Employment Rights Bill

Lord Goddard of Stockport Excerpts

Report stage
Monday 21st July 2025 Lords Chamber

[Lord Goddard of Stockport (LD)]

My Lords, I have to say that this is probably the most difficult summing up from our group of all the amendments throughout Committee and Report, because I can see the merits of both sides of this argument.

On the one hand, the noble Lord, Lord Hunt, is quite right. We are naturally suspicious of any new amendments on Report, as they have not had consultation or examination. Having said that, as a group, we have to be consistent, and our approach is that SMEs need the most support. They are the people who are the most insecure and who email me more than anyone else, and so you might think that I would be minded to support these amendments.

However, on the other hand, these amendments, in our view, would create the two-tier employment situation which we have consistently opposed throughout the legislation. I have stood here night after night saying that I cannot agree with amendments because we want one set of legislation for the entire SME sector. A two-tier arrangement would throw more upheaval and uncertainty on small SME businesses, leading them to wonder whether or not they qualify and whether they are in or out.

On balance, and probably for the first and only time in this Chamber, if this issue is pushed to a vote, our group will, unusually, abstain. That does not mean that I am not supportive of the thought behind the amendments, but we feel very strongly that there could be unintended consequences. The legislation should be clear, concise and uniform. This would cloud it a little, as it is looking for a two-tier arrangement. On balance, we are unable to give this group of amendments our full support tonight.

[Lord Leong (Lab)]

My Lords, I am grateful to all noble Lords who have spoken. I may not agree with some of the sentiments of some noble Lords, but I have listened to all the arguments in the last few years, such as when minimum wage was debated. The scaremongering that businesses will go bust does not hold water with me.

We are not anti-business; you cannot find someone more pro-business than me. I have started businesses and been a small business person myself. I strongly believe that this Bill works for workers and for business.

Before I address the amendments in the names of the noble Lord, Lord Sharpe and Lord Moynihan of Chelsea, let me say this: the Government are committed to supporting SMEs. We accept that they have been subject to a challenging operating environment and global uncertainty. That is why the Government have set up the new business growth service, to streamline access to support, and why the new strategy will span key areas, including access to finance, market expansion, business capability development, entrepreneurship, and the creation of a strong and stable business environment. In combination with our industrial strategy, trade strategy and, I hope, our SME strategy, which will be published shortly, it is a key part of this Government’s plan for change to encourage growth and put more money in people’s pockets.

Let me turn first to Amendments 132, 133, and 134. We introduced a streamlined route through the Central Arbitration Committee, which was established in 1975. It is a decision-making process for model access proposals to ensure that genuine and reasonable requests for access are not subject to unnecessary delay, while maintaining appropriate safeguards where complexity or dispute remains.

Regarding Amendments 129, 131 and 145, we believe that strong trade unions are central to tackling issues of insecurity, inequality, discrimination, enforcement and low pay across the economy. Right of access is key to this. The access framework allows for flexibility for SMEs. Unions and employers can negotiate an access agreement and employers may challenge proposals they consider unsuitable. Where an access agreement cannot be agreed, the CAC determines whether access should be granted, and this decision will be guided by matters prescribed by the Secretary of State.

On Amendment 128, the intention behind this measure is to ensure that all workers are informed of their legal rights at work without imposing undue burden on employers. Making it a requirement for employers to inform workers of their right to join a trade union is about fundamental fairness and transparency. Too many people, especially in low-paid or insecure jobs, do not know that they have this right. We are not telling anyone to join a union; we are simply making sure that they know it is an option. Just as employers are expected to inform staff about health and safety rules or their right to paid leave, they should also be clear about the right to union representation.

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[Lord Fuller (Con)]

My Lords, I will speak to all the amendments in this group. I approach it from the perspective that democracy is always about cherishing minority views and making reasonable allowances, with the proviso that the minority do not hold the majority over the barrel. If you allow the minority a veto or special qualification to enforce their narrow view of the world, it encourages extreme views and intransigence. If you give somebody a veto, do not be surprised if they use it. The effect of the Bill is perhaps to give minorities significantly lower than the 10% threshold a perverse incentive to exercise that veto. That is not good for the individual or the employer, and I believe that it is not even good for the unions, because it potentially weakens their members’ mandate.

I speak from the perspective of somebody who has negotiated the local government pay deal for many years as part of the national joint committee, alongside the noble Baroness, Lady Taylor. My experience is coloured by the knowledge that in local government there are three different unions involved—UNISON, Unite and GMB—and it is a complicated negotiating environment. It is hard enough to get consensus with three unions in the mix, still less with 10—but that is where the Bill is taking us.

If we do not accept these amendments, it will place the employers in the invidious position of choosing between various unions. The lower the threshold, the greater the incentive to fragment the union landscape—the Judean People’s Front phenomenon—and, in so doing, weaken the benefits of sensible recognition and union power. I cannot understand why the brothers are so keen to reduce the 10% threshold. Why should the employer be placed in an impossible position to arbitrate between warring unions, jostling for position and preference by allowing each to assert rights that they should be agreeing among themselves?

