Employment Rights Bill

Lord Jackson of Peterborough Excerpts

Committee stage
Wednesday 18th June 2025 Lords Chamber

[Baroness Lawlor (Con)]

I support the lead amendment in this group in the name of my noble friend Lord Sharpe of Epsom to exempt a new Government, for up to three years, from the labour market enforcement strategy of their predecessor for the reasons set out so ably by my noble friend Lord Hunt. I also support Amendments 274 and 278 for a new clause after Clause 140 to review the effectiveness of enforcement and compliance with relevant labour market requirements as in Part 1 of Schedule 7 before the new agency is set up and for the costing of such a new body before it is set up.

The new fair work agency proposed by the Bill to bring together existing functions of enforcement is unknown territory. Today, to enforce a limited number of employment rights, official powers are used by four different agencies: the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, HMRC and the Health and Safety Executive. The proposed new fair work agency bundles these—and new responsibilities under the Bill—into a single, untried and untested body. In general employers are quite familiar with HMRC and HSE, which provide advice as well as having enforcement functions. At the moment, we have the benefit of experienced bodies with whom employers are familiar and an ability by each body to be precise and knowledgeable about the subject on which it is an enforcement officer. We also have the advantage of different horses for different courses. Now, the plan is to move to an unknown, inexperienced entity with all the start-up costs that entails and without the precision focus which the present bodies have, because what is proposed is a one-size-fits-all model.

The enforcement of the laws will be differently framed with different aims by the current bodies. GLAA will have a different focus to that of HMRC, although some of the functions may overlap. I therefore suggest, in the interest of the taxpayer, that there is a need for a costing of the new body before it is set up and for a review of the effectiveness of the outcomes of present arrangements for enforcement and compliance to see how they stack up. This should be done before any steps are taken to put in place a new body. For these reasons, I heartily support Amendments 274 and 278.

[Lord Jackson of Peterborough (Con)]

My Lords, I wish to speak on the issue of the labour market enforcement strategy in support of Amendment 274 to which I have appended my name and to build on the excellent remarks of my noble friend Lord Hunt of Wirral and the specific points raised by my noble friend Lady Lawlor. For transparency, I declare that I have been a member of the Chartered Institute of Personnel and Development for more than 20 years. The CIPD estimates that the People Skills HR support service which it has mooted, working with ACAS, would cost about £13 million under the new regime when this Bill becomes an Act. We already know, following on from my noble friend’s comments, that the cumulative cost of the existing bodies doing similar work, with analogous workstreams, is about £40 million.

Amendment 274 is important because in this country we have a strange anomaly. Unusually for an advanced country, we generally do not put the architecture of scrutiny and oversight in primary legislation. I want to know how this agency is going to be accountable in terms of the costs, who it employs, its policies et cetera. No doubt the Minister will say, “Well, once it becomes an Act, there will be what was the Business Select Committee, or there might be the National Audit Office, or there might be the Public Accounts Committee”. But we are being asked to sign a blank cheque for this without knowing how precisely this agency is going to operate and, most fundamentally, at what cost. We have not seen a detailed impact assessment focusing on the work of this body. On that basis, I ask the Minister specifically how he sees the process of accountability working and whether there will be any work by his department, and Ministers more generally, to work out what the costs are likely to be.

I accept at face value that this Government are committed to reducing the regulatory burden, particularly on small and medium-sized enterprises. I am sure the noble Lord, Lord Leong, will bend the Minister’s ear on that, having come from the background that he came from as a champion of small businesses from the Labour side. It is therefore not unreasonable for us to ask what the cost will be and how we will be able to hold this agency to account once it is established.

[Baroness Coffey (Con)]

My Lords, Amendments 277 and 328, which I expect the noble Lord, Lord Goddard of Stockport, to speak to shortly, are an interesting element. Amendment 277 talks about the review of the fair work agency. Considering that a number of questions have come up about this, that is a fair assessment, given that there is still a considerable amount of consultation to be done. Amendment 328 would basically strip out the commencement of any part of the Act until that review has been done and

“a Minister of the Crown has tabled a motion in both Houses of Parliament for debate … and the review has been approved by a resolution”—

not just regulations.

