Employment Rights Bill (Fourteenth sitting)

Michael Wheeler Excerpts

Tuesday 17th December 2024 Public Bill Committees

[Sarah Gibson]

Will the hon. Gentleman give way?

[Michael Wheeler (Worsley and Eccles) (Lab)]

Will the hon. Gentleman give way?

[Greg Smith]

I will give way to the hon. Lady first.

[Greg Smith]

I think the hon. Lady has potentially misinterpreted my remarks. I am not directly conflating the pay of staff with the educational outcome: I am saying that there are academies that may well be able to structure their own affairs in the way they recruit, pay and set terms and conditions so that that is actually more favourable. That is one of those fundamental freedoms that make academies—and free schools, for that matter—different and able to offer the diversity that we both seem to celebrate, particularly in supporting those children who need additional support to whatever degree in that setting. Someone else was waving at me a minute ago.

[Michael Wheeler]

I am more than happy to wave in a friendly manner in this festive sitting. As usual, I draw attention to my declaration in the Register of Members’ Financial Interests of my membership of the GMB and USDAW. We have heard the phrase “academy freedoms”, with a lot of emphasis put on freedoms. We have also heard the Minister confirm that diversity is not being lost in terms of educational choice. We have heard that teaching assistants, according to the Low Pay Commission, have unfortunately been defined as low-paid workers. Does the hon. Gentleman accept that the only “freedom” —I use inverted commas there, for the sake of the record—being lost is the ability of academies and free schools to pay poorly?

[Greg Smith]

I understand the point that the hon. Gentleman makes, but I caution him against this presumption that those academies want to pay poorly, somehow mistreat their staff or set pay rates so low that most of us would think that it was an absurdity. I am not sure that they do; I am not sure that anybody wants to pay their staff as low as they can get away with. Those academies often advertise and appeal for staff, be they teaching assistants, teachers, ancillary staff or whoever, in a manner that actually makes them more attractive than the other offerings. That is part of the freedom to set up the school in the way that they wish and to ultimately deliver the best possible outcome for the children they are teaching and preparing for their future lives.

I come back to the point that if we start stripping away the freedoms and rights of those establishments to have local control, in this case around employment, I do not see any other natural conclusion than trying to bring our entire educational establishment back into being one single style of education. There may be some on the left—I say “the left” broadly; I am not just looking at the Labour party—who would welcome going back to simply having the secondary modern or whatever it might be. To be fair to her, the hon. Member for Chippenham agreed with me on the point of diversity and choice in education. It is a huge strength and a benefit to all children in this country that we have that level of different offering and choice in our educational establishment, and it has made our country fundamentally better. For total fairness, I repeat the fact that it was the last Labour Government who introduced academies.

Employment Rights Bill (Eleventh sitting)

Michael Wheeler Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Greg Smith]

Of course there will always be some who look for loopholes, but I gently suggest that the vast majority do not. They are good employers who care for their workforce, because, as we have discussed many times over, no business is anything at all without both parts—the workforce and those who risk their capital and so on to make those jobs happen, and to produce the products and sell the services in the first place.

The intervention from the hon. Member for Dundee Central neatly leads on to where I was going anyway. The Committee heard from almost every witness who was an employer or who represented employers that the dismissal and re-engagement provisions in the Bill were already too restrictive and would lead to staff being laid off. The SNP amendments make those even more restrictive, so it is not hard to work out where those witnesses would have gone on this front. Given that risk of lower employment and higher unemployment, I gently ask the hon. Gentleman to consider how the SNP would actually answer that challenge were the amendment to go through.

[Michael Wheeler (Worsley and Eccles) (Lab)]

As ever, it is an absolute pleasure to serve under your chairmanship, Ms Vaz. As usual, I draw the Committee’s attention to my declaration in the Register of Members’ Financial Interests, and particularly to my membership of the USDAW and GMB trade unions.

I am sure it will not surprise the hon. Member for Dundee Central to hear that I share some of his concerns about the practice of fire and rehire, and I welcome the significant steps taken in the Bill to outlaw the practice. However, I disagree with his amendment 160. What might be seen by some as a loophole is actually an important safeguard against the perverse potential for the law to mandate redundancy when there might have been other options on the table. I am sure that none of us would want to be party to including that in the Bill.

As I said, I share some of the hon. Gentleman’s concerns, and I hope the Minister will look closely at proposed new section 104I(4) of the 1996 Act, because the words

“likely in the immediate future”

are doing some precariously heavy lifting. However, if the amendment were accepted, the focus on a business being a going concern, which is the most important part of that subsection, would be removed completely. When we are passing legislation that protects jobs and promotes good employment, we absolutely cannot allow the unintended consequence of mandating redundancy when there are other options.

I look forward to the Minister’s comments. I understand the concerns of the hon. Member for Dundee Central, but this is a sledgehammer of an amendment to crack a nut of a possible loophole, with significant potential consequences.

[Laurence Turner]

Like my hon. Friend, I have intense sympathy with many of the arguments put forward by the hon. Member for Dundee Central, but the “Make Work Pay” document published earlier this year, which was subsequently endorsed in the Labour manifesto, stated:

“It is important that businesses can restructure to remain viable, to preserve their workforce and the company when there is genuinely no alternative, but this must follow a proper process based on dialogue and common understanding between employers and workers.”

We all want to see both parts of that carried through, and I look forward to the Minister’s comments on that. If amendment 160 were accepted, would it not have the effect of invalidating that part of the Government’s manifesto commitment?

