Lord Katz
Main Page: Lord Katz (Labour - Life peer)Department Debates - View all Lord Katz's debates with the Home Office
(1 day, 16 hours ago)
Lords ChamberMy Lords, these government amendments are tabled in the name of my noble friend Lady Jones of Whitchurch. They target the application of the clause to a set of restricted variations, to better focus the measures on unscrupulous “fire and rehire” tactics. We have heard many representations from both businesses and trade unions on the effect of this measure, and we have listened to the well-argued points in this House and the other place. We have greatly valued the input and co-operation of groups across industry on this issue, including the CBI, the British Retail Consortium and their members, as well as the TUC, Unite, USDAW, the RMT and many other businesses and trade unions. It is our intention to ban the unscrupulous use of “fire and rehire”, and we were elected on a manifesto commitment to do so. However, we want to avoid unnecessary restrictions on the ability of employers to make essential operational decisions.
Amendments 69 to 72, 77, 79, 82, 86, 91 and 92 mean that fire and rehire will be an automatic unfair dismissal in relation to restricted variations unless the employer is in severe financial difficulties and has no reasonable alternative. These restricted variations are pay, number of hours, leave entitlement and those changes to shift patterns that will be specified in regulations.
My Lords, I agree with the noble Lord, Lord Goddard of Stockport, that, as we warned when we discussed it in Committee, Clause 26 was, as originally drafted, quite simply unworkable.
As we reminded noble Lords throughout Committee, the clause was far too broad. It would have captured entirely routine contractual changes, such as simple variation in work location, and treated them as fire and rehire cases. That approach was not only impractical but potentially damaging to employers and employees alike. We therefore welcome the Government’s decision to bring forward amendment that define the concept of a restricted variation. This brings much-needed clarity to the legislation. Although I would not go so far as to say that the clause now flies, it is at least comprehensible.
The Minister quoted Unite. May I quote Unite back at him? It has just issued a statement saying that it condemns the Government’s amendments, which in its own way suggests that progress is being made. The Minister would be well placed to consider the rather detailed brief that Unite has delivered, condemning the way in which the Government are now reworking Clause 26. It suggests that progress is being made and all our warnings are coming to fruition. One now has to wonder, I suppose, whether the realisation dawned when someone in Whitehall spotted that the original drafting could have torpedoed the Government’s own plans to relocate 50% of senior civil servants out of London.
Of course, these amendments, while helpful, have added layers of complexity. Look at what Clause 26 now represents: it is a recipe for going to Peers such as the noble Lord, Lord Hendy, and asking, “What does this mean?” There is so much here that is very difficult to understand; these amendments have added layers of complexity. The fire and rehire provisions are probably slightly more workable now—I say this slightly optimistically—but, my goodness, they are intricate. No wonder the Government are preparing to consult on the matter in the autumn; that consultation will be crucial.
I quote another major figure: Mike Clancy, the general secretary of Prospect. He has warned that
“the government must be careful it doesn’t inadvertently create a veto against all contractual change”.
Surely that is the risk. Among the restricted variations now listed are reductions in entitlement to pay, changes to performance-based pay measures, alterations to pensions, variations in working hours or shift times, and reductions in leave entitlements. These are precisely the sort of changes that businesses, particularly smaller ones, often need to make—not recklessly, but to adapt, restructure or just survive during periods of financial strain. So we urge the Government to conduct this consultation with care. The views of employers must be front and centre. The impact on small and medium-sized businesses must be fully understood. Yes, constraints matter, but so do incentives. If we are serious about improving employment practice, we must not just punish the worst but support the best.
As amended, this clause is better, but we look forward to hearing from the Minister how he will respond to the many criticisms that have been made.
My Lords, I thought for a minute that concord might break out across the House—it did at least partially, but not quite. However, as the short debate we have had today and the debates we had in Committee have shown—the noble Lord, Lord Goddard of Stockport, identified this—there is wide agreement across your Lordships’ House that the unconscionable tactics we saw P&O Ferries use should never be allowed again. We have also heard clear arguments that employers will need to make reasonable operational changes and that this should be permitted.