The reason I say this is that I continue to assert that some of the powers here are going to be novel. Even if the Equality Act 2006 may give powers to the EHRC, it has never used them to institute legal proceedings, only as an intervener or for judicial review, rather than taking on individual cases; I am conscious that there is a consultation there. The amendment from the Liberal Democrats is an interesting way to think about how we are looking at the details of what the new agency is going to do.

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Debate on whether Clause 95 should stand part of the Bill.

[Lord Jackson of Peterborough (Con)]

I will speak to the significant number of amendments in this group in my name. This is quite an interesting cornucopia of amendments, a number of which are, in essence, probing amendments. The very nature of the work we are undertaking is to look at the minutiae of the Bill and to see it through the prism of how it impacts on small businesses. It is very important, when we consider the fair work agency’s powers, that we look at the Bill’s real-world ramifications and consequences.

Although some of the amendments may seem somewhat obscure, I think they are nevertheless quite compelling and worthy of the Minister’s attention. In addition, the Clause 95 stand part notice is in my name; I will come to that shortly. I also have a more substantive amendment near the end of the group on a duty on the UK border agency and the new enforcement agency, the fair work agency, to collaborate or co-operate.

I begin by considering the clause stand part notice. I remind noble Lords that, ostensibly, Clause 95 circumscribes the powers available in respect of using a warrant to enter a dwelling. On the face of it, the clause looks pretty innocuous, but I do not think it should be in the Bill because its wording is quite loose and opaque. I have serious concerns about the use of permissive, wide-ranging powers, particularly in subsection (3)(b), which says

“that it is not practicable to communicate with any person entitled to grant access to the documents or equipment”.

Further, paragraph (d) says

“that the purpose of entry may be frustrated or seriously prejudiced unless an enforcement officer arriving at the dwelling can secure immediate entry to it”.

I would like to interrogate the Minister’s perception and interpretation of these powers. For the avoidance of doubt, I think that the question of whether this clause should stand part of the Bill is worthy of our consideration. Although, of course, it was not considered by the statutory instruments committee—the name of which escapes me—to be a particularly egregious example of permissive or Henry VIII powers, I nevertheless think that it could be misconstrued.

I will now consider the other amendments in my name. Amendment 273A would require the Secretary of State to have “an evidential basis” for believing that a labour market offence is being or has been committed in order to request an LME undertaking, as opposed to requiring merely that the Secretary of State “believes” this to be the case. This amendment is important because what I am attempting to define more clearly the limits of the powers being conferred—in other words, to make it explicit that there has to be a firm evidential basis for exercising those powers. We do not want a situation in which the Secretary of State may do as he wishes as long as he pleads that he believed an offence was being committed.

I am not a lawyer, but I make reference to powers being conferred on a Minister based on subjective jurisdictional criteria. Let us look at—I am sure that the Minister will be advised of this—Customs and Excise Commissioners v Cure & Deeley Ltd 1962, in which it was found that Parliament would never presume on courts adopting a particular approach to statutory construction, especially when it comes to the subtleties of administrative law. I think that this reasonable and rational amendment would tighten up the wording.

Moving on, Amendment 273B would mean that the Secretary of State could impose a prohibition, restriction or requirement as an LME undertaking only where they considered it “proportionate” as well as “just and reasonable”. The test of proportionality is, of course, at the heart of adjudication and the justice system; it is the bread and butter of administrative decision-making, especially in respect of our human rights regime. It is good practice to have statute clear in order to direct Ministers to undertake the kind of judgments which the legal framework will impose on them anyway, and which otherwise will have to be communicated by the production of additional guidance material. That is the basis for that amendment.

Amendment 273C would reduce the maximum period for which an LME measure can have effect from two years to one year. This is a practical amendment, because there is no obvious reason why any necessary measures cannot be imposed and changes expedited within 12 months. It is better, for one thing, that a business falling foul of standards should be made to get its house in order quickly and to be compliant with any LME measure within a reasonable space of time. We are talking not about a month but about 12 months; I think that is a reasonable reduction from two years. It is also better for the economy, public expenditure and Civil Service efficiency to have a shorter timescale.

