sell a single ticket to a passenger, we are already hugely more costly than our operators in the same field. But we make the choice to start a race to the top instead of joining that race to the bottom.

[The Chair]

I call the Liberal Democrat spokesperson.

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[Greg Smith]

Q This is a question to all of you, off the back of the last answer. It was suggested during the last evidence session that this Bill does not go far enough. It is evident from the declarations made at the start of the sitting that the relationship between the trade union movement and the Labour party is symbiotic, so what more have you asked the Government to put into the Bill? Where do you want it to go further? Mick Lynch gave a very clear answer in the previous session. What are your respective unions’ greater asks of this Government?

Paul Nowak: Can I make a point first about the symbiotic nature of the relationship between Labour and the unions? We certainly have a shared history and shared values, and in some cases we have unions that are affiliated to the Labour party. The TUC represents those 5.3 million workers regardless of who is in government, and it does not have a formal relationship with the Labour party. Our job as trade unionists is always to want more and better for working people. I think it is important to recognise that this will be the biggest upgrade to workers’ rights in decades—I was going to say in a generation, but it is more than that. It will directly benefit millions of working people.

I came in at the end of the last panel, and Mick was talking about sectoral collective bargaining. The Government have indicated that the first fair pay agreement will be in social care. We would love to see that approach—those fair pay agreements—rolled out to other sectors of the economy. That is a point that we will make going forward.

It would be churlish not to accept that the Bill is a big upgrade to workers’ rights and to union rights. This will be the first time that a Government have repealed anti-union legislation in my 35 years as a union activist, and I think it is really important that they do. If we take the minimum service levels legislation as an example, we always warned that it would be unworkable. It was red-flagged by the Regulatory Policy Committee and by the Government’s own impact assessment when it was introduced, and not a single employer has ever used the legislation. We will be positive; there will always be more that we would like any Government to do on behalf of working people, but this is a really important piece of legislation.

Maggi Ferncombe: I agree. To be frank, as the largest trade union in the country, the political stripe of the Government does not matter to us; we will obviously do what we can to improve public services and the terms and conditions and salaries of workers in those public services. You asked what more we would want, but, to be honest with you, we want an extension of what is already in the Bill: the opportunity to have some sort of legal mechanism for collective claims. Individual workers, unions when they are involved, employers and employment tribunals spend hundreds and hundreds of hours trying to deal with individual claims from individual workers. An unintended consequence would be the savings to employers from not having to deal with individual claims that take years to go through tribunals. If there was an opportunity to have a mechanism to deal with it collectively, it would save everyone time and money, including employers.

Dave Moxham: We have a disproportionate number of zero-hours contracts in Scotland, probably because we have proportionally more small businesses as part of the UK economy. We welcome the moves in the Bill to address that. I heard the evidence given by the last panel, and from our perspective the majority of employers do not use them but they have an intensive impact. For the last 10 years, the STUC has run a campaign called BetterThanZero, which goes out daily and talks to these workers, who are predominantly, but far from all, young workers. The impact on their lives—ergo the impact on the economy because of their lack of stability, certainty and security—has a far wider effect than on just the individual and cannot be overestimated. When we look at the provisions currently in the Bill, we certainly believe that what defines a short-hours contract and some of the other things that have yet to be decided need to be quite strong. If you go on to the internet, you can already see discussions among employers about how they will circumvent the proposals, so that will be one area where we will be looking for strength.

Hannah Reed: There is an awful lot to welcome in the Bill, and I will not take up the Committee’s time by listing it. We can submit evidence to you on equality rights, trade union rights and so on.

Like all Committee members, I am sure, we are keen to ensure that the Bill comes out as watertight legislation that makes a real difference to people’s rights. There are some elements of the Bill where we would want to continue working with you as a Committee and with the Government to tighten up what we consider to be potential loopholes, and I will briefly name three areas.

