Employment Rights Bill

Lord Hendy Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Baroness Carberry of Muswell Hill (Lab)]

My Lords, I follow on from the excellent points that have been made by my noble friends on this side of the Committee by addressing, perhaps more specifically, the letter of Amendment 1. I preface my remarks by saying that I might be new to this, but I am a bit puzzled because I thought that the Benches opposite did not like purpose clauses. In the past, when Labour proposed such clauses, there was some push-back, and this side has been accused of poor practice and of risking provoking unintended consequences.

My main problem with the proposed new clause is that the list provided is not exhaustive and understates the Government’s ambition with this Bill. If we were to put our heads together to produce an exhaustive list of purposes, perhaps we might include the purpose that the Bill helps give effect to the Government’s manifesto promise to make work pay. We might also want to add that the ambition is to help stimulate economic growth, building on the extensive international evidence we have that shows that labour market protections lead to improved economic outcomes, including higher productivity. We might also want to mention that the Bill aims to end exploitative practices and redress the balance between employer and worker, and that it seeks to modernise trade union legislation.

My general point is that perhaps we do not need such an extensive list. I invite the noble Lord, Lord Fox, to clarify for us in his response in what way a non-exhaustive list, as provided in this amendment, is any better in advancing understanding of the intentions of the Bill than no list at all.

[Lord Hendy (Lab)]

My Lords, I too rise to address Amendment 1. It is a pleasure to follow my noble friend Lady Carberry. I am not clear about the purpose of Amendment 1. It seems to me that the Government have laid out the purpose of the Bill in the Long Title. It has been given a very Long Title that sets out its ambit.

What I am clear about, however, is the need for this Bill. Last August, a report by Professor Deakin and Dr Barbakadze of Cambridge University, Falling Behind on Labour Rights, stated that

“on almost every measure of employment protection, the UK is significantly behind the average for other countries in the Organisation for Economic Development and Cooperation (OECD), 38 countries generally understood to be those with a high level of economic and social development globally … As they stand, labour laws in the UK are barely half as protective as those found in France and significantly below other notable European countries … This strongly suggests that there is significant scope for improvement before British labour law is even close to matching that of our nearest neighbours”.

My noble friend Lord Monks mentioned inequality in the United Kingdom in comparison with other countries. The OECD has also considered that. It currently ranks Britain as the eighth most unequal of 40 major economies in terms of income inequality. Among EU member states, only Bulgaria and Lithuania are more unequal than the United Kingdom. The European Participation Index ranks the degree of worker participation in business decision-making in different European countries. The UK is rated 26th out of 28, with lower participation than all countries except Latvia and Estonia.

There are many other metrics by which the current state of play can be judged, and the status quo is simply not acceptable. I will not mention them all, but I will mention just three. First, median pay in this country is currently just over £600 a week. Median does not mean average; it means the pay point of half the working population. In other words, half of workers earn less than just over £600 a week, although half earn more than that. Secondly, of those on universal credit, 37% are actually in work. Thirdly, we find that 6.8 million people are in insecure work; three-quarters of them—that is, some 5 million workers—are in what is described as “severely insecure” work.

The Bill does not do all that I think it should. I had the honour to serve as the legal adviser on the working party that drew up A New Deal for Working People. It is clear that there are major differences. In later debates in Committee, I will seek to move some amendments to redress some of what I consider to be the shortcomings. Overall, however, the need for the Bill is simply unarguable. We cannot go on in the way that we are at present, with workers denied a voice at work, working in insecure conditions and on extremely low pay. The Bill will go a long way to assist in putting that right.

[Lord Empey (UUP)]

My Lords, I hope this Bill does not turn into a Punch and Judy show between employers on one side and organisations and trade unions on the other, because it obviously has a number of meritorious proposals. However, the forensic introduction to the amendment by the noble Lord, Lord Fox, illustrates that this piece of legislation is a work in progress. I understand why the Government deem it so important, but they have to concede that a lot of it is being done on the hoof, which is undermining the Government’s position.

I had the privilege of being Employment Minister in Belfast for three and a half years, and I worked very closely with business and trade unions during that period. The last piece of legislation I did had the racy title—I am sure the Minister would be very happy to adopt it—of the Employment (No. 2) Bill. It is the sort of thing that lets the blood course through your veins. But the one area where we have failed as a country for years and years is skills. We talk about it, we have apprenticeship models, we have this, that and the other, yet we still have not solved the problem. We got rid of the old-style tecs, colleges and so on, and we have been stuck in a rut ever since.

It is obvious that there have been abuses and insecurity, and there is no point in trying to deny that; I listened carefully to what the noble Lord, Lord Monks, had to say. However, there is something that I feel a bit concerned about. We live in a world where, by and large, the major trade unions operate with large employers, whether it is the public sector or big organisations, but the bulk of the industry—the bulk of the growth in employment and everything else—comes from small businesses and micro businesses, and they do not have the capacity or the risk-taking capability in how and when they employ people.

It strikes me that there is a risk of issues creeping into what we are trying to do in this country that could have the unintended consequence of making it less likely for people to employ individuals. We have to look at the international situation. We cannot ignore what is going on. There is a revolution taking place that is having a negative effect. We also have the employer national insurance contribution. We cannot ignore that either; it is a big deal.

--- Later in debate ---

[Baroness Carberry of Muswell Hill (Lab)]

My Lords, I am sorry that I find myself disagreeing for the second time today with the noble Lord, Lord Fox, specifically on the proposition that the right to be guaranteed regular hours should be replaced by a right to request.

My noble friend Lord Barber reminded us that this proposal originally came seven years ago from the Low Pay Commission. In that room were nine commissioners, who produced a unanimous report. There were three independent labour market experts, three representatives of workers and senior representatives from the Federation of Small Businesses, the CBI and big business, and, as I say, the recommendation was unanimous. In that discussion, the Low Pay Commission considered, in the words of the noble Lord, Lord Fox, whether a right to request could operate more effectively than a guaranteed offer on the ground and in the workplace, and the conclusion was that a right to request would not be a better option. That was primarily because you would be asking workers who have the least power in the labour market—the most vulnerable workers—to assert their rights. As we have been reminded, the vast majority of those workers who at the moment request guaranteed hours are turned down.

Another problem, from my point of view, with the group of amendments that are suggesting that there should be a right to request is that they are all silent on the consequences of a denied request. That is a major problem with the propositions in the amendments. In this context, I suggest that a right to request is no effective right at all.

[Lord Hendy (Lab)]

My Lords, I have a small point on Amendments 7 and 11 to 13, which seek to extend the reference period from the current 12 weeks in the Bill to 26 weeks. Last year the Chartered Institute of Personnel and Development published some figures showing the number of workers who stayed in their job for a three-month period, which I take to be some 13 weeks rather than the 12 weeks in the Bill. Some 1.3 million workers worked for less than that period of time, meaning that under the Bill 1.3 million workers will never reach the end of the reference period in order to claim the right. The figures show that if the period were extended to 26 weeks, as the amendments propose, that would cover some 8.9% of all employees, which comes to 2.7 million workers. So the effect of those amendments would be to exclude a further 1.4 million workers from ever being covered by the reference period.