Amendment 273 would require the Secretary of State to bring the end of the LME measures to the attention of “all” other persons likely to be interested in the matter, rather than “any” such persons, and the subject of the measures. This is clearly straightforward. If you are in a business, you will have multiple partners, directors or people with a significant interest in the business. Therefore, to avoid bureaucratic mistakes and errors, I think it is fair to involve as many people as practicable.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch)]

My Lords, I am sorry to interrupt. I am trying to follow the noble Lord’s arguments, but I think Amendment 273 is in a different group.

[Lord Jackson of Peterborough (Con)]

I am grateful to the Minister for giving me the opportunity to clarify where I am: it is Amendment 273D. My apologies if I have not been clear enough.

This amendment would make a small clarifying adjustment: where the text currently says that the Secretary of State must take whatever steps she or he considers appropriate to bring the end of LME measures to the attention of

“any other persons likely to be interested in the matter”—

that is, other than the subject of the measures—it would use the words “all other persons”. It is important for business certainty, good faith and, indeed, fairness that all those who are affected or likely to be affected by a quite significant measure are kept properly informed about it. Otherwise, we may see messy episodes unfold where there is a misunderstanding or extra, hidden penalties imposed on businesses in the form of the costs of informing the other people affected by the LME measure that it has, for instance, come to an end.

Amendment 273E to Clause 119 would require notice of LMEs against a partnership to be given to “all partners”, rather than just “any partner”. This does not reflect what running a business with multiple partners is like, perhaps in multiple locations or running multiple business units as partners, whether it is an accountancy firm, solicitors or others—I know that there is a different regime for solicitors. It is not sensible to advise only one partner of a significant infraction or issue arising from an LME. If you want businesses to co-operate in ameliorating the issues identified in the LME, you would really need—I admit, at some modest cost—to advise all the partners. You need also to cultivate good faith in order to make the changes necessary arising from the LME.

Furthermore, it is possible that the courts will decide that notice has been given as a matter of law in circumstances where the one partner who was theoretically served it had not actually seen it and was not subjectively aware of it. Better, then, to require that all partners be given notice to ensure that businesses are genuinely aware of the ramifications and the LME decisions.

I am mindful of the time, so I will move with greater alacrity. Amendment 273F would increase the proposed burden of proof for court orders of LME measures from balance of probabilities to beyond reasonable doubt. There is reason to fear that a future Government will use the provision of Clause 117(3), which empowers the Secretary of State to create new kinds of LME measures by regulation, to create measures which go beyond regulation and become punitive, in which case the criminal proof standard will be appropriate. More generally, good faith between businesses and government, which aids compliance, will be better cultivated if they are required to comply with LME measures only in cases where there has been a clear violation.

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[Baroness Jones of Whitchurch (Lab)]

My Lords I thank noble Lords who have spoken. I am responding to the noble Lords, Lord Sharpe, Lord Hunt and Lord Jackson, and the noble Baroness, Lady Coffey, who have tabled amendments on the powers of the fair work agency and oppose Clauses 95 and 134.

I accept the point made by the noble Lord, Lord Jackson, that some of his amendments are probing amendments. I will attempt to respond to each in turn. Forgive me if I repeat some points that my noble friend Lord Katz made in the previous debate, which covered similar ground. I think we covered some of this ground in debates on a previous day. I can assure the noble Lord, Lord Hunt, that I have no need to justify the unjustifiable in my response.

I will speak first to the fair work agency’s investigatory powers and address the opposition of the noble Lord, Lord Jackson, to Clause 95. I listened to the noble Lord, but investigatory powers are common to all regulators. The fair work agency’s powers are based on those set out for existing enforcement bodies in the Employment Agencies Act 1973, the National Minimum Wage Act 1998 and the Gangmasters (Licensing) Act 2004. Employment rights enforcement agencies have had power to enter premises used as dwellings since their inception. For example, HMRC’s minimum wage inspectors can and do regularly visit business premises used as dwellings to gather evidence. It is right that officers should be able to gather evidence from such premises. Businesses operating from premises used as dwellings is nothing new. Pubs, for example, often have flats above the public area where the business’s documentation is kept.