I begin with Amendments 74 and 88 in the name of the noble Lord, Lord Sharpe of Epsom, which seek to make it clear that, where an employer makes redundancies because they have had to change location, this should not be an automatic unfair dismissal. We agree. If there is no longer a job for the employee at a work location because that location has had to close down, this is unfortunate but is still a redundancy situation. That is why new Section 104I will apply only when the principal reason for the dismissal falls within that section. Where an employee’s place of work is closed, the principal reason for their dismissal is likely to be redundancy. We will set out further detail on this matter in our planned code of practice.
Further, the changes that the Government are making through their amendments will mean that a change to the location at which an employee works is a non-restricted variation. This means that, even in cases where there is no redundancy situation, a dismissal for failing to agree to a new work location will not be automatically unfair. An employer must still follow a fair process when making such dismissals.
Amendment 73 in the name of the noble Lord, Lord Sharpe, seeks to limit the protections in the Bill to cases in which fire and rehire was used to reduce pay and benefits. Government Amendments 69 to 72, 77, 79, 82, 86, 91 and 92 will focus the clause’s protections on variations to certain terms—specifically pay, leave, total hours worked and specified shift patterns. Those terms were identified because variations to them would have a significant impact on employees and should not be imposed under the threat of fire and rehire. This is, we believe, in line with the intention of the noble Lord’s amendment.
In his speech, the noble Lord, Lord Sharpe, raised the comments from Unite and Prospect. I think I am right in saying that they were askance. They show that there is a variety of views within the trade union movement as well as across industry. We understand that Unite would like stricter conditions on fire and rehire. We feel that, having consulted a wide range of trade unions—including, of course, the TUC—and a number of business organisations, as well as businesses themselves and representative business organisations, including the CBI and the BRC, we have struck the right balance in the way we have constructed the clause.
Amendment 75 in the name of the noble Lord, Lord Goddard of Stockport, proposes to limit the clause to contract variations that are not one of a list of protected terms and are otherwise minor and non-detrimental. The Government’s amendments, which limit the clause’s automatic unfair dismissal protections to a list of restricted variations, achieve the noble Lord’s intended outcome; he very graciously acknowledged this. They also have the benefit of being specific. For example, the Government’s amendments will not require an employment tribunal to come to a decision about whether a variation should be considered minor on the facts of each case. They also give employers flexibility to make reasonable location changes, which employers have told us is an important operational consideration and which would not be possible under the noble Lord’s amendment.
I therefore beg to move the amendments in the name of my noble friend Lady Jones of Whitchurch and ask the noble Lord, Lord Sharpe of Epsom, not to move Amendment 73.
I apologise for interrupting the noble Lord’s flow, but I feel that his comments on political funds go a fair way outside the scope of the amendments we are speaking to today. There will be plenty of time to discuss political funds next week on Report.
With the greatest respect, I do not know if the noble Lord has read my amendment, but that is exactly the point. The point is that before the Bill is passed there should be consultation on these proposals, but there is no opportunity for consultation because they are implemented at Royal Assent. The Government keep telling us that there will be a consultation, but how can there possibly be consultation if the measures come in at Royal Assent?
Still, I am grateful to the noble Lord for that interruption because it proves the point. It also allows me to explain to him another payment from the Unite political fund, which he may not be aware of, to the Marx Memorial Library. I kid you not—you could not make it up. I am sure the members of Unite are thrilled to know that their hard-earned wages are going to support the Marx Memorial Library, but when the Bill becomes an Act, in a matter of months, they will no longer have the right to see that disbursement.
If that is what Unite wants to do then that is up to Unite, but surely it should not be covered up. All I am asking at this time is that proper consultation on the effects of Parts 4 and 6 should take place before this is ramrodded through on the statute book without any proper consultation and discussion with, as the Government like to call them, “relevant stakeholders”. It is on Amendment 106 that I will probably be seeking to test the opinion of the House today.
