Employment Rights Bill

Laurence Turner Excerpts

2nd reading
Monday 21st October 2024 Commons Chamber

[Laurence Turner (Birmingham Northfield) (Lab)]

I am glad to draw the House’s attention to my declaration in the Register of Members’ Financial Interests and to my membership of the GMB and Unite trade unions.

The Bill is at the start of its parliamentary stages, but today is also the culmination of years of hard work and consultation. It is important to recognise the accomplishment that the Bill’s introduction represents, and the Ministers, civil servants and special advisers involved deserve great credit. The Bill was born out of the undermining of the dignity and protection of work over many years, which falls heaviest on those in working-class occupations. We all know the effects that 15 years of wage stagnation has brought, the shameful limits that in-work poverty places on the potential of the people we represent, and the unfairness shouldered by those who are trapped on insecure contracts, including in the security and retail sectors in Birmingham Northfield. The Bill will make a real positive difference to their lives.

In the short time available to me I will focus on three measures. First, the 3,000 school support staff and care workers in my constituency are some of the lowest-paid people in public services. They are predominantly women who work under inadequate and outmoded terms and conditions, and their professionalism has gone unrecognised for far too long. I hope that the creation of a school support staff negotiating body and an adult social care negotiating body will have cross-party support.

Secondly, the condition of outsourced workers in public services has also been neglected. They are the invisible workforce who keep our hospitals running and our nation secure. For more than 100 years, under the fair wages resolution and the initial version of the two-tier code, Governments of all colours recognised the principle that outsourced workers should not be placed at detriment. The reinstatement of that principle is of critical importance.

Finally, I welcome the proposed reforms to trade union recognition and access arrangements. When the system has been shown to be open to abuse, it must be changed. In that sense, there is a direct line of continuity between the Grunwick dispute of the ’70s—in which the late Member for Birmingham Erdington, Jack Dromey, played such a prominent role—and the creation of a statutory recognition regime 20 years later. I have heard directly from GMB members about the disgraceful anti-union tactics that they have faced, which were not anticipated when the current law was drafted. They must not wait 20 years for remedy. This Bill is important and necessary, and I am proud to vote for it tonight.

Employment Rights Bill (First sitting)

Laurence Turner Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[Jon Pearce (High Peak) (Lab)]

I also refer to my declaration of interests. I am a member of GMB.

[Laurence Turner (Birmingham Northfield) (Lab)]

I draw people’s attention to my declarations in the Register of Members’ Financial Interests. I am also a member of the Unite and GMB trade unions.

[Alex McIntyre (Gloucester) (Lab)]

I refer to my membership of the GMB and Community unions, and my previous membership of the Employment Lawyers Association.

--- Later in debate ---

[Michael Wheeler]

Q So far, we have heard an awful lot about flexibility and risk, from you and from previous panels. Would the panel accept that, currently, flexibility is too far in favour of the employer, that the risk is borne by the employee and that this Bill seeks to rebalance that? In which areas do you believe that the measures in the Bill do not work towards that?

Dom Hallas: I think that cuts to the question that Steve asked, which was about the different sectors and impacts. I can only speak for the tech start-ups and scale-ups that we work with. In practice, as I said, you have a very highly paid and mostly highly skilled sector, where the benefits and rights afforded to employees way outweigh any current statutory requirements. It is a highly competitive labour market, but that comes with the trade-off of flexibility. These businesses scale and they fail very frequently; that is part of the nature of the business. I think that, in truth, both employers and employees go into that relationship in our particular space with their eyes pretty open to that. So in our particular part of the world, I would challenge that assertion a little bit.

What I would say more broadly though—I think this is important and cuts to an area where we think the Bill could be improved for our space from both an employer perspective and an employee perspective—is that one area where we see potential further progress is banning non-compete agreements. In California, where really successful technology ecosystems have been built in silicon valley, one of the cornerstones of that has been that there are no non-compete agreements allowed in law. That offers more flexibility from a labour market perspective in many cases, but it also benefits employees significantly, because that flexibility comes to their benefit as well.

From our point of view, employers are, frankly, scrambling like hell to try and find the employees to fill these tech jobs, and the employees are very highly paid. If those businesses fail, or their needs change, that is, in our view, part of the trade-off with those kinds of businesses. I appreciate that that might not be the case across every sector, but providing that flexibility is a core part of that trade-off.

