Employment Rights Bill

Lord Leigh of Hurley Excerpts

Committee stage
Thursday 5th June 2025 Lords Chamber

I urge the Government to accept these amendments in the spirit in which they are offered—not to weaken protections but to ensure that they are practicable, proportionate and sustainable. Let us ensure that the noble intention of safeguarding workers’ rights does not become a pyrrhic victory whereby the cost of implementation undermines the very stability and jobs that the law is designed to uphold. For those reasons, I beg to move.

[Lord Leigh of Hurley (Con)]

My Lords, I support these amendments and, in particular, my noble friend Lord Jackson of Peterborough’s remarks. I agree with every word.

I vividly recall the change in this country, in 1979, when union power was such that people were frightened of starting businesses or to go to work. Murdoch took a brave stance to take the unions head on and, after 1979, the country emerged with much greater strength, economic certainty and prosperity. As a result, people like me chose to start a business in this country. That was because of the economic prosperity created by Thatcher’s Cabinet and team. Any attempt to go backwards rather than forwards is very depressing and disappointing.

My noble friend Lord Jackson is of course right that Clause 55 is the kernel of the Bill. It is an important clause that reveals why the Bill is so inappropriate and badly drafted, and it needs amendment or, if not, not to stand part.

I refer to the British Chambers of Commerce, an independent organisation which, as we know from Second Reading, criticised the Bill because of its lack of consultation, because of its greater restriction and penalties for firms that want to make workforce changes but, most importantly, because of the greater responsibilities, costs and complexity for employers. The Bill includes some of the most significant and widest range of changes to employment laws for decades.

The Government’s own assessment suggests that the legislation will cost businesses almost £5 billion a year, and that the SME sector will be impacted most. This is at a time when, just in the last couple of months, businesses have come to terms with the dreadful, unnecessary and wholly growth-destroying national insurance increase. It is literally putting businesses out of business. Your Lordships do not have to believe me; just look at the last insolvency statistics, which show record figures of insolvency, particularly for CVLs—creditors’ voluntary liquidations. People are throwing in the towel; they are not prepared to carry on business when they are faced with these increased costs for employing people and for properties and business rates, which the Bill imposes on all businesses.

My particular concern is with the SME sector. We debated this at Second Reading, and I complimented the noble Lord, Lord Leong, on starting a small business. He therefore knows and understands this, but many people on the Front Bench of the Labour Party do not have that experience and expertise and are not aware of the damage this will do. These amendments are vital, particularly to try to exempt small businesses—and, if not small businesses, micro-businesses—from these onerous requirements.

To take it to the point of absurdity, and to declare an interest, I personally employ one person—do I have to give that one person a piece of paper when they join? It looks like I do. Will I then be told by the Government that I have to give that person a statement “at other prescribed times”? What does that mean? It means that when the unions are short of members, as they invariably are, and they need to raise more money —we know where that money largely ends up—they will say to employers, “Right, you’d better give all your staff a statement to tell them that they have the right to join a union”, and encourage them so to do. It is on the point of absurdity.

The BCC goes on to say:

“the scale and scope of the changes is huge, with many feeling they are being rushed through at breakneck speed … Firms are particularly concerned about the lack of detailed consultation on the Trade Union changes, especially when the Government’s own assessment was so vague about the impact”.

It rightly points out that:

“Overall, there is a lot in the Employment Rights Bill that reinforces much of what good businesses already do. But the fear remains that certain elements could create huge costs for firms and damage the UK’s ambitions for growth”.

I repeat the request made to the Government Front Bench by the noble Lord, Lord Jackson, to cite businesses—SME businesses in particular, but actually any businesses—that are in support. Richer Sounds is not a good example. Julian Richer sold Richer Sounds to an EOT—it is a co-operative. One of the firms mentioned last time was Nationwide. That is not an SME, and the Co-op is certainly not. So where is the support for this? Please can we exclude this extremely vague “at other prescribed times”, which is without any limitation or cap? If it said “annually”, that might be a start. Can we also exclude both SMEs and micro-companies from these onerous requirements?