The first is the provisions on fire and rehire. Unite’s concerns are that some of the uses of heavy-handed tactics by employers that we saw during the pandemic and since could still be lawful under this Bill. We are concerned that employers may be able to justify fire and rehire in certain circumstances, and our view is that there needs to be a total ban. We are not confident that the employment tribunals will look behind the corporate veil or question an employer’s arguments for why they needed to use fire and rehire tactics, so we do not think it goes far enough. Importantly, there is nothing in the Bill at the present time that stops the employer from sacking the workforce. While we welcome the Government’s consultation on interim relief, we, like previous participants. would like to see some measures before that that stop the employer and require them to open their books to demonstrate to forensic accountants that changes are needed, and to provide a genuine opportunity for negotiation with trade unions. We are very equipped; we know what needs to be done if changes are needed.

Secondly, we would like to see further measures in the Bill to extend collective bargaining. Very briefly, we recognise that there are important measures on statutory recognition in the Bill, but we would like the Government to consider going further, particularly to ensure that laws prevent the abusive practices seen in the recent Amazon campaign. We would also like faster routes to recognition. Workers often have to wait for six months and are repeatedly asked, “Do you want statutory recognition?” They repeatedly say, “Yes, we want statutory recognition,” but employers are given time to fight against the workers’ will. We think there should be a faster route to automatic recognition.

The last point I would raise is on access. I have already talked about the benefits of working people having the opportunity to meet with trade unions in the workplace, to tackle discrimination and press for better pay and conditions through negotiation. We would like to ask the Government to look at the access measures, to see if there are ways of having a default or free-standing right of access so working people have a genuine right to democracy and representation at work.

[Justin Madders]

Q Good afternoon, everyone. I want to start with a question to you, Paul. You have referenced this £13 billion benefit, which I think is from some recently published research by the TUC. Could you tell us a little more about what that will look like in terms of benefits to individuals?

Paul Nowak: The research was based on a very modest estimate, taken from the Government’s own suggestions that there would be improvements on things like productivity, reducing absenteeism and bringing back into the workforce people who currently find it difficult to access the workforce, for example because they have caring responsibilities or a need to balance work and family life. We assumed a 1% uptick across those measures —as I say, a very modest assessment—which meant £13 billion-worth of positive impact on the UK economy.

In many ways, this just reflects what already happens in unionised workplaces. One of the things I do as the general secretary of the TUC is to visit places up and down the country, large and small. Some of the most successful and most productive employers in this country —whether it is Airbus, Jaguar Land Rover, Rolls-Royce or, indeed, our largest private sector retailer—are employers who have close working relationships with trade unions and treat their staff with respect.

This legislation is really important, Minister, because it does what it says on the tin. It is about making work pay, and for far too many people in this country, work does not pay at the moment. We have a problem with low-paid, insecure employment, with over a million people on zero-hours contracts. Overwhelmingly, when you ask those individuals if they would like the right to guaranteed hours, poll after poll shows that 80%-plus say they would. When you play that out in practice—I know that the Work Foundation did some work with Wetherspoons. When Wetherspoons offered their staff a choice between zero hours and guaranteed hours, 99% of their staff took the guaranteed hours. That is good for those workers, but it is also good for employers, because workers who are securely employed, who feel good about their work and who are supported at work are more productive, and employers are more likely to invest in them. I genuinely believe that this legislation is win-win—it is a win for employees and workers but a win for employers as well, and it is good for the UK economy overall.

[Justin Madders]

Q Thank you for that answer. You have certainly been able to quantify a lot of the evidence we have heard today about the benefits of the Bill. Does anyone want to add anything on the benefits to the economy and wider society?

Maggi Ferncombe: Let us take a sector within Unison such as the care sector, where you have low-paid workers who, some of whom are on zero-hours contracts or working away from home, potentially for 10 or 12 hours a day, but only getting paid for five of those. The amount of money they put into their local economy will be a lot smaller than if you had a fair pay agreement with proper regulation, where people were paid adequate salaries and had better opportunities to train.

We must bear in mind that the care sector has one of the largest vacancy rates, with 130,000 vacancies at the moment. That is simply because care workers are either taking on additional part-time jobs in the evening or morning—I do not know when they have time—or taking on jobs in supermarkets or call centres because they can get paid far more. If they were paid a better salary, they would put more money into their local economy and would pay more tax. Ultimately, that would be the benefit for the economy from that particular sector. Those 130,000 vacancies are a growing problem; we are an ageing population, and having a properly remunerated workforce in social care will bring nothing but benefits. It is very hard to quantify how much that will be; it all depends on what the fair pay agreement comes out with.