My Lords, I thank all noble Lords for their thoughtful contributions to this important debate. We are very grateful to the noble Baroness, Lady Grey-Thompson, for having raised what is a profoundly important issue, one that deserves very careful consideration by your Lordships’ House.
As my noble friend Lord Wigley reminded us, serious childhood illness places unimaginable strain on families, and it is not just a case of emotional turmoil. There are so many practical challenges as well, including hospital visits, overnight stays, unexpected emergencies and a need for sustained and focused care that no working parent can possibly schedule around.
I am pleased to say that many good employers already recognise this: in the most extreme circumstances, they show compassion and flexibility, ensuring that parents are not forced to choose between caring for a seriously ill child and retaining their job. At the heart of this is not only compassion but continuity. A child battling serious illness often requires a parent at their side, not occasionally but consistently. Without job protection and some form of financial support, the very people whom we would expect to be there—parents—may find themselves unable to be so.
Of course, any new entitlement must be, as the noble Lord, Lord Hogan-Howe, reminded us, designed carefully, with due attention to cost, clarity and implementation. Whereas on these Benches we do not take a fixed position on the amendment itself, I welcome the fact that it prompts us to engage seriously with a difficult but crucial area of employment and social policy.
I thank all those who have contributed to this important debate, and I hope that the Government will take from it not only a recognition of the challenge but a willingness to explore how it might be best addressed in law.
My Lords, this has been a powerful debate on Amendment 97, which seeks to introduce financial support and leave for the parents of seriously ill children, and I thank all noble Lords who participated in it. I pay particular tribute to the noble Lord, Lord Wigley, for sharing his painful and very personal story. It is clear that, even after a fair number of not just years but decades, the indelible mark of the pain that he and his partner and the rest of his family went through is still with him. On behalf of the whole House, I thank him for sharing that story.
I begin by thanking the noble Baroness, Lady Grey-Thompson, for bringing this extremely important issue to the attention of your Lordships’ House. I pay tribute, as, I am sure, does every noble Lord who has spoken in this debate, to the excellent work done by Ceri and Frances Menai-Davis and their charity, It’s Never You, which provides vital support to the parents of seriously ill children. Ceri and Frances set up this charity in memory of their late son, Hugh, who died tragically in 2021 after battling a rare form of cancer. It’s Never You has worked with the noble Baroness, Lady Grey-Thompson, to draft this amendment, and I know that Ceri and Frances have campaigned hard on this proposal to honour the memory of their son Hugh and to provide support to parents who face the same tragic circumstances that they did.
It is of course vital that parents be able to spend time at the bedside of their sick child without the fear of loss of employment or financial difficulties adding to a situation that can already be mentally overwhelming, isolating or physically draining, as the noble Baroness, Lady Grey-Thompson, set out so well. One can only imagine the trauma of being in such a terrible situation. I say that one can imagine, but perhaps one can never really fully understand unless one is in that situation.
I know that this challenge has been raised previously in your Lordships’ House and in the other place, and I want to emphasise that the Government are keen to continue to look at the issue with the noble Baroness, Lady Grey-Thompson, and It’s Never You. As the noble Baroness said, I have personally met Ceri and Frances several times already, and I have been struck by their selfless determination and resolve to provide for other parents what they did not have. We intend to continue this engagement. I want to ensure that parents of sick children are not ignored or left behind.
However, we do not believe that incorporating this amendment into the Bill would achieve this end, despite the very best of intentions with which it has been prepared. I will highlight three reasons for this.
First, we are concerned about the approach of amending the Neonatal Care (Leave and Pay) Act, which was taken through your Lordships’ House by the noble Baroness, Lady Wyld, as she set out a moment ago. Although the amendment rightly seeks to provide much-needed care to older children, it risks unintentionally undermining some fundamental principles of neonatal leave and pay, which were designed with the specific situation of newborns requiring medical care in mind. Much of the eligibility criteria for the leave and pay entitlements in the existing Act, for example, are connected to birth-related forms of leave, such as maternity and paternity, that simply would not apply to parents of other children. Similarly, the specific definition of “neonatal care” in the current Act has been carefully constructed through extensive consultation. Again, this amendment would require that to be overhauled, risking creating a gap in existing support.
