Employment Rights Bill

Lord Monks Excerpts

2nd reading
Thursday 27th March 2025 Lords Chamber

[Lord Monks (Lab)]

My Lords, I add my congratulations to the quartet of maiden speakers. I think they have all laid down a mark and people will look forward to their future contributions in this House.

I want to pitch my remarks at some of the messages coming from across the Chamber, almost asking “Why have we got this Bill in the first place when our wonderful flexible labour market is doing so well?” For me, a key justification of the Bill is deep concern about the UK’s relative position in the world. I will give a couple of OECD figures. Of 40 major economies, we are the most affected by rising inequality. In Europe, only Bulgaria and Lithuania fare worse. The gap between top and bottom earners in this country continues to soar to some eye-watering amounts, which are not always linked to corporate success. When it comes to worker participation in management decision-making, the OECD ranks us 26 out of 28 European countries. We are propped up only by Latvia and Estonia doing worse. We are not in the Premier League on these particular measures: more like the Vanarama.

If we had been outstanding economically, as the advocates of deregulated labour markets in the 1980s hoped, and if our productivity and investment record had been better, maybe you could justify high unemployment, high inequality and poor participation in management; perhaps it would have been a price worth paying. But the result has been that we are currently 20% poorer on average than workers in France or Germany, which have very different labour markets and a much greater degree of regulation.

I could go on making these depressing and unfavourable comparisons. If some people thought trade unions were overmighty subjects in the 1970s and 1980s—many people did and still do—and that unions could do with a good regular dollop of restrictive legislation loaded on them, I hope that today they will honestly acknowledge that British workers have payday very heavy price for what has happened since: the flexible labour market and its dark sides. I acknowledge that there are some upsides for some people in certain circumstances, but there are many dark sides for others who have very little choice: lower pay, lower protection, lower skills and poor productivity. This is not a happy picture for our nation and it is one the Government are determined to do something about. Mrs Thatcher did not expect the flexible labour market to produce some of these awkward facts, but they have to be faced by her successors.

The Bill strengthens the workers’ voice in the workplace, and I hope that that will echo, too, in boardrooms across the country. It needs to, if firms are to prosper as effective communities and teams. The Bill should boost job security, and it should reduce bad behaviour in a number of areas and tackle a number of abuses in the workplace at the present time. I encourage the noble Lord, Lord Hunt—who we are happy to renew dialogue with after many years—to have another look at the biography of Stanley Baldwin to see what he did after the general strike to promote collective bargaining.

The Bill will put unions in a stronger position. I do not apologise for that: the balance tilts with this Bill if it goes through in its present form. It can help tackle inequality and improve, through that, productivity. We need the Bill, and we need it soon.

Employment Rights Bill

Lord Monks Excerpts

Committee stage
Tuesday 29th April 2025 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, briefly, I thank the noble Lord, Lord Fox, for bringing forward this important purpose clause amendment, which I must tell him—I know he is always surprised when I praise him—is a very cleverly worded amendment to which my noble friend Lord Sharpe of Epsom and I were very happy to add our support.

I do not know why this Bill has had to be rushed through within 100 days. Given the significance of this legislation, surely it would have been better if the Government had committed themselves to ensuring thorough and proper scrutiny. However, we have seen the introduction of 160 amendments on Report in the House of Commons—amendments which, in many cases, received no or little meaningful examination.

Even more concerning is the fact that the Government have tabled 27 amendments for Committee in this House. We have received a letter from the Minister warning us that there are more amendments in the pipeline on fire and rehire, the fair work agency, employment Bill time limits, trade union reform and maritime employment. What on earth is going on? Why was not this Bill properly prepared? This has meant that the letter to which the noble Lord, Lord Fox, referred is virtually saying to the House of Lords, “Please, on behalf of all the employers—and, indeed, all the businesses in the UK—we rely on you in the House of Lords to scrutinise this Bill properly”. I just do not think that this is the right way to treat Parliament. We owe it to the legislative process and to the public we serve to ensure that our scrutiny is neither rushed nor compromised.

No doubt the Minister will argue that a purpose clause is completely unnecessary. However, we respectfully disagree, and not only for the reasons raised by the noble Lord, Lord Fox. It is vital for the Bill clearly to articulate its overarching aims: not simply to modernise employment rights in name but to set out a clear ambition to create a fairer, more secure labour market; to encourage genuine co-operation between employers and workers; to protect rights and well-being in the workplace; to ensure proper standards for pay and conditions across sectors; and to guarantee robust enforcement of labour protections. I have to say that, without a purpose clause, this Bill risks being directionless and, worse, risks unintended consequences that neither workers nor businesses can possibly afford.