David Hale: Typically, flexibility is a demand from employees rather than a demand from employers. Most employers would love the same people to turn up each week for the same shift; most employees would like to be able to work their shifts around their day-to-day lives. Most workplaces come to an accommodation on that, with things like shift-swapping.

What I am not clear on is where there is gain. Take zero hours and the scenario where this Bill ends up meaning that somebody who has worked the same hours for 12 weeks in a row is offered a contract. Somebody who an employer has employed for the same hours for 12 weeks in a row is likely to be either somebody they would like to give a contract to or somebody who has worked in a seasonal role. Those are the two scenarios. That employee is unlikely to be the employee who wants more hours or regular hours, because the employer is already giving them that. So there is not really a gain that is very obvious. What there is, is a lack of flexibility, because the response to the legal risk will be for employers to say to employees, “Actually, I need to keep an eye on precisely how many hours you are working each week for a reference period. So, no, you are not allowed to swap shifts.” That is a damage to flexibility, with no obvious gain for people who have been working 12 weeks in a row, who, frankly, the employer probably wants to agree a permanent contract for, but does not.

[Laurence Turner]

Q We heard quite a balanced account from the previous panel; there were measures in the Bill that they welcomed, alongside measures that they wanted to see changes to. Mr Hallas, I notice that you have said that gaps in employment law are becoming an increasing challenge. So I want to ask the same question to both of you: are there individual measures in the Bill that you welcome and, if so, what are they?

Dom Hallas: When I talked about employment law in that context, it was as part of a broader range of work we do with what we call platform businesses. They might be traditionally known as gig economy platforms, sharing economy platforms or online marketplaces that have two sides—someone who wants to sell something and someone wants to buy something, whether that is services or goods. The gaps in law that exist there are an increasing problem, because many of these platforms want to be able to offer support to the people who leverage them, but they are not able to do so because of the restrictive nature of employment law.

The challenge at the moment is that the Bill does not necessarily address that. There is clearly a way of potentially having further conversations on that. Obviously, some of that is being discussed down the line, including whether there is a single status for workers. We are not sure whether that is exactly the right approach, but there is a conversation to be had with Government about what is the right approach.

In the meantime, what we have is a structure built by court case, which I do not think is helpful for anyone concerned. It is frustrating for a number of unions and workers’ rights organisations that have been campaigning on this issue, but also for a wide variety of platforms—they are not the very biggest ones that are taking things all the way to court. They would prefer some clarity so that they could potentially offer additional benefits to people who leverage their platforms. That is the first thing to say.

A significant portion of the Bill is made up of things that we either have no view on or that, broadly speaking, would be fine. The reality is that I am not going to sit here and say that it is going to be catastrophic for the tech start-up community. In truth, it is not going to be.

David Hale: There are steps in the Bill on strengthening paternity and maternity protection, and that is one of the reasons why I talk about splitting the Bill up. Those seem like good things that probably have a positive impact on the workforce as a whole. As I said, because of the overwhelm, we are still going through the detail, but those seem like good measures. Would it not be better to focus on good measures, and things where the risks, costs and trade-offs are understood, and to make a decision to proceed positively with those?

Compared to the last speakers, we are less likely to have a particular view on the trade union aspects of the legislation. On the trade union aspects, it is fairly well understood what the measures are and what their impact will be—that is decision-ready. The bits that are not decision-ready are the proposals around unfair dismissal and zero-hours contracts. The bit that could be decision-ready but is not is probably around SSP and the question of a rebate.

[The Chair]

Anneliese Midgley is next. If we are brief with the question and answers, we will have time for one more question after this.

Employment Rights Bill (Second sitting)

Laurence Turner Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[Jon Pearce (High Peak) (Lab)]

I refer to my declaration in the Register of Members’ Financial Interests. I am a member of the GMB.

[Laurence Turner (Birmingham Northfield) (Lab)]

I again refer to my declaration in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions.

--- Later in debate ---

[Steve Darling]

Q Thank you for coming today. This is the same question for both representatives about my constituents in Torbay—a world of mostly small businesses. Do you have any reflections on how the Bill could be improved to be more supportive of small businesses?