--- Later in debate ---

[Michael Wheeler]

It will come as no surprise to my hon. Friend that I agree with him. It is important that we keep our focus on the reality of work and the need to provide workers with protections and good-quality employment. The Bill has been brought forward in the context of “Make Work Pay” and the “Next Steps” document, and I look forward to what I am sure will be illuminating comments from the Minister.

[Sarah Gibson]

I thank the hon. Member for Dundee Central for tabling the amendment, which has drawn out a potential loophole that I hope the Government will look at carefully. We so often see legislation introduced with good intentions, and then 90% of businesses—especially smaller businesses—comply with it to the letter, because they think that is the right thing to do, but the larger corporations find a way around it.

Employment Rights Bill (Twelfth sitting)

Michael Wheeler Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Greg Smith]

I am grateful to the hon. Gentleman, although he was possibly milking it with the length of that intervention—[Hon. Members: “Oh!”] It is nearly Christmas.

I accept the hon. Gentleman’s points about some of those very outdated provisions. I really hope that my children do not find a job out there that involves free milk, because they might jump at it a little too quickly. This probing amendment seeks simply to understand a little further where the flexibilities lie, and to get underneath some of the detail around when a variation of contract might be a good thing on both sides, or when things have just changed and there needs to be a variation in order for the jobs to be saved. I would hope that Members on both sides of the Committee would come at this from the perspective of the real world and wanting to save jobs, create more jobs, grow the economy and grow employment.

There may be legitimate reasons for wanting to vary terms and conditions, such as to provide for improved employment practices, or to update and reform outdated working practices—as the hon. Member for Birmingham Northfield referenced—in order to allow for the more effective running of a business or organisation. The amendment seeks to understand the Government’s position should such a situation arise, and to understand why they are legislating to prevent businesses from acting in such a way.

[Michael Wheeler (Worsley and Eccles) (Lab)]

On a point of clarity, is it the purpose of the amendment or an unintended consequence of the drafting that it would completely delete the subsection, rather than adding to it? If the purpose is to completely delete the subsection it is amending, are Opposition Members trying to remove the protections for those going concerns?

[Greg Smith]

The hon. Gentleman asks a perfectly legitimate question. I repeat that this is a probing amendment: we are not going to press it to a vote or try to put it in the Bill. The purpose behind it is to get the evidence base, the justification and some clarity of thought from the Government about why the clause is necessary and proportionate. Sometimes we have to suggest getting rid of something to get a good example or a good justification for going there, doing it and putting it in primary legislation.

The Opposition certainly do not want to see exploitative fire and rehire in any workplace. From talking to businesses, and from the evidence we have heard, we know that there needs to be solid grounding and an evidence base to show that the wording in the Bill is justifiable and does not justify shutting down many businesses that are growing, adapting and changing—hopefully, for the better, so they are more successful. They should be able to keep and grow their staff, rather than go down the redundancy route or other scenarios whereby jobs are lost.

Matthew Percival from the CBI said:

“In the fire and rehire proposals, there is a risk that we might be making it easier to make people redundant than to change contracts”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 7, Q1.]

That is the absolute nub of the matter. It would be nothing short of a total disaster if the unintended consequence of the exact wording of the clause or the Bill perversely incentivises companies to make people redundant, so people lose their jobs and have to go home and have that difficult conversation with their loved ones and say that they need to find a new job, with the devastation that that brings to real people’s lives. I cannot imagine that the Government want that to happen. With this probing amendment, we are seeking to kick the tyres. We want an explanation, or at least to encourage the Minister and the wider Business and Trade team to find a better way that does not have that unintended consequence.

A recurring theme of our debates in recent days, and from the Bill Committee witnesses—other than trade union representatives—is that the measures in the Bill on dismissal and re-engagement will be too restrictive for employers. I gently ask the Minister to reflect on that and think about whether the measures will actually work and will not have unintended consequences, so that people’s jobs are protected and saved. We do not want people to be unintentionally forced down the route of job losses.

[Michael Wheeler]

I agree with the comments of my hon. Friend the Member for Gloucester. I appreciate that this is a probing amendment, but I want to talk to its specifics. It appears to me that there are plenty of consensual mechanisms for achieving most of what the shadow Minister is suggesting about the variation of contracts to reflect working practices. If anything, they are inherently better than anything that is imposed. Quite often, when working practices, organisations and business practices are modernised, communication between those doing the work and the managers and owners leads to a much better outcome.

I suggest that we need to remember that we are talking about fire and rehire, which is inherently quite extreme. The amendment seems to refer to the particulars of normal working practices, looking at updating mechanisms to account for modern technology and suchlike, that are much better handled by the existing consensual mechanisms. While I appreciate that it is a probing amendment, it seems entirely unnecessary and does not necessarily speak to the heart of what the clause is about: ending the extreme practice of fire and rehire.

--- Later in debate ---

[Greg Smith]

Indeed, we know from their declarations of interest that they all are. I hope the Minister takes the question with the good intent with which it is asked. Not everybody is in a trade union and not everybody organises in that way, so how would the mechanics of the measure work in those circumstances?

That leads to the wider question, “Why 20?” Why not 19, 18 or 15? Why not 25? It seems like an arbitrary number. I accept that a number needs to be put down. In some ways, in specifying a number, this clause is more detailed than most in the Bill, and it gives certainty, but I would like to understand why it is 20. It seems like a number picked from thin air. It could negatively impact an organisation if it led the employer to decide, “Well, we’ll just get rid of 19 of them, and we won’t have to comply.” That seems at odds with the other provisions in the Bill, where the Government seem to want to move all rights back to day one, yet they do not seem to want to apply that to organisations where, for whatever reason, 20 people are, sadly, being consulted on being made redundant. I would like clarity on that point.