I think also—and I hope the noble Lord, Lord Fox, will agree—that a purpose clause is particularly important where there are a large number of delegated powers to make regulations within it. In effect, the Government are saying, “Please give us the power to do whatever we would like to do whenever we would like to do it”. The committees of this House have, time and again, urged Governments to turn their back on these Henry VIII clauses and present Parliament with clear cases to amend primary law, not do it through secondary legislation.

Well, there is growing concern about this Bill, which is why the British Chambers of Commerce, the Confederation of British Industry, Make UK, the Institute of Directors and, in particular, the Federation of Small Businesses, which between them represent thousands of businesses across the country, have published this open letter to the House of Lords, asking for urgent changes to the Bill. They did so because they are deeply concerned that, as drafted, the Bill will make it harder, not easier to create fair, secure and co-operative workplaces. They warn that the Bill will increase risk and uncertainty for businesses precisely at the moment when we need businesses to invest, to hire and support in particular those who are at the margins of the labour market.

I do not think that the substantive concerns of all the businesses quoted by the noble Lord, Lord Fox, have been listened to. I just hope that the Minister can respond when she winds up this debate. I look forward to the speeches from all sides of the House. I will not quote in detail from the letter, but it does remind me of the words of Milton Friedman. If I am ever to find myself quoting Milton Friedman, I suppose that this is the moment. He said:

“One of the great mistakes is to judge policies and programmes by their intentions rather than their results”.


Well, fine phrases about modernising employment rights and updating legislation are no substitute for carefully considered, properly scrutinised measures that deliver real-world improvement. So that letter from all those businesses is not a warning but a plea to this House. It is a recognition that we as the revising Chamber have a unique and critical responsibility to ensure that this Bill works. They are not closing the door on the Government but offering, at the end of the letter, to work with us all and with Ministers to help improve legislation.

In conclusion, if we are to get all these amendments, can we hear from the Minister how many more amendments we are going to get and when? The Government Chief Whip is constantly referring us to the Companion. I have never quoted from the Companion before, but it has pretty severe words for a Government who choose to table amendments at the last moment, without proper notice. So could we hear from the Minister what further amendments are planned, when we will receive them, and which parts of the Bill will be fundamentally altered? Here we are, at the start of Committee, still not knowing what the Government are proposing.

In an unguarded moment, the Minister disclosed to me that she has an implementation plan, which I understood from her was in draft. This House ought to see the draft implementation plan. Why can we not see it? Perhaps we could help the Minister produce the final draft. We should not get an implementation plan half way through Committee. Could we hear from the Minister on when we will see the implementation plan? A lot of businesses up and down the length and breadth of this country are totally uncertain about what the detail of this Bill will be. It is about time that we heard from the Minister about what the Bill seeks to do, what its purpose is and whether we can see it in its full form before we go any further with Committee.

[Lord Monks (Lab)]

My Lords, I will speak to Amendment 1 and avoid the temptation to engage in a mini-debate across the whole width. So far, I feel I have been sitting in a Second Reading debate. I have given speeches in this House before, reflecting similar sentiments to those in this amendment about fairness and co-operation. These are the words used in the amendment from the noble Lord, Lord Fox. I gave them in the context of the debates on Conservative anti-union laws, which we have addressed in this House in my time. Sadly, no one on the Conservative Benches, except for the noble Lord, Lord Balfe, who is in his place, paid any heed. The laws then proceeded to the statute book and the result was an imbalance in British employment law very much in favour of employers.

The Bill goes some way towards correcting that. Once it has been implemented, I hope we can look again at a system of mature collective bargaining of which we all can be proud. But first, we must replace the imbalance, and do so speedily, because it is glaring. Change is desperately needed; our labour market is characterised by high inequality—only two OECD countries have a bigger gap between rich and poor and between top earners and the very low-paid.

Employment Rights Bill

Lord Monks Excerpts

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Lord Monks (Lab)]

My Lords, it is commonplace for individuals who express personal views that clash with the ethos of a particular company or institution to run into some trouble. Gary Lineker is the latest and most topical example, for displaying material that is considered to be antisemitic. My first experience, age 12, was my father refusing to let me display a political poster at a general election. If I had known about the Free Speech Union, maybe I would have joined the noble Lord, Lord Young, at that stage—maybe he should send Gary Lineker a membership form.

[Lord Young of Acton (Con)]

I have.

[Lord Monks (Lab)]

Oh, he has already done it—very good.

Let us be real about this. A lot of situations call for tact and diplomacy, and for us to be careful about the way we express difficult thing. A lot of people do not do that; they say what they like, thinking it is totally justified, and they get into difficulty. Unions spend a lot of time helping people get round those kinds of situations when they have got into trouble with their employer.