Jim Bligh: I want to speak specifically on that to flexible working. Most of our sector, as I said, offers flexible working. I think most employers do generally, and they really see the benefits of that for employee engagement. There are eight reasons at the moment why you might reject a flexible working request, most of which are based on business need, quality, performance and so on. The concern with the proposal in the Bill is that the burden has shifted to the employer to prove business need. It could be a real challenge for smaller businesses to have to evidence that point.

If you are a small business, as many of you will know from your constituents, you may well be running the business, the finances, the sales and the HR. This adds yet more process into what should be a fairly simple system—a system that we know works, through the stats. People will request flexible working and very often that will be accommodated. The concern for us is that small businesses will be unfairly penalised on that front in particular.

Jamie Cater: I agree. Coming back to the question of timing, it is helpful, as has already been mentioned, that there is a period where not only is there further consultation for organisations like ours to feed into the details and feed in the views of small businesses who make up around 90% of manufacturing, but a period for businesses to be able to see what is coming, plan for it and make preparations. That period between now and 2026 is really important.

Generally, there is a role for Government and organisations like ours, who represent those businesses but also provide support and advice to them, to work together around the communications and make sure that people are aware of the changes—what they mean for them in practice and for SMEs who might not have HR directors, HR departments and access to lots of specialist support. We can do what we can with Government to make sure that businesses really understand what is coming, how they can comply and how they can look at things like best practice to make sure they are ahead of the curve, if maybe they need to be.

[Laurence Turner]

Q I want to ask you about the international dimension; I am thinking about manufacturing businesses. Do you have sites in other countries? Mondelēz Cadbury in south Birmingham comes to mind. Among your members that have exposure to different systems of employment law and labour market regulation, have you received any feedback on the Bill that is informed by a knowledge of different systems and practice?

Jim Bligh: I would be happy to write to you with more details. We have not had direct feedback from members. Very often, the businesses that we work with in the UK, whether large or small, are the UK arm—they will operate their HR and legal policies and all the rest of it in and from the UK for the UK market.

To go back to something I said earlier, flexible labour markets are the hallmark of growing economies and of growing productive food and drink manufacturing sectors around the world. Global businesses would say that the UK has done really well on that front in recent years, so would not want to go any further backwards. I am happy to write to the Committee after this with more information about international examples.

Jamie Cater: Anecdotally, some concern has been expressed by our members about the competitiveness of the UK when it comes to manufacturing and the measures in the Bill. There is a concern from member companies that might be headquartered elsewhere or have significant operations in countries outside the UK that it is becoming harder, more expensive and more challenging to employ people in the UK.

The Government have done a lot of very welcome stuff in developing an industrial strategy that gives a lot more certainty and confidence for lots of businesses to invest generally in operations in the UK, but when we think about the total cost of the Bill and its administrative and regulatory impacts, there is a bit of concern that it is becoming less attractive to employ people in the UK versus elsewhere. We are increasingly having conversations with members about that.

[Nick Timothy]

Q The impact assessment says that the costs of the Bill are around £5 billion, but earlier we heard that that is actually probably an underestimate and it is likely to be a lot higher. Could you tell us a bit about where those costs will tend to fall for your sectors in particular and how they will relate to other challenges that businesses are going to face with the national insurance rise, the equalisation of the minimum wage and higher energy costs?

Jamie Cater: A lot of those up-front costs will have to go into training, in particular for HR managers, people managers and line managers, not just to ensure regulatory compliance but for employers that want to think about how their broader culture and organisational culture reflects the principles of the Bill. Lots will go into ensuring compliance and wider training of staff.

I mentioned earlier that there was concern that the Budget announcements on NICs—you mentioned the living wage and minimum wage as well—may make it more difficult to take the risk of employing people who might require additional training and, more broadly, that training budgets might get squeezed. It is already difficult and has been made challenging over recent years for our members to recruit the apprentices that they need; I am thinking about the apprenticeship levy and wider skills policy.

The challenge, I suppose, is that given that training budgets are getting squeezed the money effectively goes increasingly into training managers rather than necessarily into the young people who need the trade and technical skills to work on shop floors and production lines. The risk is that that could further weaken manufacturers’ already unfavourable position when it comes to investing in the technically skilled workforces of the future. That is where we see the real risk.

