Employment Rights Bill

Lord Hendy Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

Moved by

[Lord Hendy]

143: Clause 28, page 50, line 6, at end insert—
“(2A) In section 189 (complaint and protective award), after subsection (2) insert—“(2A) Any such declaration may be enforced in the High Court as if it were a declaration of the High Court and, for the avoidance of doubt, such enforcement may include—(a) an Order to comply with the declaration of the employment tribunal,(b) a Declaration that any dismissal which should have been but was not subject to compliance with section 188 or section 188A is void and of no effect, and(c) in relation to any failure to comply with an Order of the High Court, proceedings for contempt of Court.””Member’s explanatory statement
This amendment is intended to provide a remedy for a breach of s.188 or 188A given that the doubling of the protective award appears may be unlikely to deter employers such as P&O Ferries where the value of the protective award can be calculated to be outweighed by the benefit of reduced wages over time.

[Lord Hendy (Lab)]

My Lords, Amendment 143 is intended to provide a tougher remedy for breach of the obligation, which is a very modest one, to consult in cases of collective redundancy. At present, the remedy is an award of loss of earnings capped at a maximum of 90 days, which the Bill proposes to increase to 180 days. My amendment is not concerned with that. It proposes judicial intervention to prevent the breach, or at least to restore the position prior to the breach. So, where a declaration has been made by an employment tribunal, the union should be entitled to go to the High Court to obtain an order to enforce that declaration. The employment tribunal does not itself have the jurisdiction to make such an order; indeed, it does not have the power to enforce its own orders. That is why it is necessary for workers to issue further proceedings in the county court if their employer fails to pay a tribunal award.

The amendment makes it clear that any dismissal which should have been subject to Section 188 of the 1992 Act but was not will be void and of no effect, so the obligation to continue to pay wages and to honour the other incidents of employment will continue until the employer has fulfilled its legal duty. I should add, in case any of your Lordships doubt it, that the High Court does indeed have the power to restrain dismissal and declare a purported dismissal void and of no effect. The court has often done so where the dismissal was unlawful because, in breach of contract, the power is still more apposite where the unlawfulness is breach of a statutory duty.

Finally, the amendment puts beyond doubt that the normal consequences of non-compliance with an order of the High Court will apply: that the company and any officer personally frustrating the order may be subject to proceedings for contempt of court, including fine, sequestration and, in the most egregious cases, imprisonment.

The rationale for my amendment is obvious. We are talking about a situation in which an employer has broken or proposes to break the law by throwing a significant number of people out of work without properly consulting on measures which might have avoided that situation. A very limited financial penalty is plainly not enough to dissuade lawbreakers, as I think the noble Lord, Lord Hunt, recognised. What is required is not just a more dissuasive remedy but one which prevents the unlawful situation, or at least restores the situation to lawfulness, so far as it can be restored. Only the High Court has the power to do that.

There is another reason: the need to comply with international law which the UK has voluntarily ratified. Conventions 87 and 98 of the International Labour Organization will need more detailed consideration in later amendments, but for current purposes it is enough to note that, together, they require member states—not just ratifying states—to respect and protect freedom of association and the right to bargain collectively. Compliance with international law is the eighth of Lord Bingham’s principles of the rule of law, and the importance of compliance with international law was emphasised by the Attorney-General in a speech to the Royal United Services Institute last week. It matters not whether the provision in question relates to trade, the environment, security, labour or any other matter, and compliance is not restricted to the black letter of the treaty but also required of the decisions of the bodies appointed by the treaty to supervise compliance with it.

One such constitutional body of the ILO is the tripartite Committee on Freedom of Association, which consists of representatives of government, employers and workers. On 8 November 2023, it published its decision on a complaint brought against the United Kingdom by Nautilus International, the RMT, the TUC and a number of international trade union federations. This arose out of the P&O Ferries scandal mentioned earlier this evening. At 7 am on St Patrick’s Day 2022, the employer summarily dismissed 786 seafarers, with security guards escorting them from the ships past waiting coachloads of agency staff from third-world, cheap-labour countries recruited to replace them.

The report says that the committee notes the complainants’ indication that

“while breaches of the UK law entitle claims to be made in an employment tribunal, such claims are subject to statutorily fixed (and very modest) maxima; for this reason, the company was able to quantify with precision what the cost of the dismissals would be and to assess how long it would be before that cost could be recouped from future profits generated by the poverty wages and diminished terms and conditions of the new crews. The complainants thus allege that the dismissal of 786 seafarers to replace them with non-unionized agency workers constitutes an act of anti-union discrimination. The complainants further allege that the existing legislation is insufficient to deter anti-union discrimination as in practice, employers can, on condition that they pay the compensation prescribed by the law for cases of unfair dismissals, dismiss any worker for being a trade union member with better terms and conditions under a collective agreement. The Committee recalls in this respect that protection against acts of anti-union discrimination would appear to be inadequate if an employer can resort to subcontracting as a means of evading in practice the rights of freedom of association and collective bargaining … The Committee considers that it would not appear that sufficient protection against acts of anti-union discrimination, as set out in Convention No. 98, is granted by legislation in cases where employers can in practice, on condition that they pay the compensation prescribed by law for cases of unjustified dismissal, dismiss any worker, if the true reason is the worker’s trade union membership or activities … The Committee recalls that the Government must ensure an adequate and efficient system of protection against acts of anti-union discrimination, which should include sufficiently dissuasive sanctions and prompt means of redress, emphasizing reinstatement as an effective means of redress … Furthermore, the compensation should be adequate, taking into account both the damage incurred and the need to prevent the repetition of such situations in the future … The Committee therefore requests the Government to ensure an adequate and efficient system of protection against acts of anti-union discrimination, which should include sufficiently dissuasive sanctions and prompt means of redress, emphasizing reinstatement as an effective means of redress”.