[Michael Wheeler]

I will keep my contribution relatively short, but I did not want to let the clause pass without warmly welcoming its inclusion in the Bill. In a previous life, I worked to represent shop and retail workers. While P&O and the scandal of fire and rehire entered the collective consciousness, the Woolworths redundancy situation was burned into the consciousness of the workers I represented at that time. That is exactly the loophole that this measure is trying to close. Thousands of workers affected by the Woolworths redundancy missed out on the compensation they deserved as part of the lack of consultation because they worked in individual establishments that were small and fell below the threshold. The interpretation of the law at that point meant they were isolated, divided and not included as part of what was clearly, to everyone—

[Greg Smith]

Perhaps I can test the hon. Gentleman a little bit on that. I remember many happy hours as a child in Woolworths in the town where I grew up. They were fantastic stores, and they are greatly missed. Given where he is coming from, is he content with the number being set at 20? While Woolworths was a substantial business, I can think of smaller businesses with separate sites, retail outlets, pubs, restaurants or whatever that might employ 19 or 15 people.

[Michael Wheeler]

The hon. Gentleman invites to me to say whether I am content. I draw his attention to the fact that the clause removes the single establishment loophole while leaving in place the thresholds that are already part of the law around consultation and the time period. I have not examined and, despite the invitation, I will not speculate on where those thresholds should be, but I warmly welcome the removal of the single establishment loophole, so that where the numbers in a redundancy cross those thresholds—legitimately and apparently to everyone looking at it—there are not legalistic mechanisms for those workers to be left out.

Having warmly welcomed the removal of the loophole, let me reassure the shadow Minister. In a previous, previous life I was in a different job—we have all had many jobs—where trade unions were not recognised. I speak for myself alone when I say that I would love for every worker in this country to have the benefit of trade union representation. I confirm for the shadow Minister that I would love to see that, because I think it has genuine benefits.

[Greg Smith]

Not a surprise.

[Michael Wheeler]

I am sure it is not. I worked in a retail establishment that did not benefit from trade union representation and that went through consultation, not on redundancy but on a variation of contracts, so it is relevant to what we were talking about before. It was actually a relatively smooth and easy process for employee representatives to be appointed and elected from among our number, despite the lack of an existing structure, and to engage with the company in those consultation exercises. While I would love there to be a trade union fighting the corner for every worker, when it is absent it is not a burdensome process to have employee engagement in these processes.

[Justin Madders]

I recognise that the shadow Minister welcomed the clarification I provided. No doubt there will be debate to come, as is often the case with legal issues, but the Government are fairly clear and confident that the clause will not have the unintended consequences we heard raised in evidence.

The shadow Minister asked, “Why 20?” He will pleased to know that that was a product of EU regulation. It is in existing law as part of the Trade Union and Labour Relations (Consolidation) Act 1992, which has been amended many times, so I could not say exactly when it came into force, but—

Employment Rights Bill (Eighth sitting)

Michael Wheeler Excerpts

Committee stage
Thursday 5th December 2024 Public Bill Committees

[Laurence Turner]

I am grateful to the hon. Member for raising that point. It is a shame that our Liberal Democrat colleagues are not able to join us, because we could have an interesting discussion about the consequences of the 1919 police strike, and the promises that Lloyd George made and subsequently broke, which led to the creation of the Police Federation rather than an independent trade union, but I will not detain the Committee on that matter. I will just say that we are operating under the international framework for employment law, which sets out very clearly that there are exemptions to the normal right of freedom of association—let us call it what it is—and that includes industrial action. I do not think that the Bill is the right place to diverge from that international framework.

I had reached the end of my points. As I say, there are good national security reasons for rejecting the amendment.

[Michael Wheeler (Worsley and Eccles) (Lab)]

It is, as ever, a pleasure to serve under your chairmanship, Sir Christopher. As this is my first time speaking today, I draw everyone’s attention to my declaration in the Register of Members’ Financial Interests and my trade union memberships. I want to pick up very slightly on some of the points made by my hon. Friend the Member for Birmingham Northfield.

I fully appreciate that we are talking about a probing amendment. I will not revisit my use of the word “ridiculous” on Tuesday—we stayed in that territory for long enough—but the shadow Minister perhaps underestimates the ability of different sectors to accommodate flexible working and to overcome the challenges that he believes the flexible working measures in the Bill might present. In fact, GCHQ already operates a flexible working policy. On its website it is proud to point out that

“Work-life balance is important to us”

and that its

“flexible working patterns…are designed to help work fit… alongside…personal lives.”

If anything, exclusions for entire services sectors would be a retrograde step in places where flexible working provisions are already working perfectly well.

Moving on to the broader point, as demonstrated, I believe that sectors, businesses and employers can cope with this change. There are adequate measures for reasonableness in the Bill. Access to flexible working is an incredibly important right for workers in a modern, evolving workplace. Measures such as these gear the world of work for the future by enabling people to enter the workforce and to stay in it—something that the shadow Minister has expressed a concern about. Anything like this amendment that would exclude sectors, groups or organisations wholesale feels unnecessary, especially in the light of how the measures would work in practice.

Employment Rights Bill (Fifth sitting)

Michael Wheeler Excerpts

Committee stage
Tuesday 3rd December 2024 Public Bill Committees

[Greg Smith]

I understand the hon. Gentleman’s point about umbrella companies. He almost tempts me to get on to one of my hobby horses, which is IR35, but that would be way out of scope, so I promise not to go there.

