Employment Rights (Amendment) (EU Exit) (No. 2) Regulations 2018

Lord Henley Excerpts

Wednesday 6th February 2019 Lords Chamber

Moved by

[Lord Henley]

That the draft Regulations laid before the House on 31 October 2018 be approved.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I hope I shall speak also to the other three sets of employment rights regulations before the House on the Order Paper. These SIs are part of a package of measures that the Government have promised to introduce to make sure we are prepared in the event that we leave the EU without a deal. It is important to remember throughout this debate that these changes will not be needed if there is a deal. The SIs in front of us make amendments to EU-derived employment law in both Great Britain and Northern Ireland.

As noble Lords know, new directives agreed in the EU are transposed into UK law. The act of the UK leaving the EU therefore does not remove these rights, as they are already in UK law. In passing the European Union (Withdrawal) Act, Parliament gave the Government the ability to ensure that necessary changes can be made to keep the statute book in proper working order. These statutory instruments make only minor changes to language to ensure that existing regulations reflect that the UK would no longer be a member of the EU. These changes are necessary to ensure that the statute book is accurate and clear. It is important that businesses, employees and citizens have clarity on their rights and responsibilities.

We are not making any changes to employment rights or employment policy through these regulations. The Prime Minister, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy, and many other colleagues have been clear that there will be no rollback of workers’ rights when we leave the EU. I wish to highlight that these statutory instruments would make some changes to the regulations for European works councils. This would be an unavoidable impact of the UK leaving the EU without a deal. I can explain these changes in more detail later.

Looking to the future, the political declaration on our future relationship with the EU states that we will build on the withdrawal agreement commitment not to reduce our shared standards—a commitment not to regress from existing EU legislation. I will now go into more detail on the amendments made by the statutory instruments. The Employment Rights (Amendment) (EU Exit) Regulations and the Northern Ireland equivalent regulations repeal four powers that the Government can use to make secondary legislation. These powers relate to parental leave, part-time work, fixed-term work and information and consulting rights. The powers that are repealed relate only to obligations that the Government would be under from EU directives. As the Government would not be under these obligations if the UK left without a deal, these powers would be redundant. We would not be able to use them even if they remained. For clarity and legal certainty, we are seeking to remove these powers. Removing them in no way changes the rights that workers enjoy, nor the Government’s ability to protect workers in the UK in future.

The Transnational Information and Consultation of Employees Regulations 1999 are also amended to reflect the UK’s departure from the EU. Withdrawing from the EU will mean that the UK is no longer included in the EU rules on European works councils, which is why changes are required to the legislative framework set out in those TICE regulations. Provisions relating to existing EWCs—which can continue to operate in a no-deal scenario—are maintained. These include the protections for workers and their representatives on EWCs.

I move on to the next pair of regulations—the Employment Rights (Amendment) (EU Exit) (No.2) Regulations and their Northern Ireland equivalent. These are listed first on the Order Paper, despite their numbering. The amendments made through these regulations amend the text of existing Acts to reflect the UK’s departure from the EU. None of these changes affects the rights workers enjoy or changes employment policy.

The changes that may elicit the greatest interest across the House are those made to Section 38 of the Employment Relations Act 1999 and its equivalent in Northern Ireland. These relate to TUPE protections. The SIs amend the wording of the existing legislation to maintain the current scope of a power currently derived from EU directive obligations. This power has been relied on to make secondary legislation to cover situations where workers are not covered by TUPE regulations. The revised clause still retains the breadth of the existing powers for the Government to amend TUPE regulations to protect the rights of workers. The changes also protect the regulations that have previously been made under this power. These amendments do not change the rights to which workers are entitled.

There is one further point I wish to bring to the House’s attention. Of course, I hope that these regulations will not need to come into effect. I hope agreement can be reached with the EU and these regulations can be revoked. However, in the event that there is no agreement—no deal—it is vital that these regulations are enacted. Failure to pass these largely technical regulations would mean uncertainty over both workers’ rights and employers’ obligations. This could lead to disruption for businesses and citizens, and an increased risk of litigation. This is in no one’s interest. It would be unacceptable not to provide this clarity to businesses and I hope noble Lords will accept that the Government are delivering on our workers’ rights commitment and that these SIs can therefore be approved. I commend them to the House and beg to move.

