Employment Rights Bill

Lord Fox Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 10th December 2025 Lords Chamber

Moved by

[Lord Fox]

Leave out from “disagreement;” to end and insert “do disagree with the Commons in their Amendments 1E and 1F in lieu of Lords Amendment 1B; and do propose Amendments 1G and 1H in lieu of Commons Amendments 1E and 1F—

1G: Clause 1, page 3, line 24, at end insert “and that period must be not less than 26 weeks”

1H: Schedule 1, page 153, line 13, at end insert “and that period must be not less than 26 weeks””

[Lord Fox (LD)]

My Lords, similarly to the Minister, I beg the House’s indulgence because, if this speech is longer than a speech would normally be for round three of ping-pong, it is because, as she pointed out, there have been developments since we last debated the Bill.

My Motion A1 addresses a major issue that has caused us concern. As I have said repeatedly, we support the principle that workers should have a right to guaranteed hours after completing a period of zero-hours work. Our concern has always lain in the cumbersome administration of that right. After several attempts to make what I think were meaningful improvements without undermining that principle, I must admit I have felt quite frustrated on this issue.

However, as we heard just now from the Minister, it is reassuring that the Government have taken these concerns on board. As she partially explained, the reference period is crucial in setting how often the employer must make a new offer of guaranteed hours to an employee. I point out that the employee does not necessarily have to want that offer; there is merely an obligation on the employer to make it. Clearly, if this offer has to be made every month, it is much more burdensome than if it has to be made once or twice a year. That is the nature of the amendment that I have tabled.

I understand that this is subject to consultation, and I am reassured by the description of the consultation that the Minister has just given. My choice of 26 weeks was, first of all, in a sense, to emphasise the point between a month, 26 weeks or 12 months, but also to spark the sort of response that I have just had from the Minister. In that respect, I am satisfied.

A joint press release issued after the negotiations by the business organisations noted:

“We remain committed to working with government and unions to dealing with this in the necessary secondary legislation to implement the Bill. We must ensure that it supports opportunity for workers while avoiding damage to economic growth”.


We subscribe to that view, and I think the Minister gave her support to the nature of the consultation that will follow.

I will now move on to the unfair dismissal issue. As we heard, the government amendment in lieu creates a six-month qualifying period for workers’ rights. It also, crucially, removes the section that would have enabled secondary legislation to alter that qualifying period. That was good news. It will therefore come as no surprise that we welcome this compromise. It represents success for the tripartite discussions that led to its breakthrough, and all three parties should be commended for the good faith that they brought to that meeting.

The Bill’s previous position on day-one rights would have significantly held back the employment prospects of anyone who would have represented the slightest risk to an employer. This avoids that risk. As the British Chambers of Commerce, the Chartered Institute of Personnel and Development, the Confederation of British Industry, the Federation of Small Businesses, the Recruitment & Employment Confederation and Small Business Britain put it in their press release that heralded this deal:

“This agreement keeps a qualifying period that is simple, meaningful, and understood within existing legislation. It is crucial for business confidence to hire and to support employment, at the same time as protecting workers”.


That is a strong endorsement from the employment side for this part of the deal.

I feel sure that one factor that helped concentrate minds during negotiations was the need to meet a deadline. If the Bill does not gain Royal Assent by the end of the year, key benefits that we have discussed, and that many of us support, to be created by the Bill will not be enacted for workers across the country for a further year. I feel proud of those on our Benches who helped create the pressure and who held firm while that decision was in the making. I thank my Liberal Democrat colleagues for turning up, every time, to help the Government, alongside the other two parties, come to the compromise that we now have. It is a credit to this side of the House and the rest of the House.

I move to Motion B1, in the name of the noble Lord, Lord Sharpe. As well as containing good news on day-one rights, the government amendment in lieu contained a surprise, or a surprise to us. It is clear that removing the compensation cap for unfair dismissal has generated unease since the amendment was tabled. This is not something your Lordships have discussed. As we heard, it was discussed during the tripartite negotiations, but there has been some confusion. I suggest that the ambiguity of the word “lift” has contributed to this in no small measure: “lift” can mean both remove and increase, and I suspect there may have been some confusion.

Some employers, while welcoming the shift from day-one rights to a six-month qualifying period, have expressed concern about the possible implications of potentially unlimited financial exposure. Your Lordships should note that, as the Minister said, the average unfair dismissal award for the year 2023-24 was under £7,000, with a ceiling of more than £118,000. Clearly, the cap did not influence the awards being made. I asked the Minister to confirm—and she has—that the criteria that are used to set the award are not changed by the contents of this Bill. This being the case, it seems that the main beneficiaries of this change will be those who earn considerably more than the average wage in this country. It will be those who are paid more, but, in my anecdotal experience, the very highest paid rarely use employment tribunals; their deals are set in boardrooms, usually with NDAs. I genuinely do not believe that SMEs will be disadvantaged by this. However, I think we can all agree that the process was poor.

In my discussions with the Government, I pressed for a meaningful impact assessment. We have just heard the Minister confirm that there will be consultation and a meaningful impact assessment that will be published. This will be completed and published before the clause that lifts the cap is enacted, so if something really bad comes out of that IA then there will be time to act on it. After that, as the Minister noted, ongoing monitoring of the effects of these changes will be essential, and corrective action should and must be taken if negative trends emerge. In any case, I remain unconvinced that Motion B1 would provide the analytic value that we would get from a proper impact assessment. Even in the event that I was supporting the noble Lord, I do not think the route that he seeks to take is one that would be of benefit. It seems more symbolic than meaningful.

--- Later in debate ---

[Baroness Lloyd of Effra (Lab)]

I emphasise again that the Government’s convening of recent discussions and our willingness to compromise on the issue of unfair dismissal should signal to parliamentarians and stakeholders that we want to get this right. I emphasise that the Government’s work on this agenda is far from over. There will be opportunities for further debate and scrutiny, and I look forward to these discussions. I therefore hope that noble Lords will join business representatives and trade unions in supporting the position reached in recent discussions and backing the Government’s Motions today.

[Lord Fox (LD)]

My Lords, there was a moment when I was engulfed in shame that I had misunderstood the difference between median and average. Fortunately, the noble Lord, Lord Hendy, distracted your Lordships quite quickly, so I have recovered.

Nobody in this House is pretending that this is perfect. We are at a point of pragmatism and, I remind your Lordships, at the third round of ping-pong. The noble Lord, Lord Vaux, has made some important points. All of us go into this. If it was perfect, I would press Motion A1 and I would want to keep on iterating. I know that now is the time for this Bill to pass. Therefore, I beg leave to withdraw Motion A1.

Motion A1 (as an amendment to Motion A) withdrawn.