Dave Moxham: I will just quote a number of different quantifications. I know that small businesses, particularly in hospitality, have been a large focus for this Bill and more generally. The estimates made by hospitality businesses of the cost of staff turnover are anything from £5,000 an employee to £15,000 an employee, although none of those are my estimates. Then consider that it is an industry with incredibly high turnover—we are talking a 30%-plus turnover. I have not done the sums, because there are various estimates, but you can work out how a relative improvement in retention would impact the hospitality sector. Some of the measures here that we believe would encourage lower-paid hospitality members to stay in the workplace would have an incredible impact.

Hannah Reed: We do hope that the Bill will lead to an expansion in collective bargaining, because it is the tried and tested method and internationally recognised as the best way of improving pay and conditions and reducing staff turnover. We know that there is a skills shortage in this country; reducing turnover and investing in skills, which is what trade unions work with employers to do, will have significant economic benefits, including improved productivity.

I must confess that today I quickly read the Regulatory Policy Committee report, which raised questions about whether the measures in the Bill are justified. Speaking as a trade unionist who speaks on a daily basis to working people, there is not a single measure in the Bill that is not needed. One of the risks with impact assessments carried out by the Government—we hope that the Government will look at this—is that often they capture quantitative data but do not look at the qualitative data. What is the actual experience of working people in the workplace? Where is the harm and what needs to be addressed? We know that in hospitality, for example, one of the big issues our members face is a lack of security or certainty over hours. The costs of childcare for hospitality workers are huge, and the inability to pay rents or even dream of saving for a mortgage is a very significant problem.

There are also real problems of sexual harassment. One of the things that really surprised me was that the RPC said that it could not see a justification for further regulation of third-party harassment. To give some statistics, the NHS staff survey this year showed that 8.67% of NHS staff experience some form of harassment by either the public or patients every year. We know that there are major staff shortages in the NHS. Exposing our workforce to harassment by third parties is a major problem.

In hospitality, it is far more rife. Unite did our own survey that showed that 89% of our members reported being subject to some form of sexual harassment in the last year. Many of them—56%—said that that was from customers, and at least half our members said that they were considering leaving the workplace because of the sexual harassment they have experienced. There are many rights in the Bill that we believe will help to deliver better employment and support businesses to become more productive and more profitable.

[Justin Madders]

Q It seems clear that the RPC did not talk to any of you before producing its report. Can I ask you about something that came out in the evidence this morning? Some concern was expressed that where there is a recognition ballot and the numbers voting in it do not demonstrate a majority of workers in the workplace—it may be a simple majority of people who voted, but it is not an actual majority of workers—it may not be a true voice of the workforce. It was almost implicit that there will be another mechanism for that voice to be heard. I wondered if you had anything to say about those concerns.

Paul Nowak: I think it is a misplaced concern. Union recognition ballots are the only democratic test that we have where we would expect not only to get simple majorities, but to have 40% of those who are eligible to vote voting in favour. I think it puts a barrier in place towards unionisation. We would not use that democratic test in a parliamentary election, a local council election or the election of a leader of a political party, and it seems perverse to put that obligation on unions and workplaces.

Unions derive their credibility and their ability to represent people from being genuinely representative of the workforce, and it is in nobody’s interest to have a union that only represents a minority of the workforce. Unions are always striving to represent the majority of the workforce in workplaces, and I think we do that and prove that very effectively in workplace after workplace.

At the moment, the system is effectively gamed towards hostile employers to frustrate the will of people to join a union. We effectively count abstentions as no votes. Again, that is not a democratic test that we would put up anywhere else. Taken alongside the other provisions in the Bill, including the union right to access the workplace, the simplification of the recognition procedure is really important in representing the democratic view of the workforce.

Going back to a previous point, I think it is important to say this, Minister. No piece of legislation requires people to join a union or requires a workforce to vote for union recognition. All those decisions rest with the workers themselves. That is a really important underpinning point for the way we do trade unionism in this country. With this change in legislation, we get a level playing field for unions.

[Justin Madders]

Does anyone else want to come back on that one?