Today, more and more businesses operate from home. Current law makes no distinction for dwellings. This Government believe in stronger safeguards for such powers. That is why Clause 95 introduces a new requirement for a warrant to enter dwellings. Together with the additional safeguards in Clause 128 and Schedule 8, this clause strikes the right balance between protecting the privacy and rights of individuals and allowing the fair work agency to go about its job of enforcing labour market legislation. I hope that I have reassured noble Lords on this point, and that noble Lords can agree that Clause 95 should stand part of the Bill.

The noble Lord, Lord Jackson, also addressed his amendments to Clause 128. I recognise the intent behind these amendments, but there are already extensive safeguards around the use of investigatory powers in Part 5, including the new requirement for a warrant when entering a dwelling. Clause 128 is a sensible provision that sets out that any enforcement officer has the right to execute a warrant and, as long as the enforcement officer is present, they can be accompanied by an authorised person or persons if they deem it relevant to the investigation—for example, an IT specialist.

Turning to Amendment 271ZC from the noble Lord, Lord Sharpe, enforcement of holiday pay is a key part of the fair work agency’s remit. Large numbers of workers are missing out on their statutory right to paid annual leave. The Trade Union Congress estimates that 2 million people lose around £3 billion per year by not receiving holiday pay to which they are entitled. We recognise that this disproportionately affects the lowest-paid workers. The fair work agency will not be able to meaningfully support workers to recover the holiday pay they are owed if it cannot issue notices of underpayment. This is a power that is already available in the national minimum wage enforcement regime, which has been successful in ensuring that workers receive the arrears that they are owed. Therefore, I must respectfully resist this amendment.

I turn now to the amendments to Clauses 116 to 121 inclusive, in the names of the noble Lords, Lord Jackson, Lord Sharpe and Lord Hunt, together with the amendments to Clauses 126 and 136. These pertain to the labour market enforcement undertakings and orders regime. Although these amendments touch on important aspects of the Bill, they either duplicate existing provisions and introduce unnecessary complexity, or risk undermining the careful balance that has already been struck in the drafting. The labour market enforcement regime was introduced by the 2015 to 2017 Conservative Government. Indeed, the noble Lord, Lord Jackson, at that time in the other place, voted in favour of this regime consistently during the passage of the Immigration Act 2016.

It is a regime that works and works well. It promotes a compliance-first approach, as employers are first encouraged to enter into voluntary undertakings to correct their behaviour. Only persistent or egregious offenders are issued with a compulsory order to stop. As of March 2024, there have been 140 labour market enforcement undertakings and just 14 labour market enforcement orders. These amendments seek to water down the regime and increase legal tests and administrative burdens for its use. By making the labour market enforcement regime more cumbersome and less effective, the fair work agency would have to resort more often to prosecution, which could be disproportionate and time-consuming for all concerned. The effects of these amendments would be to make enforcement more heavy-handed, less efficient and less focused on helping businesses to comply. This is not what businesses or workers want or need, and it is not what the fair work agency is about.

[Lord Jackson of Peterborough (Con)]

I hear what the Minister says, but surely she would agree that, if one looks at Amendment 273F, which moves from having “a balance of probabilities” to “beyond reasonable doubt”, if you are taking forward an LME infraction case beyond reasonable doubt, you are more likely to succeed, and the corollary of that is that you are not taking forward cases on which you have a paucity of evidence. So, with all due respect to the noble Baroness, I disagree. If you are bringing in proportionality and “beyond reasonable doubt”, you are going to have sharper cases that tackle the most egregious examples of infractions of the legislation and do not waste a lot of time—and consequently save the taxpayer money.

[Baroness Jones of Whitchurch (Lab)]

The evidence shows that the current wording is proportionate. There has not been a huge number of cases. Maybe we could argue about whether there should be more cases, but the fact that there has not been a huge number of cases is a reflection of that. What we do not want to do is set the barrier so high that we cannot take the cases that are necessary to deliver the changes and the better worker protection that we seek to achieve.

