Employment Rights Bill

Lord Hunt of Wirral Excerpts

Committee stage
Wednesday 18th June 2025 Lords Chamber

Moved by

[Lord Hunt of Wirral]

271ZZA: Clause 91, page 110, line 12, at end insert—
“with the three-year period resetting three months after any general election.”Member’s explanatory statement
This amendment seeks to ensure that a new government would not be held to the labour market enforcement strategy of a predecessor government for up to three years.

[Lord Hunt of Wirral (Con)]

My Lords, in moving Amendment 271ZZA, I will also speak to Amendments 274 and 278, standing in my name.

Clause 91 requires the Secretary of State to set out a plan for enforcing labour market legislation over a three-year period. However, as currently drafted, Clause 91 lacks the flexibility necessary to reflect changes in government and political leadership. As the Minister will be aware, Clause 91(1) places a statutory duty on the Secretary of State to publish a labour market enforcement strategy

“before the beginning of each relevant three-year period”.

Subsection (6) then defines those periods as

“beginning with the next 1 April after the day on which this section comes into force”

and every successive three years thereafter. At first glance, that may seem entirely sensible, but let me explain why it creates a democratic and practical problem that our amendment seeks to fix.

Suppose, for example, this Bill passes this year, in 2025. Under Clause 91(6)(a), the first strategy would need to be published before 1 April 2026 and it would then run until March 2029. Now, imagine a general election takes place in 2027—entirely plausible, perhaps even probable. That would mean that a new Government taking office in 2027 would be bound by a strategy formulated and published by a previous Administration, with potentially very different political priorities, until well into 2029. I suggest to the Government that this is neither democratic nor desirable.

Labour market enforcement is not a neutral administrative matter. It involves clear policy choices about which sectors to prioritise, what level of inspection and enforcement to undertake, what approach to take with non-compliant employers, and how to engage with trade unions, businesses, regulators and workers. These are not technocratic decisions. These are matters of political judgment. They ought to reflect the democratic mandate of the day.

Our amendment is, therefore, straightforward. It would insert into Clause 91(6) a provision that the relevant three-year period should reset three months after any general election. This would provide any new incoming Government with a short period—not an immediate obligation—in which to consult the advisory board and prepare a revised strategy, only if they wish to do so. It would not force a change of strategy; it would simply enable one at a more appropriate and timely moment.

Amendments 274 and 278 together seek to inject evidence, accountability and proportionality into the Government’s proposal to establish a single labour market enforcement body under this legislation. These are not abstract or procedural concerns; they speak directly to the credibility of this legislation and the consequences it will have for workers, businesses and the rule of law in the labour market. We are therefore being asked to approve a significant structural reform—the consolidation of multiple specialist enforcement agencies into a single, central body—without a clear estimate of how much it is all going to cost and without a rigorous analysis of whether it will improve enforcement outcomes.

The idea that such sweeping institutional change could proceed without a public, detailed cost-benefit analysis should give us all pause for thought. The creation of a new enforcement authority is not merely a matter of administrative reorganisation; it involves physical premises, staff transfers, IT infrastructure, the legal realignment of enforcement powers, data-sharing agreements, and the re-establishment of everything, from complaints mechanisms to enforcement protocols.

All of this will come at considerable financial and operational cost, yet no such cost has been published, nor can it be debated. It is absent. This is particularly concerning given that we have seen similar government reforms in other domains—such as the establishment and eventual dismantling of the UK Border Agency—go badly awry, not for lack of ambition but for lack of foresight and planning. An effective enforcement agency cannot simply be declared into being. It has to be built carefully, deliberately and on the basis of hard evidence.

That is why Amendment 274 requires the Secretary of State to lay before Parliament a detailed cost assessment. We understand that the Government’s broader agenda includes a desire to reduce inefficiency and waste in the public sector. That is a principle all sides of this Committee would support. We would not, and I hope the Minister would not, wish to see the creation of another bloated agency duplicating functions and budgets and wasting taxpayers’ money under the guise of reform. Without clear planning, the risk is precisely that a new bureaucracy, with vague lines of accountability, an unclear mandate and spiralling costs fails to deliver better outcomes for workers and businesses.

