Employment Rights Bill

Lord Clement-Jones Excerpts

Committee stage
Thursday 5th June 2025 Lords Chamber

Moved by

[Lord Clement-Jones]

148: After Clause 34, insert the following new Clause—
“Definition of AI System(1) For the purposes of this Act, “AI System” means an engineered or machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as content, predictions, forecasts, recommendations, or decisions influencing real or virtual environments. (2) AI systems may operate with varying degrees of autonomy and include use of algorithmic techniques such as natural language processing, large language models, multi-modal models, machine learning, speech or image recognition, neural networks, deep learning, or decision trees.”Member’s explanatory statement
This amendment clarifies the definition of an AI System within the context of employment rights as an engineered system generating outputs from inputs using algorithmic techniques.

[Lord Clement-Jones (LD)]

My Lords, first of all, I must make my apologies that this is my first contribution to the Bill. I have waited until day 7—I am not quite sure that that is entirely my fault—but it is a pleasure to speak in this group, particularly as I know that the noble Lord, Lord Holmes, is on the same page, even if he has put forward a different set of amendments.

In moving Amendment 148, I will also speak to Amendments 149 and 150. I hope that these amendments are of interest to the Committee; they are certainly close to my heart. They address the profound and rapidly evolving impact of artificial intelligence systems on the modern workplace. Reports by the Institute for the Future of Work and the All-Party Group on the Future of Work paint a clear picture: the wide spread of AI at work is transforming lives and livelihoods in ways that have plainly outpaced or avoid the existing regimes per regulation. The impact of AI will be profound and, although there are potential benefits, there are also significant risks or impacts on employment rights and conditions in the workplace. We must make sure that AI benefits are realised but also that the detriment is avoided.

As the All-Party Group on the Future of Work found, there is an urgent need to bring forward robust proposals to protect people and safeguard our fundamental values in the workplace. Existing regulatory frameworks are strained. Technical approaches commonly deployed before deployment of algorithmic systems are often inadequate. That is why a systematic framework for accountability is urgently required.

The workplace AI risk and impact assessments—WAIRIAs, as we have coined them—proposed by these amendments, are intended to provide such a framework. As the Institute for the Future of Work and others have argued, mandating such regimes of impact assessment is a practical response to a deficit of responsible foresight.

It is important for WAIRIAs to be made a legal requirement and for accompanying guidance to be issued to outline a framework. Amendment 148 defines what constitutes an “AI System” in this context as:

“an engineered system generating outputs from inputs using algorithmic techniques”.

That very clear definition ensures we are all addressing the same technology when discussing its regulation.

Amendment 149 introduces the cornerstone requirement for workplace AI risk and impact assessments. This amendment mandates that:

“Before implementing or developing an AI system which may have significant risks or impacts on employment rights and conditions in the workplace, an employer must conduct a workplace AI risk and impact assessment”.


The rationale for this is crucial. AI systems can have a potential significant risk or impact on areas vital to workers, including:

“the identification or exercise of rights … work access or allocation … remuneration or benefits … contractual status, terms or conditions …”

and even

“mental, physical or psychosocial health”.

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[Lord Clement-Jones (LD)]

My Lords, I thank the Minister. That is probably the most comprehensive statement about the Government’s intentions on AI regulation that I have heard in this Parliament, so I thank her and her officials for taking the time and trouble to set out their approach.

The noble Lord, Lord Sharpe, talked about gap analysis. I am very much in favour of that. I do not want to see duplication of regulation; I want to see effective regulation. The noble Baroness, Lady O’Grady, set out the challenge: will the Government address the new challenges? That seems to be absolutely at the heart of this.

I thank the Minister for her assurance that there will be an imminent consultation. I think all of us with an interest in this will very much want to take part in that. I hope that this mini-debate has started the ball rolling in getting people’s thoughts about what we can do. What the noble Baroness, Lady Bennett, said was crucial; the illustrations she gave were exactly why we are concerned about these issues.

Talking of gap analysis, this morning I helped to launch the ICO’s new AI and biometrics strategy. We are all a bit nervous about this because we do not think the current ICO regime covers all the issues relating to AI use, particularly in the workplace. We are subject to exactly the issues that the noble Lord, Lord Holmes, put his finger on. The Government have no appetite for cross-sectoral regulation, but what does that mean? Does it mean having to pick off individual sectors, sector by sector, only to be told on individual Bills, “I’m sorry, it’s not appropriate to start legislating about AI in our particular bit of legislation”?

Employment Rights Bill

Lord Clement-Jones Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

Finally, as I said two years ago, there was not then, and there is not now, any clear channel between freelancers and government. The Creative Industries Council, which is concerned primarily with the health of the sector rather than the health of the industries’ workforce per se, contains no direct representation for individual artists or creators. The creator remuneration working group is concerned with the single important issue of streaming. A freelance commissioner would absolutely help to bridge a gap that so clearly exists.

[Lord Clement-Jones (LD)]

My Lords, I declare an interest as chair of Authors’ Licensing and Collecting Society. I rise to speak to Amendments 301 and 302, which aim to provide vital protections for freelance workers in the UK. It was a pleasure to hear the introductions from the noble Lord, Lord Freyberg, and the noble Earl, Lord Clancarty, who set the scene extremely effectively.

The common theme is that the Bill take steps to modernise employment law but risks leaving a significant segment of our workforce behind. As we have heard from both out initial speakers, the UK’s freelance workforce is a powerful engine of our economy and culture, particularly in the creative industries. As both illustrated, the number of self- employed is not only rising rapidly, reaching 1 million now in the creative industries; but the actual proportion of those engaged in the creative industries, representing 32% of jobs within the creative sector, is an extraordinary figure.

Despite their immense contribution, however, freelancers currently lack a single clear voice representing their interests to government. This absence has led to a decline in pay and conditions, with nearly two thirds of freelancers reporting low or unfair pay in their careers, and an overwhelming majority impacted by late payments. As the noble Earl, Lord Clancarty, mentioned, the Covid-19 pandemic starkly exposed their vulnerabilities, highlighting a lack of security, unequal access to opportunities and inadequate basic safety nets. These three amendments specifically address those critical issues.

A fundamental problem is the lack of a consistent legal definition for freelancers. Freelancing is not the same as self-employment, and freelancers often operate through a mixture of engagements, blurring the lines of employment status. This ambiguity creates uncertainty and can inadvertently exclude them from rights.

Amendment 301 proposes to insert a new section into the Employment Rights Act 1996, providing a clear definition: a freelancer is an

“individual who is engaged to work by a company directly on flexible contracts, through their own company or through other companies on a short-term basis, and who is typically responsible for their own tax and national insurance contributions and is not entitled to the same employment rights as employees”.

I take the point of the noble Earl, Lord Clancarty, about sole traders, but this clarity is essential for effective policy-making and for freelancers themselves to understand their status and rights.

The amendment also empowers the Secretary of State to issue further guidance and to create an online tool to assist in determining freelancer status, adapting it as time goes on. Once we have a clear definition, we need a dedicated champion, and the noble Earl’s Amendment 287 proposes the establishment of an office of the freelance commissioner, to be led by an independent freelance commissioner appointed by the Secretary of State. This role, as he mentioned, has been overwhelmingly called for by voices across the sector, including my own Authors’ Licensing and Collecting Society, Creative UK, the Federation of Small Businesses, Prospect and a host of other organisations to which he also referred.