[Baroness Lawlor (Con)]

My Lords, I support the amendments in this group that seek to mitigate the impact of Clause 55, which amends the Trade Union and Labour Relations (Consolidation) Act 1992 by inserting a new section with a

“Statement of trade union rights”.


I support, in particular, Amendment 205 by the noble Baroness, Lady Noakes, which would apply the statement only to larger companies. We have heard very good arguments as to why this should happen. I support the amendment by the noble Lord, Lord Jackson, which would leave open to employers the option to decide whether to apply the statement under the new Section 136A. I support the amendment of the noble Baroness, Lady Noakes, which would mean it does not apply to smaller employers and those with fewer than 10 employees, as well as her amendment that probes why such a statement should be given at times other than the start of the job. The noble Lord, Lord Leigh, put forward some good potential reasons.

This a very bad clause. I oppose it for two reasons. I support the noble Lord, Lord Sharpe, on the Front Bench, who has stated that it should not be part of a Bill, certainly not in 2025. Such obligations interfere with the professional balance of duties and responsibilities in a business between employer and employee. The employer must promote the best interests of the business and, with the directors of the company, employers are bound to do so.

Employers are also bound under employment law. The 1992 Act, which this clause amends, already strikes a balance between the role of trade unions in the workplace and the employer. It sets out that the employer or business recognise trade unions that meet certain criteria, engage in collective bargaining, provide information to the unions and respect those engaged in lawful industrial action. We already have recognition of the responsibilities of employers to trade unions in the workplace; a balance has been struck, and it has worked, by and large, very well.

The interests of the business will also involve treating all workers not only legally but fairly and professionally. It should not involve employers being obliged, as the new Section 136A stipulates, to give a written statement that the employee has the right to join a trade union at the start of the job and at other prescribed times. It should also not be left to politicians, as the new section states—the Secretary of State at the time—to prescribe what information is included, what form the statement takes, in what manner it should be given, and whether regulations prescribing anything for the purpose of this section may make different provision for different purposes.

Are we making the law or are we leaving it to some executive authority to make something up on the back of an envelope and prescribe it through his or her officials in government? This is not lawmaking, and this Parliament should challenge this sort of power being given to a Secretary of State to do what he or she may like. This not only adds a layer of bureaucracy but brings uncertainty to businesses and adds costs, from which smaller businesses at least should be spared.

The individual choices that employees make should not be anticipated by presuming that union membership is an assumption that both employer and employee make. That undermines the freedom of both parties to have a non-politicised atmosphere and implies that a business will be run in an atmosphere of expected confrontation instead. It suggests that freedom is being undermined. Yes, it does not require an employee to join the union, but if an employer presents a new employee with this statement, what on earth is the employee to think except that this is what should be done in order to get on in this business?

The second ground for objection, however, is more general. Obliging businesses to make such a statement politicises the internal arrangements of business. Trade union membership may or may not be something individuals choose, but we must recognise that trade unions are affiliated to the Labour Party; they founded the Labour Party. The Parliamentary Labour Party appears to be dominated by former union members—or perhaps continuing union members. At certain times of Britain’s history, trade unions have dominated many workplaces and paralysed public services. Indeed, we see that continuing this year in Birmingham, with the paralysis in relation to bins and the failure of the council to deal with the Unite union. They have stopped the productive activities of the British people in industry and in business, undermining the economic success of the whole country and the ability of people to earn a decent wage or salary.

I am afraid they have undermined freedoms and have undermined the democratic decision by the people of this country to live without fear—fear that their child’s school will be closed by strikes, fear that their university lectures may be cancelled because the union has called a strike, and the fear of many working people that they cannot get to work and earn their money because the railways are strike-bound. This clause should not be in the Bill. It undermines the freedoms that were fought hard for by Conservative Governments since 1979 to restore freedom in the workplace, with a fair balance between trade unions and working people.

