Employment Rights Bill

Lord Stoneham of Droxford Excerpts

Committee stage
Monday 16th June 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, jumping to Clause 92, I shall start by addressing Amendment 271ZZB in my name. It refers to the annual report that the Secretary of State would be expected to make on the extent to which they have undertaken the enforcement functions. I have a particular problem with suggesting that it is acceptable to have in primary legislation:

“As soon as reasonably practicable after the end of each financial year”.


There have been plenty of other reports which say that things will not fit the grid slot, or that all these other things that get in the way. We get promised a child poverty strategy, then we discover it will arrive probably about seven months after originally planned. Those sorts of things are the reason I have simply suggested that this should be done within three months. I have seen that happen for other things, such as the Environment Act, where a specific timing is put on reports. To me, this is no different in that regard, so something as sloppy as that should not be left in the Bill.

Clearly, we are now on to Part 5, a really chunky part of the Bill that deserves detailed consideration. The previous Administration started this idea of bringing together the different enforcement bodies, and I think everybody is united on this. It is noteworthy that the Labour Government, in the variety of papers they have put out, say that they are going far further than any of that. That is why this needs careful consideration.

In this Bill, not only do we see significant changes in employment rights and in the scope of what is here, but, as has been pointed out, this is also a radical change in who gets to do it. As the noble Lord, Lord Carter of Haslemere, pointed out, I would be interested to find anywhere else within government—perhaps the Civil Nuclear Police and the Armed Forces—that would have this level of direct control by the Secretary of State.

That said, I will explain why I have some sympathy with the Government in how they are going about this. I am also very struck by Amendment 269, tabled by my noble friend Lady Noakes. Setting out the advice the board has given to the Secretary of State would not be unprecedented, because this is exactly what the Office for Environmental Protection does on matters involving environmental legislation. By the way, Ministers are not expected to ask—nor do they have to ask—the OEP for advice, but they can. However, the OEP can and does publish the advice that it gives, solicited or not. That open transparency, to which my noble friend Lady Noakes referred, in how these powers are being used would be welcome to give confidence in this new body. We will be debating, perhaps on Wednesday rather than today, why I think some of this is so novel. It certainly merits all that scrutiny.

More broadly, I completely understand what the noble Lord, Lord Carter of Haslemere, is saying about the extent of the powers being given. I have some sympathy and, in another group, I talk about these enforcement officers—who used to be known as labour market offence officers—and combining all these different agencies and how that comes together. For example, the Environment Agency is a regulator that has powers to investigate criminal offences. It started an investigation on 18 November 2021, and at no point would it ever brief Ministers on the progress or intimate details of that investigation. To this date, it still has not brought any charges. We recognise that the public expect somewhat more of Ministers nowadays, powers having been set out, and that it is possible for all these things to happen. If Ministers are then, effectively, locked out from what is going on in terms of this operational independence, I can understand why they are keen to have a closer relationship with what is going on.

I will explain this in more detail in the other group, but having it as an executive agency with this advisory board provides an element of scrutiny but not the independent oversight, which is why the framework to which the noble Lord, Lord Carter, refers is important in trying to get this balance in whether people are behaving themselves in applying the law. I am not suggesting that any civil servant or any enforcement officer would necessarily want to go rogue, but they would have that extra oversight, with such significant powers. Let us be candid: a Secretary of State does not have the time to go through every single assessment of every operation that would be expected under the widened scope of legislation that this new agency will be enforcing.

I have some sympathy with the noble Lord, Lord Carter, who wants to see a pretty tight grip on what is going on, but I understand why the Government have set it out in the way that they have. Nevertheless, as my noble friends on the Front Bench pointed out, that aspect of oversight is important. As has been explained, considering how small businesses will handle this gets us into pretty tricky stuff.

By the way, I fully supported the development of the Gangmasters and Labour Abuse Authority. That is where a lot of the powers that may seem pretty tough in this Bill originated. How can I put it? Some people, whether in aspects of modern slavery or otherwise, can be pretty tough employers. I understand why some of what is, in effect, emergency access to offices and documents is needed: to make sure we tackle the abuse of workers. Overall, however, this is going to be a sensitive area. I encourage the Government to be as open and transparent as possible, and to consider not only the level of scrutiny but also the transparency in terms of reports—which would be, I am sure, welcomed by the Government and, candidly, by people relying on these agencies to do this work for them in the future.

[Lord Stoneham of Droxford (LD)]

My Lords, my noble friend Lord Goddard is disappointed that he is unable to speak on this group this evening. Given the multiple groups of amendments concerning the fair work agency, we will restrict our comments to this group. The Department for Business and Trade has set out the rationale for the fair work agency, suggesting the current system of employment rights enforcement is fragmented and inefficient. We agree. This fragmentation causes confusion for both workers and employers and leaves many breaches, such as underpayments, unchallenged. The Bill aims to establish the fair work agency and will consolidate existing bodies responsible for enforcement, abolishing those authorities and transferring their functions.