Secondly, more detailed analysis is required to fully understand the total cost implications of this proposal. We need to understand how many parents may be eligible for support across England, Wales and Scotland, as well as the estimated take-up, familiarisation and business costs. Initially, external estimates suggest that the cost of this amendment could be in the low millions—the noble Lords, Lord Palmer and Lord Hogan-Howe, referred to that specifically—based on data from England only. However, those figures are likely to represent only a small proportion of all parents who may be eligible for support. The actual cost could be significantly higher, depending on how serious illness and other eligibility criteria are defined. Therefore, the overall financial impact will depend on the final definitions and scope used to determine eligibility.
Thirdly, it is also right that the Government consider other suggestions of support that have been put forward by parents who are put in this incredibly challenging and difficult situation, such as the right to a career break to enable parents to take an extended period of time out of work to provide care for a seriously ill child, as has been highlighted by Conservative MP Mark Francois in the other place and his constituent Christina Harris. It is right that the Government explore all proposals before proceeding to legislate in order to ensure good law—indeed, a workable law—and the very best outcome for parents, which I think we all, across the House, agree is needed.
The Government appreciate that there is a significant challenge to be addressed here, but more work needs to be done to understand the best approach and costs of tackling it. For instance, the noble Baroness, Lady Bennett of Manor Castle, raised GoFundMe and the way successful fundraising campaigns interact with the benefits system. That is undoubtedly an area that needs to be understood.
As the noble Lords, Lord Hogan-Howe and Lord Hunt of Wirral, said, we need to understand the costs, and to have clarity and full consideration. More work needs to be done to understand the best approach and the costs of tackling this issue and addressing it properly. However, I want to be very clear that we are listening, and I have been moved—as we all have—to hear of the distress caused by the incredibly challenging situation of serious childhood illness and the financial strain that comes with caring for a sick child.
The noble Lord, Lord Gascoigne, asked for a way forward, and I hope noble Lords will take what I am about to say in the spirit intended. I make a commitment to the noble Baroness, Lady Grey-Thompson, and to Ceri, Frances and It’s Never You, that we will consult on support for parents of seriously ill children, including the proposal for Hugh’s law, to gain views from all interested parties on the specifics of the support. We are doing this at pace—the consultation will run next year in 2026. We wish to continue working with It’s Never You, the noble Baroness and all noble Lords who are interested—having heard the debate this evening and the strength of opinion across the House—on this extremely important matter, as we further explore this proposal.
It is appropriate that we consult publicly and provide space to hear a range of views to ensure that we arrive at the most appropriate policy outcome. We want to do something that is right. We want to make sure we have a solution that sticks, is workable, and provides the support that so many parents need—indeed, that Ceri and Frances needed but did not have. It is important that we do not rush into it but have a considered approach. I therefore ask, while we undertake this consultation, that the noble Baroness withdraws Amendment 97.
My Lords, I thank all those who have contributed to the debate this evening and, very specifically, the noble Lord, Lord Wigley, for sharing his deeply personal and moving experience. What we sought to achieve with the amendment has been discussed at length. I appreciate that, but it was over many meetings. We asked several weeks ago for guidance if there were technical concerns. We got a response yesterday, which was very helpful, but I note that there is no indication within it that the amendment is inoperable, nor that these concerns could not be dealt with through the offer of a tidying-up amendment or, potentially, an alternative text at Third Reading. I welcome the opportunity to continue to discuss this and I do not wish to delay the House any further, but I wish to test the opinion of the House.
My Lords, this has been a useful debate on Amendments 98 and 99, tabled by the noble Lord, Lord Palmer of Childs Hill, and the noble Baroness, Lady Fox of Buckley.
On Amendment 98, the law already provides that when workers are invited to attend a disciplinary and grievance hearing, they are entitled to bring a companion who is either a fellow worker, an official employed by a trade union or a workplace trade union representative who the union has reasonably certified as having received training in acting as a worker’s companion at a disciplinary or grievance hearing.