[Lord Monks (Lab)]

My Lords, it is pretty obvious that these regulations were drafted—as was necessary—before the conclusion of the current talks that the Prime Minister very belatedly initiated with the TUC and others about employment rights post Brexit. I understand that talks with the Business Secretary are still going on. I hope that at the back of the Minister’s mind is the thought that these regulations might well be altered in the light of any progress made in these talks. In effect, the TUC seeks a binding guarantee that existing employment rights will not just be maintained but will not fall below any levels of protection developed in the rest of the European Union and its single market.

There is a lot going on in the European Union at the moment on precarious employment, the gig economy, self-employment and protections for migrant workers. The key point in these negotiations with the Business Secretary is whether there can be any chance of a meeting of minds in these areas. So far, the Prime Minister has said to the union negotiators, “Trust me to make sure we will do the right thing”. “Trust me” is not quite good enough, given the transitory nature of being Prime Minister or party leader in this country. Binding guarantees are rather better than good intentions in this area.

The backcloth to these regulations has been drawn to my attention by the TUC. It has circulated a brief to Members of this House, which I hope noble Lords have had a chance to read. The first point is a procedural one about consultation. I echo previous debates in the House today by asking: who has been consulted on the regulations?

I turn first to the regulation dealing with the European works councils. It is worth reminding Members of this House that there are 850 or so EWCs and UK workers are represented on 500 of them. About 10 million European workers in total are covered by European works councils. Although their performance varies, as one would expect, on the whole they have been very successful in holding companies to account on their future plans and strategies. This is an important dimension in a world where pressures from financial markets on companies not to consult, inform or discuss their plans are very powerful.

We welcome the Government’s commitment to maintaining British participation in existing EWCs, but this commitment does not extend—at least as yet—to including new ones or to absorbing into UK law any changes in EWC arrangements that come into force over the next period. No new EWCs will be required to be set up under UK law after Brexit. We are worried that—at least in some cases—UK workers might lose their seats on the European works councils and therefore put British jobs at much greater risk than those of our neighbours across the channel and the North Sea. In other cases, I think there would be voluntary agreement. There are specific measures on the rights of UK worker representatives, such as paid time off to attend meetings. I note that these will be maintained after Brexit in relation to EWCs, but not necessarily to new EWCs that have a British component.

If there is no deal, most of these regulations are designed to come into force on Brexit day. What is the timetable should a withdrawal agreement be concluded? In our view, they should not come into force during a transition or implementation—or indeed a backstop—period.

I turn to the 2018 family of regulations. These are centred primarily on TUPE—the transfer of undertakings legislation—which has been valuable in handling transfers of staff due to privatisations in particular. They came in during the 1980s, under the Conservative Government at that time. The TUC is concerned that the regulations in this area lack a clear definition of what “TUPE-like protection” actually means. This is the phrase that has been adopted. I have not come across this kind of legal term before. “TUPE-like” seems to lack precision, as least to my layman eyes. Unless someone can explain the contrary to me, I think a clearer definition is very much needed.

The regulations do not extend TUPE-like protection and provisions to employee representatives, only to employees. Under the TUPE regulations, employee representatives have certain rights to information and consultation, and they should be maintained in whatever the future holds for us in this area.

Next, can we have an assurance that the regulations will not be brought into effect in any transitional or backstop period—that we would stick with the status quo? The powers under Section 13 of the withdrawal Act would hinder the UK’s ability to keep up with changes in EU law during any transition or backstop period and in the event of no deal. We want to avoid workers in the UK during such a period not having the same rights and protections as workers in other European countries. Protection during a transitional or backstop period is very important.

--- Later in debate ---

[Lord Stevenson of Balmacara (Lab)]

My Lords, it has been a very helpful and useful debate and we look forward to hearing the Minister’s response. I have a number of questions that pick up on points already made by other noble Lords.