When I first came to this country in 1979 as a student, one of the members of staff of my college told me, “I am the sole earner in my family now. My husband had to join a union because of the closed shop. He couldn’t get a job without joining a union. Now that he has joined the union, he has been told he can’t work. This is why I, for the first time in my life, am voting for the Conservative Party and Mrs Thatcher”. Conservative Governments have successfully and successively restored order to the economy, allowed this country to prosper, allowed people to get jobs, helped entrepreneurship and growth, and helped Britain to no longer be the sick man of Europe. People voted for that. We should not turn the clock back to a day when we are chipping away bit by bit at those rights, so that people will not have the freedom to earn and this country will not be able to pay its way.

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[Baroness Coffey (Con)]

I agree with my noble friend. I have tried to get deposited in the Library, or sent through some other form of communication to all Peers, a response I have received from the Secretary of State on this matter. By the way, I have still not received a reply from the Cabinet Secretary, who is supposed to uphold Cabinet Office guidelines. In essence, the answer came back: “We’ll do a full impact assessment once the Bill is completed”. We know that industry is looking for that. We have no idea when these regulations will be introduced; I assume that they could already have started the consultation. It is important that the Secretary of State—I am trying to remember; I do not have a photographic memory—basically said, “We haven’t really changed that much”. That is where we are. I will continue to make the point. My noble friend is right and reminds me to chase the Cabinet Secretary.

[Lord Leigh of Hurley (Con)]

Perhaps I can help my noble friend by explaining that Section 38 of the Employment Act 2002 allows an employee to claim compensation of between two and four weeks’ pay. Does she think this will lead to ducks-and-drakes people trying to seek such compensation?

[Baroness Coffey (Con)]

I expect the bigger employers, if they know about this legislation—although we are hearing from a lot of the employers’ representatives that a lot of their members had not even heard about the day one rights until very recently—will probably put their HR departments and lawyers on it. I am concerned about the smaller ones, which is why I am sympathetic to the amendments in this group on micro employers and small employers. Otherwise, this could start to become a very expensive business. It is yet another reason why the Government generally do not seem to understand the chilling effect that not only their economic policies but legislation such as this will have on the recruitment of people to jobs.

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[Baroness Lawlor (Con)]

I support Amendments 212 and 213 in this group tabled by my noble friend Lord Jackson. I agree that a 24-hour notice period is necessary, particularly for small businesses, because access to the workplace by third parties can be disruptive. Visitors calling unannounced can disrupt a carefully organised schedule between an employer and his or her employees. The 24-hour notice period would allow employers to prepare for a visit and to reschedule certain tasks. I support exempting smaller businesses from some of these arrangements, because it is very hard to organise smaller businesses with third-party interruptions.

[Lord Leigh of Hurley (Con)]

My Lords, I support the amendments of the noble Lord, Lord Jackson of Peterborough, and others. This clause strikes horror in my heart. The idea that someone could come into my business, access my premises with no notice—good luck with that, because I sit in a room on my own—or even worse, access my systems and my server, which are all heavily password-protected because I am regulated, strikes horror not just in my heart. I can assure the Minister, who says that she has consulted business groups, that she will see surveys coming out in the very near future that show the fear, horror and dislike that small businesses have of this Bill, and in particular the clauses we have been debating tonight. I hope she will have the opportunity to meet again with business representatives and listen to what they are saying.

The draftsman on this Bill is working in another era. What does physical access to a business mean? I like the clauses restricting this for smaller businesses, because most small businesses do not have a physical presence. In many businesses, literally tens of thousands of them, the employees work from home. They might have a WeWork office where they meet every now and then, but it is meaningless to give right of access to most small businesses. If we then go to right of access to digital communications, that implies, from the wording I have read, that a trade union official would have to be given the passwords to enter the systems.

What protection is there? What indemnities are there to ensure that this is not abused? We know that abuse happens, particularly in these days of cyber fraud, where someone who has accessed the system could take advantage. Obviously, I am not suggesting that that is going to be prevalent or happen in the majority of cases by any means, but I do not see any protection for small businesses should that happen.