Maggi Ferncombe: Can I just make a point? It is almost like unions are the enemy, when you hear certain businesses talk. Unions have a common goal with every employer where we organise, and that is for the organisation to do well, because that means that the staff and the workers will do well as well. Especially in the sectors that I represent, we have an absolute common goal with all the public sector bodies. We want good-quality public services. Working with trade unions is the best way to achieve that, and good employers know that. Good employers know that working with us will save them time, money and energy. They will have a workforce that are much happier in what they are doing, and they will be more productive, with less sick days. The statistics are all around. Putting additional barriers in place where workers cannot undertake the fundamental right of joining a trade union—I think it is a false barrier, to be perfectly honest with you, because if workers really want to join, they will.

Dave Moxham: Very briefly on the access issue, individual workers should have the right to say yes or no, but in order to exercise their right, they need to know the possibility. The possibility comes from very simple, but hopefully very straightforward and not bureaucratic, arrangements that expect an employer once in a while to provide access for a union to speak to those workers. It should be really simple. You do not get to exercise the right to say yes or no if you do not know in the first place.

Hannah Reed: I have one quick comment. I totally agree with the points on access. Trying to think about it from an employer’s perspective, if a substantial number of workers within your workplace are saying, “We want trade union recognition,” ignoring that—saying no to those requests—must have an impact on staff morale.

Another point we would add is that our concern is that the statutory recognition provisions are not balanced. All the provisions at present tend to be weighted too much towards the employer, because the employer can delay the process, providing them with more and more time during statutory recognition to invest resources and put pressure on workers not to vote for recognition.

We welcome the consultation from the Government, and we want to work with them to strengthen the provisions to provide much earlier access, so that it becomes the norm in the workplace that the trade union is present and that workers can ask questions, but also that there are stronger unfair practice provisions. I know that we look at international practices, and I noticed in the States just last week that the National Labour Relations Board actually made it unlawful for employers to hold meetings with staff for the purpose of trying to convince them not to support recognition.

Could you imagine a law within the UK—we hope we could get to this point—where there is actually a level playing field, and where employers cannot create a hostile environment and say to workers, “You cannot have a democratic right. You cannot have your choice to have a say”? That is what collective bargaining is: giving workers a say over their own pay and their own terms and conditions. That is not something that is foreign; it is just about empowering workers to have their voices heard by their employers.

--- Later in debate ---

[Greg Smith]

Q Thank you for being with us. Can you give us your view on whether the Bill goes far enough to combat the issues that you campaign on, particularly women’s rights at work? Where would you like to see elements of it amended, either to make it stronger or to get rid of things that might have unintended consequences, and are you concerned about any particular areas of the Bill either not delivering what they say they will or delivering something completely different?

Jemima Olchawski: At Fawcett, we really welcome the Bill. Overall, we still have an economy and workplaces that consistently disadvantage and exclude women. That means that they are much more likely to be on zero-hours contracts, to be in low-paid work and to be held back by a lack of access to quality flexible part-time work. Each of those issues is intensified for most black and minoritised women, and for disabled women. The situation results in serious consequences for individual women. We have a gender pay gap of just under 14%. On average, women take home just over £630 a month less than men. It also has a detrimental impact on our economy, because it is a marker of the ways in which women are not fully participating or contributing to the economy at their full potential. Estimates indicate that that means we are missing out on tens of billions of pounds of GDP.

We strongly support the measures as an important step towards redressing that balance. In particular, we are pleased to see the inclusion of equalities action plans as an important way to get employers to drive forward progress on the gender pay gap. We are glad to see the emphasis on the importance of flexible working and the day one right to statutory sick pay, which will have a disproportionate beneficial impact on women, as well as further protection from sexual harassment in the workplace. Some 40% of women experience sexual harassment at some point during their career.

There are areas where we would like to see additional inclusions or things going further. Flexible working is incredibly important for women who have caring responsibilities and continue to do the majority of unpaid care, and having access to flexible work is vital to enable them to progress and earn to their full potential. We would like to see a duty on employers to advertise jobs as flexible, rather than a situation where women have to wait until they are in a job before they can begin that conversation. You cannot move into a new job if you are not sure whether you will be able to replicate the flexibility that you have in an existing role. That leads to women being under-employed and their skills underused.