I will not delay the House too long, but I cannot let pass my normal question to the Minister, when dealing with SIs, about commencement dates. His department has a very bad record on bringing out regulations that commence on the common commencement dates. He promises to do better, but I have yet to see it. Unfortunately, these are not ones that I can tease him with because they are supposed to come out only if required and on exit day.

However, that is not quite the case here, is it? If we look at the Employment Rights (Amendment) (EU Exit) Regulations 2019 and the parallel regulations for Northern Ireland—which I think are numbers three and four as grouped on the Order Paper—both of them say that the regulations,

“come into force on exit day, subject to paragraph (2)”.

Paragraph (2) provides that certain elements of the regulations,

“come into force the day after the day on which these Regulations are made”.

When the Minister introduced the regulations, he said that we did not have to worry about them, that there was nothing in them that would need to take place, and that he was optimistic that there would not be a need for them to come into force. However, that is not true, as some parts of these regulations will come into force. In that context, could he reinforce what he said, which is that there is no diminution in existing rights as a result of the parts of these regulations that will come into force before exit day—and are, therefore, not strictly EU exit regulations in that sense, although we will pass over that, if the issue is indeed trivial, as I suspect it is, given that they seem to be corrections to earlier regulations and primary legislation that may not have kept pace with nomenclature in the EU. If that is not the case, the Minister owes it to the House to make a statement about exactly what is happening under these regulations.

More generally, several speakers—my noble friends Lord Monks and Lady Crawley and the noble Lord, Lord Balfe—have raised points about what is meant by the fact that, on the one hand, the Government are withdrawing powers which, as my noble friend Lady Crawley said, are currently in force and could be implemented to maintain workers’ rights and the rights of employee representatives but, on the other, the Government intend, although there is no evidence for this apart from the assertions of both the Prime Minister and the Minister, that there should be no diminution. Where is the legislation that is going to bring forward that levelling up to the existing situation? If the Minister cannot give us an answer, will he please write to us about what the Government’s intentions are? Clearly, the regulations amend Section 13 of the Work and Families Act. That amendment reduces, in crude terms, the rights of workers currently. What is the timescale for that being rectified?

On the question of what TUPE means and the definition of “TUPE-like”, again the regulations remove powers that exist. Where is the regulation that is going to bring forward the parallel arrangements to make sure that that continues in UK law? The rights of employee representatives, which were mentioned in particular by the noble Lord, Lord Monks, are similarly affected.

These may not seem to be very serious comments, but I think that people across the country will be concerned that their rights are being eroded. At the same time, politicians are saying that they should not worry about it, because the Government have in mind to make sure that there is no diminution. So it is not just a question of the diminution but of making sure that, when changes are made that would have happened had we stayed in the EU, those are also replicated in UK law. I would be grateful to hear the Minister’s comments on those points.

[Lord Henley]

My Lords, I thank all noble Lords for their comments. The noble Lord, Lord Monks, complained that these regulations had possibly been drafted before the talks were concluded. I have to say that it would be rather difficult to draft them after the talks were concluded because I suspect that they might be somewhat late. I think that to start drafting these amendment regulations at 10 minutes to midnight would not be the right way to go about it and I would be quite rightly criticised.

What I can say, and I think that the noble Lord will be pleased about this, is that the Employment Rights (Amendment) (EU Exit) Regulations were published in draft form in December 2017. That allowed for extensive consultation and allowed us to comply with the statutory obligation to consult the relevant bodies on a change made to the conduct of employment agencies and employment business regulations. We received, I think, two responses, one from the National Association of Schoolmasters Union of Women Teachers and the other from the Recruitment & Employment Confederation. I need not go into detail, but neither raised concerns about the drafting of the amendment: rather, they commented more on EU exit in general. We also, as I said, shared these regulations in draft with the TUC and with the CBI—so there was considerable consultation on them.

I shall repeat the commitment that has been made by my right honourable friend the Prime Minister, by my own Secretary of State and by Ministers throughout the Government. Now as a Parliamentary Under-Secretary of State I shall repeat it, although it has been made by people who are far important than me. We are committed not to rolling back on workers’ rights, and by laying these SIs we are upholding that commitment. We already go beyond the EU minimum in many areas of employment law; that is well known. I can say to the noble Baroness, Lady Burt, that we have no intention of making any changes to statutory maternity pay. People will not be affected whether we are in the EEA or not. That is true for all the concerns that have been put forward.