I turn to the noble Lord’s Amendment 273N. I agree that effective sharing of information and pooling of knowledge will be crucial to the success of the fair work agency. The list of bodies that the agency will be able to share information with is limited to those with a need for access, and safeguards are provided for. However, the power to update the list is necessary to ensure that the fair work agency can respond to future changes in the wider labour market and the regulatory landscape. It means that we can keep the list of bodies under review and remove bodies where the need to share information no longer applies. This is good data information governance.

The noble Baroness, Lady Coffey, asked about the Low Pay Commission being listed. The fair work agency will be able to share information with the bodies in Schedule 9 if it is for the purposes of a function of the body. This does not need to be about the enforcement functions. I also say to the noble Lord, Lord Jackson, that the Delegated Powers and Regulatory Reform Committee expressed no concern with this power in its report on the Bill.

On the opposition of the noble Baroness, Lady Coffey, to Clause 134, HMRC data is critical for investigating and enforcing various employment rights, not just the national minimum wage. However, I say to the noble Baroness that much of HMRC’s data is confidential, and it is therefore prudent to require an extra level of approval before this information is shared further.

Clause 134 restricts the sharing of confidential HMRC data without authorisation from HMRC commissioners. This will ensure that the fair work agency operates in line with the Commissioners for Revenue and Customs Act. This is a standard safeguard which is necessary to ensure responsible data sharing between HMRC and the fair work agency.

In relation to Amendment 273PB from the noble Lord, Lord Jackson, I reassure him that the Bill already gives the Secretary of State the power to share information with border authorities, such as the National Crime Agency and immigration officers. Rather than enhancing enforcement, the amendment risks introducing unnecessary complexity and diverting attention away from the fair work agency’s core task. The amendment’s intended effect can be achieved through the existing Bill drafting.

I turn to the noble Lord’s Amendment 273R to Clause 140. The ability to recover enforcement costs in relation to the time spent is a matter of fairness. Restricting the use of hourly rates would in practice force the fair work agency to adopt fixed fees. A fixed approach to cost recovery could mean that a small business ended up paying the same as a much larger organisation, regardless of the scale or complexity of the case, and that is not fair. This clause is an enabling power. Regulations made under it will be subject to the affirmative procedure. Parliament will be able to scrutinise and debate whether to adopt a fixed-fee or variable-fee regime at the point where the regime is proposed, and it is right that we afford that flexibility in design at this stage.

In conclusion, while I appreciate the intention behind the amendments, they either replicate what is already achieved by the Bill’s existing provisions or risk unsettling a framework that has already been carefully constructed. I therefore ask the noble Lord, Lord Sharpe, not to press Amendment 271ZC.

[Lord Jackson of Peterborough (Con)]

I thank the Minister for that comprehensive canter through my amendments. I defer to the poetic licence of my noble friend Lord Hunt of Wirral and accept that it is not a cornucopia, but my cup overfloweth nevertheless.

I appreciate the spirit in which the amendments were received. I was attempting to improve the Bill. Not for the first time, my noble friend Lord Hunt put it much more succinctly than I did in that, certainly with regard to proportionality and “beyond reasonable doubt”, notwithstanding the excellent drafting by officials, the amendments would have improved the Bill.

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[Lord Carter of Haslemere (CB)]

My Lords, I support the comments made, particularly those of the noble Lord, Lord Murray. This is an extraordinary clause; I am not aware of anything else on the statute book like it.

My practical question to the Minister is: if the Secretary of State takes it upon himself or herself to go to court on a worker’s behalf, and the worker is strongly against that, what will that do to the relationship between the worker and the employer? It could absolutely devastate that relationship, because the employer will greatly resent the fact that the Secretary of State is taking proceedings on behalf of the worker, even if the worker has said that they do not want those proceedings brought. This is not good for industrial relations at all.

I really urge the Government to rethink this. What are its practical implications? How will it work in practice if the worker is against it? Will they be called as a witness by the Secretary of State, if necessary? Will they then be a hostile witness? It is all a complete and utter mess, I am afraid. I was not planning to speak on this, but this is an extraordinary clause and I urge Ministers to drop it completely.