My principal point is that there are always unintended consequences. And yes, in some respects, while acknowledging the reality of the contribution that small businesses make to our economy and their ability to meet a heavy regulatory demand, there may have to be other steps around that to prevent the further perverse incentives that the hon. Gentleman mentions. But I come back to my central argument: if we clobber small businesses down, there will be fewer jobs, and small businesses will not be growing, which means that the whole UK economy is not growing. His Government purport to want to see the economy grow. The Budget flew in the face of that, but, if we take as read the desire of all Members to see a growing economy in the United Kingdom, we cannot have that without small business, medium-sized enterprises or, frankly, the self-employed.

Let us not forget that, as we came out of the 2008 crash and through the coalition years, a huge part of economic growth came from the growth of self-employment, which led to those self-employed registering as companies, growing and—many of them—being a huge success story. If the Bill has the unintended consequence of reducing the incentive for entrepreneurs to set up on their own, start a business and employ people, that is a very unhappy place to be.

[Michael Wheeler (Worsley and Eccles) (Lab)]

I refer the Committee to my declaration in the Register of Members’ Financial Interests and my trade union memberships. When the shadow Minister listed the groups upon whom growth depends, he seemed to miss a rather large group—the workers. Does he accept that the purpose of the Bill is to create good employment and valued workforces? As we heard in evidence, good employment and valued workforces lead to increased productivity. Opposition Members are often keen to refer to the cumulative burden. As we are now on their fourth or fifth amendment, all in the same vein—about excluding millions of workers in this country from the benefits of the Bill—does he accept that the cumulative effect is to create a set of wrecking amendments that will remove the benefits of this Bill from millions of people in this country?

[Greg Smith]

The hon. Gentleman makes his point well, but I fundamentally disagree that these are in any way, shape or form wrecking amendments. Where we have common ground and where we do agree is that, of course, no business is anything without its employees—the people who actually do the work. However, where I think he and I may disagree, and I do not want to put words into his mouth, so I invite him to intervene on me again if I get this wrong, is about the person who has risked their capital—who has either borrowed money or risked money to have to start that business— who runs that business, who is the director of that business, being as much a working person as everybody else within it. Businesses only exist because of human beings—before our AI overlords come in and take over everything, way into the future. Of course, workers are at the hub of that, but the people who run the businesses are as much working people as everybody else.

To come back to the central point, there will be no workers, or fewer workers, if there are not people to actually employ them in the first place. If the Bill’s unintended consequences are that SMEs—and perhaps larger businesses, but to be frank, it is more likely to be SMEs—are disincentivised from taking people on, disincentivised from growing their workforce, I do not think anybody will be happy.

[Michael Wheeler]

The shadow Minister invited clarification and an intervention. I do not think that anyone is disputing some of what he says, though we will dispute much. In the context of the Bill, he talks much about, as he put it, the mounting burden, but with little evidence—though he seems to quite like evidence when referencing the RPC. Does he accept, though, that the fundamental principle of the Bill is a rebalancing within the economy between workers and their employers, that nothing in it goes beyond that, and that some rebalancing is actually needed within that relationship for growth across the whole economy?

[Greg Smith]

I understand the hon. Gentleman’s point. Of course, it is no surprise that a Labour Government would seek to bring in such a Bill. We knew it was coming; it was in their manifesto. We will come to the question of whether they really needed to rush this out in 100 days, given the number of Government amendments that we will consider later. It is, by definition, a rebalancing, and I hesitate to say this for perhaps the fourth, fifth or sixth time, but this process is about kicking the tyres.

I welcome our debate in Committee. The point of a Bill Committee is to go through provisions in far more detail than we can on Second Reading in the main Chamber, or even on Report or Third Reading further down the line. Even if Conservative Members would not have gone about making changes in this way, we need to be certain that the Government of the day succeed in their aims. The Labour party has a mandate to govern the country and we want to be a constructive Opposition. Although we might not agree with everything that the Government do—or maybe nothing that they do—it is in the country’s interest that they succeed. Therefore, kicking the tyres on the Bill and ensuring that unintended consequences are ironed out in Committee is a good debate to have and a fundamental purpose behind why we will all will spend our Tuesdays and Thursdays together through to the end of January.

--- Later in debate ---

[Michael Wheeler]

I appreciate that the shadow Minister has said that it is a probing amendment. I wish it was not quite so ridiculous, in all honesty—it is an utter low ball—but I will speak to it and to the clause it seeks to amend.

[Greg Smith]

I know the hon. Gentleman is new to the House, but sometimes one has to be a bit ridiculous to prove a point and to get answers. Does he agree?

[Michael Wheeler]

Well, I agree on my newness, and maybe as I gain more experience, I will encounter more ridiculousness in this place than I already have—in fact, I am sure I will. I wish to speak to the amendment, despite its probing nature. In my view, and I hope the Minister would agree, the clause is designed to promote stability and financial security for those who currently lack it because of the number of hours that are baked into their contracts. To set the bar as low as two hours would run counter to that purpose.

The measure has been widely trailed and debated in the run-up to the election and in this Committee. I highlight a few things that I hope the Minister will speak to with a view to that purpose. I hope that we would all agree that tackling the insecurity that millions of people in our economy face is a worthy aim, and that that is not limited just to those on zero-hours contracts but includes those on low-hours contracts who regularly work more than their set hours.