As we have heard, and perhaps in response to the critique by the noble Lord, Lord Ashcombe, employers can allow workers to be accompanied by a companion who does not fall within the above categories. Some workers may have a contractual right to be accompanied by persons other than those listed—for instance, a professional sports body, partner, spouse or legal representative.
As my noble friend Lady O’Grady of Upper Holloway helpfully reminded us, the existing legislative provisions seek to keep disciplinary and grievance procedures internal to workplaces to better ensure that the heat is taken out of the situation and that they are used as conciliatory opportunities to resolve tensions and maintain a good employer-worker relationship. As my noble friend said, this could involve a workmate who knows the context of the situation, understands the employment —and probably both parties to the grievance—and can provide real insight to the situation and focused support.
The inclusion of professional bodies, which may include legal representation in the legislation, may jeopardise the involved parties’ ability to engage in amicable conversation, with the concern that discussion may be significantly restrained as a result, with neither party willing to accept fault. The Government are rightly concerned that this will result in an increased likelihood of a failure to reach a suitable outcome for both the worker and employer. As my noble friend Lady O’Grady said, we want systems in place that are quicker, cheaper and more effective at reaching resolutions.
However, this in turn, as part of the proposal, would increase the cost of hearings for both parties, as the processes and the meetings themselves become more protracted and reduce the chances of a mutually beneficial outcome. The involvement of legal representatives may be particularly costly for smaller businesses, which may not have legal resources readily available—we have heard much already today, if not in previous debates in Committee and on Report, about that issue. Additionally, the introduction of legal expertise at these hearings may limit the ability of ACAS to mediate an ongoing dispute, as legal arguments may already have been heard during an internal hearing. It is worth noting that an amicable solution between the parties is the fastest way to deliver justice and the amendment may have the inadvertent effect of increasing the likelihood of tribunal claims being made, although of course that is not its intention.
Of course I understand that certain organisations, including those that provide legal services, would benefit. However, as previously noted when discussing similar amendments, an employer already has the existing ability to nominate an organisation to accompany their workers if they set this out in the workers’ terms and conditions. This is a solution in search of a problem. ACAS estimates that there are 1.7 million formal disciplinary cases in UK organisations each year.
It is rare that I ever say this, let alone from the Dispatch Box, but I agree with the noble Baroness, Lady Fox of Buckley, in that the approach taken by the noble Lord, Lord Palmer, in his amendment would be unduly cumbersome. It would complicate a law that has been in place for over 20 years and, if accepted, will require that the employer checks secondary legislation for every case to see who is a responsible body and whether the individual has been certified as having been trained. These are additional administrative burdens that the Government are keen to avoid. Indeed, the Opposition Front Bench has been keen to point out when they see fault in our proposals in other places—erroneously, I should add.
On Amendment 99, tabled by the noble Baroness, Lady Fox of Buckley, the Government believe that strong trade unions are essential for tackling insecurity, inequality, discrimination, enforcement and low pay. If Amendment 98 was a solution in search of a problem, Amendment 99 is an opportunity for the noble Baroness, Lady Fox, to bash a problem, in her view—namely, trade unions.
I am a former trade union official. I have also worked in a number of private sector roles as a manager. Unions are a good part of our industrial landscape, as we have heard across the House. I join with others across the House in saying that it would better if more people were members of trade unions. They are far from perfect, but although the cases that the noble Baroness raises undeniably raise issues about the trade unions she talked about, they do not undermine the day-to-day work of many trade unions and, in particular, of trade union reps. In the workplace, day in, day out and across the country, they work with employees and businesses to make workplaces safer, to ensure that employees are properly educated and skilled, and to help those employees access their rights at work, which we deem fair and necessary.
