Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022

Lord Collins of Highbury Excerpts

Monday 18th July 2022 Lords Chamber

Moved by

[Lord Collins of Highbury]

At the end insert “but that this House regrets that the Regulations have been introduced without required or sufficient consultation, are opposed by employer and employee organisations, will do little to address the trained workforce shortfalls, could put workers’ safety at risk, will harm industrial relations, and may breach international law; further regrets that the associated Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 is unnecessary, as there are few if any occasions on which damages have been claimed, and an increase on the cap by 400 per cent is a threat that may inhibit the legitimate exercise of the right to strike; and concludes that the two instruments are simply a political exercise to deflect from the failure of Her Majesty’s Government to engage meaningfully with the organisations affected to resolve the disputes”.

[Lord Collins of Highbury (Lab)]

My Lords, I thank the Minister for introducing this debate, but what I heard was a lot of gesture politics and nothing about how we improve industrial relations in this country. In moving this amendment, I will focus on the failure to consult, the lack of an impact assessment when the statutory instrument was laid, and whether the instrument will meet the Government’s policy objectives.

The Employment Agencies Act 1973 requires consultation before changes are made. Rather than consult on the new regulations, the Government are relying on a consultation conducted in 2015, when Ministers previously considered similar changes. I do not see how it can be justified for a seven-year old consultation to apply to legislation being laid in 2022. Things have changed considerably in those seven years, both industrially and politically. Even the department itself acknowledged that

“circumstances have altered in some ways”.

However, it did not think that these were

“particularly relevant to the changes”

proposed. Tell that to the employees of P&O Ferries, where agency workers were used to undermine a collective agreement and replace unionised jobs. P&O’s actions were met with condemnation from all political parties—including the Minister’s—unions and employer organisations alike.

Turning to the 2015 consultation, let us not forget that 70% of the respondents were of the view that the changes would impact negatively on employees, yet the Government still believe that they have got the balance right between the interests of individuals—by protecting their right to engage in industrial action—and the interests of the general public.

Despite what the noble Lord says, I think it has the completely opposite effect. They are not defending individuals’ rights. Rather than focus on supporting negotiations to resolve disputes, we have a Government determined to undermine workers and damage good industrial relations. The use of agency workers during a strike would increase tensions between workers and their employers. This is bound to make disputes more difficult to resolve amicably.

Let us not forget: strikes are a last resort, as the noble Lord says, and most negotiations resolve in an agreement. Even where a strike takes place, the resolution requires agreement and this Government are doing nothing to support negotiations and reach settlements and agreements. It will make it far harder for working people to organise collectively to defend their jobs, their livelihoods and the quality of their working lives. This would be a shameful outcome for a Government which only a few years ago promised to protect and enhance workers’ rights.

The Explanatory Memorandum to the draft regulations stated:

“The Impact Assessment will be published in good time before any parliamentary debates”.


That did not happen. The explanation for the delay, given to the SLSC by the department, was that an impact assessment had been produced but needed “final quality assurance checks”. As the SLSC reminded us, every time an instrument is laid without the supporting impact assessment, it undermines the ability of Parliament to scrutinise legislation effectively.

Last week, the Government belatedly published an impact assessment. This featured, as the noble Lord said, vastly reduced costs and benefits from 2015, suggesting that any net benefit for businesses is expected to be below £5 million per year. The impact assessment published in 2015 was declared not fit for purpose by the Regulatory Policy Committee because it did not provide sufficient evidence of the likely impact of the proposals.

Of course, the SLSC rightly drew attention to the Secretary of State’s statement that it is not possible to robustly estimate the impact of the policy due to the lack of evidence. That is where we are: no evidence. This is purely a political gimmick without any consultation with those most affected, including employment agencies and workers. How can we believe the assumptions in this latest assessment?

The lack of robust evidence and the expected limited net benefit must raise questions as to the practical effectiveness and the benefit of the proposed repeal of Regulation 7. I repeat that this change is opposed by employment agency businesses, trade unions and employee organisations alike.

In his letter to noble Lords, the Minister stated that:

“We believe the changes we are making will help mitigate the impact of future strikes, such as those seen on our railways this week, by allowing—


—and these are his words—

“trained, temporary workers to carry out crucial roles to keep trains moving.”

What is clear is that there is not a large pool of sufficiently trained and qualified agency workers able to replace most roles on the railway and in most other sectors. They are simply not there, so what is the purpose of this change?

Neil Carberry, chief executive of the Recruitment and Employment Confederation, says:

“The government’s proposal will not work. Agency staff have a choice of roles and are highly unlikely to choose to cross picket lines.”


In addition to the damage to constructive employment relations, agency workers could also face a terrible choice between crossing a picket line or turning down an assignment and risk not being offered future employment.

--- Later in debate ---

[Lord Callanan (Con)]

My Lords, I thank all noble Lords for their contributions to this debate—which, I have to say, was a bit shorter than I expected. I will start with the amendment tabled by the noble Lord, Lord Collins. I thank him for raising his concerns.

I repeat the point I made at the outset. This is very much a question of getting the right balance between, on the one hand, the right of individuals to strike, and on the other hand the rights of individuals to go about their daily lives, whether it be children taking an exam, people going to their hospital appointments or other workers wishing to go to work to do their jobs. These reforms will ensure that our laws strike the correct balance. In doing so, we are protecting the public from unwarranted disruption while, as I said, maintaining workers’ ability to go on strike, which, I repeat, will remain unaffected by these changes.