The freelance commissioner would serve as a critical conduit between industry and government, providing expert knowledge and genuine oversight. The responsibilities are set out in the amendment, but, in effect, he or she would advocate for the needs of freelancers across all government departments; bridge the existing gap in representation, especially where councils such as the Creative Industries Council lack advocacy for individual artists or creatives; drive change in government and business, aiming to eradicate the red tape affecting freelancers; gather and analyse crucial data on the freelance workforce, with a focus on the creative industries; and improve government understanding of the employment issues facing freelancers.

Finally, to ensure that the commissioner’s role is embedded in government policy considerations, Amendment 302 introduces a duty on relevant government departments to consider the specific needs of the freelancer workforce when formulating new policies or regulations. Currently, freelancers are often left behind in government policy due to gaps in data and their irregular employment patterns. They are more susceptible to economic fluctuations and lack the fundamental protections that employees enjoy, such as sick pay, flexible working hours and parental rights.

This amendment would mandate that departments such as the Department for Business and Trade, the Department for Work and Pensions and the Department for Culture, Media and Sport have due regard to freelancer circumstances. Crucially, it would also require those departments to consult with the freelance commissioner during the development of any such policies. This duty is vital to ensure that upcoming employment reforms are fit not only for more traditional forms of employment but for the self-employed and freelance workforce, thereby safeguarding the long-term success of industries such as the creative sector.

These three amendments, which seek a clear definition of a freelancer, the establishment of a dedicated freelance commissioner and a statutory duty on government to consider freelancers in policy-making, are interconnected and essential. They represent a fundamental recognition of the modern workforce and a commitment to creating a fairer, more secure environment for those who drive innovation, creativity and economic growth.

[Viscount Colville of Culross (CB)]

My Lords, I apologise for being unable to here at the beginning of this debate despite having added my name to Amendment 287. I was stuck on the motorway for the last three hours. I absolutely support the amendment; it is an incredibly good measure. I hope that the Minister will listen kindly to my noble friend’s amendment and speech.

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[Lord Katz (Lab)]

My Lords, I am grateful to the noble Lords, Lord Freyberg and Lord Clement-Jones, and the noble Viscount, Lord Colville of Culross, for tabling their amendments, all concerning the creative and cultural sectors. I am pleased to be having this debate on how this important sector is being supported by the Government and how workers within the sector will benefit from the Bill. I pay tribute particularly to the noble Lord, Lord Freyberg, for his excellent and long-standing work in this area. I think it is fair to say that he is a creative inspiration to us all in his endeavours to support this very important sector.

The Government share this passion and certainly understand the importance of this sector. I draw attention to the significant work that we are already doing to support it. These sectors—creative and cultural—are a vital source of growth. Creative industries are estimated to have contributed £124 billion in 2023, accounting for 5.2% of UK gross value added, and the cultural sector is estimated to have contributed some further £35 billion in the same year, accounting for 1.5% of UK GVA.

The creative industries and cultural sectors are a distinct part of the wider UK workforce, as the noble Lord, Lord Freyberg, explained. They have a significantly higher proportion of self-employed individuals, reflecting the sector’s entrepreneurial and freelance nature. In the latest published data, as of 2023 there were 2.4 million filled jobs in the creative industries and 666,000 filled jobs in the cultural sector. Of these jobs, nearly half, 49.6% in the cultural sector, were self-employed, and 27.9% in the creative industries, compared with 14.5% of UK jobs overall. This flexibility not only drives innovation but supports the more project-driven nature of the creative industries. However, we also know that freelancers’ creative careers, despite offering a more flexible and autonomous way of working, are often precarious and come with lower job security; many speakers in this debate spoke to that fact. I highlight the contribution made by the noble Baroness, Lady Bennett of Manor Castle, setting out the precarious nature of working in this sector.

I turn specifically to Amendment 259 in the name of the noble Lord, Lord Freyberg. Through the Bill we are introducing the school support staff negotiating body and introducing a framework for negotiating bodies in the social care sector to help tackle recruitment and retention issues there. The Government recognise that other sectors, such as the arts and culture sector, may well benefit from more formal frameworks for collective bargaining, and we intend to consider other sectors in due course. In the meantime, we want to encourage collective bargaining at the local level in these sectors. It is the Government’s intention that we should learn the lessons from this process in the social care sector first, before considering where it may be appropriate to introduce similar frameworks in other sectors.

I am struck at this point by the contribution from the noble Lord, Lord Londesborough. As he said, while the focus of these amendments is to discuss the nature of freelancing in the creative and cultural sectors, freelancers are self-employed but of course there are self-employed workers in many other sectors beyond. It is not a simple thing to analyse, that is for sure.

Regarding Amendments 284 and 288, also in the name of the noble Lord, Lord Freyberg, regarding impact assessments, as your Lordships’ Committee will be aware, we have already published a comprehensive set of impact assessments. This analysis is based on the best available evidence on the sectors likely to be affected by these measures, including the arts, entertainment and recreation industries. We recognise the importance of ensuring that the impacts of these policies on workers, businesses and the economy are considered, and that analysis is published outlining this. That is in section 17 of the summary impact assessment, which assesses the impact on all different sectors, including the creative industries. We already intend to publish further analysis, in the form of both an enactment impact assessment when the Bill secures Royal Assent and further assessments when we consult on proposed regulations to meet our better regulation requirements. We are also committed to consulting with businesses and workers ahead of setting out secondary legislation, including the sector mentioned in the amendment.

On Amendments 285 and 331 in the name of the noble Lord, Lord Freyberg, we recognise the importance of preserving and supporting the financial sustainability of cultural organisations, including small and independent cultural organisations. However, we want to avoid uncertainty or even unintended negative consequences for cultural workers. We welcome views on the ways that cultural organisations experiencing financial hardship can be supported, including the types of advice that they may require on employment practices. More generally, the Government will continue to work with the creative and cultural sector to understand how this legislation can work with it in its context, while strengthening legal protections for employers. But again, this must not lead to uncertainty or negative consequences for the workforce, which we believe staged implementation, for example, would create. I think the noble Lord, Lord Freyberg, will know that both DBT and DCMS have been engaging with sector organisations, including UK Theatre, to have productive conversations to support this sector in understanding and adapting to the new legislation, while considering what additional support we could give to this sector in particular.

Finally, I address Amendments 286 and 287 tabled by the noble Lord, Lord Freyberg, and Amendments 301 and 302 in the name of the noble Lord, Lord Clement-Jones, regarding freelancers. Freelancers may benefit from the reforms to trade union legislation and improvements in the enforcement system, including the regulation of umbrella companies. We have also committed to additional measures to strengthen protections for the self-employed. The noble Earl, Lord Clancarty, rightly raised issues facing those who are self-employed, such as action to tackle late payments. We have already announced a package of measures to tackle late payments to small businesses and the self-employed, including a new fair payment code, upcoming legislation requiring large companies to include payment performance in their annual reports and an upcoming consultation on potential measures to go further. Other measures to strengthen protections for the self-employed include the right to a written contract, an extension of health and safety, and blacklisting protections.

On health and safety, my noble friend Lady Caine of Kentish Town raised the honourable campaigning work of the Mark Milsome Foundation, in a speech that showed both passion and insight in this area. It is essential that employers in the creative industries do not use—or rather, abuse—the multifarious employment statuses of those working in the sector to evade their responsibilities, particularly when it comes to health and safety. As the noble Baroness, Lady Bennett, said, it can indeed be a matter of life and death.