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[Lord Katz (Lab)]

We have had a fair amount of scrutiny of the wider proposal, rather than the Bill’s specific fair work agency proposals. As I said, over the past nine years since 2016, there have been 33 different strategies and reports, including—but certainly not limited to—the Taylor report. This is not an area that has not been considered and scrutinised to some degree. I also say to the noble Baroness that the Single Enforcement Body—as it was called by the previous Administration—was the policy of successive Conservative- led and Conservative Administrations. I am not going to intrude on the great policy disagreements on that side of the House. We feel it important to establish the fair work agency and to ensure that we have strong enforcement of labour market regulations. I therefore ask the noble Lord to withdraw Amendment 271ZZA.

[Lord Hunt of Wirral (Con)]

My Lords, this has been a very significant debate, because I believe it is the first time I have heard from the Government Front Bench an acceptance that the Opposition will eventually take over government again. He and I may disagree on when this will happen—of course we disagree: I just happen to believe that it is going to happen at the next general election. That is why these amendments are so important.

I also want to say how much we miss the noble Lord, Lord Fox. I was very disturbed indeed to hear about his unfortunate accident, but I am very pleased to hear that he may shortly be with us. I hope that, by speeding up the process to Report in July, he will still be able to be with us, because he has always brought a note of common sense—despite coming from the Liberal Democrat Benches. Now I am upsetting everyone. All I want to say to the noble Lord, Lord Goddard of Stockport, is that he has been a marvellous substitute, if one can say that. His pragmatic approach to the Bill has been enormously valuable, but we do miss the noble Lord, Lord Fox.

I thank my noble friend Lady Lawlor, who is quite right: we are moving into unknown territory. Although the Minister might remind us that the Conservative Government were committed to looking at stepping in this direction, we are still moving into unknown territory and, as my noble friend Lord Jackson of Peterborough pointed out, the CIPD cost estimates are really worrying. I do not think the Minister properly addressed his key question on the whole issue of accountability.

However, here we are. I am surprised that the Government have rejected Amendment 271ZZA. It is a reasonable and pragmatic amendment that simply recognises the basic democratic principle that a new Administration should have the ability to review and, if necessary, revise a labour market enforcement strategy to reflect new economic realities and public priorities. Despite the amendment to which he referred—which is at the margin—the Government have always insisted that a labour market enforcement strategy must run its full term without reset, regardless of elections or changes in government. But why should a new Government be bound by a strategic direction set by their predecessor? That is not consistent with the democratic mandate bestowed on any incoming Government. Surely it is neither logical nor democratic to compel a newly elected Government to implement a strategy they did not design, especially in a labour market that is dynamic and constantly evolving.

Economic landscapes can shift dramatically within short periods, whether due to international events, technological change or domestic challenges. Flexibility to adjust enforcement priorities accordingly is essential. It is not only a question of governance, but of ensuring that enforcement remains effective and responsive to current labour market conditions. The Government have already recognised the importance of periodic review and the resetting of the labour market enforcement strategy every three years, as set out in Clause 91. If I am not mistaken, that periodicity is built into the framework precisely to ensure that the strategy remains relevant and responsive.

The main feature of this debate has been the cogent arguments put forward by the noble Lord, Lord Goddard of Stockport. His insights, and those of my noble friend Lady Coffey, highlight the pressing need for a substantive independent review of the proposed fair work agency. While the promise of increased efficiency in enforcement is welcome, we must remember that there are intentions and then there are results. We must understand how such efficiency will be achieved and at what cost, what other alternatives were considered, and why they were rejected.

To date, the Government have not committed to publishing any specific details about the establishment of the fair work agency—details that are crucial for proper scrutiny. We lack clarity on the expected costs of this new body, the standards by which compliance will be measured and the criteria that will guide enforcement decisions. Without that transparency, it is difficult to assess whether the creation of this body will represent genuine progress or simply add another layer of bureaucracy, which, as the noble Lord, Lord Goddard of Stockport, stressed, will impinge on smaller businesses in particular.

There remains much to discuss and questions to be answered about the fair work agency. Unfortunately, I find myself unconvinced by the Government’s arguments against the amendments proposed by myself and the noble Lord, Lord Goddard of Stockport. Our proposals are not about obstruction but about ensuring proper oversight, accountability and flexibility in this important area of labour market governance. I am sure that we, and the Liberal Democrats, will return to these issues on Report, but for now, I beg leave to withdraw the amendment.