Jim Bligh: I agree with Jamie on all that and would add two more specific examples. I have mentioned the administration burden, which falls particularly on small businesses but really falls on them all. There are two examples of where that might come in. One is on the collective redundancy proposals for consultation, which remove the single establishment. If you are a large business with, say, four or five different sites and you are making more than 20 people redundant at one of those sites, the expectation will be, according to how we read the Bill, that you consult across all those sites.

Previous witnesses have called this a perpetual consultation, and that is a concern that we have as well —that it would be quite hard to manage. It is administratively really difficult to manage something like that across five different sites in a business. It could also lead to uncertainty and confusion among employees, who are being constantly consulted on restructuring and changes to other parts of the business in other local areas that have no impacts on them.

The other point on zero-hours contracts is that there is a risk that with a short reference period of 12 weeks, you end up not aligning with seasonal spikes in demand, so you end up paying people substantially more to do contracts that actually are not required, given that that does not reflect a full season. So our proposal, like others’, is for something more reflective and closer to the Ireland model. We would suggest a 26-week reference period; that covers most elements of seasonality in a business.

--- Later in debate ---

[Steve Darling]

Q Not that long ago, I met Sovereign Housing Association about developing more social rented housing in my constituency of Torbay. It shared that in the west of England, one of the biggest issues is the lack of medium-sized builders to help to deliver this good. I am sure that is the case elsewhere in the country as well. Do you see the Bill having a positive impact on developing those potential positive engines of change for our country, or having a negative impact? What would you change?

Alasdair Reisner: As an employer representative body, it is very easy to say, “Here are all the problems associated with the Bill.” I think we should be nervous about that, because there is a democratic mandate for what is going forward. Equally, I think we should be honest and say that we do see that it will create an additional burden for industry, although I am going to be very honest and say that we do not have good research at industry level to know what the nature of that is. However, it seems palpable that there will be impacts, as there are with some of the other policy changes we have seen, and which you would expect with the change between two Governments.

At the risk of looking like I am trying to duck the question, there are both pros and cons with the Bill—it is as simple as that. The particular concerns we have are around redundancy and day one unfair dismissal. Those are the things we want to focus on specifically, as those are the policies that are likely to have the unintended consequences.

[Laurence Turner]

Q I think it is common ground that there are productivity challenges in construction that are particular to the industry, as well as a historical fragmentation of employment relationships. Do you see any opportunities for marrying the levelling up of employment standards with productivity gains? The industry has done some very important work on mental health, and I want to put on the record my appreciation of CECA’s positive role in supporting it.

Alasdair Reisner: That is very kind. I was not expecting that at all. It is something that we are extraordinarily passionate about. We have done a lot of work on mental wellbeing, which I think is also incredibly relevant to this Committee, because we are looking at a culture in the workplace that drives mental health. Unfortunately, as an industry, we have really poor mental wellbeing issues, particularly for those at the very bottom end of the skills levels. That is our problem, and we need to do more on that. Sorry, I cannot remember the specifics of your first question.

[Laurence Turner]

Do you see opportunities for marrying the levelling up of employment standards with productivity gains in construction?

Alasdair Reisner: In terms of industry productivity, there is a lot to do, but one of the biggest drivers will be people being happy and healthy at work, and being provided with appropriate training that drives their competence to deliver. So yes, I think there is something there. Ultimately, there are big challenges that sit outside the employment space. At the minute, we are not even measuring productivity properly. Knowing whether we are improving starts with having the first clue about what we are supposed to be measuring. I should say that there is good work going on in that space at the moment.

[Chris Murray]

Q I am particularly interested in how migration has affected the labour market. I know the construction industry has seen a lot of it, and there has certainly been a big public perception—whether it is true in reality is up for debate—that sectors that saw high levels of migration over the past 10 or 15 years also saw a degradation in working standards through the spread of zero-hours contracts, wage undercutting, and fire and rehire. Do you agree with that assessment—not that it is the case, but that there is that perception? Would strengthening workers’ rights as proposed in the Bill assure employees in your industry, who have a perception that global events—migration flows or changes in how capitalism works—affect them?