[Lord Jackson of Peterborough (Con)]

My Lords, I was happy to sign the clause stand part notice with my noble friend Lady Coffey. I am thinking of the words of Zhou Enlai, I think, who, considering the French Revolution, said, “What did they mean by that?” I look at this clause and think, “What do they mean by this?” Maybe the Minister will open the trinket box at the end of this process and let us into the secret of this bizarre, perverse clause, but I really cannot see the point of it.

I am mindful of the fact that we are surrounded by very accomplished lawyers, so I will not get too much into law, but lawyers and others will be aware that Magna Carta—1215; I know the noble Lord, Lord Katz, likes a history lesson occasionally in Committee—resiled from the arbitrary power of the state. It is an arbitrary power of the state for it to insert itself into civil litigation without any real methodological basis, any timeline or, as my noble friend Lord Murray of Blidworth so rightly said, any tests being met. That is very odd.

Perhaps the Minister will enlighten us as to the rationale. The clause is novel. It is completely perverse and unheard of, to be quite honest, because it will engender a disputatious regime, more litigation and more disputes in the workplace. It will have a deleterious effect on business, commerce and profitability, and on how businesses are run. What tests will the Minister use? How likely is it that these powers will be used and at what likely cost? Is there any impact assessment or opportunity cost as to the use of these powers?

Why does subsection (2) leave agricultural workers out of the process? There may be a specific sectoral reason for that, but that is a reasonable question to ask. Why are they not swept up in these powers? Why are their rights not circumscribed to not get involved in civil litigation in respect of employment?

Finally, the most bonkers part of a truly epically bonkers clause is subsection (7). It is so crazy that it could have been written by the Liberal Democrats, but it would be unkind to make such an observation. My noble friend Lady Coffey has already made the point that you do not even have to be a worker to have the Secretary of State impose themselves into your potential litigation on a matter; you can be someone seeking employment as a worker. Presumably, anyone who is of working age can be affected by this clause. Subsection (7) also states that a worker is defined more widely as an individual who is a worker for the purposes of Part 4A of the Employment Rights Act 1996.

I really do not understand the rationale for or the logic behind this clause. The Minister is clearly aware of the great disquiet that it gives rise to, and I hope she answers the specific points made, not least by the noble Lord, Lord Carter of Haslemere. It takes something for a noble Lord of his experience in the law to say that this is the most perverse and strangest clause he has seen in a piece of primary legislation. On that basis, I hope the Minister will respond to that and answer those specific points that noble Lords, in particular the noble Lord, Lord Carter of Haslemere, have raised.

[Lord Ashcombe (Con)]

My Lords, I support my noble friends Lord Sharpe of Epsom and Lord Hunt of Wirral in some of the amendments in this group, and my noble friends Lady Coffey and Lord Jackson of Peterborough in their opposition to Clause 113, which I must describe—much as the noble Lord, Lord Carter of Haslemere, did—as quite extraordinary. It is extraordinary because it grants the Secretary of State exceptional powers—namely, the ability to initiate proceedings before an employment tribunal on behalf of a worker without that worker’s consent or even their knowledge. How can this be right? If a worker has chosen not to pursue a claim, whatever their reasons, how can the state reasonably step in and proceed in their name? Unlike my noble friend Lord Murray of Blidworth, I am no lawyer, but I think this demonstrates the need for Amendment 271D.

Consent is a fundamental principle in so many aspects of law and life, yet here it appears to be disregarded. Amendment 272ZZA at the very least seeks to restore some balance by ensuring that the worker in question is given the opportunity to consent or decline. If consent is not given, the matter should go no further: all bets should be off. I find it puzzling that those on the Benches opposite consider it appropriate to have the ability to disclose personal data, whether legally privileged or not, without the written consent of the individual concerned. It is not typically something permitted in other circumstances. It is not fair, and we are about fairness in this House.

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[Baroness Jones of Whitchurch (Lab)]

As the noble Lord has more legal expertise than me, I am happy to write to him on that point because it is an important point that we need to clarify. Of course, these are relatively new powers that we are taking on board, and we are taking them for very good reasons. I am sorry that noble Lords opposite do not see the case for this, because, certainly, an awful lot of workers are being exploited out there. At the moment, they do not have the power to speak for themselves in the way that many others who are better informed can do.