Of course, there the committee considered that the collective dismissals were in order to avoid long-standing collective agreements which provided for notice of dismissal and consultation over proposed redundancies, which it regarded as anti-union discrimination. That situation will not occur in every collective redundancy—of course that is the case—but it will be true in many, though not all, collective redundancy situations. I should add that what we are looking at here are really bad employers. The remedy that I am proposing will not be used against good employers that do their best to deal with the situation.

The tribunal remedies which the committee considered very modest were not just for failure to consult over collective dismissal but included compensation for unfair dismissal. Here we are considering the even more modest, statutorily capped compensation for failure to consult. As the committee held, what is needed are

“sufficiently dissuasive sanctions and prompt means of redress, emphasising reinstatement as an effective means of redress”.

Only an injunction will achieve that outcome. That would have stopped P&O Ferries in its tracks.

I say to my noble friend the Minister that I can see no reason not to add this remedy to those available to restrain such unlawful activity. While the increase in maximum award, from 90 to 180 days—as the tribunal has to assess compensation as what is just and equitable up to that cap—is not sufficient in itself, since injunctions are available for breach of contract, why are they not for breach of statute as well? I beg to move.

[Lord Davies of Brixton (Lab)]

I thank my noble friend for his powerful and clear speech; he has said it all. I just want to add that this issue has arisen from the P&O scandal that took place three years ago. The maritime unions are particularly concerned about this, and I hope that my noble friend the Minister will be able to provide some comfort for the arguments that have been presented. The issue of pre-emptive injunctive relief for seafarers and other workers is a crucial issue and it is possible that we will need to return to it on Report.

--- Later in debate ---

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

My Lords, I thank the noble Lord, Lord Hendy, for tabling Amendment 143.

The Government agree that employers should not be able to deliberately ignore their obligations, and it should never be financially beneficial to do so. However, this amendment would offer a disproportionate response to address the issue. First, employment tribunals have jurisdiction over the majority of employment matters, including the enforcement of protective awards in cases of collective redundancy. It would not be appropriate to amend this jurisdiction solely for collective redundancy cases and it would lead to a disparity within the legal structure governing employment rights and their enforcement.

Furthermore, Section 15 of the Employment Tribunals Act 1996 already offers routes for affected individuals to pursue unpaid employment tribunal awards via the county courts, for England and Wales, and the sheriff courts, for Scotland. Finally, the amendment may have the unintended consequence of an increase in scenarios where employers are forced to become insolvent in response to both paying a protective award and requiring the reinstatement of affected employees.

Responsible employers across the country already go further than the current obligations to consult collectively. They agree with the Government that collective consultation with their workforce is a valuable tool in finding solutions to some of the challenging situations that employers find themselves in. Clause 29 closes a loophole in our collective redundancy legislation which meant that P&O Ferries could not be prosecuted when it dismissed people without warning, including because they worked abroad on foreign-registered ships. This goes some way to addressing the ILO’s concerns about the lack of an effective remedy. Our measure to confer powers on Ministers to create a mandatory seafarers’ charter will also help to create a level playing field in the sector and prevent such events happening again. A couple of amendments in subsequent groups will address that issue.

Doubling the protected period means that employees who were not afforded any consultation when being made redundant will now be awarded up to 180 days’ pay. Employment tribunals can award a further uplift of up to 25% where an employer unreasonably fails to comply with the code of practice on dismissal and re-engagement. Taken together, these measures increase the potential statutory payout per person far beyond that which P&O Ferries offered to dismissed employees. This clause will provide a balanced approach that gives certainty to employers, employees and tribunals, and will provide an increased deterrence against deliberate breaches of the collective redundancy requirements, without disproportionately penalising employers which attempt to comply with their obligations.

I hope that this provides some assurance to my noble friend, and I therefore ask that his amendment be withdrawn.

[Lord Hendy (Lab)]

My Lords, I am grateful to my noble friend Lord Davies for his support. I am also grateful to the noble Lord, Lord Sharpe, for his contribution. In response to him, I note that the proposal is not that employment tribunals should make a declaration that a dismissal was void and of no effect. Instead, the idea is that the High Court will make a declaration based on another declaration already made by the employment tribunal that the employer has breached the law by failing to consult—or by failing to consult properly.

The remedy I am proposing, since it is going to be in the hands of a High Court judge, will not be granted for technical or administrative errors; it will be for only the most egregious breaches.

On the point that an injunction might be granted months later, that cannot be so because delay will always defeat an injunction. Injunctions are only ever granted if the application is brought in a timely fashion, and whatever the court orders can be fulfilled.

I am grateful for the Minister’s very full response. I am not sure that the measure I propose is disproportionate —it is intended only for the most egregious breaches of the duty to consult—or that it distorts the remedies available for employment matters. As my noble friend pointed out, employment tribunal awards already have to be enforced in the civil courts and not by tribunals themselves. I am not sure about the unintended consequences. I know everything he says about The Seafarers’ Charter; my concern is with those on land. I have heard everything he says with sympathy, and on that basis, I beg leave to withdraw my amendment.

Amendment 143 withdrawn.