Employment Rights Bill (Fourth sitting)

Marie Tidball Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[The Chair]

Dr Tidball, do you wish to make a declaration of interest now?

[Dr Marie Tidball (Penistone and Stocksbridge) (Lab)]

It may be that I do not ask a question, but for clarity, Professor Alan Bogg was my professor for labour law many years ago, and we were at one point work colleagues.

[The Chair]

I do not know what the collective noun for professors is—a proliferation, perhaps. Anyway, could you please introduce yourselves briefly?

Professor Bogg: I am Professor Alan Bogg, and I am a professor at the University of Bristol and a barrister at Old Square Chambers.

Professor Deakin: I am Simon Deakin, and I am a law professor at the University of Cambridge.

Professor Simms: I am Melanie Simms, and I am professor of work and employment at the University of Glasgow.

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[Nick Timothy]

Q Okay, you don’t want to answer that; I will ask another one.

One of my concerns about labour market regulation relates to the use of substitution clauses by firms like Amazon and Deliveroo, where they give a licence to a courier and the courier is then entitled to share that licence with others. The expectation is that responsibility for checks for things like the status of the substitute, in terms of whether they can work legally and so on, and responsibility for the pay that will be provided to that person, all lies not with Deliveroo or Amazon, but with the person that they have contracted with in the first place. That is not dealt with in the Bill at all; I think it should be. Can you expand on that, please?

Professor Deakin: Of course, the issue of employment status has been deferred, has it not, to a consultation? But unless a way is found to include workers like the Deliveroo workers within the scope of protective labour law, the proposals to improve collective bargaining rights and many other rights will just fall away. Large businesses like Deliveroo, I would say, need workers; and if our labour law system cannot describe those workers as protected by one means or another, there is a clear defect in it.

There are various ways to get to that point. They do not all turn upon the definition of worker, or the use of a substitution clause to get you outside the scope of the current law. In some cases, and in some countries, independent contractors are protected by labour law rights, even if they do not count as employees. In our past, homeworkers who might have employed other people had legal rights under labour laws. So this issue absolutely has to be addressed. I understand it is out for consultation. Many of the measures contained in the Bill would not be effective, unfortunately, if this issue was not grappled with.

Professor Bogg: In the situation that you have just described, I think part of the driver for the use of substitution clauses is that they are used to avoid employment status. So in any review of employment status, a key thing that will need to be addressed is the problem of substitution clauses as a way of avoiding either employee or worker status. There is quite a simple way to do that, which is to treat personal work as an indicative rather than a conclusive factor, because it then just drops back into the range of things that the tribunal will look at.

In a situation where a large company is relying on wilful blindness to avoid responsibilities under migration rules or under health and safety legislation, there is a very simple response, which is to impose criminal liability on large corporations that try to rely on wilful blindness to avoid obligations in primary legislation. That is a very straightforward way of tackling an abusive avoidance of rules that are very important to enforce.

[Dr Tidball]

Q You have mentioned where the Bill places the UK internationally in terms of strike law. Where do you think the Bill broadly places the UK compared with other developed nations, when it comes to the level of employment rights?

Professor Deakin: If we take the whole of individual employment law, for example, the Bill will bring us closer to the OECD average, but there will still be various respects in which we would not be as protective of individual rights as other countries, especially when they relate to remedies for unfair dismissal. Enforcement could be made much more effective, but there is no doubt that the Bill brings us closer to the OECD norm—and not just there: many countries in east Asia and other parts of the world will have labour law systems that are at least as protective as ours. So it is a corrective.

On the other hand, I emphasise that UK employment law has never been as deregulatory as US law has, for example. We are not in a situation, as US unions and US workers are, of starting from scratch. We also have a history of labour law that we can build on. That makes it easier to think of this as the first step in a rolling programme that will effectively restore us to where we were before the 1980s. In the 1970s, more than 80% of workers in this country were covered by a collective agreement. Union membership was around 55% or even 60%, but coverage was over 80%. We had a very progressive employment protection law at that point.