Trade unions have an important role to play in supporting workers during the process of a disciplinary or grievance hearing. Union officials allowed to accompany a worker, as prescribed in the existing framework, must be certified as having received training in acting as a worker’s companion at disciplinary and grievance hearings. By opening this role up to anyone the worker chooses, the amendment risks introducing individuals into the disciplinary and grievance hearings process who are not familiar with the workplace in question or, indeed, with the employment rights framework.
As I noted when speaking to the previous amendment, this is again likely to lead to a reduced likelihood of successful mediation of these disputes. The role of the recognised union representative allows the relationship between the employer and representative to be developed over time, thus increasing the likelihood of an amicable solution that does not go to a full legal process. This amendment could lead to the involvement of a family member or friend in disciplinary grievance proceedings, which may, in practice, cause more problems than solutions, given the sensitive nature of such a personal relationship.
In closing, it is unclear to the Government where the demand for expanding this right is coming from and which workplaces specifically would benefit. In the consultations we have undertaken in government and prior to being elected, with both businesses and trade unions, the need to expand this right has not featured from either side in the workplace.
I think the Minister may have answered his own question there, because if the consultation was with trade unionists about whether there was any need for non-trade unionists to go in, then they would give you one answer. I want to clarify one thing: it is true that I have never been a trade union official, but I have been a rank and file trade union member for decades. I am not anti-trade union, but I do not think the world stops and starts at trade unions.
I want to ask the Minister whether he understands that, at the moment, the statutory right to be accompanied by a trade union official is not in-house. The way the law is phrased is that any trade union official, even one from a union that you have never joined and from a completely unrelated sector, can accompany you—that is the way the law is. I wanted to know whether that is fair or whether that wording could change. What is wrong with, say, a Citizens Advice caseworker or what have you? The numbers of people who are in the trade unions just do not tally for people to be accompanied fairly at the moment. Unless there is an 80% increase in trade union membership, it is obviously two-tier and discriminatory at present.
To respond to the first point the noble Baroness made, perhaps I did not enunciate clearly enough, but I said that in the consultation the demand for change did not come from either trade unions or employers.
This is the final word. This is not a trade union rights Bill; this is the Employment Rights Bill. It is casually known as the workers’ rights Bill. There are millions of workers who are not in trade unions for a variety of reasons, including your own Minister Angela Rayner, as I just noted. I simply suggest that when you ask employers or trade unionists whether there is a demand for this then rank and file workers are being ignored. I suggest that you acknowledge and empower them.
My Lords, I just want to put the record straight, because we have heard much about the Deputy Prime Minister not being in a union. She is in a union. She is in the union called UNISON and has been for a number of years. I did not want noble Lords to go home tonight thinking that no one would represent the Deputy Prime Minister.
I thank my noble friend Lady of Nichols of Selby for that helpful clarification. I thought that was the case, but I am glad that she made it. She is in a far better position than I am to talk about UNISON and its membership.
In response to the noble Baroness, Lady Fox, I want to be clear that this issue has not come up in all the consultations we have undertaken, with a wide variety of stakeholders. It is not that I am saying, “We talked to some trade unions and, guess what, they’re quite happy with the status quo”. Genuinely, this issue has not come up. Simply, this is not an issue for workplaces. That is why I described it—
Does the Minister understand that there is a two-tier system here? If you are a trade unionist you can have somewhat more professional attendance than somebody who is not a trade unionist. That is what is important.
To be clear, if there is a recognised trade union or you are a member of a trade union then you can take a trade union representative, but you also have the right to be accompanied by a workmate. If you are a member of a trade union, you do not need to take that trade union representative along; you could have a workmate come along. If responsible employers want to have more flexibility, they can write this into their terms and conditions. There is nothing to stop people doing that. That is why I suggested, to again use the phrase, that the solution to such a problem is not something we really need to respond to in the legislation because it might create unintended consequences and, in terms of the amendment from the noble Lord, Lord Palmer of Childs Hill, unfair administrative burdens on employers. Therefore, I ask the noble Lord to withdraw Amendment 98.
My Lords, we have had some very interesting comments here from various people. I remind noble Lords that all we are saying is that people should have a choice. They could have a trade union representative, fine, but 77.7% of people are in firms that do not have a trade union. But if there was a trade union, that is fine.