I do not think the argument coming from the other side of the Chamber is a convincing one. Let us remember a bit of common sense, and that tact and diplomacy are still required in many organisations, not just the BBC—and not just with my old dad, who did not like the fact that I had a “Vote Labour” poster in the window.

[Baroness Verma (Con)]

My Lords, I did not want to intervene on this group, but, listening to the noble Lord, I became slightly worried that we are getting into censorship. This country is a proud country because of its ability to speak out and speak up. I would be incredibly nervous if we felt that we could not demonstrate our political views openly without being penalised for it. The unions do their own work, but it is incredibly important that people are able to demonstrate a political affiliation or a particular viewpoint without having to feel that they are going to be censored. That would really worry people like me, who often are the recipient of things that we do not like to hear, but we tolerate it because we think the country enables us to have the debate.

--- Later in debate ---

[Lord Monks (Lab)]

My Lords, I do not doubt that critics of this part of the Bill speak with a lot of personal experience as well as commitment to their employees and the way they run their affairs. However, let me remind people that the argument that is really coming from the other side—that the qualifying period would be damaging to employment—is the argument as has been used against just about every bit of progressive employment legislation from the Factory Acts onwards. If noble Lords think that that is hyperbole, they should remember the national minimum wage and the campaign that was run against it. None of that came to anything like what was forecast from that side of the House. I have risen briefly to ask the other side of the House to remember that it was wrong on the minimum wage and to consider whether it might be wrong on this as well.

[Lord Hendy (Lab)]

My Lords, I get the impression that there is a bit of a misunderstanding around the nature of employment tribunals. I spent the first half of a long career at the Bar doing employment tribunal cases, many of them unfair dismissal cases. In fact, the first case I ever did—pro bono, by the way—was an unfair dismissal case in 1972, under what was then the very new unfair dismissal legislation. Unfair dismissal cases are difficult for employees to win. Most cases that go to a full hearing result in the employer being vindicated.

I want to make two points. The first is that employment tribunals now have robust procedures for weeding out vexatious cases; such cases never go to a full hearing. Secondly, I remind your Lordships of the law on unfair dismissal in Section 98 of the Employment Rights Act 1996. The test is in two parts. First, the employer must demonstrate that the reason for the dismissal is capability, qualifications, conduct or redundancy or the fact that the employment is in breach of some enactment. Once the employer has shown that that is the reason, the test for the tribunal—I shall read it out—is whether the dismissal is fair, which,

“depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee”.

So all the factors that one would expect to have to be taken into consideration are taken into consideration.

The tribunal then has to determine that,

“in accordance with equity and the substantial merits of the case”.

The Court of Appeal has added yet another burden. When the tribunal decides whether the employer acted reasonably or unreasonably, it is not about what it considers was reasonable or unreasonable; it is about whether it considers that the dismissal fell within the band of responses of reasonable employers. It is at two stages removed. It is not like an ordinary negligence case where the court decides whether an employer was reasonable or not reasonable in putting a guard on the machine. It must decide. Even if it thinks that the decision was unreasonable, if it finds that, nevertheless, reasonable employers would say that it might be possible that the reason was fair, that would be legitimate.

--- Later in debate ---

[Lord Barber of Ainsdale (Lab)]

The noble Lord pointed to the daunting process that faces an employer potentially facing an employment tribunal accusation that would damage perhaps their reputation, as well as the daunting issues that also face the employee who is considering going down that course. My noble friend made some emphasis on that point.

The debate has been conducted as if this is a hugely common threat: indeed, as if it is a threat that, potentially, is going to do tremendous damage to our economy. But could I just point to the scale of the issue? In 2023-24, there were just over 5,000 unfair dismissal cases referred from the Tribunals Service to ACAS for the conciliation processes that my noble friend referred to. What is the size of our workforce in the British economy? Is it 25, 26, 27—

[Lord Monks (Lab)]

Thirty-four.

[Lord Barber of Ainsdale (Lab)]

Thirty-four million workers. Five and a half thousand cases. Why is the number so small? It has been suggested that it is because an employer’s immediate response is to offer a settlement to buy off the prospect of a tribunal. Some may make that judgement, but, given the evidence my noble friend has referred to about the unlikelihood of applicants succeeding with their claims, that does not seem a very wise response to give. There may be some, but for the individual, it seems to me, more daunting factors influence them to hold back because it is so painful and potentially stressful that they are reluctant to take their case in the first place.

This whole Bill is about giving people at work in Britain more confidence and there needs to be some sense of perspective about the scale of the issue we are talking about. Five thousand people.