Looking to the future, as my noble friend Lord Balfe invited us to do, I would remind the House of what we discussed in a Statement debate—and there will be other chances to discuss it. Our Good Work Plan sets out our vision for the future of the labour market and our ambitious plans for implementing the recommendations that arose from the Taylor review. That important package will ensure that workers have access to the rights and protections that they deserve in a changing labour market, with the changing technology that we face. In addition, it will create a level playing field for employers, thereby ensuring that good employers are not undercut by the small minority who seek to circumvent the law. That is worth stating at the Dispatch Box as I move these instruments.

Perhaps I may deal with one or two specific concerns, in particular the drafting points made by the noble Lord, Lord Monks, and echoed by others. He asked whether the new phrase “TUPE-like powers” provide the same scope for power. The phrase “TUPE-like provisions” is needed to maintain the current scope of the powers, and the new wording ensures that the Government will continue to have the power to enhance workers’ rights as we do now. We will continue to do that and I repeat that commitment once again. The noble Lord also asked whether these statutory instruments would need to be amended following the talks that he referred to. I can make it quite clear again that these SIs are for no deal. We hope that once we have a deal they will be unnecessary.

The noble Lord also put a question about European works councils. He asked how the Government could claim to be preparing for Brexit when they did not have plans for workers to have proper representation in the absence of European works councils. We are preparing for a no-deal exit, as any responsible Government would do. UK employees will still be able to be represented on works councils—but, again, that will be a matter for the employer and employee representatives. Employees and their representatives on European works councils will retain their existing protections in all circumstances.

The noble Baroness, Lady Burt, asked about the differences as regards Northern Ireland. This is a devolved matter in Northern Ireland in a way that I do not think it is in Scotland. The TUPE-equivalent amendment in Northern Ireland is to the Employment Relations (Northern Ireland) Order 1999. However, in the continued absence of a Northern Ireland Executive, it is for the UK Government to take any necessary EU exit legislation for Northern Ireland through Westminster. However, I can give an assurance that the Northern Ireland departments have been consulted in the preparation of these statutory instruments.

The noble Lord, Lord Monks, also asked whether they would apply during any implementation period. Again I can say that they will be needed only in the case of no deal. I have dealt with the question of statutory maternity pay, which will remain the same. My noble friend Lord Balfe asked about the ability to repeal the legislation. If the SIs are no longer required on exit day we expect, as I think he quoted, to defer, revoke or amend them through further legislation in time for the end of the implementation period. Which route we take will be a matter for us to decide at the time—but, regardless of what we decide, we will uphold our commitment not to roll back on workers’ rights.

With that, I think that all I need to do is to repeat the assurance to the noble Baroness, Lady Crawley, and others that these amendments do not narrow TUPE powers: rather, they ensure that the Government will continue to have the power to enhance workers’ rights, as we do now. One last question was put to me about European works councils by my noble friend Lord Balfe. He asked whether we could apply the EU directive on EWCs like Switzerland. I repeat that these SIs are only for if there is no deal. Switzerland is covered by the directive under the deal that it has with the EU, so that would be a matter for future negotiations.

[Lord Stevenson of Balmacara]

I wonder whether the noble Lord could answer my question about the commencement date and the discontinuity between the fact that these are supposed to be brought in only on exit day although two of them refer to regulations that will come into force on the day they are passed—which presumably will be today. If the noble Lord does not have any inspiration at this moment, perhaps he could write to me.

[Lord Henley]

I had completely and utterly forgotten the noble Lord’s obsession with commencement dates in the excitement of dealing with orders of this sort. It might be that inspiration comes to me, but it may not be the sort of inspiration that would satisfy the noble Lord. I am told that the standard practice for statutory instruments is that they have a coming into force date. If that does not answer the noble Lord’s question, I will write to him.

I think that I have dealt with all the points that were put to me.

Motion agreed.