I spoke of a rebalancing earlier, and that is about fairness and the quality of employment. As part of that, it is only right that, where need is demonstrated, employees are offered—not given; there is still an element of choice—the opportunity to have those hours baked into their contracts, as is set out in the Bill. That would improve their financial security, their work-life balance, the predictability of their hours, and their ability to live their lives, to which their income is incredibly important.

I am looking forward to hearing the Minister roundly reject this amendment, but I also want him to address some other parts of the clause, specifically the inverse of the amendment, the phrase,

“not exceeding a specified number of hours”.

I hope we would want to see this measure apply to as many workers—

[Sir Ashley Fox]

The hon. Gentleman spoke of the need for employees to have stability and security, but would he not agree that the Bill causes great instability and insecurity for many small business owners precisely because it is so vaguely and badly drafted? The Government have submitted 109 amendments of their own. There are two new schedules and large parts of the Bill that have been left to be amended by future regulations. The Minister spoke earlier about the probation period, but we do not know how long that will be. What is a low-hours contract? It has taken the Opposition to say, “How about two?”—a ridiculous number, we admit—to show that there are enormous parts of the Bill that are not properly drafted. Would it not be better for the Government to just take this Bill away and start again?

[Michael Wheeler]

I would not agree, which will not surprise the hon. Member. I gently suggest that the number of Government amendments will possibly provide the clarity that he asks for—they will be baked in, and will provide that clarity. This is part of the process of getting the provisions right for all involved. I would suggest that it reflects exactly the opposite of what the hon. Member suggests.

I return to the point about stability and instability. If the basis of the provision is to have hours regularly worked included in contracts, having that contractual term would provide not only stability for the employee, but predictability and stability for the employer. I am sure we can agree that stability all round is beneficial.

However, I come on to possible unintended consequences. The term,

“not exceeding a specified number of hours”,

could do with some clarity, in order to provide that stability and to ensure that the measure applies to the widest number of people within our workforce, to fulfil the intended aim. There is also the phrase “regularity”. Will the Minister consider how to clarify that term to provide the clarity that we would all welcome? Finally, I come on to the term, “excluded worker”. As I have said, we want to see as many people as possible covered by the Bill, so that they feel the benefits of it. The provisions are measured, for both workers and employers. I would welcome the Minister’s commitment to consider those points, as well as his roundly rejecting the ridiculous premise on which the amendment is based.

[Justin Madders]

I am grateful to the shadow Minister for clarifying that this is a probing amendment, and possibly also that it is a ridiculous amendment, although I am not sure that that is the best way to persuade us to accept it. He will not be surprised to hear that we will not accept it.

An important point has been raised, and my hon. Friend the Member for Worsley and Eccles has asked a number of questions about what the amendment is trying to achieve. As I understand it, the amendment would mean that only workers on zero-hours contracts or arrangements, and those with two hours or fewer guaranteed per week, would be covered by the regulations. It would also remove the power to make regulations setting the maximum number of hours for those low-hours contracts to be in scope of the provisions.

The low-hours concept will be crucial in determining how many workers end up in scope of the right to guaranteed hours. That is partly intended as an anti-avoidance measure, to prevent employers from avoiding the duty to offer guaranteed hours by moving a worker on to a contract guaranteeing a very small number of hours. I think we can all see that, if the shadow Minister’s amendment were accepted, we would soon be talking in the lexicon about two-hours contracts, rather than zero-hours contract, and that would not deal with the questions of stability and security that we are trying to address.

We will consult on what we mean by low hours. We think it is very important to get this point absolutely right, and we understand that pitching it at a level that works for both the business and the worker will be absolutely critical. We are committed to working in partnership.

We are looking to clarify the provision in regulations. We understand that there are arguments about the detail being in the Bill, but the counter-argument is that putting the details in regulations gives us more flexibility to review the provisions as we move along. It is fair to say that we do not expect the number to end up being two hours. I do not think there has been any evidence put forward for that.

--- Later in debate ---

[Greg Smith]

This is the last group of Opposition amendments for a little while. Amendments 143 and 144 would specify the length of the reference period as 18 months. The RPC, which was widely referenced in the first set of amendments, has said that the Government have not justified why they are pursuing—

[Michael Wheeler]

Will the hon. Member give way?

[Greg Smith]

That was quick, but go on.

[Michael Wheeler]

It is a quick intervention: I am just wondering whether the amendment’s reference to 18 months is another example of the ridiculousness that we were talking about.

[Greg Smith]

It is certainly probing. Like earlier amendments, it is intended to spark debate so that we can understand where the Government sit on the issue, what is coming down the line and what businesses can expect in the real world once the Bill receives Royal Assent at some point next year.

The last Conservative Government removed exclusivity clauses in zero-hours contracts, tackling those contracts that were potentially exploitative. The clause that the amendment seeks to amend is based on the flawed assumption that employers will exploit their employees and that all the power in the relationship lies with the employer. There is no doubt that some do, but the Opposition do not hold the presumption that all will. Those that do should be challenged, but the vast majority do not seek to exploit their employees.

The London School of Economics has found that zero-hours contract jobs have 25% more applicants than permanent positions in the same role. That flexibility is clearly sought after by employees. The author of the study said:

“Policymakers should be cautious with how heavily the use of zero-hours contracts is regulated.”

The RPC has asked the Government to clarify the likelihood that the Bill’s provisions on zero-hours contracts will increase unemployment and worklessness, and how far that risk is mitigated by zero-hours contracts remaining potentially available. I would be grateful if the Minister clarified the extent to which they will remain available. What is his view on the impact that the policy will have on workers who might like to work fewer than the guaranteed number of hours a day? Some people may desire that.