I am pleased that my noble friend Lady Caine acknowledges that this Bill may not be the most appropriate vehicle for the changes that she wishes to secure and that secondary legislation or amendments to the Health and Safety at Work etc. Act would perhaps be more appropriate. However, I am happy to take this back to colleagues in DBT and DCMS.

As has been noted, the creative industries have a high proportion of freelance workers, who are crucial to the sector’s success. To respond to the noble Lord, Lord Clement-Jones, and others, the sector is working to address the recommendations of the Good Work Review, a deep dive into the working practices in the creative industries, which highlighted freelancers’ job quality as a particular concern. My colleagues in the Department for Digital, Culture, Media & Sport are working with industry to understand government’s role in any solutions that are developed. I and my DCMS colleagues will be happy to continue discussing how best to support freelancers, and the creative industries more widely. It is with this in mind, and the Government’s unwavering support for the creative industries, performing arts and entertainment sectors, that I ask the noble Lord, Lord Freyberg, to withdraw Amendment 259.

[Lord Clement-Jones (LD)]

My Lords, the Minister has noticed the strength of feeling across the House in terms of support for some of the freelance amendments. I very much appreciate what the noble Lord, Lord Sharpe of Epsom, said earlier. However, across the Benches there is very strong support for further protection for freelancers. Will one of the options in the Good Work Review, which the Minister referred to, be the appointment of a freelance commissioner—with all the other aspects that I have mentioned in terms of definition and duties?

[Lord Katz (Lab)]

I was certainly happy to reflect that there was cross-party agreement on this. I am unable to recall the exact terms of the Good Work Review here, so I undertake to write to the noble Lord with some more detail if that is acceptable.

[Lord Clement-Jones (LD)]

Perhaps the Minister could add another bell or whistle to what he has just said. Will he undertake to meet those with a strong interest in the protection of freelancers on a cross-party basis, to have discussions, before Report?

[Lord Katz (Lab)]

I am always happy to meet with noble Lords on these important matters.

Employment Rights Bill

Lord Clement-Jones Excerpts

Committee stage
Tuesday 24th June 2025 Lords Chamber

Moved by

[Lord Clement-Jones]

318: After Clause 150, insert the following new Clause—
“Rights of dependent contractorsAfter section 230 of the Employment Rights Act 1996 (Employees, workers etc), insert—“230A Rights of dependent contractors(1) A dependent contractor is an individual who—(a) is engaged to perform work or services personally for an employer or contractor of services;(b) primarily or substantially relies on a single employer or contractor of services for their income;(c) is not classified as an employee under a contract of employment, nor as an independent contractor operating a fully autonomous business;(d) is subject to a degree of control by the employer or contractor of services regarding the manner, timing, or conditions under which the work is performed.(2) A dependent contractor, as defined in subsection (1), must be entitled to the following rights statutorily accorded to employees— (a) payment at or above the National Minimum Wage for all tasks performed;(b) paid annual leave and shall be subject to the record-keeping duties as outlined for employees in this Act;(c) statutory sick pay;(d) family leave entitlements including parental leave, and bereavement leave;(e) protection from unlawful deductions from pay and protection against discrimination under applicable equality legislation;(f) the right to request fixed hours after a qualifying period of continuous service with the same employer or contractor of services;(g) the right to and on terms to be defined in regulations, mirroring the rights afforded to zero-hour workers and those on similar contracts.(3) Dependent contractors, as defined in subsection (1), are not entitled to—(a) statutory redundancy pay;(b) minimum notice periods for termination unless otherwise specified in their contract.(4) The Secretary of State may by regulations make further provision in respect of the rights and obligations of dependent contractors, including defining qualifying periods for certain rights.””Member's explanatory statement
This amendment aims to define dependent contractor status by reference to existing employee rights particularly those related to flexible working arrangements and family leave.

[Lord Clement-Jones (LD)]

My Lords, I will see my noble friend Lord Fox tomorrow and I will tell him what he has been missing. I think the noble Lord, Lord Leong, is already making history by using the phrase “very, very soon”—or was it “very, very, very soon”? In my experience, I do not think I have heard that, so it is probably arriving tomorrow morning.

Amendment 318 seeks to introduce specific provisions for dependent contractors. It proposes the insertion of a new section into the Employment Rights Act 1996, by way of a new clause after Clause 150. It is intended to address a significant gap in our current employment law by recognising essential rights and extending them to a growing segment of our workforce. This is a serious and rather surprising omission from the Bill; certainly, it is a gap my party promised to fill in its manifesto last year. I feel an obligation to put this amendment forward today.

The Minister spoke about employment rights in a modern labour market. I do not believe we can secure proper employment rights in a modern labour market without addressing the issue of the dependent contractor. We know that the nature of work has changed and is changing. More and more individuals are engaged to perform work or services personally, relying primarily on a single employer or contractor for their income, yet they fall outside the traditional definitions of employee and fully autonomous independent contractor.

These dependent contractors are often subject to a degree of control over how, when and where they work, leaving them in a precarious position, without adequate employment protections. No doubt this Committee will be familiar with many of those who work in the gig economy—delivery workers, contracted drivers, piece-rate workers, home workers and even consultants who work almost exclusively for a single client. Granted, some Uber drivers and Hermes couriers went to court and managed to establish that they are in fact workers and not independent contractors, but more needs to be done. We need explicit statements about the status of such workers and explicit rights set out in this Bill.

The amendment seeks to rectify the situation by defining dependent contractor status clearly within the Employment Rights Act. Crucially, it proposes to extend several key employment rights to these individuals, treating some of the measures in the Bill as applicable to them. Specifically, this amendment would ensure that dependent contractors are entitled to the rights set out in proposed new subsection (2) of my amendment. This includes payment at or above the national minimum wage for all work performed; the right to payment for cancelled, moved and curtailed shifts, which mirrors the vital protections the Bill introduces for zero-hours workers; statutory sick pay from day one of sickness, aligning with the Bill’s improvements to SSP; day one rights to paternity and parental leave, and the new right to bereavement leave.

The amendment also includes a statutory right to disconnect from work-related communications outside of normal working hours, and protection from detriment for exercising this right, as the Bill establishes for other workers. It also includes protection from unlawful deductions from pay, and against discrimination. It further includes an entitlement to guaranteed hours if regular and predictable hours are worked for a defined period, moving beyond just the right to request and aligning with the new provisions for qualifying zero-hours workers.

It is also important to note that this amendment respects the distinct nature of dependent contractor relationships. It acknowledges that, unless specified otherwise in their contracts or by future regulations, dependent contractors would not automatically be entitled to statutory redundancy pay or general minimum notice periods for termination, so there would continue to be a distinction between employment and dependent contractor status.

Furthermore, the amendment would empower the Secretary of State to issue further regulations to define key terms and the specifics of these rights, ensuring flexibility and the ability to adapt to evolving working practices. It would also mandate the issue of guidance, including an online tool to aid in determining dependent contractor status in disputed cases. By accepting the amendment, we would have the opportunity to bring fairness and greater security to a significant and growing portion of our workforce. We could ensure that individuals who are deeply reliant on a single employer received fundamental employment rights reflecting the modern realities of the work. I very much hope that the Government will support this vital addition to the Bill. I beg to move.