While I respect the intention of the noble Lord, Lord Sharpe, behind some of his amendments, I must state they are unnecessary. Some of the provisions of the amendments are already provided for, either within the existing drafting of the specific clauses or in other clauses of the Bill. Regarding Amendments 271D, 272ZZA and 272ZZD, as I mentioned on Monday, normal practice would be for the Secretary of State to bring proceedings with a worker’s consent and involvement. However, in the worst cases of serious exploitation and intimidation, workers may fear the repercussions that they may face from their employer should they be de-anonymised. By allowing the Secretary of State to take a case forward without consent, it would be harder for employers to attribute blame to individual employees. Therefore, limiting this power in the way that these amendments seek to do could prevent the Secretary of State pursuing serious breaches in some of the most egregious cases.

Amendment 272ZZB is an unnecessary amendment. Legally privileged material and confidential information is already protected under the Data Protection Act, as well as under usual legal rules and principles that apply to proceedings.

On Amendment 272ZZC, normal public law principles already take account of all considerations referenced in this amendment, including the best interests of a worker. This is therefore another unnecessary amendment.

Amendment 272ZZE is yet another unnecessary amendment. Clause 113(6) does not provide a blanket exclusion from all liability, and it is self-evident that the Secretary of State would be held accountable if they undertook actions that were unlawful. This is a basic principle of the rule of law.

On Amendment 272ZC, it is clearly in the interests of enforcement authorities and all parties that the most effective and proportionate means of enforcement is chosen. The Bill already provides that civil proceedings cannot be initiated where a notice of underpayment has been given. It would be inappropriate to impose hurdles on the fair work agency’s use of its powers; it should be able to decide how best it will use this and its other powers to enforce labour market legislation in each case.

On Amendment 272AA, Clause 92 already provides for the fair work agency to prepare and publish an annual report, which we would expect to cover all of its activities. It is simply not necessary to require individual reports on individual powers.

We strongly resist Amendment 272AB. Ultimately, the business of the next Parliament should be for that Parliament to decide and not for us to dictate now.

Briefly on Amendment 272AC, only officers with appropriate knowledge and training will carry out these powers. Clause 87(6) already clearly provides that a person can exercise the powers of an enforcement officer only to the extent specified in their appointment by the Secretary of State. This amendment would duplicate that existing provision.

To summarise, Clause 113, together with Clauses 114 and 115, delivers a manifesto commitment. It provides a new power that will enable fair work agency enforcement officers to bring proceedings to an employment tribunal in place of a worker. It is designed to address situations where a worker has a legal right to bring a claim but, for various reasons, including fear of retaliation, lack of awareness or language barriers, they are unable to do so. This clause enhances the state’s ability to support the most vulnerable workers in accessing justice and will be particularly valuable in cases involving labour exploitation or breaches of minimum employment standards.

It will bring broader benefits. The fair work agency will be able to bring multiple complaints simultaneously. This will save time and costs for workers and employers alike. It has the potential to reduce the burden on the employment tribunal system over current practices, where most claims are brought individually.

Importantly, the clause is tightly drawn. The fair work agency’s tribunal proceedings will follow the same process as if they were brought by workers. This includes a requirement for ACAS consultation. Additionally, the power cannot be used in cases where a notice of underpayment has been issued under Section 100. This ensures that there is no duplication of enforcement mechanisms. Both the Secretary of State and the worker can appeal a decision, recognising that both parties have a legitimate interest in the outcome. The clause includes safeguards to ensure that the Secretary of State cannot be held liable to the worker for how they exercise this power, reflecting the discretionary and strategic nature of enforcement.

This clause forms a crucial part of the fair work agency’s toolkit, enhances the effectiveness of labour market enforcement and delivers a manifesto commitment upon which Members in the other place were elected. It should stand part of the Bill.

[Lord Jackson of Peterborough (Con)]

I am listening very carefully to the Minister, and she did not address either of my specific points. Given that she is saying that this rather strange clause is to defend the interests of new migrants and black and minority-ethnic folk, many of whom work in agriculture, particularly in the east of England and other parts of the UK, why is there a carve-out for agricultural workers? The Minister did not answer my question on why that happened. Secondly, can I press her on my specific point on why de facto unemployed people fall under the purview of subsection (7) of this clause, allowing the Secretary of State to insert state apparatus into their litigation, when they are not even in gainful employment?