We believe the legislation should include the exact length of the reference period. I accept Government Members’ point about the 18-month figure, but as I said to the hon. Member for Worsley and Eccles, it is about triggering a debate, kicking the tyres and getting to a reasonable but considered position on what the reference period should be. The Opposition’s point is that we should know what it is. It is not just politicians in this House and the other place who need to know, but the real businesses, entrepreneurs and drivers of our economy who employ real people. They need to understand what the legislation is going to specify and what the rules are by which they are going to have to play the game.

Employment Rights Bill (Sixth sitting)

Michael Wheeler Excerpts

Committee stage
Tuesday 3rd December 2024 Public Bill Committees

[Sarah Gibson (Chippenham) (LD)]

As I am sure the Minister knows, the Liberal Democrats as a group are convinced that a lot of elements of this Bill go a long way towards strengthening workers’ rights. There is no doubt about that. However, when I see these amendments and listen to the comments of Opposition colleagues, I am constantly concerned about what I am beginning to see as the plight of small and medium-sized businesses that are not being taken into consideration. This amendment alone is hugely complicated to understand. I have visions of contractors and small businesses in the construction industry in my constituency, who quite often are the employer, coming home after a long day’s work to do the admin side of their business and trying to unravel this. I highlight the construction industry because fixed-term contracts for employees are not only common, but incredibly useful. Building projects—like this one, with the works we are doing here—do actually come to a finite conclusion, and a fixed-term contract is therefore appropriate. I express my continuing concerns about this matter and some of the other amendments in connection with small businesses.

[Michael Wheeler (Worsley and Eccles) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I will speak to these Government amendments collectively, because although they are incredibly technical, we must not lose sight of their purpose, which is to promote good employment. If there are loopholes and readily available routes by which employers can avoid the measures laid out in this Bill, we will see good employers undercut and workers not feeling the benefits. I welcome this as part of the Government doing their job to strengthen the legislation by introducing well thought out amendments to close loopholes and ensure that it is as strong as it can be. I commend this and the other amendments as being not simply technical—although they are—but part of what really gives the Bill teeth in achieving its purposes.

[Sir Ashley Fox (Bridgwater) (Con)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I would like the Minister to deal with these points when he concludes, because I am concerned about the effect of an amendment that is as complicated as Government amendment 12 is on the small businesses that make up the bulk of business in my constituency. They will not have the benefit of an employment lawyer, such as the hon. Member for Gloucester, and they will not have an HR department. I ask the Minister to glance at the wording of the amendment and imagine that you do not spend your day job in a solicitor’s office, or a trade union office, or perhaps in the Palace of Westminster. You are wondering whether to employ someone and then you read that

“it is to be presumed, unless the contrary is shown, that it was not reasonable for the worker’s contract to have been entered into as a limited-term contract if the work done by the qualifying worker under the worker’s contract was of the same or a similar nature as the work done under another worker’s contract under which the qualifying worker worked for the employer—

(i) where the period in question is the relevant reference period, during that period;

(ii) where the period in question is the offer period, during that period or the relevant reference period;

(iii) where the period in question is the response period, during that period, the relevant reference period or the offer period.”

There are all sorts of technical legal terms used. The point is that you want this to apply to all small businesses, no matter how small—whether they have one, or two, or three employees. This point applies generally to the Bill. When the assessment of the Bill put the costs at £5 billion, the majority of which would fall on small businesses, I think it had exactly this sort of legal gobbledegook in mind. Very small businesses are going to have to deal with this, and they will probably not be able to understand it.

--- Later in debate ---

[Greg Smith]

I do understand the hon. Lady’s point. Nobody wants to see people turned away as they turn up for work, with their employer saying, “Sorry, no work today.” That is not a position that we want anybody else to find themselves in, but I am trying to make another point.

Let us take the hospitality sector as an example, which has had a pretty rough time since covid. It is one of the sectors—be it pubs, restaurants or attractions—that is struggling the most to recover from the pandemic. There are certainly times when I turn up to a pub in my constituency, perhaps on a Tuesday night, and it is completely empty and has no bookings. That is not necessarily the pub’s fault, but it will be a problem if there is an absolute requirement for the pub still to pay its full staff rota because it was full the previous Tuesday night and needed all those staff. I think this is one of those real-world examples where there has to be a little bit of flexibility; businesses have to be able to say, “Sorry, we’ve got no bookings tonight.” Worse than that, there might be the nightmare scenario that the beer delivery has not arrived and there is not actually any beer to sell.

[Michael Wheeler]

Does the shadow Minister accept that it is not the fault of the worker either? In fact, the employer has more control over the situation, on balance. On his example of planning out work, especially bookings, employers would know that there were no bookings further in advance than on the day—there are comparable examples across other industries—so giving notice of that on the day is completely and utterly unacceptable. The cost, in terms of proportion of income, is disproportionately borne by the worker, not the business, and these measures we are discussing are a proportionate way to rectify the situation.

[Greg Smith]

Fundamentally, I agree that it is not the worker’s fault either—I am absolutely at one with that. I made it very clear that I do not want to see anyone turn up for work only to be turned away and told, “Sorry, no work today.” That is not a great place for anyone to be. I absolutely understand and accept the hardship that that will place on someone who will perhaps not get that day’s wages, but I think there should be greater flexibility in circumstances where it is not the business’s fault either; those situations may be few and far between, but they will happen in hospitality, and they may happen in some manufacturing sectors where supply chain problems have occurred, as we discussed earlier.