[Lord Sharpe of Epsom (Con)]

My Lords, I thank the noble Lord, Lord Clement-Jones, for his amendment. As we consider this legislation, it is timely to reflect on how it would interact with one of the most significant shifts in our labour market in recent decades: the rise of the gig economy. This sector has delivered considerable benefits, including increased flexibility, new income opportunities and innovative business models. It has allowed many individuals to engage with work on terms that suit their circumstances, whether as a primary or supplementary source of income.

However, with any new form of work comes a degree of legal complexity. Our current employment framework was designed largely in a different era—one where work tended to take place in fixed locations, during fixed hours and under traditional contracts. The gig economy challenges many of those assumptions. For businesses, this complexity can lead to inconsistencies in regulation, administrative uncertainty and litigation risk; for individuals, it can mean uncertainty about rights and entitlements, and for policymakers, it raises the broader issues of whether and how the legal definitions of employment need to evolve to reflect modern working practices.

The Bill, while not focused exclusively on the gig economy, touches on matters such as workplace rights, regulation and the role of secondary legislation that will inevitably affect it. We should therefore consider whether the legislation provides sufficient clarity for businesses operating flexible models, whether it supports fair and predictable frameworks for all parties, and how future regulations will ensure that any changes to employment classifications or entitlements are based on clear, evidence-led analysis.

The question before us is not so much whether the gig economy is good or bad—it is part of the modern labour market, and it will obviously continue to grow and remain so. The more pressing question is whether the labour market is equipped to keep up with that evolution, and whether the Bill provides the right foundation for doing so. In that context, thoughtful and measured discussion about emerging work patterns such as dependent contracting, platform work, freelancing —which we discussed the other day—and other hybrid models are not only appropriate but very necessary. I look forward to further discussions with the noble Lord, Lord Clement-Jones, and others, on this subject.

Before I sit down, I thank the noble Lord, Lord Leong, for the great courtesy with which he has always conducted himself in his discussions and deliberations with our side. I enjoyed his valedictory remarks. I felt that he was perhaps slightly irked by the fact that we have had some relatively lengthy debates—perhaps because he did not agree with the premises of some of them. I would say very gently that that is the point of Committee; we are not supposed to agree, we are supposed to probe. As a former Home Office Minister, I have to say that these debates are not long; they are brief. These debates are like Usain Bolt; ours were like Mo Farah.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling Amendment 318. He raises an important issue. As we have been discussing, the changing nature of work and the gig economy are a real challenge for us, and we recognise the complexity and shortcomings of the UK’s current employment status framework.

I can reassure the noble Lord that the Government have committed to consulting on a simpler framework for employment status, and this remains our intention. We have been clear that, as a result of the complexity, some of the reforms in the plan to make work pay will take longer to undertake and implement. We want to get the potential changes to the framework right, and we will consult on the fundamental aspects of employment law before taking action. I think that in part echoes the comments of the noble Lord, Lord Sharpe, who recognised the complexity and the need to think it through before we get it right. We are determined to follow this through and take action.

I am sympathetic towards the noble Lord’s aims to extend the protection of employment law. The self-employed make a huge contribution to the UK economy. As the noble Lord, Lord Sharpe, said, while many enjoy being their own boss and the flexibility that self-employment brings, others can find themselves highly dependent on one particular client with little choice, which can bring them challenges and problems.

I appreciate that the noble Lord is seeking to address this with his amendment by introducing a new employment status of “dependent contractor” and extending employment protections to those individuals. However, the amendment would further complicate what is already a highly complex area—one where, as I am sure the noble Lord knows, there have been several high-profile Supreme Court judgments in recent years. We want to avoid introducing an additional employment status before we have had the opportunity to reflect and consult further.

In addition, I can assure the noble Lord that the Government are committed to supporting and championing the self-employed. We have already announced a package of measures to help the self-employed thrive in good-quality self-employment, including measures to tackle late payments to small businesses and the self-employed. I urge the noble Lord to listen to our reflections and our determination to look at the whole issues around the gig economy, and to give us a little bit of space to do that. For this reason, I ask him to withdraw Amendment 318.

[Lord Clement-Jones (LD)]

Can the Minister say what the status is of the consultations she mentioned? She offered very reassuring words and said there was a consultation on employment status. Is that under way? Would that mean the idea is to eventually have an Employment Rights (No.2) Bill, which we would all look forward to debating? What is the exact status of what the Minister is reassuring us on?

[Baroness Jones of Whitchurch (Lab)]

This has come up several times in the debates we have had on the different aspects of employment status. We have said that we need to do further work on the employment status elements of the plan to make work pay. I do not think it is intended to come back and put that in this legislation. The consultation has not started yet, but there will be a thorough consultation. We are going to carry out a detailed piece of work on this, and we will come back with further proposals on how we are going to address it in due course. I hope that answers the noble Lord, even if not completely.

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[Lord Clement-Jones (LD)]

My Lords, that ministerial “in due course” is not quite as good as “very, very, very soon”. I sense an awful lot of goodwill coming from the Minister, but this is a really important part of the economy. I appreciate the thoughtful comments from the noble Lord, Lord Sharpe. I did not expect a resounding endorsement of my amendment, but what he said about the evolution of employment rights and the need to make sure that our employment law is equipped to keep up with the way the modern economy is evolving is really important.

The Minister clearly recognises that we need to move forward in this area, but it is the pace and the fact that so many people—an increasing number—are now part of the gig economy. We see them passing every day: they do deliveries and are couriers—every form of the gig economy—and they have very few rights unless they have litigated, like Uber drivers or Hermes couriers, to establish them.

Employment Rights Bill

Lord Clement-Jones Excerpts

Report stage
Monday 21st July 2025 Lords Chamber

Moved by

[Lord Clement-Jones]

111ZA: After Clause 34, insert the following new Clause—
“Workplace AI risk and impact assessments(1) Before implementing or developing an AI system which may have significant risks or impacts on employment rights and conditions in the workplace, an employer must conduct a workplace AI risk and impact assessment (a “WAIRIA”)(2) A WAIRIA must be conducted under this section if there is a potential significant risk or impact on—(a) the identification or exercise of rights;(b) recruitment;(c) work access or allocation;(d) remuneration or benefits;(e) contractual status, terms or conditions;(f) mental, physical or psychosocial health.(3) A WAIRIA conducted under subsection (1) must—(a) document the intended purpose and functionality of the AI system;(b) establish a process for undertaking the monitoring of significant risks and impacts; (c) document the definitions, metrics and methods selected for the WAIRIA;(4) Employers must review and update the WAIRIA—(a) at least once every 12 months,(b) whenever substantial changes are made to the AI system to which it relates, or(c) when evidence emerges of unforeseen significant risks or impacts.(5) The Secretary of State must require any Fair Work Agency to issue guidance on the conduct disclosure and enforcement of WAIRIAs within 6 months of this section coming into force.”

[Lord Clement-Jones (LD)]

My Lords, Amendment 111ZA seeks to introduce a requirement for workplace AI risk and impact assessments. This amendment is focused on addressing the profound and rapidly evolving impact of artificial intelligence systems on the modern workplace. There are many opportunities for its adoption but also risks and impacts. There is potentially massive job displacement. AI could displace 1 million to 3 million UK jobs overall. There are workplaces skills gaps; more than half the UK workforce lacks essential digital skills and the majority of the public has no AI education or training.