Amendment 271ZZA withdrawn.

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[Lord Hunt of Wirral (Con)]

My Lords, I will speak to Amendments 271ZC and 273BA but I first thank my noble friends Lord Jackson of Peterborough and Lady Coffey for their amendments. My noble friend Lord Jackson began by describing his amendments as a “cornucopia”. I was always told that a cornucopia was a goat’s horn overflowing with flowers, fruit and corn. A better definition than the one he used would be “an abundant supply of good things”, which opened the opportunity for the Minister to justify the unjustifiable. We all look forward to hearing from her.

Amendment 271ZC seeks to avoid governmental overreach by excluding holiday pay from notices of underpayment, given that the existing legal framework provides adequate remedy for individuals seeking to enforce their rights in this matter.

Amendment 273BA seeks to ensure that labour market enforcement undertakings are requested only when there is a public interest in doing so. This amendment provides an essential layer of protection against the risk of regulatory overreach and against the misuse of powers that could otherwise affect individuals and businesses unfairly. Clause 117 gives the Secretary of State considerable discretion to impose conditions on people or businesses suspected of labour market offences. That discretion already includes subjective tests of what is just and what is reasonable. Who defines what is reasonable? Who ensures that decisions are being made not just fairly but in service of the broader public good? By requiring measures to be in the public interest, as this amendment does, we would root enforcement action in its proper purpose: protecting workers, upholding lawful employment practices and maintaining public confidence in our regulatory system.

This amendment would strengthen the legitimacy of LME undertakings. It would ensure that measures are not only lawful and proportionate but meaningful, and that they serve society as a whole, whether it is tackling exploitation, improving transparency or deterring repeat offences. I believe the public interest must be front and centre. Without this safeguard, we risk opening the door to punitive, reputational or performative measures that may be justified in form but not in principle. This amendment would give Parliament, and more importantly the people affected, the confidence that LME undertakings will be guided by public value, not political expediency or administrative convenience. I urge the Government to support this amendment.

As I mentioned, I also support the amendments tabled by my noble friend Lord Jackson of Peterborough. His proposed changes to the wording of the legislation, particularly in relation to enforcement powers, are both thoughtful and necessary. By raising the evidential threshold from a simple belief to one requiring an evidential basis, and by increasing the standard of proof for courts from “the balance of probabilities” to “beyond reasonable doubt”, these amendments would introduce essential safeguards. They do not undermine the policy intention of the Bill to tackle labour market offences effectively. Rather, they ensure that enforcement actions are firmly grounded in evidence, and that the rights of employers and individuals are protected from potential overreach or misuse of power. In short, my noble friend’s amendments help strike the critical balance between robust enforcement and fairness, which I believe is vital for maintaining public confidence in the system.

Amendment 273PB, tabled by my noble friend Lord Jackson of Peterborough, is an incredibly important amendment. We live in a world where migration patterns are increasingly complex and the risks associated with illegal immigration, visa overstays and exploitation in our labour market are growing. At the same time, threats to our national security have become more sophisticated, requiring a co-ordinated and agile response across multiple agencies.

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[Lord Jackson of Peterborough (Con)]

My Lords, I commend my noble friends’ excellent speeches on this clause. I press the Minister on what the Explanatory Notes say about subsection (4), because we have talked about the concept of persons and what that actually means. My noble friend spoke earlier about ministerial powers and the lack of information on costs, which should have been in a proper and more detailed impact assessment but is not. It is not in any supporting material, including the Labour Party manifesto for the general election. Presumably, the Minister will say that such information about the form and function of the clause will be developed in secondary legislation.

The sentence in the Explanatory Notes about subsection (4) is extraordinary, because it touches on what is potentially ultra vires and will certainly, I think, be subject to litigation or judicial review. Given that this is an Employment Rights Bill about labour relations and employment, it says:

“Subsection (4) makes provision for situations where proceedings relate partly to employment or trade union law … and partly to other matters”.


I just do not understand what those other matters can be. This is an employment law Bill. It is about labour relations and the relationships between employers, trade unions and a workforce. What other matters are within the bailiwick of Clause 114? I think we need to press the Minister on that, because we are being invited to give a blank cheque with taxpayers’ money to something that is very opaque, we do not understand, is not costed and is not detailed. On that basis, the Minister should address those specific issues.