The day one rights to maternity, paternity and parental leave are important, but they have to be remunerated. There has to be a day one right to pay if we actually want people to take it. Particularly if we want men to take on more caring roles, we need to make sure we have a refocus on remunerated leave, and that includes parental leave. We welcome the fact that there will be a review, but we need to think about this as part of those measures.

I would like to see more around equal pay in the Bill. Measures could be taken that would support women to access fair pay, such as pay transparency and ending salary history questions. The last thing I would like to see more on is making sure that there is proper enforcement of those rights—that the enforcement bodies are properly resourced and have the teeth to ensure that the rights really hold.

Joeli Brearley: It is a big question that you have asked. I support everything that Jemima has just said. We are very supportive of the Bill, but I think there is a lack of clarity on some of the areas that we are particularly interested in. On flexible working, we are really pleased to see that the Government want to make it the default way of working. That is really important, but we need to know exactly how, and what mechanisms will be in place to do that. The current law on flexible working isn’t working. We want to see an advertising duty as well, which I am sure we can explore in a bit more detail later.

We are also very supportive of parental leave being moved to a day one right. It is kind of amazing that that is not in place already. But without it being remunerated, take-up will be very low. We would have liked to see more on parental leave. We have a shockingly low rate of pay for maternity. We have the worst paternity benefit in Europe. This is causing huge problems for families, particularly new families that have just had a baby. They are getting themselves into terrible amounts of debt. Also the way that our parental leave system is structured means that women are responsible for the care of a baby. They tend to take long periods of time out of work, whereas men tend to go back to work very quickly. They fall into the role of breadwinner, and the woman falls into the role of caregiver, and that continues for the rest of their lives—which is why there is such a large gender pay gap.

The redundancy protections are great. Again, we are very pleased to see that, but we need specifics about what it means. We would like to see that pregnant women and new parents can only be made redundant in exceptional circumstances. By that we mean when a business is closing or perhaps when a service has stopped being delivered. It is very difficult, if you are made redundant when you are pregnant or have just had a baby, to get another job. Often you are made redundant and then cannot access statutory maternity pay. These are very particular circumstances. We know that many women are still being made redundant when they are pregnant or when they are new mums; 17% of calls we get to Pregnant Then Screwed are related to redundancy, so it is a big problem.

What we do not have at the moment, but really need, is data that shows us what is happening on the ground. A report was done by the Equality and Human Rights Commission under the coalition Government that found that 54,000 women a year are pushed out of their jobs for getting pregnant or for taking maternity leave, and 77% of new mums experience some form of discrimination. That report was done in 2016, and there was a guarantee at that point that the report would be done again five years later. It is now nine years later and we still do not have any new data to show us exactly what is happening on the ground. Without it we are making decisions in the dark, so we would really push for that report to be done again.

We would have liked to see something in the Bill on non-disclosure agreements. Our research found that 435,293 mothers had been gagged by non-disclosure agreements when experiencing some form of discrimination. It is a serious problem. Again, we do not know what is happening in companies across the country. Women tend to experience this form of discrimination and are then forced to sign these agreements and are given a low amount of compensation. They suffer mental health consequences because of that. We want to see the UK follow what Ireland has recently done, so that non-disclosure agreements cannot be enforced unless the claimant wants them to be. We would also have liked to see something in the Bill on miscarriage leave, because at the moment there is no right to any leave or pay if you miscarry before 24 weeks. We would have liked to see something on fertility treatment. As many of you will know, we have a baby crisis in the UK—we are not having enough babies. We want to encourage people to have fertility treatment, so we need a legal right to time off.

We would like to see something on reasonable adjustments. There are currently reasonable adjustments if someone has a disability, but not if they have a dependant with a disability. Many mothers of disabled children are struggling in the workplace because they need time off for appointments, or whatever it may be. We would like to see a requirement for all employers to publish parental leave policies.

[Justin Madders]

Q I have just one question, mainly for Jemima, but you are welcome to chip in, Joeli. The Regulatory Policy Committee has suggested that there is no evidence base for third-party harassment. Do you have any thoughts on that criticism?