AI recruitment algorithms have resulted in race and sex discrimination. There are legal vulnerabilities. Companies risk facing costly lawsuits and settlements when unsuccessful job applicants claim unlawful discrimination by AI hiring systems. Meanwhile, AI adoption accelerates rapidly, and the UK’s regulatory framework is lagging behind.

Organisations such as the Trades Union Congress and the Institute for the Future of Work have consistently highlighted the critical need for robust regulation in this area. The TUC, through its artificial intelligence regulation and employment rights Bill, drafted with a multi-stakeholder task force, explicitly proposes workforce AI risk assessments and emphasises the need for worker consultation before AI systems are implemented. It also advocates for fundamental rights, such as a right to a human review for high-risk decisions. IFOW similarly calls for an accountability for algorithms Act that would mandate pre-emptive algorithmic impact assessments to identify and mitigate risks, ensuring greater transparency and accountability in the use of AI at work. Both organisations stress that existing frameworks are insufficient to protect workers from the potential harms of AI.

When I spoke to a similar amendment—Amendment 149—in Committee, the Minister acknowledged this and said:

“The Government are committed to working with trade unions, employers, workers and experts to examine what AI and new technologies mean for work, jobs and skills. We will promote best practice in safeguarding against the invasion of privacy through surveillance technology, spyware and discriminatory algorithmic decision-making … However, I assure the noble Lord, Lord Clement-Jones, that the Institute for the Future of Work will be welcome to make an input into that piece of work and the consultation that is going forward. I reassure the noble Baroness, Lady Bennett, and all noble Lords that this is an area that the Government are actively looking into, and we will consult on proposals in the make work pay plan in due course”.—[Official Report, 5/6/25; col. 878.]


This was all very reassuring, perhaps, but I have retabled this amendment precisely because we need more concrete specifics regarding this promised consultation.

The TUC and IFOW have been working on this for four years. Is it too much to ask the Government to take a clear position on what is proposed now? The Minister referred to the importance of proper consultation. This is a crucial area impacting the fundamental rights and well-being of workers right now, often without their knowledge, and AI systems are increasingly being introduced into the workforce, so the Government need to provide clarity on what kind of consultation is being undertaken, with whom they will engage beyond relevant stakeholders and what the precise timescale is for this consultation and any subsequent legislative action, particularly given the rapid introduction of AI into workplaces.

We cannot afford a wait-and-see approach. If comprehensive AI regulation cannot be addressed within this Bill as regards the workplace, we need an immediate and clear commitment to provision within dedicated AI legislation, perhaps coming down the track, to ensure that AI in the workplace truly benefits everyone. I beg to move.

[Lord Holmes of Richmond (Con)]

My Lords, it is always a pleasure to follow my friend, the noble Lord, Lord Clement-Jones, who, in his single Nelsonian amendment, has covered a lot of the material in my more spread-out set of amendments. I support his Amendment 111ZA and will speak to my Amendments 168 to 176. I declare my interests in the register, particularly my technology interests, not least as a member of the advisory board of Endava plc and as a member of the technology and science advisory committee of the Crown Estate.

I will take one brief step backwards. From the outset, we have heard that the Government do not want to undertake cross-sector AI legislation and regulation. Rather, they want to take a domain-specific approach. That is fine; it is clearly the stated position, although it would not be my choice. But it is simultaneously interesting to ask how, if that choice is adopted, consistency across our economy and society is ensured so that, wherever an individual citizen comes up against AI, they can be assured of a consistent approach to the treatment of the challenges and opportunities of that AI. Similarly, what happens where there is no competent regulator or authority in that domain?

At the moment, largely, neither approach seems to be being adopted. Whenever I and colleagues have raised amendments around AI in what we might call domain-specific areas, such as the Product Regulation and Metrology Bill, the data Bill and now the Employment Rights Bill, we are told, “This is not the legislation for AI”. I ask the Minister for clarity as to whether, if a cross-sector approach to AI is not being taken, a domain-specific approach is, as opportunities are not being taken up when appropriate legislation comes before your Lordships’ House.

I turn to the amendments in my name. Amendment 168 goes to the very heart of the issue around employers’ use of AI. Very good, if not excellent, principles were set out in the then Government’s White Paper of 2023. I have transposed many of these into my Amendment 168. Would it not be beneficial to have these principles set in statute for the benefit of workers, in this instance, wherever they come across employers deploying AI in their workplace?

Amendment 169 lifts a clause largely from my Artificial Intelligence (Regulation) Private Member’s Bill and suggests that an AI responsible officer in all organisations that develop, deploy and use AI would be a positive thing for workers, employees and employers alike. This would not be seen as burdensome, compliant or a mere question of audit but as a positive, vibrant, dynamic role, so that the benefits of AI could be felt by workers right across their employment experience. It would be proportionate and right touch, with reporting requirements easily recognised as mirroring similar requirements set out for other obligations under the Companies Act. If we had AI responsible officers across our economy, across businesses and organisations deploying and using AI right now, this would be positive, dynamic and beneficial for workers, employees, employers, our economy and wider society.

Amendment 170 goes to the issue of IP copyright and labelling. It would put a responsibility on workers who are using AI to report to the relevant government department on the genesis of that IP and copyrighted material, and the data used in that AI deployment, by which means there would be clarity not only on where that IP copyright and data had emanated from but that it had been got through informed consent and that all IP and copyright obligations had been respected and adhered to.

Amendments 171 and 172 similarly look at where workers’ data may be ingested right now by employers’ use of AI. These are such rich, useful and economically beneficial sources of data for employers and businesses. Amendment 171 simply suggests that there should be informed consent from those workers before any of their data can be used, ingested and deployed.

I would like to take a little time on Amendment 174, around the whole area of AI in recruitment and employment. This goes back to one of my points at the beginning of this speech: for recruitment, there currently exists no competent authority or regulator. If the Government continue with their domain-specific approach, recruitment remains a gap, because there is no domain-specific competent authority or regulator that could be held responsible for the deployment and development of AI in that sector. If, for example, somebody finds themselves not making a shortlist, they may not know that AI has been involved in making that decision. Even if they were aware, they would find themselves with no redress and no competent authority to take their claim to.

--- Later in debate ---

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)]

My Lords, I will begin with Amendment 111ZA, moved by the noble Lord, Lord Clement-Jones, and Amendments 168, 169, 171, 172, 175 and 176, tabled by the noble Lord, Lord Holmes, whom I thank for his engagement on these important issues.

I start by reassuring all noble Lords that we agree that AI should be deployed and used responsibly, including within the workplace. As the noble Lord knows, in January 2025, we published the AI Opportunities Action Plan, which included a commitment to

“support the AI assurance ecosystem to increase trust and adoption”

of AI. One of the key deliverables in this area is the AI management essentials tool. We are developing this tool to support businesses, particularly SMEs, to implement good AI governance practices. Following public consultation earlier this year, I hope to update your Lordships’ House on the consultation response and an updated version of that tool soon.

Regarding these amendments, I remind noble Lords that our plan to make work pay makes it clear that workers’ interests will need to inform the digital transformation happening in the workplace. Our approach is to protect good jobs, ensure good future jobs, and ensure that rights and protections keep pace with technological change.

To be clear, we are committed to working with trade unions, employers, workers and experts to examine what AI and new technologies mean for work, jobs and skills. We will promote best practice in safeguarding against the invasion of privacy through surveillance technology, spyware and discriminatory algorithmic decision-making. In response to the noble Lords, Lord Freyberg and Lord Hunt, of course we will put ethics and fairness at the heart of that.