[Lord Hunt of Wirral (Con)]

My Lords, I thank my noble friends Lady Coffey, Lady Noakes and Lord Jackson of Peterborough for some penetrating questions about the power to provide legal assistance as set out in Clause 114. First, I would like the Minister to share with us what discussions have been held with the Lord Chancellor and the Secretary of State for Justice. A number of the points made by my noble friends relate to the fact that legal aid is already available in certain circumstances, so what is this all about and, as my noble friend Lady Coffey asked, who is this going to benefit?

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[Lord Katz (Lab)]

I do not want to disappoint the noble Lord, but I am afraid he is stuck with me again. I thank the noble Baroness, Lady Coffey, for tabling amendments on legal assistance and the noble Baroness, Lady Noakes, for notifying us of her opposition to Clause 114 standing part of the Bill.

I will start with Amendment 272BA. To be fair, the noble Baroness, Lady Coffey, and others indicated that this has overlapped with not only previous discussions today but discussions of groups on previous days in Committee. As my noble friend Lady Jones said on Monday, the drafting of Clause 114

“was carefully thought through and is deliberately broad and inclusive”.—[Official Report, 16/6/25; col. 1883.]

It is only fair that it covers not just employees but employers and trade unions. To answer a specific question from the noble Baroness, Lady Coffey, about what other assistance could be provided, this could include help in understanding procedural requirements, preparing documents or accessing expert input. It is designed to be flexible and responsive to individual needs. Given this, we cannot support Amendment 272BA.

Amendment 272D would restrict the amount of support that could be offered to any individual through this power. It is not a reasonable measure. I understand that it is a probing amendment, as the noble Baroness, Lady Coffey, said, but the small amount proposed in the amendment would leave the power meaningless. As we have discussed, this would be, although it is not intended as such, tantamount to a wrecking proposal, because it is such a small amount. Obviously, as we have discussed, this is a manifesto commitment. The fair work agency should be able to decide how much support it can offer, without being constrained to random financial limits for no good reason.

Amendment 272E would create an additional process before the power can be used. Part 5 of the Bill already calls for the fair work agency to publish an annual strategy, as we discussed on an earlier group. Requiring yet another administrative document in this way would be burdensome and unnecessary, and I think we share across the Committee a desire to reduce bloated bureaucracy—a phrase that has already been used this afternoon.

Turning to Amendment 272F, the powers under Clause 114 will operate in tandem with those in Clause 113, but workers will not always want to be separately represented in proceedings brought by the fair work agency. They can be represented, but they do not have to be. Therefore, we cannot support this amendment.

Amendment 272G would mean that the fair work agency would duplicate ACAS’s existing responsibilities regarding dispute resolution. This power is not intended to be a replacement or a duplication of existing support. We cannot support this amendment, as it would complicate the enforcement landscape when we are trying with this Bill to simplify it.

Amendment 272H would limit the scope of this power. It would create situations where legal assistance would have to cease, even if proceedings continued, leading to unfairness. It could lead to people being unable to continue their cases, which could cover other matters such as discrimination, because support could no longer be offered. The fair work agency should be able to decide what is appropriate and fair in each case.

Amendment 272I would put an unnecessary burden on the Secretary of State to have insurance in place before being able to provide advice on a settlement agreement. To be fair to the noble Baroness, Lady Coffey, she sort of indicated uncertainty around this. To be clear, this amendment wholly contradicts established government practice. I refer her to paragraph 4.4 of Managing Public Money, which sets out that the Government should generally not take out commercial insurance and it is not good value for money.

To summarise on Clause 114, the legal system can be intimidating, particularly for vulnerable workers or those from marginalised backgrounds. To repeat what my noble friend Lady Jones said in the previous group, many vulnerable workers are reluctant or unable to bring their cases to tribunal to enforce their employment rights, and this has serious consequences. Rogue employers exploit this, breaking employment law, and get away with it. For instance, Citizens Advice suggests that high-paid workers are more likely to file a case with an employment tribunal than lower-paid individuals, despite the latter being more likely to have their rights infringed. As I said, this lets rogue employers off the hook, and that is unfair for the vast majority of businesses, which we all know do the right thing by their staff and want to. It is unfair for the vulnerable workers involved—to state the obvious—who are being denied their rights, and it is unfair for the rest of the workforce, who are denied work opportunities due to illegal practices undercutting them.