[Baroness Jones of Whitchurch (Lab)]

I thank the noble Lord. My apologies; I should have answered both of those questions. On the issue of agricultural workers, I do not know the answer, so I will write to the noble Lord. On his question about why subsection (7) covers people who are not yet employed, the clause was worded in that way to capture whistleblowers and was amended to widen it to include zero-hours contract workers. I hope that answers the noble Lord’s questions.

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[Baroness Noakes (Con)]

My Lords, in this group of amendments, I have the stand part notice for Clause 114. I support the several amendments in this group in the name of my noble friend Lady Coffey, many of which are probing amendments to try to find out more about this clause. I could find no clear rationale that the Government have given for Clause 114, in the sense of providing a rationale for the state—that is to say, taxpayers—funding the legal and other costs of civil proceedings in employment matters cases.

The scope of Clause 114 is huge. Not only does it cover the whole of employment, trade union and labour relations law, but the intended recipients seem to be unlimited. My noble friend Lady Coffey referred to the use of “person”. Subsection (1) refers to

“a person who is or may become party to civil proceedings”,

which covers a huge number of persons, and there does not seem to be any clear target for this clause. Of course, as we have heard, the funding can also extend to litigation involving non-employment matters, which seems extraordinary to me. All of this adds up to Clause 114 being very wide.

We already have in the UK a system for providing support for people in legal cases. It is called legal aid. It costs the taxpayer around £2 billion a year, nearly half of which is for civil litigation. That already has rules for employment tribunal support, where there is no funding for legal representation but there may be funding for advice on preparing cases. Successive Governments have had to make hard choices about what will be funded by legal aid in order to keep the cost of it within reasonable bounds for taxpayers as a whole but, now, with Clause 114, the business department is going to undermine that completely by taking powers to fund legal cases completely outside of the structures and limits that have been created for the legal aid system. The Government are again showing that they are, at heart, a two-tier Government, with unlimited legal aid by the backdoor for some favoured employment cases but tough eligibility criteria and financial limits for everybody else.

I now turn to the costings, which my noble friend Lady Coffey mentioned briefly. I could not find out what Clause 114 is going to cost. There is a limited amount of information in the paperwork that surrounds the Bill on the estimate of the overall costs for the fair work agency but, as far as I could find, there is no reference to how much the implementation of this proposal to fund legal costs will be within that totality. So my question to the Minister is really quite simple: what are the Government’s estimates of what Clause 114 will cost?

Going beyond that into the underlying assumptions, how many cases do the Government expect to bankroll every year? Will the Government support only cases with a better than average chance of success, or will they also fund no-hopers? What is the average cost of the cases that they think they will fund using the powers under Clause 114? What are their assumptions about cost recovery? I would have expected to find all these things analysed in detail somewhere in the papers, but I could not find anything. I hope the Minister will be able to answer these specific questions, and maybe also explain the lack of analysis in the documentation that the Government have prepared surrounding the Bill so far.

As I said earlier, I support my noble friend Lady Coffey’s amendments in this group, and I will listen carefully to what the Minister says in response to those amendments and, indeed, on Clause 114 standing part overall. My view is that, in the absence of good justification and a good understanding of the costs of Clause 114, it should not stand part of the Bill.

[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?

--- Later in debate ---

[Lord Jackson of Peterborough (Con)]

I must press the Minister. I have looked at the Labour’s Plan to Make Work Pay document and it does not make reference to de facto legal aid. It says:

“We will also consider measures to provide accessible and authoritative information for people on their employment status and what rights they are owed, tackling instances where some employers can use complexity to avoid legal obligations”.


That is very different to what the Minister has outlined to your Lordships’ House.

[Lord Katz (Lab)]

I do not want to extend the debate too much or do too much quoting across the Dispatch Box but, to counter that, Labour’s Plan to Make Work Pay talks about establishing a single enforcement body that

“will have the powers it needs to undertake targeted and proactive enforcement work and bring civil proceedings upholding employment rights”.

To a fair-minded person that is pretty clear.