I am keen to stress that we are taking steps to enhance our understanding of this area. This has included engagement and round-table events with a wide range of stakeholders and experts to help enrich our understanding. I reaffirm that we will consult on the make work pay proposals in due course.

The noble Lord, Lord Clement-Jones, asked what would be in the scope of the consultation. The consultation plan includes examining: what AI and new technologies, including automation and AI, mean for work, jobs and skills; how to promote best practice in safeguarding against the invasion of privacy through surveillance technology, spyware and discriminatory algorithmic decision-making; and how best to make the introduction of surveillance technology in the workplace subject to consultation and negotiation with trade union or employee representatives.

The noble Lord, Lord Holmes, asked whether or not this was going to be domain-specific. As the noble Lord, Lord Hunt, just reminded us, this was dealt with in an Oral Question earlier this afternoon, when my noble friend Lord Vallance said that existing regulators will oversee most AI systems, supported by enhanced AI skills and cross-regulatory co-ordination through forums such as the Regulatory Innovation Office. Some cross-cutting issues will be addressed also in the planned consultation on AI.

Looking specifically at Amendment 171, let me reassure the noble Lord that we believe that data protection legislation provides sufficient protection for workers and individuals where their personal data is being used in line with the key data protection principles, including lawfulness, fairness and transparency. Consent is a lawful ground to process personal data. However, due to the power imbalance between the employee and employer, it is often inappropriate for employers to rely on consent from employees to process their data. This is why we have an additional lawful ground to carry out such processing, such as legitimate interest under the data protection law. Therefore, we do not wish to limit data processing in these situations to consent alone. I also point out that while data protection principles establish the requirements that we expect the use of AI systems to adhere to, AI assurance provides ways to evidence that these requirements have been met in practice.

Amendment 170 tabled by the noble Lord, Lord Holmes, would require workers and employers to maintain records of data and intellectual property used in AI training and to allow independent audits of AI processes. As he will know, this issue was debated extensively during the passage through your Lordships’ House of the Data (Use and Access) Act 2025. Only last month I confirmed that we will publish a report, including on transparency in the use of intellectual property material in AI training, within nine months of Royal Assent to the Act, which will be due by 18 March next year. The Government have also committed to setting up expert stakeholder working groups to help drive forward practical, workable solutions in this area, alongside a parliamentary working group to engage with policy development.

Amendment 174 tabled by the noble Lord, Lord Holmes, proposes a review of the use of AI in recruitment and employment. As the noble Lord will be aware, last year the previous Government published detailed guidance on responsible AI in recruitment, which covers governance, accessibility requirements and testing. This was developed with stakeholders and relevant regulators, such as the Information Commissioner’s Office and the Equality and Human Rights Commission. Employers and recruiters may find this guidance useful to help integrate AI into their recruitment practices in a responsible way.

Furthermore, I am excited about the opportunities of AI in supporting the UK’s workforce, as well as creating jobs and growing our economy. However, we must also understand how it may affect the labour market, including any potential disruption. The AI Security Institute has begun assessing this issue, and I hope to be able to update your Lordships’ House on this as work progresses.

Regarding our position on general AI regulation and the establishment of a new AI regulator, we believe that AI is best regulated at the point of use by the UK’s existing sectoral regulators. As experts in their sector, they are in the best place to understand the uses and risks of AI in their relevant areas, and we will support them to do this. I emphasise that in response to the AI Opportunities Action Plan, we have committed to supporting regulators in evaluating their AI capabilities and understanding how they can be strengthened. I assure your Lordships’ House that we are committed to making sure that workers’ interests inform the digital transformation taking place in the workplace.

I am grateful to my noble friend Lord Pitkeathley for raising non-compete clauses. There has been extensive research and analysis in recent years looking at the prevalence of non-compete clauses in the UK labour market and their impact on both workers and the wider economy. Government research published in 2023 found that non-compete clauses were widely used across the labour market, with around 5 million employees in Great Britain working under a contract that contained a non-compete clause, with a typical duration of around six months. As my noble friend identified, this can adversely impact both the worker affected, through limiting their ability to move between jobs, and the wider economy, due to the impacts on competition.

It is often assumed that non-compete clauses are found only in contracts of high earners. However, research published last year by the Competition and Markets Authority found that while non-competes are more common in higher-paid jobs, even in lower-paid jobs 20% to 30% of workers believe that they are covered by non-compete clauses. The Government have been reviewing the research and work done to date on non-compete clauses, and I am pleased to be able to confirm that we will be consulting on options for reform of non-compete clauses in employment contracts in due course.

Finally, the noble Lord, Lord Hunt, asked for my suggested reading list following my noble friend’s kind offer earlier this afternoon. I can do no better than to recommend the excellent book by the noble Lord, Lord Clement-Jones, on AI. In that spirit, I ask the noble Lord, Lord Clement-Jones, to withdraw his Amendment 111ZA.

[Lord Clement-Jones (LD)]

The noble Baroness nearly won me over at that point. I thank her. I feel like someone who was expecting a full meal but receives a rather light snack. I will explain why as we go through.

I thank the noble Lord, Lord Holmes. I feel that I am somewhat upstaging him by putting an amendment at the front of the group, but we have many common themes that we both have pursued over the years together. I agree with him on the desirability of a cross-sector approach. He is much more patient than I am and, in putting down individual amendments and hoping that the Minister will give satisfactory answers, he is clearly more optimistic than I am. Whether his optimism has been justified today, I am not so sure.

The Minister could not even acknowledge the work done by the TUC, which has been ground-breaking in so many ways. It has taken four years, so it is extraordinary that the Government are doing what they are doing. I acknowledge what the noble Lord, Lord Pitkeathley, had to say. I was not quite sure how it connected to AI, but he very cunningly linked the subject of non-compete clauses to innovation, which does link to AI. I was encouraged by what the Minister had to say about consultation on reform.

The noble Lord, Lord Hunt, reminded me that I was a solicitor. Unlike him, I do not still have a practising certificate still, but there we are. He has much more stamina than I have. Non-compete clauses can be extremely important in making sure that know-how is preserved within an existing business. I thank the noble Lord, Lord Freyberg, for what he had to say on making sure that AI ensures human flourishing and that we preserve agency. That is what the amendments tabled by the noble Lord, Lord Holmes, and me are all about.

The Minister talked about an AI assurance ecosystem and AI management essential tools that there will be a consultation on, but I could not sense any intention to do anything other than a sort of voluntary approach. We have a lot of employment law that has developed over the years, but the Government seem to be allergic to doing anything with any teeth. She mentioned recruitment practices, but that again seems to be very much a voluntary approach. The AI Security Institute is not a regulator. I cannot feel that the Minister has given much more than the noble Lord, Lord Leong, gave last time. For instance, the Minister talked about consultation over make-work proposals. This involved talking about best practice on the adoption of AI and how best to deal with surveillance technology. Again, I did not sense any real intent to make sure that we have a new set of protections in the workplace in the face of AI.

I very much hope that, as time goes on, the Government will develop a much more muscular approach to this. As many noble Lords have said, AI presents a great number of opportunities in the workplace, but we absolutely do not want to see the opportunities overwhelmed by mistrust and a belief that AI presents unacceptable risks on the part of those employees. We want to see employees understanding that in the face of AI adoption, they have the right to be consulted and there is proper risk assessment of the introduction of these systems into the workplace, so that there is a proper, consensual approach to AI adoption.