Going back further, we were the first country not just to industrialise, but to have modern factory legislation. We now know that the implementation of the Factory Acts led to not just protection and things like the weekend, but improved productivity. This history is important for us.

Professor Bogg: This Bill seems as radical as it does only because the baseline is so low, and it is very important to keep that in view. Let us assume that this Bill is not enacted—if you look at the OECD countries, we are the fifth least regulated on dismissal protection out of 38 countries, and we are the third least regulated on hiring on temporary contracts. That is where we are in OECD terms, so the measures on dismissal protections and guaranteed hours will push the UK back into an intermediate position in the OECD. I do not think the Bill marks any kind of revolution just yet; it just pushes the UK back into the mainstream of other civilised OECD countries with employment regulation that works effectively.

Professor Simms: To return to enforcement, the challenges of both individual and collective enforcement in the UK at the moment really do add extra difficulty. Not only do the rights not exist in general—there are relatively few rights in general—but they are very difficult to enforce.

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[Alison Hume]

Q Some 20% of all employees in my Scarborough and Whitby constituency work in the hospitality sector, and obviously a large number will be women. According to the latest Office for National Statistics figures, 50% of women in part-time jobs in my constituency were paid below the living wage. Can you drill down a little more into how the Bill will lead to greater income security for women working in hospitality?

Dr Stephenson: Having a better enforcement body and proper enforcement of the living wage and equalising minimum wage rates with living wage rates for workers under 21—the hospitality industry in particular employs large numbers of younger people—will be really important. Good employers want to do the right thing, and they are undercut by bad employers who are deliberately breaking the law, so better enforcement is important.

To go back to my earlier point, outwith this Bill it is also important to look at access to proper legal advice for people in those situations. It can be very difficult—we have advice deserts in this country. One of the impacts of cuts to civil legal aid has been a reduction in any lawyers with specialism in certain areas, because the loss of legal aid has meant less money in the sector and fewer people going in to develop that specialism. Even if you can afford to pay, it can be quite hard to find a lawyer for certain areas. The enforcement mechanism will make a big difference, but we also need to look at legal aid.

[Dr Tidball]

Q I have two questions. First, to pick up on your point about the economic inactivity of women with caring responsibilities, can you reflect on the value of the maternity leave and paternity leave protections in the Bill for women and their job retention and economic activity? As part of that, what other opportunities are there in relation to paternity and parental leave to strengthen women’s economic activity?

Secondly, we heard from an earlier witness that they were not certain whether the Bill would lead to a decrease in jobs among people with protected characteristics. What is your perspective on the role of the Bill in positively affecting those who have protected characteristics, particularly women and disabled women?

Dr Stephenson: On your first point, as I said earlier, women’s unpaid work is at the heart of their economic inequality. One thing we need to do is to have a better balance of those unpaid caring responsibilities between women and men.

The paternity and parental leave changes in the Bill are a step—a small step. We need to go much further, because we still have one of the biggest gaps in Europe between the entitlement for fathers and second parents and the entitlement for mothers. We also need men to have periods of leave in their own right that they are not taking while the mother is on leave.

The thing about paternity leave is that it is generally taken immediately after the birth and it is about providing support to a new mother just after she has given birth. It is a very difficult time: the first time you do not know what you are doing, and the second time you normally have a toddler to look after as well as a baby, so you need more than one pair of hands.

If we are going to change patterns of caring, there needs to be provision that would encourage and support men to have leave after their partners have gone back to work, where they are the sole carer, because it is not until you are the sole carer in charge of a baby that you actually understand what it is really like. If you are one of two parents at all times, there is always somebody else to do it. That needs a different type of leave.