The alternative is that, as the noble Baroness, Lady O’Grady, said, you could have a fellow worker. But the point of the amendment is that we are saying that the workers need to have a trained person to represent them. It can be a trade unionist—that is fine—but, if it is not, it will be like when a person goes to the solicitor at the end of the road and gets him to represent them on a complicated issue: he is the wrong person to represent them on that issue. You have to have someone who has some training. The trade unionists have the training, but they do not represent everybody. We are saying that the person who is seeking help should have someone who is trained.
I thank the noble Baroness, Lady Fox, for what she said; I gather, from having spoken to her, that she will support the amendment in my name. Bearing in mind the lateness of the hour, I would like to test the feelings of the House.
I thank my noble friend for introducing this important debate. As he has pointed out, the challenge is to strike the right balance. We must protect individuals from being exploited or drawn into extended unpaid roles that are in effect jobs by another name, but we also must avoid placing undue burdens on organisations whose motives are benign and whose placements offer genuine social and developmental value. I welcome the debate that the amendment has prompted, and I hope that as the Bill progresses, the Government will engage closely with stakeholders to ensure that any future regulations achieve the twin goals of fairness for individuals and viability for those offering valuable early opportunities.
I thank noble Lords for this short but interesting debate around Amendment 103 moved by the noble Lord, Lord Holmes of Richmond, which seeks to prohibit work experience for a period exceeding four weeks. With regret, as he said, the noble Lord was unable to join us in the Chamber in Committee when we debated this amendment, which was moved on his behalf very ably by the noble Viscount, Lord Colville of Culross, who I do not believe is in his place at the moment.
The Government have always been clear that a fair day’s work deserves a fair day’s pay. You need only look at the Government’s track record on the national minimum wage and the provisions in this Bill to see how the Government are delivering on this commitment. I will reiterate what I have said on this issue previously because it is worth emphasising: the existing legislation is clear that aside from a very small number of exemptions, workers who are entitled to the national minimum wage should be paid accordingly. No ifs, no buts. These are the rules that our enforcement body enforces, and these are the rules that we expect businesses to abide by. Of course, the vast majority do, but those that do not undercut the responsible businesses unfairly, and we should all be agreed that this is not behaviour that we should tolerate. This means that an employer cannot call a worker an intern to avoid paying them. I want to repeat this very important point, not only for your Lordships’ House but for those who are listening to this debate outside: an employer cannot call a worker an intern to avoid paying them.
If workers who are entitled to the national minimum wage are not being paid what they are due, there are protections in place so that they can receive what they are owed. The Government and His Majesty’s Revenue & Customs have raised and continue to raise awareness on workers’ rights, so that no one is left out of pocket. I have previously stated that the Government will be consulting on this issue soon. In fact, and in response to the noble Lord, Lord Holmes, I am pleased to be able to tell your Lordships’ House that this consultation will indeed begin tomorrow with a call for evidence. I do not believe that I am overstating the case when I say that all of us in this House care about this issue, in particular, ensuring that our young people have access to opportunities, regardless of their background, whether they can afford to work for free or where they are based in the country. The noble Lord, Lord Holmes, spoke powerfully on that basic right and I think that we are all in agreement with the principle.
This amendment, while well-intentioned, risks creating loopholes, where existing workers who are entitled to the national minimum wage from day one could find themselves working for free for up to four weeks. I am sure that we would all agree that this is not right and not what any of us wants to see. Adopting this amendment could well lead to an influx of four-week roles appearing, with only those who can afford to work for free accessing them. We do not want to lock away valuable opportunities and create unintended consequences by rushing through this amendment. These issues are complex, which is why I reiterate that it is important that the Government consult on this issue first. To make clear, we are standing by our words in Committee. When we said that we would be starting the consultation “soon”, in this case, that means tomorrow. As I stated in our debate in Committee, the issues that the noble Lord, Lord Holmes, wishes to address can be dealt with most effectively outside of this Bill. I therefore ask him to withdraw Amendment 103.