These amendments will not weaken the thrust of what the Government are trying to achieve, but they would provide the certainty of a materiality threshold that would otherwise allow the unintended consequences of negotiation chaos—too many cooks being allowed to spoil the broth. That would disadvantage the employee by reducing the negotiating power of the majority; disadvantage the employer by making it hard to negotiate with unions with sufficient critical mass; and, for the union movement, value fragmentation and the pursuance of special interests over building consensus.

Once more, we have an opportunity to ask the Government to support sensible and measured amendments that will help them achieve their purpose. To resist would risk delivering the opposite, and not for the first time.

[Lord Goddard of Stockport (LD)]

My Lords, in Committee we tabled several amendments resisting this reduction from 10%, and the reason for doing that was that we think that is the existing and fair threshold. To go to 2% is not being done for the reason that the noble Lord, Lord Fuller, says, which is about competing unions and getting the one with the lowest threshold, but for a different reason.

When we have had these arguments, in Committee and tonight, the fall-back position of the Ministers and other speakers is, “Well, they don’t have to join a union—they don’t have to be in a union”. I was in the GMB—I do wish people would not list Unite and the other one, and put the GMB third; please put the GMB a bit further up the pecking order next time. But the point of the story that I am trying to tell noble Lords is that although the Minister says that you do not have to join a union, by reducing this to 2% from 10% you are effectively stacking the deck. You are setting them up there. If you believe that trade unions are free to join or not, and there is a threshold and it is 10%, that is your principle, and that has stood for years. Why, then, in employment law do you need to move that down to 2%? What brings you to that number? There is an obvious reason for that number, is there not?

On the unintended consequences again—it becomes a mantra, but I will say it very quickly—in small and medium-sized businesses employing 10, 15 or 20 people, they need only two, three or four people to say, “We want to join a union” for it to become complicated, with HR and all the other unintended consequences. So 10% is a reasonable threshold. The Government have given us no reason why they want to change it from 10% to 2%. They should leave it at 10%; leave the status quo. If the noble Lord, Lord Sharpe, decides to press his amendment tonight, my depleted troops will be supporting him in the Lobby.

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

I thank all noble Lords for the short but focused debate we have had on this set of amendments, moved and spoken to by the noble Lord, Lord Sharpe of Epsom. I particularly pay tribute to my fellow GMB member, the noble Lord, Lord Goddard of Stockport.

As I set out in Committee, we believe that current thresholds pose too high a hurdle in modern workplaces, which are, as we know, increasingly fragmented. We want therefore to be able to consider whether the 10% membership threshold on application should be reduced in future. The reason why a range of 2% to 10% has been chosen is that, in 2020, the previous Government reduced the threshold that triggers information and consultation arrangements from 10% to 2% in the workplace, so what the Bill proposes aligns with that. But, to be absolutely clear, we want to consult before making any decisions on whether we should bring forward secondary legislation and by how much the threshold should be varied, if at all. We will consult businesses—including, of course, small and medium-sized businesses—as part of that consultation process.

Should we decide to bring forward secondary legislation in the future, that legislation will be subject to full debate in both your Lordships’ House and the other place. We will carry out an impact assessment at that time that will consider impacts on businesses, including, as before, small and medium-sized businesses.

I want to reassure all noble Lords, and the noble Lord, Lord Sharpe, in particular, that, whatever the application percentage in the bargaining unit is or may be, the fact remains that unions would still need to obtain a majority of a bargaining unit in a trade union recognition ballot. That point is fundamental to the misconception that is coming from the Benches opposite about what this part of the Bill does or does not do. To be clear, this is not, to address the point of the noble Lord, Lord Fuller, the “tyranny of the minority”; in fact, it is absolutely contrary to that point. This is ultimately about a trade union having to win a majority.

Experience has shown that this is not easy to achieve. The union will have to make a good case to persuade the majority in the bargaining unit to vote for recognition in a recognition ballot overseen by an independent, qualified person. It is in the trade union’s interest to be confident that it can win a majority in the ballot, otherwise it would still be prevented, as is currently the case, from applying for another statutory recognition ballot in the same bargaining unit for three years. That is why it is highly unlikely that a union will apply for statutory recognition when there is only one worker who is a member of that union. Indeed, if experience tells us anything, it is that it is highly likely that trade unions will continue to focus their efforts on larger workplaces where there is greater bang for the organising buck.

The union recognition process is generally consensual, and that is a good thing. In the nine years from 2017 to 2025, only 375 recognition applications have gone to the CAC. Close to half of the 1,476 recognition applications received since 1999 were withdrawn by unions at various stages of the recognition processes, in many cases because the parties have reached a voluntary agreement for recognition. The confrontation that has been set up by some speakers from the Benches opposite is a chimera; this is not the reality of organised workplaces. Given that, I ask the noble Lord, Lord Sharpe of Epsom, to withdraw Amendment 135.