If we force businesses into a place where they have to shell out significant amounts of money for no gain—as we discussed earlier, the workers are the ones who produce the services, goods, products or whatever it might be that enables the business to have the money in order to pay people in the first place—and we push them into a place where their low margin is eroded even further by paying for things that are completely outside their control, then those businesses may well go bust.

We are talking about the hospitality sector—and we are seeing pubs close virtually every week. That is a very sad state of affairs, particularly in rural communities, where the pub is often the beating heart of a village, or certainly the social hub. It is not just a place for a pint; pubs do a lot of social good as well. We are seeing pubs close far too frequently for all sorts of reasons, often because of the low margins and other factors that have come in—I will resist the temptation to go too hard on the Budget. There is a cumulative impact, and this measure could well be the straw that brings the whole house down. I want the Minister and Government Members to reflect on where we could bake in other forms of safeguard and flexibility, so that the Government do not put a number of businesses on to that sticky wicket.

Employment Rights Bill (Third sitting)

Michael Wheeler Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[The Chair]

I call Michael Wheeler to ask a very brief question, which should receive a brief answer.

[Michael Wheeler (Worsley and Eccles) (Lab)]

Q Thank you to the panel for your evidence so far.

I will just circle back to guaranteed hours. Although I appreciate that flexibility is of value in the sector, if the hours are there in the business and regularly being worked, would you not agree that that demonstrates there is a need for those hours in the business to be worked, and therefore, in the interests of fairness and financial security for workers, should those hours not be guaranteed for them?

Helen Dickinson: Again, it comes back to how. A lot of people who work flexibly want to vary their hours because they have other commitments, either family commitments or caring commitments. From an employee perspective, they should absolutely have the right to request flexibility, or to be able to have future hours that reflect something that they have over whatever reference period it is, whether it is 12 weeks or longer. If the regulations end up requiring that reference period—and, by definition, requiring employer to offer whatever that period is to the employee, just by process—peaks and troughs around peak trading periods and employees’ other commitments will cause the company to end up in a continual process of changing people’s hourly patterns, all the time and for a lot of people. When a company has multiple locations, and tens of thousands or hundreds of thousands of employees, it could be quite difficult.

I think we are absolutely agreed on the principle. The question is how you implement it, and whether there is a way to implement it that gives the employee the right to request, rather than putting the onus on the company to put in a whole load of process that actually, at the end of the day, might not be what the employee wants.

[The Chair]

Order. I have to bring this session to an end. We have run out of the allotted time, and sadly, there are some Members of the Committee who did not get the opportunity to ask the questions that they wanted to ask. However, I thank the witnesses for the time they have spent with the Committee.

Examination of Witnesses

Joanne Cairns and Liron Velleman gave evidence.

Employment Rights Bill (Fourth sitting)

Michael Wheeler Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Chris Law]

Q Can I press a little bit further on that, Mike? I understand that there should be some room for employers who are under extreme financial stress, but the employers we have looked at so far—British Airways, P&O, British Gas, Douwe Egberts and Tesco—are not small companies. They have deep, deep pockets. They could exploit this loophole in the Bill. I wonder what you think about the language and whether it needs to be tightened or removed completely.

Mike Clancy: We will be going through clause by clause, will we not? We will have to look at where there is potential for employers to exploit these sorts of loopholes. What you have to understand is that often in employment relations, sensible employers read the writing on the wall. The rights of access may or may not come in for some time, but employers will think, “Right, we are moving into an environment where we need to engage with our workforce differently.” Other employers will say, “Look, that sort of behaviour is frowned upon in public policy. We are not going to go near it.” I do not think we should lose sight of the direction that the Bill sets on these matters. Let us be clear about the context. This is a big endeavour, and there will be detail to work through for both employers and trade unions. I think we should set out on this in the way that we mean to go forward. Let us do it co-operatively where we can.

Andy Prendergast: Just following up on fire and rehire, I was involved in resolving the British Gas dispute, where close to 500 members of ours got fired because they would not sign a new contract. At the time, it was roundly condemned across the House. The Prime Minister at the time got up and said that it was dishonourable, and that has very much been our view.

The real concern for us, as Mike says, is that, as trade unions, we sometimes have to make very difficult decisions. Following 2008, I would go into factories to negotiate pay cuts to keep people in work. It was heartbreaking, but we had to do it because it was the right thing to do. Overwhelmingly, we had those conversations not because of fire and rehire, but because, ultimately, we could convince our members that that was the best way of securing their jobs. We did something similar during covid.

The big issue for us is that if you look at British Gas, it is a highly profitable company and it went down a route that was, frankly, disastrous for it as a business and that it is still recovering from. We need to stop that behaviour happening. A contract is a contract. In this country it is almost your word, and if you are willing to break that it asks questions about whether you went into it honourably in the first place.

Some of the points you make are right. We have seen lots of financial engineering. We see inter-company debt. I think there is a concern long term that we may find cases where companies have engineered a financial position that allows them to do something they otherwise would not. That will have to be dealt with on a case-by-case basis. Where we have collective rights, we can still take action on that when we need to. This Bill takes a significant step in the right direction towards a point where the expectation is that contracts are honoured and that companies are prevented from boosting profits at the cost of their workforce.

On the SSP point, as a trade union we are used to negotiating improvements. Occasionally we cannot let perfect get in the way of good. I am pleased that we are talking about an improvement on SSP. Does it go far enough? I do not believe it does. I think that will have to be looked at long term. There are huge areas, such as care, where it is catastrophic that people do not feel that they can take time off, and, as I said before, that has a real impact, but at the moment I am happy that, for once, we are talking about an improvement to this. Personally, I am always of the view that we bank it and move forward.