As was said in the last group, that is why, in the plan to make work pay—again, a manifesto commitment—we set out that the fair work agency will have powers to bring civil proceedings to uphold employment rights. The Bill will give the fair work agency the power to bring civil proceedings in the employment tribunal to uphold rights. This is a critical power, particularly for situations where a worker feels unable to bring proceedings themselves. But there are occasions where a person is able to bring proceedings in the tribunal or another court but needs assistance, or where the case has wider ramifications and the person concerned could benefit from the fair work agency’s expertise.

[Lord Hunt of Wirral (Con)]

My Lords, can the Minister remind us to what extent there has been consultation with the Secretary of State for Justice? Has the Lord Chancellor been involved in putting together this scheme, which is going to sit alongside legal aid, for which she is responsible? It would be really helpful if the Minister could make sure that the Government is joined-up in putting forward what is, in a way, as my noble friends have pointed out, quite a blank cheque, which has not properly been costed. Can he put us right on all this, please?

[Lord Katz (Lab)]

I am more than happy to. The noble Lord, Lord Hunt, anticipates the comments that I was just about to come to—but we can address the point now. The noble Lord, Lord Jackson of Peterborough, focused on this as well. This is not expanding legal aid. The power is intended to give the fair work agency a discretion to provide support in employment-related cases. It is not an alternative to legal aid and it will be used in specific cases. The Government will set out how and when the fair work agency will exercise its power in due course and will discuss this with a range of stakeholders. I reassure the noble Lord, Lord Hunt, we have regular conversations with the Ministry of Justice, including on the Bill’s implementation.

I return to what I was saying about the importance of ensuring that the power of legal advice is appropriately bounded. It cannot be used to fund dispute resolution facilities delivered through other routes. Importantly, the clause protects the integrity of the courts and tribunals by confirming that nothing in the clause overrides existing restrictions on representation imposed by legislation or judicial practice. This clause complements the fair work agency’s wider role in promoting access to justice and fair treatment in the workplace. It provides a vital lever for supporting individuals who might otherwise face legal barriers alone or for ensuring compliance with relevant law, and it delivers our manifesto commitment on which Members in the other House were elected.

The noble Baroness, Lady Noakes, asked about the costs. These will be set out in due course and will be discussed with a range of stakeholders, particularly employers, trade unions and employees.

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[Baroness Coffey (Con)]

My Lords, I am conscious of the sentiments expressed here, but it would put the Government and the Secretary of State in a very difficult legal situation if they were to hold information that they were not allowed to pass on to relevant authorities within the rest of government. I hear what the noble Baronesses have said, but I do not know, with all the other rights that are starting to come through this Bill, why anyone should be afeared, especially when they are here on a legitimate visa as in the example to which the noble Baroness, Lady O’Grady of Upper Holloway, has just referred. I am conscious of some of the exploitation, but I believe that same sponsor was suspended from sponsoring any more visas. I was not aware of what the Home Office did or did not do, but restricting the Secretary of State from formally upholding the law is quite a worrying trend.

[Lord Hunt of Wirral (Con)]

My Lords, I thank the noble Baroness, Lady Hamwee, whom I had the honour to serve when she chaired the Home Affairs Select Committee. She has raised a number of key points, as has the noble Lord, Lord Paddick, and I thank the noble Baroness, Lady O’Grady of Upper Holloway, and my noble friend Lady Coffey for their speeches as well.

Let me make it absolutely clear: modern slavery remains one of the gravest human rights abuses of our time, and tackling it requires vigilance, clarity and effective enforcement. It is crucial that the agencies tasked with identifying and assisting survivors and with co-operating closely with the Independent Anti-Slavery Commissioner have clear mandates and necessary powers to act decisively. While the specific amendments before us seek to clarify the transfer of roles from the Gangmasters and Labour Abuse Authority to the fair work agency, the wider point is this.

Enforcement bodies must be both effective and well co-ordinated to respond to the complexities of modern slavery. Without this, vulnerable individuals risk slipping through the cracks, and the machinery of justice and protection loses its impact. Ensuring transparency about which bodies are responsible for what and guaranteeing that they are properly equipped underpins our broader commitment to eradicating modern slavery. It is not just about legal technicalities but about safeguarding human dignity and upholding fundamental rights.