My Lords, before the Minister sits down, does he have to hand the number of prosecutions that HMRC has taken under the NMW regulations in this instance? If he does not have that to hand, I would be very happy for him to write.
I do not have that information to hand. I am happy to write to the noble Lord with the detail. I take the opportunity to point out that the fair work agency that we are creating in this legislation will be responsible for enforcing this aspect of employment rights regulation as well as others. We would expect that work to be taken forward by the fair work agency. I undertake to write to the noble Lord with that detail.
My Lords, I thank all noble Lords who have taken part in this debate. As the hour is late, I will not run through them all by name. I am thankful to the Minister for his response. I very much look forward to the consultation tomorrow and, for now, I beg leave to withdraw the amendment.
My Lords, I thank my noble friend Lord Holmes of Richmond for his Amendment 110. What this amendment does is simple but important. It encourages the Secretary of State to ensure that in bringing forward regulations under the Employment Agencies Act 1973, they draw upon existing recognised certifications and industry standards. These standards, developed and refined by responsible actors within the market, offer a ready-made baseline for compliance which the Government can and should use.
There is consensus that regulation of umbrella companies is overdue, but as we take this opportunity, let us ensure that the regulation is done well and in a way that is pragmatic, proportionate and effective. This amendment helps point us in that direction, so I hope the Minister can offer some reassurance that the spirit of the amendment will be reflected in the Government’s approach to umbrella companies.
My Lords, I am grateful to the noble Lord, Lord Holmes of Richmond, for tabling Amendment 110, which covers the regulation of umbrella companies. The amendment seeks to place an obligation on the Secretary of State to utilise pre-existing industry codes and accreditations as a basis for the regulation of umbrella companies.
We recognise the important role accreditation and trade bodies play in sharing information and best practice with their customers and members. The work of these bodies in the umbrella company industry has had some success in driving up standards. However, this success has been fairly limited, and we would not want to assume that an organisation that is a member of an accreditation or trade body is necessarily compliant with everything. We therefore believe that now is the right time for the Government to step in to protect businesses that already do the right thing and also protect workers.
Many in the umbrella company industry, and those who use umbrella companies, welcome regulation, especially as it will help to level the playing field. This includes public positions taken by the Freelancer & Contractor Services Association, Contractor Calculator, the Recruitment and Employment Confederation and several other bodies’ responses to the consultation run under the previous Government.
We have been clear since Clause 34 was introduced to the Bill that the Conduct of Employment Agencies and Employment Business Regulations 2003 will be amended to apply to umbrella companies. The Government recognise that the regulations in their current form are not appropriate to regulate the activities of umbrella companies. That is because the regulations predominantly focus on entities providing work-finding services or supplying individuals to end clients, which, generally, umbrella companies do not do. Where umbrella companies do provide such services, they would indeed already be covered under the regulations.
The Government have a statutory requirement to consult before any changes are made to these regulations, and as referenced in the recent roadmap publication, the consultation on umbrella companies regulation will be published this autumn. As part of the consultation process, the Government are keen to get views from trade unions, workers and industry bodies in the umbrella company sector. This will enable the Government to better shape policy development. Following consultation, an appropriate and proportionate umbrella company regulatory regime will be introduced in 2027. Once those regulations come into force, they will be enforced by the Fair Work Agency, which will take a risk-led and intelligence-led approach to its compliance regime.
I hope this provides some of the reassurance that the noble Lords, Lord Holmes and Lord Sharpe of Epsom, were seeking, and for that reason I ask the noble Lord, Lord Holmes, to withdraw his Amendment 110.
I thank the Minister for his response. It is good to hear that the consultation is coming in the autumn, and we can only hope that is the early autumn and that following that, perhaps there can be some more pace, and it will not be put out to 2027. We also hope the Minister will consider what happens in the interim for all those businesses currently doing the right thing that are disadvantaged by being in a market where some others are perhaps not operating to the same standards and codes of practice. But for now, I beg leave to withdraw the amendment.