Alasdair Reisner: There is a characterisation that construction sought migrant labour as a way of undermining the cost of the existing workforce, but—I hold my hands up; I am a lobbyist for the industry—that is just not true. A lot of people do not understand that we are a relatively high-paying industry. We used migrant labour where there was a lack of capacity in the industry, and it was almost a balancing item to meet that capacity; it was not about undermining costs. I am confident that, whatever we do on employment rights, we will still have a challenge around meeting our future skills needs. I do not think migration is the answer; I think there is a long-term piece around us recruiting more effectively domestically.

Employment Rights Bill (Third sitting)

Laurence Turner Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Steve Darling]

Q I have one short question. How do you see the Bill impacting the United Kingdom’s productivity?

Liron Velleman: The Bill should have a positive impact on productivity. Following on from Joanne’s previous answer, when people are in insecure work, they are worried about whether they are going to lose their job tomorrow, whether they will lose some of their benefits or pay, and whether they will have the security of knowing what shifts they will be working. Tightening up lots of parts of employment legislation currently on the statute book should give workers extra confidence, so that they will be able to be happy at work and work more flexibly, representing the current state of the economy rather than keeping to how things were. That should, in totality, result in greater productivity for businesses as well as for individual workers.

[Laurence Turner (Birmingham Northfield) (Lab)]

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

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

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

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

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

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

[Chris Law (Dundee Central) (SNP)]

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

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

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

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

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

--- Later in debate ---

[Sarah Gibson]

Q I have a quick question. Do you think that some of the reforms in the Bill will genuinely help people who are disabled to go back into work in a more flexible and safer environment, and will therefore encourage them to take on employment where perhaps they are not doing that at the moment?

Nye Cominetti: The bit of the Bill that most obviously addresses that is the right to request flexible work, which is being strengthened, as I am sure you know—employers now have to give a justification for saying no. When you look at surveys of workers with disabilities or elderly workers, flexibility is very often mentioned as something that might have helped them to stay in work.

If you will allow me to make a second point, surrounding all these measures and, in fact, our employment framework more generally, are questions of enforcement and worker power—they are sitting at the side, but they are absolutely crucial. There are many existing rights that workers have on paper, but because our enforcement systems are fairly weak, especially compared with other countries where the state does more of the job of enforcing these rights, people do not necessarily experience in reality the entitlements that the law says they should have.

Even in a world where workers gain that strengthened right to flexible work, that means little if they, for example, look at the employment tribunal system delays and think, “Well, that’s an impossibility. There’s no point fighting my employer over this. I’m never going to win that,” or, “I can’t spend the next two years waiting to win that.” So the answer is yes, but only if we also resolve some of the existing problems about people’s ability to enforce their own entitlements.

[Laurence Turner]

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

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

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

[Chris Law]

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

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

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

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

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

Employment Rights Bill (Fourth sitting)

Laurence Turner Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Sarah Gibson]

Q I am glad to hear that you share my concerns for small and medium-sized enterprises. As you have probably all noticed—it is in my declaration of interests—I have run a small business both here and on the continent for most of my adult life, so I feel for them. It was the first thing that came up once I started to read the Bill.

You mention that you are concerned about day one rights. I wonder about the changes in the probation period. We seem to be in agreement that it might affect where you draw your prospective employees from. Can you suggest any amendments to the Bill that might encourage the entrepreneurial small businesses we so rely on to continue to take on staff from areas of deprivation or the long-term unemployed—those who currently struggle to get work?

Michael Lorimer: I was at a breakfast yesterday morning for the launch the Jobs Foundation’s report, “Two Million Jobs”. A chap from Sheffield spoke who runs an organisation that gets young people into work. He gave the example of a kid—I cannot remember his name—who would not normally find it easy to get a job interview. They trained him and helped him to get the right attire to get him into a job. The point was that this guy looked very risky—he had not worked, and he came from a long line of people who had not really seen any value in work—but he got the job because the people interviewing him saw something that they thought was worth working with. They knew they were taking a risk; they did. He has turned out to be an absolutely superb kid and is now progressing well.

Equally, yesterday I spoke to a friend of mine, a CEO of a business, who had somebody who interviewed incredibly well, did very well for the first 12 months, got promoted and at month 13 or 14 became an absolute monster to manage. Under the two-year rights, they were able to sort that out.