It seems to me that the whole concept of access is misconceived. I would quite understand it if the legislation were drafted to require an employer of any size to pass messages to an employee—I would understand that; it would be reasonable—but can the Minister explain to us why she is demanding access to both physical and digital assets of small businesses?

[Baroness Coffey (Con)]

My Lords, I shall speak in particular to the amendments regarding communication with workers. I think it was Amendment 207 but, whichever one it is, I think noble Lords will know. The reason I bring this up is that my noble friend has just referred to aspects of cybersecurity. By the way, I am not suggesting that any trade union would be seeking to cause this havoc, but we know this is a particular challenge. I am struggling to understand how, under wider confidentiality, how anybody would have access to this or be expected to. It may be that the employer is required to pass on an email, I do not know.

I am also struggling to find the justification for this. In introducing the Bill, the Government did not make any reference to digital communication or this other communication; they referred only to physical access. I cannot find any justification put forward by the Minister for this. I cannot find the amendment in Committee, and I am struggling to find the amendment on Report, in the Bill documents on the parliamentary website. I am sure they are there; I am just struggling to find them. I certainly cannot find any reference by the Minister in the other place to why this is deemed necessary. I appreciate that it is not necessarily the job of the Government to do my research for me, but that would be very useful to hear, because it certainly was not in the Bill introduced to the Commons.

I would be grateful if the Minister could give this House a justification, because one of the things that is causing concern among employers’ representatives is this sort of process. It is fairly well established that trade unions are often invited in; that is all part of good industrial relations. The legislation talks about being able to organise. I think the Minister in the other place talked about using it as an opportunity to recruit new trade union members, to organise, to have meetings and so forth. I want to clarify something. The Bill states, in line 15 on page 75, that

“the access purposes do not include organising industrial action”,

so I would be grateful to understand this better. How is the Minister in the other place saying that you can organise different from organising industrial action?

I am genuinely concerned that anyone can just be told, “Please email all your employees with this material”. Fortunately, at the moment, it does not seem that we have prescription that the Secretary of State will write the words that need to be said—I expect they would not be writing on behalf of the trade union—but, again, I am trying to understand why employers would need to allow that to happen. On that, I will draw my comments to a conclusion.

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[Lord Katz (Lab)]

I assume my civil servants understand that I probably know the answer to that question—they might be right, or they may be wrong. To cast my mind to the inner workings of Committee in the other place, the reference in the Bill, as I understand it, is to communication with workers rather than explicitly to digital communication. I sometimes feel that I cannot speak for the way we examine Bills in Committee in this place, let alone in the other place.

We now have the opportunity to discuss, as we are doing, the fact that in the modern day, in 2025, the idea that access to a workforce would not include digital channels is, frankly, fanciful. Were we seriously to say, not to trade unions but to employees—to workers—that the only way that they could receive a message from a trade union or from an employee representative or, to turn it on its head, from an employer was on a piece of paper or in a one-to-one verbal communication, then I think we would all regard that as fanciful. There is a little bit of sophistry—

[Lord Leigh of Hurley (Con)]

Just to expand on this a little further, we are not arguing that unions should not have the right to communicate digitally with workers. That is not the issue; the issue is the right of access. The Government are asking the House of Lords tonight to pass legislation that will allow a third person the right to access an employee’s computer—let us imagine that it is an SME business, possibly run on only one computer, which may contain highly sensitive information; in my case, that would be market-sensitive information— without any controls, references or parameters. I invite the Minister to commit that, before Report, further consideration is made of what such right of access means and the limitations on that right of access. We are not trying to exclude communication to workers; we are just trying to find out the channels and protect SMEs from intrusive activities.

[Lord Katz (Lab)]

I am happy to write to the noble Lord with more detail, but this is one of things that will be set out in regulation following extensive consultation. I go back to the original point of principle that I made about levels of granularity in setting out specific channels: if we specify channels A, B and C, as soon as the Bill is published we risk finding that employers are actually using channels E, F and G, because that is the pace of technology as it develops, so we have to retain flexibility.