The noble Lords, Lord Collins, Lord Woodley and Lord Paddick, all referred to the consultation not having been carried out on the agency regulations since 2015. In response to those concerns, I would say that the consultation that we carried out in 2015 was extremely thorough. Given that, I struggle to see what a further consultation will bring up. Are there any new issues or objections that we are not already aware of? I think the response to that is no. As we said in response to the Secondary Legislation Scrutiny Committee, some things have changed but the fundamental issues remain the same. I think that in their hearts, Opposition Peers know that that is the case. This is about finding that right balance between the rights of individuals to strike and the right of the public to go about their lawful daily business.

The noble Lord, Lord Collins, also referred to the impact assessment. As I said in my opening remarks, it has been published, as we committed to do in the Explanatory Memorandum. As the impact assessment makes clear, this is a permissive change: employers will hire agency workers only if it makes sense for them to do so. There is no compulsion on them; it is permissive and their choice. Our assessment also shows that this change needs to lead only to a small reduction in the number of working days lost for it to have a positive effect on the economy.

The noble Lord, Lord Collins, went on to question why it was necessary to raise the damages cap for unlawful strike action when damages are so rarely claimed—in which case, Opposition Peers’ concerns are ill founded. We are simply restoring the deterrent effect that Parliament intended when the original amounts were set.

The noble Lord also suggested that the increase in the cap would inhibit the ability of unions to take legitimate strike action. He himself made the point that there have been no recent cases on this matter. I also respectfully disagree with the point he makes. As I said, this change applies only to action which a court determines to be unlawful. If, as he suggests, trade unions go to the maximum possible trouble to make sure that their action is lawful, they will have nothing to be concerned about. I am sure that no noble Lord would suggest that unlawful strike action is acceptable in this day and age.

Let me address some of the other points made in the debate. My noble friend Lord Balfe asked whether agency workers would be willing to cross picket lines given current labour shortages. Again, this is a permissive change; nobody is going to be forced to take an assignment that they do not want to take. The point is that the current regulatory framework actually prevents them having that choice, and that cannot be right. The noble Lord, Lord Woodley, raised concerns about the damage that this will do to the reputation of the recruitment sector, and the concerns of the employment businesses and others that have registered about this change. Nobody is being forced; nobody is being compelled; no employment businesses will have to supply workers to businesses facing industrial action. Again, it will be their choice to take part or not, as the case may be; no one is going to force them. We just do not see the point in having the blanket ban that we currently have.

The noble Lord, Lord Monks, drew some I think incorrect parallels with the P&O Ferries case earlier this year. This case is completely different. In the P&O Ferries case, the company has admitted deliberately choosing to ignore statutory consultation requirements when firing staff with no notice. All we are doing in the case of these changes is giving employers more flexibility to help them minimise the disruption that industrial action causes. Where proper procedures are followed, staff on strike should not lose their jobs; they will continue to have exactly the same legal protections that they already have.

The noble Lord, Lord Hendy, questioned whether these changes comply with our international legal obligations, including our commitments under trade and co-operation agreement. We have carefully considered all of these issues and we are confident that the changes are compliant with all of our international obligations—as, indeed, I told the noble Lord, Lord Collins, during Question Time last week. The ability of businesses to use agency staff does not affect individuals’ right to strike, and the protections those striking workers have in law remain unaffected. The Government are adjusting the balance between the right of workers to strike, and the rights of the wider public to go about their lawful business, and this falls well within our margin of appreciation when implementing international conventions.

The noble Lord, Lord Paddick, raised concerns about health and safety. Again, these concerns are not well founded, simply because this change does not change the broader health and safety rules that businesses still have to comply with. Similarly, the obligation on employment businesses to supply suitably qualified workers also remains in place. The aim of our trade union laws is to support an effective and collaborative approach to resolving industrial disputes, one that balances the interests of trade unions and their members with the interests of employers and the wider public. The changes we are making will, in my view, support that balance, and I therefore commend these draft regulations to the House.

[Lord Collins of Highbury (Lab)]

My Lords, simply asserting something does not make it true, and that is exactly what the Minister has done tonight. In fact, the reason why this debate was perhaps shorter than he expected is that not a single person supported his line of argument; that is the issue here. He talks about strikes as if there is somehow a desire on the part of workers to go on strike; there is no such desire. It is when they face intransigence; when they face Governments who are determined that negotiations cannot take place—that is what we have heard. I have not heard a single word tonight supporting the Minister’s assertion that this Government are in favour of a collaborative approach. When we were collaborative, as my noble friend said, during the pandemic, the TUC worked hand in hand with this Government to make sure that the economy did not suffer long-term distress—and what is the payback? As the noble Lord, Lord Balfe, says, it is simply to have a pop, to have a go, but with no evidence provided that it will achieve anything that the Minister suggests. It will entrench opinions and it will delay settlements.

The employers, the temporary agency firms—and there are many of them—provide a very necessary service. They provide flexibility in very difficult, tight labour markets, as we have heard, and this action will undermine and discredit them and make it more difficult for them to do their job. It has been a very interesting debate. I hope we will be able to read in Hansard what this Government really are about, because they assert something and do something else. I beg leave to move the amendment and divide the House.