As we all know, you can get the interview stage right or wrong with hires. For SMEs, you just need to give comfort and space that hopefully they will get the right hires, but that if they do get the wrong hires and it is not the right fit, there is an escape route. Personally, I do not want to put a time on that. Our system works well for us at the minute, but I am sure Luke might have an opinion.

Luke Johnson: I find this a big piece of legislation, by my standards: 150 pages is probably what you are used to, but as someone running a business who has 1,000 other things to do than read a 150-page piece of legislation about employment, I find the whole thing rather a surprise. The Prime Minister said that he wants to

“rip out the bureaucracy that blocks investment”.

If there is a genuine belief in the Government that this legislation will boost investment, I have a bridge to sell them.

[Laurence Turner]

Q I apologise to the panel for returning to an earlier dispute in this quite disjointed way, but just for the record, earlier this week one of our witnesses, Paul Nowak, said:

“I do not think there is a direct link; you do not pass a piece of legislation and trade union membership and collective bargaining go up”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 67.]

Another witness, Mick Lynch, said that personally he hoped to see 50% collective bargaining coverage. That is compared with 39% now. It seems like thin margarine to me and certainly not a unionisation of the economy, but there we go.

My question to the panel is the same question that was put to employers’ federations earlier this week. We all understand the points that you have made, but are there specific measures in the Bill that you welcome?

Michael Lorimer: No.

Luke Johnson: No.

Michael Lorimer: I am not trying to be contrarian, but I think Luke’s point is a very good one. There are 150 pages and 28 new measures, or whatever it is. Apart from anything else, it is an administrative burden. I welcome the White Paper hugely, but there is nothing in here that I am excited about.

Luke Johnson: I will give you an example of one very specific issue that may arise that I do not think has been thought through properly, and its unintended consequences. There is an adjustment to collective redundancy rights. This would, I guess, normally apply in a business that is going through a very severe restructuring and possibly an insolvency.

What happens in an insolvency is that a buyer can keep that business alive and keep a chunk of the jobs, at least, from going by buying it out of administration. The one thing that goes through an administration is the TUPE rights of the employees. If you are only buying a small portion of that business, normally you can carve out only TUPE rights relating to the staff of the bit you are buying—let us say that it is several divisions, departments or whatever. As I understand it, this will tighten that, as proposed, such that almost any buyer of any part of that business will face the TUPE rights of the whole workforce. The unintended consequence will therefore be that parts of a business that were good and that could survive will not; they will be shut. The whole thing will be shut and all the jobs will be lost.

I do not think that whoever drew up that part of the legislation has fully thought it through, because it is in society’s interest that where businesses can be saved and rescued—I have been involved on both sides in those situations—they should be. It is always a great deal easier in certain respects to save a business that has failed because it had too much debt, or some other problem, than to start all over again from scratch.

Michael Lorimer: Perhaps I should add that there are aspects of this that I am quite neutral or comfortable about. There are some things around bereavement, and so on, that are all good. I emphasise that my focus today is around the day one stuff and flexibility.

[Nick Timothy]

It is quite conspicuous that you are the first two witnesses, I think, who actually run businesses yourselves, and your evidence is rather different from much of the—

Luke Johnson: Has any of the other witnesses ever created a single job?

--- Later in debate ---

[Dr Tidball]

Q I have two questions. First, to pick up on your point about the economic inactivity of women with caring responsibilities, can you reflect on the value of the maternity leave and paternity leave protections in the Bill for women and their job retention and economic activity? As part of that, what other opportunities are there in relation to paternity and parental leave to strengthen women’s economic activity?

Secondly, we heard from an earlier witness that they were not certain whether the Bill would lead to a decrease in jobs among people with protected characteristics. What is your perspective on the role of the Bill in positively affecting those who have protected characteristics, particularly women and disabled women?

Dr Stephenson: On your first point, as I said earlier, women’s unpaid work is at the heart of their economic inequality. One thing we need to do is to have a better balance of those unpaid caring responsibilities between women and men.

The paternity and parental leave changes in the Bill are a step—a small step. We need to go much further, because we still have one of the biggest gaps in Europe between the entitlement for fathers and second parents and the entitlement for mothers. We also need men to have periods of leave in their own right that they are not taking while the mother is on leave.

The thing about paternity leave is that it is generally taken immediately after the birth and it is about providing support to a new mother just after she has given birth. It is a very difficult time: the first time you do not know what you are doing, and the second time you normally have a toddler to look after as well as a baby, so you need more than one pair of hands.