We have called for a period of maternity leave, which is about recovering from childbirth, establishing breastfeeding and so on; for a period of paternity/partner leave, which is about supporting a new mother; and then for both parents to have a period of what we would call parental leave, which is about caring for a child. Both of those need to be paid, and they need to be individualised. We think that would make a difference. That is something that we hope would come out of longer-term reviews of maternity, paternity and parental leave.

In terms of whether the Bill would lead to a decrease in jobs for people with protected characteristics, as I said earlier, that warning is often heard when you improve employment rights—that actually, it will lead to job losses. That has not proved to be the case thus far, and I do not think the changes in the Bill are so significant that they would lead to job losses. For example, the changes to paternity leave are relatively minimal—it is about making it a day one right, rather than making people wait. It will really help those whom it benefits, but it would be unusual for an employer to go, “Actually, men now have a day one right to paternity leave, therefore I’m not going to employ them.” Of course, men have a protected characteristic of sex, just as women do.

In many areas, improving the situation of workers on zero-hours contracts, who are more likely to be from ethnic minority backgrounds, is more likely to improve their overall standard of living. It will help to lift them and their families out of poverty, so it is more likely to be beneficial.

[Laurence Turner]

Q Dr Stephenson, I would like to ask about outsourcing and outsourced workers, an often-overlooked part of the labour market. We know that women and people from ethnic minority backgrounds are more likely to be outsourced. What is your opinion of the clauses in this Bill in relation to the extension of gender pay gap reporting to outsourced workers and the restoration of the two-tier code for outsourced workers from the public sector?

Dr Stephenson: I can speak to the first question; the second is probably beyond my area of knowledge. We welcome the move to include outsourced workers in gender pay gap reporting. We think that this has been a gap. We are very conscious that you will quite often see that the lowest paid workers, particularly in the public sector, are now outsourced. One of the reasons why people say pay in the public sector is better on average than in the private sector is not because it is better job for job; it is because the lowest paid workers have been moved out of the public sector and into the private sector, and a large proportion of those workers are women, for example cleaners, canteen cooks and so on.

Counting those workers in is really important, as is anything that encourages greater insourcing of workers. What we have seen with outsourcing is that the efficiencies and so-called savings have been largely at the expense of the pay and conditions of those outsourced workers.

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[Dr Tidball]

Q Seven children in every classroom of 30 in my constituency of Penistone and Stocksbridge are in poverty. Can you set out more broadly the economic benefits of the Bill, many of which were set out in the TUC’s report this week? In particular, while you have mentioned some just now, can you focus on the economic benefits for working people and working families?

Justin Madders: Obviously, the TUC report is not an official Government document, but it has some interesting figures. It reckons that we could gain up to £974 million from reducing the number of days that people take off due to stress and anxiety because of poor working conditions; another £930 million a year from improved staff wellbeing; £168 million a year from improved minimum wage compliance; £510 million a year from reduced industrial action; £8 billion a year, potentially, from improved industrial relations; and up to £2.6 billion a year from increased labour market participation—there are a number of reasons why that might be the case. We do not know how much of those figures will be delivered, because an awful lot of variables are in there, but it is an impressive attempt to quantify, in a way that we cannot, given the rules of Government the positive impacts of the Bill on the wider economy.

[Anneliese Midgley]

Q Minister, you spoke earlier about some of the engagement you have had on the Bill, and some of the witnesses earlier today spoke about tripartite meetings that they had been at between the Government, unions and businesses. Could you set out some of your planned future engagement on the Bill?

Justin Madders: Engagement continues, and there will be more next week—we are meeting a group of small and medium-sized businesses—but to date 140 different stakeholders have attended official or ministerial meetings. You will have heard from many of the witnesses that they have been quite impressed, I think, with the level of engagement and how we have listened to concerns expressed about the Bill. We also undertook extensive engagement in opposition. We will continue to do that. We are moving through some live consultations at the moment. As we develop the Bill and some of the regulations and codes of practice that will follow it, there will continue to be engagement throughout. We are very clear that that is the best way to deliver excellent legislation, and we will continue it.