Employment Rights Bill

Lord Hutton of Furness Excerpts

Committee stage
Tuesday 10th June 2025 Lords Chamber

While these changes are intended to improve clarity and fairness in industrial action procedures, the Government must carefully consider the wider implications of lowering turnout thresholds or extending validity periods. They go too far. We must protect both workers’ rights and collective action and the need for transparency and confidence in the process. I look forward to the Minister’s response on these points and potential refinement of these positions in further meetings. I beg to move.

[Lord Hutton of Furness (Lab)]

My Lords, Amendment 251A stands in my name. I draw the Committee’s attention to the interests I have disclosed in the register. I chair the operating company that runs London Luton Airport.

Much in the Bill is to be welcomed. It will deal with some of the manifest gaps in our framework of employment law and will strike a better balance of rights in the workplace. I strongly congratulate my noble friends on bringing this Bill forward. My amendment addresses the question of balance. Ministers have repeatedly emphasised the importance of balancing the need for better protections for workers and a simplified, less complex framework for industrial relations law with the legitimate and reasonable concerns of employers about flexibility and the regulatory costs of additional legislation. Being both pro business and pro worker is a laudable aim, but it will depend on this balance being properly struck.

I believe that Clause 71 as drafted does not strike the correct balance as it affects UK airlines because this clause directly, but probably inadvertently, brings into play in any future industrial action involving UK airlines the regulations concerning airline passenger compensation set out in what is known in the industry as UK261, which would impose potentially significant costs on airline operators in any future industrial dispute. This regulation gives passengers a right to compensation if a flight is cancelled fewer than 14 days before departure, unless there are, according to the regulations, extraordinary circumstances. Compensation can be anywhere between £110 and £520 per person, depending on the length of the flight, not the value of the ticket. Unions are required under the current law to give 14 days’ strike notice to any UK airline operator, allowing flights to be cancelled without incurring potentially enormous claims for compensation from passengers.

The regulations and the primary legislation are, in this context, extremely and entirely harmonious. Clause 71 would change the current careful balance and expose airlines to significant claims for compensation as in future if the Bill becomes law only 10 days’ notice of strike action would be required. An important ruling of the European Court of Justice in 2019 made it clear that strikes by an airline’s own staff are not to be considered extraordinary circumstances under UK261, so we have an obvious problem. I cannot believe that Ministers intended this outcome because, put simply, there is no balance here. Uniquely in this sector, the law would discriminate against airline operators.

My amendment proposes a solution to this. UK airline employees should continue to be required to provide 14 days’ notice of strike action. I do not believe that my amendment raises any fundamental issues of principle. Trade unions should, and must, have the freedom to take industrial action, but employers also have the reasonable expectation that the law will remain neutral and will not favour one side over the other. I am afraid that Clause 71 does precisely that as far as the airline sector is concerned. If my solution is not considered acceptable to my noble friend on the Front Bench, I hope that she will be able to tell me how she plans to deal with this situation.

[Lord Moynihan of Chelsea (Con)]

My Lords, I am embarrassed to keep your Lordships even a few minutes more, but I stand to support the amendment tabled by the noble Lord, Lord Goddard, and my noble friend Lord Jackson in his opposition to Clause 69 standing part, and to introduce my own opposition to Clause 66 standing part. Thus, I go further than the noble Lord Goddard, even though I very much support his words.

Why is Clause 65, in combination with Clause 66, so damaging? The noble Lord, Lord Goddard, was quite right to focus on the democratic legitimacy of the provisions of Clause 65, but there is a further, even more key, set of problems with these clauses. With noble Lords’ permission at this very late hour, for which I apologise, I will give a very brief review of the history.

Let us first look at days lost to strikes in the 1970s. In 1970, 10 million days were lost; in 1972, 24 million days were lost; and in 1979, 30 million days were lost during the winter of discontent. We consequently had the Thatcher reforms, which outlawed secondary action, banned strikes conducted for political reasons, regulated picketing, required secret ballots for strike action, and made trade unions legally accountable for actions taken in their name. This enabled unions to restore control and reduce the number of unofficial strikes, which had been a major source of the growth in strike activity in the 1960s and 1970s. The result, post-Thatcher through to the 2020s, was that, on average, less than half a million days a year were lost to strikes. Industrial peace was a direct consequence of those reforms. There were no more winters of discontent. This was enormously valuable, for example, for the Blair and Brown Governments of the noughties.

Let us note that the Government’s Bill seeks to eliminate very few of those specific Thatcher reforms. The amendments from the noble Lord, Lord Hendy, which we have just discussed, made an attempt at that; I am glad to hear the Government sensibly decline his invitation. However, even though the Government apparently see the sense of leaving most of the Thatcher reforms in place, they seem, in Clauses 65 and 66 in particular, to be looking to find other ways to unionise the private sector landscape.

If the Government succeed in that, there will be inevitable consequences for the UK’s economy. Last week, it was observed that unions are currently mostly confined to the public sector in the UK, but nobody asked why that was so. It is obviously because public sector workers have a monopoly of employment, so can enforce their will, and timid Governments seek to placate them so as to be able to appear, at least, to be in charge. What is the impact of this? They are multiple public sector strikes and excessive wage settlements in the public sector, the costs of which are now directly leading the Chancellor to her current dilemma of a runaway deficit, plus underserved public services such as social care and child welfare, and an impending debt crisis.

What will Clauses 65 and 66 collectively do to the union landscape in the UK? Clause 65 removes Section 226(2)(a)(iia) of the Trade Union and Labour Relations (Consolidation) Act 1992, meaning that for the ballot to be valid, you no longer have any floor for the percentage of employees voting. Clause 66 alters subsection (2)(a)(iii) so that only a majority of those voting would be required for a strike to go forward. One businessman whom I spoke to just today was utterly startled by this news. He runs an SME employing 36 workers. If, say, one-third of them—12 people—vote, and only six of those 36 employees vote to strike, then you have a strike. It is not hard to find six out of 36 employees to vote for a strike.

However, is that, as the noble Lord, Lord Goddard, pointed out, democratic? Will the electorate’s heart warm to this quantitative gerrymandering? As I described just now, we all see the impact of unionisation in the public sector. What will happen in the private sector if this Bill, in the undemocratic manner that the noble Lord, Lord Goddard, has so rightly decried, passes?

I described last week in this Chamber some of the past, when unionisation destroyed industries such as the London docks, and the present, when the public is tormented by public sector strikes ranging from dustbins to doctors and from teachers to train drivers. This present-day public sector malaise, if it spreads to the private sector, will, as my noble friend Lord Hunt made clear, take us straight back to the 1970s and the winter of discontent.

If the Government are, sensibly, really not proposing to change much of the Margaret Thatcher reforms, which have brought industrial peace to the private sector at least, why is there any need to bring in these new anti-democratic changes? Do the Government really think that allowing strikes to go forward, with feasibly only 10% or even less of employees voting for the strike, will be seen by the public and indeed by the other 90% of the employees of that company as anything but outrageous and leading to even more strikes, even more outrageous wage settlements, even more yawning deficits, even, dare I say, a very large and this time real economic black hole?

If the Government proceed with these changes, the inevitable consequent industrial strife will be laid at their door. The Labour Party saw what happened to it in the 1979 election as a result of the winter of discontent. Why is it now seeking a similar fate in 2029? I urge the Government to withdraw Clause 66 and indeed Clause 65.