If we are going to change patterns of caring, there needs to be provision that would encourage and support men to have leave after their partners have gone back to work, where they are the sole carer, because it is not until you are the sole carer in charge of a baby that you actually understand what it is really like. If you are one of two parents at all times, there is always somebody else to do it. That needs a different type of leave.

We have called for a period of maternity leave, which is about recovering from childbirth, establishing breastfeeding and so on; for a period of paternity/partner leave, which is about supporting a new mother; and then for both parents to have a period of what we would call parental leave, which is about caring for a child. Both of those need to be paid, and they need to be individualised. We think that would make a difference. That is something that we hope would come out of longer-term reviews of maternity, paternity and parental leave.

In terms of whether the Bill would lead to a decrease in jobs for people with protected characteristics, as I said earlier, that warning is often heard when you improve employment rights—that actually, it will lead to job losses. That has not proved to be the case thus far, and I do not think the changes in the Bill are so significant that they would lead to job losses. For example, the changes to paternity leave are relatively minimal—it is about making it a day one right, rather than making people wait. It will really help those whom it benefits, but it would be unusual for an employer to go, “Actually, men now have a day one right to paternity leave, therefore I’m not going to employ them.” Of course, men have a protected characteristic of sex, just as women do.

In many areas, improving the situation of workers on zero-hours contracts, who are more likely to be from ethnic minority backgrounds, is more likely to improve their overall standard of living. It will help to lift them and their families out of poverty, so it is more likely to be beneficial.

[Laurence Turner]

Q Dr Stephenson, I would like to ask about outsourcing and outsourced workers, an often-overlooked part of the labour market. We know that women and people from ethnic minority backgrounds are more likely to be outsourced. What is your opinion of the clauses in this Bill in relation to the extension of gender pay gap reporting to outsourced workers and the restoration of the two-tier code for outsourced workers from the public sector?

Dr Stephenson: I can speak to the first question; the second is probably beyond my area of knowledge. We welcome the move to include outsourced workers in gender pay gap reporting. We think that this has been a gap. We are very conscious that you will quite often see that the lowest paid workers, particularly in the public sector, are now outsourced. One of the reasons why people say pay in the public sector is better on average than in the private sector is not because it is better job for job; it is because the lowest paid workers have been moved out of the public sector and into the private sector, and a large proportion of those workers are women, for example cleaners, canteen cooks and so on.

Counting those workers in is really important, as is anything that encourages greater insourcing of workers. What we have seen with outsourcing is that the efficiencies and so-called savings have been largely at the expense of the pay and conditions of those outsourced workers.

[The Chair]

Thank you very much for coming along and giving your evidence.

Examination of Witness

Justin Madders MP gave evidence.

--- Later in debate ---

[Anneliese Midgley]

Q Minister, you spoke earlier about some of the engagement you have had on the Bill, and some of the witnesses earlier today spoke about tripartite meetings that they had been at between the Government, unions and businesses. Could you set out some of your planned future engagement on the Bill?

Justin Madders: Engagement continues, and there will be more next week—we are meeting a group of small and medium-sized businesses—but to date 140 different stakeholders have attended official or ministerial meetings. You will have heard from many of the witnesses that they have been quite impressed, I think, with the level of engagement and how we have listened to concerns expressed about the Bill. We also undertook extensive engagement in opposition. We will continue to do that. We are moving through some live consultations at the moment. As we develop the Bill and some of the regulations and codes of practice that will follow it, there will continue to be engagement throughout. We are very clear that that is the best way to deliver excellent legislation, and we will continue it.

[Laurence Turner]

Q Minister, over the past two years, we have seen some of the highest levels of industrial action since the 1980s. Could you tell us what effect you think the Bill will have on the conduct of industrial relations?

Justin Madders: I hope it will have a positive impact on industrial relations. The way strike action spiralled in recent years was probably the result of frustration with a Government who were not listening to the voice of workers, were not prepared to address their concerns, and were actively moving to frustrate legitimate acts by trade unions to take industrial action. It is about the culture and the level of engagement, as much as it is about the legislation, but there is no suggestion, as far as I can see, that the Bill will massively increase strike action, as some people might have suggested.