I really do not feel that the Government are keeping up to date with the issues in this respect, and I am afraid that is rather reflected in some of the issues that we are going to talk about on Wednesday as well. In the meantime, however, I beg leave to withdraw the amendment.

Amendment 111ZA withdrawn.

Employment Rights Bill

Lord Clement-Jones Excerpts

Report stage
Wednesday 23rd July 2025 Lords Chamber

[The Earl of Clancarty (CB)]

My Lords, I will speak to my Amendment 160, although I support all the amendments in this group. I declare an interest as a self-employed visual artist. Amendment 160 seeks to establish a freelance commissioner. It is closely tied to consequential Amendments 161 and 162, in the name of the noble Lord, Lord Clement-Jones, which seek to define what a freelancer is and to give the freelance commissioner greater teeth. I am very grateful for the support on this from the noble Lord, Lord Clement-Jones, and I welcome the support of my noble friend Lord Freyberg and the noble Lord, Lord Sharpe of Epsom, as well as that of my noble friend Lord Colville, who I know would have signed this amendment if there had been room to do so.

The first thing to say is that the creative industries welcome the appointment of a champion for this sector, as announced in the industrial strategy after Committee, and are pleased that that champion will be a member of the Creative Industries Council. These are things that the creative industries have been asking for for a long time, so there is appreciation that the Government have listened in this respect. Yesterday, I also had sight of the draft terms of reference—which is, of course, interesting timing. Those terms of reference, which are the result of conversations between relevant organisations and the DCMS within the framework of the Good Work Review, are impressive, if not yet entirely comprehensive, tasks and concerns. It is important to stress that this also illustrates the immense challenges a freelance champion will have. Nevertheless, I applaud the Government for opening the lines of communication between the DCMS and other organisations; long may that continue.

However, there remain questions concerning the champion. What powers will the champion really have, if any significant powers at all? Is this to be a salaried position? How much, in practice, will the champion be able to cut across different departments? Will this role be more about guidance for the sector rather than the really necessary action required for freelancers in terms of the many rights that standard employees have—and to a large extent take for granted—but that freelancers lack? I would be very grateful if the Minister could fill in some of those gaps if she is able to do so.

There are broadly two reasons why we should have a statutorily appointed and independent freelance commissioner. The first is that we urgently need someone to look at the whole landscape of freelance and self-employed work, which constitutes a not-negligible 15% of the workforce—and this is a sector that is growing. As my noble friend Lord Londesborough pointed out in Committee, this includes not just the creative industries but construction workers, agricultural workers and others. My amendment covers that landscape, one that the Bill—which is supposed to be an Employment Rights Bill, not an employee rights Bill—does not cover. Instead, as freelancers are always asked to do, we are told to wait in line. This of course happened during Covid, when so many freelancers fell through the gaps in support.

Even looking just at the creative industries, there is a question as to whether the whole of the creative industries themselves would necessarily be served by the new champion, in whatever guise that comes. The DCMS’s current understanding of these industries may be narrower than the reality, and this is certainly true of those craft industries—hugely important for our economy—that may not necessarily fall within the champion’s remit because of the manner in which parts of the creative industries are currently defined. This is something for the Government to look closely at, and I know that my noble friend Lord Freyberg intends to flesh out some of the detail of this very real concern about invisibility in both this and the debate that follows.

The second crucial reason for having a statutory appointment is not just that that role would have the requisite powers to argue for and effect real change, with the necessary authority to do so, but that it is a long-term position that cannot be rescinded easily because we are in this for the long haul. There is no doubt that freelancers’ concerns—this is certainly true of the creative industries—have grown more critical in terms of rights; income; the problems with late payment; Brexit, which has affected and continues to affect so many of our creative industries, not just music; AI, of course; and, crucially, the downturn in the funding of the sector. All these things have become immense pressures, which demand the appointment of an independent commissioner with the requisite powers to effectively address all these concerns and influence government policy.

I talked at some length in Committee about these increasing pressures as they affect the creative industries, and I will not repeat those arguments, except to add some conclusions from a survey to be published tomorrow by the organisation Freelancers Make Theatre Work—I am grateful for its permission to do so. It says:

“A striking headline in this year’s data is that 44% of respondents earned less than the 2024 UK National Living Wage in the 23-24 tax year … a significant worsening of the already critical situation from the previous year … where the equivalent figure was 34%”.


It goes on to say:

“These levels of pay would be illegal in salaried positions”.


I was worried by Chris Bryant’s recent evidence to the Culture, Media and Sport Committee, in which he said that he wants to see a reduction in the number of freelancers over the next 10 years. My understanding was that he is thinking about workers such as his mother, a make-up artist for the BBC, who lost their salaried jobs and were pushed into becoming freelancers. However, this is but one part of the landscape, and this exclusive emphasis ignores all the other freelancers, many of whom are creators—artists, writers, composers and many others—for whom there never has been any option other than being a freelancer for the work they do. Again, we need to understand the whole landscape—the reality of that landscape and the ecology of that landscape.

It becomes difficult to imagine how effective a champion with close proximity to the DCMS will be if the DCMS is actively trying to reduce the total number of freelancers—something it ought to be agnostic about. We need an independent commissioner—in other words, someone in a position of authority—who will support and, importantly, promote the practice of freelance work. We need it in law; we need it in the Bill. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, it is extremely disappointing that we are debating something of this order of importance at this time of day and at the fag-end of this Bill. However, unusually, I shall try to ingratiate myself with the House by being as brief as possible.

First, I want to thank the noble Lord, Lord Katz, for his letter of 30 June and for the publication of the draft terms of reference for the freelance champion, referred to by the noble Earl, Lord Clancarty, who set out the stall extremely cogently for these amendments. I do not need to go over the ground that he has explained extremely well. The lack of a single clear voice representing the interests of freelancers to government is what this is all about—a clear definition of what a freelancer is and clear duties for the freelancer commissioner.

The freelance champion has some similar characteristics to the freelance commissioner, but there are significant differences from the independent freelance commissioner. It is not going to be a statutory office, unlike the freelance commissioner. The structure proposed in our amendments would be more permanent and more independent of government. The terms of reference explicitly state that the champion will focus on freelancers working in the creative industries only, so it will not be cross-sectoral. As we heard from the noble Lord, Lord Londesborough, it is clear that freelancers are extremely prevalent not only in the creative industries but in many other industries as well, including construction, professional, scientific and technical activities, business support, health and social work, IT, digital services and education and training.

While welcome, the freelance champion for the creative industries under the sectoral plan does not go nearly far enough across the board in making sure that there is a real advocate and one with teeth who is able to influence policy towards freelancers across all those different sectors. The question really is why the Government have failed to grasp the urgency and widespread nature of the challenges faced by freelancers across all sectors. It is not unclear that freelance work covers much broader areas than just the creative industries. These amendments would offer recognition to a workforce that contributes enormously to our economy and cultural life and is too often unprotected and unheard in legislative terms.

I urge the Government, even at this time of day and at this time in the Bill, when they cannot really change their approach, really to think about this. We have heard so much about how, on AI or dependent contractors, the Government are considering these things. They really need to shape up in terms of the modern economy. Freelancing is on the increase and they need protection—and the freelance commissioner would be by far the best way forward.