Jemima Olchawski: There is strong evidence that the majority of sexual harassment experienced in the workplace comes from third parties. This is where someone experiences harassment from a client, customer or patient. Some of those who are most vulnerable would include those working in retail and hospitality. It is essential that anyone working in those environments is as safe as they can be and respected in their workplace. We would consider it essential that employers’ responsibility to take reasonable steps to prevent harassment includes third parties, because as a victim, it is not relevant that the person was not a direct co-employee. What matters is the harm experienced. It is absolutely within the bounds of good practice and reasonable steps for employers to address that.

Joeli Brearley: Nothing from me. It is not my area.

[Steve Darling]

Q I visited Torquay girls’ grammar school in my constituency of Torbay some time ago, and met the head and some of the sixth-form students who were experiencing sexual harassment in the workplace throughout Torbay. Does the proposed legislation go far enough? I am particularly thinking of young people who may lack confidence. What could be built in to support them to call it out, so that it is not just seen—as other people might call it—as a bit of a banter or something like that? It is deeply hurtful and painful for those individuals, and the sooner we give them support the better. I welcome your reflections on how the Bill could be strengthened in this area.

Jemima Olchawski: It could be strengthened by having clear guidance and expectations around the reasonable steps that will prevent. That should include multiple reporting routes, which might be anonymous if that feels more appropriate, and training for managers. Our research shows that managers want to respond appropriately, but often when those conversations come up, they do not know what the right thing to do is. Consequently, lots of those conversations end up going badly, and young people or employees do not get the support they need.

It is also important that enforcement agencies have the resource to investigate whether policies and procedures are in place, so that we can embed a culture of prevention rather than just respond decently when incidents happen. That is in the interests of employers too, because cultures where there is bullying or harassment are bad for productivity and staff turnover. It is in everyone’s interest to ensure we address this and cut it off at the pass.

Joeli Brearley: The only thing I would add is that when women experience sexual harassment or any form of discrimination and want to access justice, the justice system is currently failing them—it is not working. We know, certainly in cases of pregnancy and maternity discrimination, that fewer than 1% of women who have that experience even raise a tribunal claim. Part of what we need to do is extend that time limit to raise a claim. It is currently three months. It needs to be at least six months, so that women have the opportunity to recover from their experience before they start to go through that onerous, difficult process of raising a tribunal claim.

--- Later in debate ---

[Greg Smith]

Q Do you have a view on how it would be best to structure change around specific single projects like the building of a railway station, which might take two, three or four years and then that is it; there is a cliff edge and the project is over? How would you best structure that?

Alasdair Reisner: It is an interesting question. There is the notification element and the consultation element. I suppose we have to ask what the policy is trying to achieve. If it were trying to avoid people almost hiding redundancies by doing them in small units, I do not think we would have any complaints about ensuring that notification was still required. It is where you are forcing people into consultation who are never going to be made redundant, yet they find themselves under the scope of that. Splitting those two things apart—so you would still have the notification, but you would not necessarily have the consultation for those who are unaffected—is something we are exploring. I do not want to say that that is the silver bullet that will solve things. We have not even discussed that collectively as an industry; we are just trying to consider what options might be on the table.

[Justin Madders]

Q I think you said you had the largest collective agreement in the country—congratulations on that. Could you tell us a bit more about what your members see as the advantages of that?

Alasdair Reisner: It is a cliché, but we rely on the people we work with, and they must be represented. Having good, positive relationships with the employees’ representatives is crucial. The CIJC has for decades provided us with that vehicle—I should say that it is not the largest overall; it is just the largest in the construction sector. I think back to covid, when we needed a relationship with the workforce that provided us with the independence —I have to say that Unite was brilliant at that time—to engage with the rest of the industry to say, “We’re all working collectively towards a common good.”

From discussing the Bill with members over the past few days, I know that one of the potential concerns is that it might in some way undermine existing collective agreements. I do not think that is written in the Bill; it is more in the discussion that has happened prior to the Bill. That is something we would like to protect. I am not going to pretend it is all sunshine and roses—sometimes it can be quite challenging—but I think we would want to ensure that whatever the outcome of the Bill, there is a strong, positive partnership between the employers’ representatives and the employees’ representatives.

[Justin Madders]

Thank you.

[The Chair]

I call the Liberal Democrat spokesperson.