However, there remains some uncertainty about the agency’s precise scope and responsibilities, how it will relate to existing organisations, the level of funding it will receive, how it will access and use data, and the mechanisms for compliance and oversight. Although the Bill includes data-sharing provisions and the Minister has highlighted further detail, these issues will be key in determining the agency's effectiveness.

On powers and oversight, many enforcement powers currently held by other bodies will be transferred to the fair work agency, including powers of entry. New powers, particularly in relation to HMRC, will also be introduced. Oversight of these powers is planned to be provided through independent policing standards authorities, but it is important that the limits to these powers are clear and that they are exercised proportionately.

Regarding resourcing, it is understood that around £600 million is currently allocated across the authorities being restructured into the new agency. I am sure that discussions with the Treasury on the appropriate level of funding are ongoing, but is the Minister confident that this figure will provide the resources needed to meet the scale of the agency’s mission?

Bringing enforcement functions together in the fair work agency should improve the Government’s ability to tackle labour market abuses, including serious issues such as modern slavery. It is also acknowledged that previously, fragmented responsibilities caused confusion, duplication and ineffective enforcement, so this consolidation aims to provide a clearer, stronger enforcement framework.

I will not speak at length on the amendments put forward by the noble Lord, Lord Carter, but what he said was very wise. He raised important questions about the advisory board’s composition and enforcement powers which deserve further consideration by the Minister and the Government. Given the wide-ranging powers the agency will have—from workplace inspections to civil penalties and criminal enforcement orders—it is only right that Parliament has a clear opportunity to scrutinise how these powers will be used in practice.

Before the agency becomes operational, there should be clarity around its remit, resourcing and relationship with other enforcement bodies, and around the structures of accountability that will apply. This is particularly important for small and medium-sized businesses, which often lack the internal capacity to navigate complex regulatory frameworks. Advance scrutiny and a clear published framework would offer reassurance to both workers and employers that the agency’s approach will be proportionate and well targeted. We would welcome the Minister’s further explanation of how the Government intend to maintain transparency and accountability, to ensure balanced representation on the advisory board, and to keep Parliament informed throughout the phased implementation of the fair work agency.

Finally, I seek clarity on the Government’s timeline for the agency’s full implementation and how they plan to keep Parliament updated on progress. These are significant institutional changes and deserve close attention. I look forward to the Minister’s response.

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

My Lords, I am grateful to all noble Lords who have tabled amendments in this group, all of which pertain to the governance of the fair work agency and its relationship with government. While I appreciate and respect the spirit in which they have been made, I must set out why the Government do not believe they are necessary or appropriate.

Amendment 263ZA in the name of the noble Lord, Lord Sharpe, has good intentions; however, in practice, it introduces unnecessary rigidity into a system that already works effectively. Currently, enforcement officers undergo extensive training; for example, HMRC officers complete an 18-month programme that equips them with the skills and knowledge they need. This is a robust and proven process. There is no evidence that adding a legislative requirement for qualifications would improve outcomes. Moreover, this amendment would reduce flexibility. It would impose a legal burden that could hinder recruitment, especially when enforcement needs evolve rapidly. Finally, it is important to note that Clause 87(6) already gives the Secretary of State the power to specify which powers an officer may exercise in the appointment. This ensures appropriate oversight and safeguards without the need for additional legislation.

Similarly, Amendment 263ZB, also tabled by the noble Lord, Lord Sharpe, is, in practice, unnecessary and creates duplication. The powers granted under the Bill already require enforcement officers to provide written notices such as a notice of underpayment. These are not optional; they are embedded in the operational framework. Moreover, current enforcement bodies such as the Employment Agency Standards Inspectorate already maintain detailed records of inspections. Officers also operate with a strong emphasis on consent and co-operation, often arranging visits in advance and documenting their findings thoroughly. Introducing a statutory requirement for additional reporting and oversight risks creating administrative burdens without adding meaningful value. It could divert resources away from enforcement and into bureaucracy. This amendment seeks to legislate what is already standard practice; it is not needed in the Bill, and I urge noble Lords to reject it.

Turning to Amendment 263C, the Bill already provides limitations on what powers officers can exercise through letters of appointment. I appreciate the noble Lord’s desire to ensure that enforcement officers exercise powers in a way that minimises disruption and harm to individuals and businesses, particularly as they will be extensive powers. This includes their powers to enter premises to determine whether there has been non-compliance. However, while these powers are by nature disruptive, they will be required to be exercised proportionately and reasonably, and, where possible, officers will carry out their duties on a consensual basis. In practice, this means officers will correspond with a business in advance to arrange a reasonable time and date before they visit, and they will also generally enter during business hours.

It is also worth noting that we are setting up the fair work agency as an executive agency of the Department for Business and Trade. Enforcement officers will therefore be civil servants who are subject to the usual standards of public life and will be required to operate in line with the Civil Service Code. The fair work agency will take a balanced approach to carrying out its role. This is in everyone’s interests.