[Lord Freyberg (CB)]

My Lords, it is a pleasure to follow my noble friend Lord Clancarty and the noble Lord, Lord Clement-Jones, who have each set out the case for a more coherent and strategic approach to freelance policy with great clarity. I shall not repeat their arguments but will attempt to build on them.

I support Amendments 160 to 162, to which I have added my name, and I will speak to my own Amendments 163 to 165. I declare my interest as an artist member of DACS, the Design and Artists Copyright Society.

--- Later in debate ---

In response to the spirit of these amendments, the Government could commit to publishing a report within 12 months, similar to that argued for in the amendment tabled by the noble Lord, Lord Moynihan, that outlines revised definitions for freelance and self-employed status, assesses the impact of legislation on these groups, explores data classification reforms and makes targeted recommendations to improve the fair treatment and statistical visibility of workers in the visual arts and craft sectors. This would be in keeping with the Government’s broader commitments under the creative industries sector vision and ongoing work to support the freelance workforce. I beg to move.

[Lord Clement-Jones (LD)]

My Lords, I am going to be extremely brief because it is now 11.20 pm. We need to finish these proceedings at least before midnight, but that may be an ambition too far. I declare an interest, as I should have done in the last group, as chair of the Authors’ Licensing and Collecting Society.

It would have been extremely useful to have inserted the speeches of the noble Lords, Lord Hendy and Lord Berkeley, because that is precisely what my amendment is all about. It is about ensuring that our employment law ensures the rights of a growing segment of our workforce. Our current system is based on statutory definitions and case law, and it settled on three categories: self-employed; worker—also known as limb (b), as the noble Lord, Lord Hendy, mentioned —or dependent contractor; and employee. However, determining whether an individual falls within this framework is often inconsistent and reliant on lengthy and expensive court cases, such as the landmark Uber v Aslam case. The Minister has extremely helpfully undertaken a consultation on employment status, and that is exactly what this amendment was designed to provoke, so I feel that to a large extent we have succeeded in pushing the Government further towards defining that kind of employment status.

I have had some useful conversations with Evri, which engaged in a legal case when it was under the name Hermes. As a result of its engagement with the GMB, it has come forward with what I think is an extremely interesting and satisfactory form of dependent contractor status that grants certain rights as if they were employees, and that is precisely what I hope this consultation will come up with in terms of family leave, entitlements, the right to request fixed hours and so on. The GMB, while awaiting formal policy setting through its democratic process, has expressed a positive stance towards retaining and reforming the limb (b) worker status. So I hope that the consultation that the Government engage in will not try to force everything into two categories but will make sure that that third category is recognised and given enhanced rights.

I think there was some misunderstanding in Committee in what the Minister said. She talked about complications and so on, and I hope that does not mean that what we are all trying to get to is two categories, employment or self-employment. I hope that the result of the consultation will be to come forward with some kind of dependent contractor status for precisely the kinds of people that the noble Lord, Lord Berkeley, was talking about—however fast they may go on their scooters.

[Lord Moynihan of Chelsea (Con)]

My Lords, I rise to introduce at this late hour Amendment 184A in my name. I refer to my registered interests as an employer and investor. I thank the many noble Lords on the Labour Benches who have kindly stayed to hear the noble Lords, Lord Freyberg and Lord Clement-Jones, and myself; it is very decent of them. The noble Baroness, Lady Jones, kindly committed just now to publishing the Government’s consultation on employment status, which relates strongly to the amendments that the three of us have introduced to this clause, and it is very welcome to hear that commitment. For me, that takes us half way to what my amendment proposes.

The Minister’s focus just now was on freelancers, while that of the noble Lords, Lord Freyberg and Lord Clement-Jones, was on both freelancers and the self-employed. My amendment focuses on protecting the self-employed and the so-called middle worker status, in particular for so-called platforms, which I will elaborate on briefly in a minute. I do hope to get your Lordships out before midnight; I will do my best.

The Government’s make work pay document, part of their manifesto, has, as we all know, made various commitments—or threats, as we call them on this side of the House—relating to workers’ employment status. Some are included in the Bill and some are promised for an unspecified future Bill or other kind of regulation. In particular, the employment status of worker, a middle stage between self-employed and fully employed, as just described by the noble Lord, Lord Clement-Jones, and as decided in the ruling in the Uber case, is to be reviewed, and there is the threat that that category will be tightened or even abolished. To date, the Government have said little else about its future although, in the Bill we are discussing now, Clause 1 on guaranteed hours and Clause 2 on shift contracts both significantly constrain what an employer can agree with an individual holding worker status.

It is depressing to note how the Government’s financial and regulatory policies are already hitting employment—the very topic of this Bill—not just in traditional areas such as pubs and entertainment, but in those advanced sectors where the economy’s hope for the future lie: AI or gene modification, for example, and now, in this Bill, the platform businesses that drive the gig economy.

Take driver platforms. In surveys, 76% of drivers say being self-employed is the key attraction; 60% of them value flexible hours above all else, rising to 72% among working parents. Nearly nine in 10 use multiple platforms to earn a living, which would be near impossible if rigid employment frameworks were imposed. A strong entrepreneurial spirit runs through the sector: 34% already see themselves as entrepreneurs and 49% aspire to be.

Platform companies such as Bolt, which has 100,000 drivers on its books, are currently at sea as to what the rules will be. Will they, because of all this, be forced to offer full employment packages to those who would rather be flexible worker employees? Will this then increase the platform company’s costs and lead to layoffs, as more hours have to be offered to these workers, leaving fewer hours available to the self-employed?

My amendment seeks to get a commitment to a formal review of all this—and we just got that from the Minister—in order to ensure that the Government stand by their stated intent to consult fully, and I think that word is key, before changes are made. Platforms need to know what future employment categories will be allowed and how they will be defined because, one way or another, all of this will lead to their having to make very significant changes to their platforms. It is important that the Government have a full review and consultation before they decide on their detailed approach.

Platform companies can and must form a leading part of our future economy. As the noble Earl, Lord Clancarty, the noble Lord, Lord Clement-Jones, and others explained, as was the case with freelancers, so it is with platform workers. All employers and employees agree that, in these areas, flexibility is key and the Government have elsewhere committed to reducing, not increasing, inflexible regulation. This amendment seeks to hold the Government to that commitment.

Platform employers are investing hundreds of millions in their activities per country, per platform employer, in other countries around the world, yet are not doing so here in the UK. One platform company recently contacted me to say that they had withheld £170 million of investment from this country precisely because of this Bill and the threats it imposes on it.

We are falling further and further behind other modern economies, and it is precisely because of ever-increasing taxes and regulation, and the threat of more to come, from this and future mooted Bills. Removing the middle-stage worker status would both increase unemployment and deter further inward investment.

My amendment seeks to hold the Government to account on their promises to consult on the expected outcome of this part of the Bill, which the Minister has just done, and to figure out the likely impacts carefully in the hope that the most detrimental potential regulations might not be imposed. As we go into the summer break, we already see employment, particularly youth employment, plummeting. The NIC increases, the now very high minimum wage and the fear created by this Bill are causing employers to hold off further employment. All of this is leading to less and less hiring. I ask the Government to have pity on the employer, to have pity on the self-employed and indeed to have pity on our economy overall by agreeing to this, I hope, helpful amendment.