[Michael Wheeler (Worsley and Eccles) (Lab)]

Q This is a question particularly for Mr Prendergast. What do you think will be the impact of reinstating the school support staff negotiating body—a measure that your union has long called for—on your members in schools?

Andy Prendergast: When you look at the school support staff negotiating body, this is something that has been on the agenda for about the last 25 years. We have found overwhelmingly in schools that teachers have national bargaining and very clear terms and conditions that are vigorously enforced, but unfortunately for the support staff, it is almost like the soft underbelly. So often when schools enter financial difficulties, heads—when you read the school returns, they have often given themselves quite large pay rises—end up cutting hours and pay from some of the lower-paid people.

Over the last quarter of a century, we have seen a transformation in what schools are like. Most of us remember schools having one teacher and that was it. Now, we see increasingly more pupils with special educational needs go into mainstream education, and they need that additional support. People from vulnerable backgrounds get the support of teaching assistants, and we have seen educational outcomes really improve off the back of that.

For us, particularly as we see more and more academisation and more and more fragmentation, we often find that there is an undercut-and-poach approach from different schools, which ultimately means that one benefits at the expense of another. It is not helpful when we get into that situation. The school support staff negotiating body allows for minimum standards and the extra professionalisation of roles, which really have changed over the last 25 years. Originally, there was a little bit of a stereotype that teaching assistants were there to clean paint pots and tidy up. Now, they do very detailed work on things like phonics and supporting pupils with special educational needs and disabilities, and they really help to deliver classes. I think it is time that professionalism was recognised and rewarded.

[Nick Timothy (West Suffolk) (Con)]

Q I think that you, like all the other witnesses from the trade unions, were quite pleased with the Bill, and understandably so. I know you said that you felt shut out over the 14 years of government until the general election. I want to ask about your engagement with the Department and with Ministers, and indeed with No. 10. How many meetings have your organisations had with officials, special advisers and Ministers, and were you involved in any of the drafting of the clauses of the Bill? Did you see any in advance before publication, and that kind of thing?

Andy Prendergast: Personally, I was involved in two meetings, and they were tripartite ones. They were quite robust exchanges where we had Ministers, civil servants, people from the employers’ associations and large employers, and also people from trade unions. I think those meetings were really quite helpful. We were raising points that sometimes they would argue with or agree with, and they raised points that sometimes made us look at things differently.

In the wider sense of the union, we have had quite a lot of engagement, but I would expect a union to be engaged over a Bill that has a huge amount of clauses about trade unions. In terms of whether we saw any of it in advance, no. We were very much holding our breath when the Bill came through. Part of my job is to tell people things and make cases, and to be told that they have heard, and then something comes out that is the complete antithesis of everything that we talked about.

As I said, we did not see the Bill in advance. When it turned up, there were some things we liked an awful lot. Some things, as we said beforehand, did not go far enough. The majority of engagement was tripartite, and I think both ourselves and the business organisations that have taken part in that process have helped understand it, and we have got to something we can all live with. That is certainly our impression.

Mike Clancy: I would just emphasise that Prospect is not affiliated with a political party, so any comments I make are based on evidence of the past and the present. We have had proportionate engagement. We have not kept a count or a register in that regard. Frankly, probably trade unions and business would want more and more time on this, and I am sure that will be a challenge going forward.

What I think was most positive, and something I had not seen in my career before, was a tripartite meeting with a range of very senior business representatives, trade unions and civic society with officials, the Business Secretary and the Deputy Prime Minister back in August. That is important because it demonstrates that we can get in a room, we can talk to each other and we can resolve problems. That, for me, is the absolute core of this Bill and the “Next Steps to Make Work Pay” agenda. I hope that we can do more of that. I have talked a lot—I have had the privilege of doing this job for a long time—about how we have lost convening spaces in the economy in the past period, so we may be shouting over fences or making our cases separately to Government. Government is difficult, and it is about problem solving. The more that business, trade unions and civic society can come together and say, “Look, we’ve got our differences at the edges, but we can do this together. This is how we would fashion an outcome within the public policy you set,” the better. We will always want more, but to be fair, with their strong pace and intensity, the Government and their supporting officials have done an admirable job in convening us.

--- Later in debate ---

[Nick Timothy]

Q Indeed. With not just the Bill, but the increase in employer’s national insurance contributions and things like the equalisation of the national living wage for young people—you also mentioned energy prices, Mr Johnson, which are a particular concern of mine—you sound very worried about the future of innovation, investment and ultimately jobs in this country. You have a platform today to send a message to the Prime Minister and all the Ministers who are involved in this legislation. What would that message be?

Luke Johnson: I think there is a complacency about our current prosperity. There is this belief that jobs will always appear, that businesses will always invest and that living standards will naturally rise. It sometimes feels as if Britain is a nation running on fumes at the moment. We have large amounts of debt, certainly at Government levels. We have public spending projected to take, I think, 45% of GDP—a very high level compared with 10 years ago—and that crowds out the private sector. Interest rates, especially if you have to borrow from the bank, are pretty punitive.

As for the idea that we can continue to occupy the role in the world that we used to occupy decades ago, it is a dramatically more competitive place. There are dozens and dozens more countries where money can be invested, factories can be sited and jobs can be created. Many of them are much lower-cost than we are. They might argue that they have a hungrier workforce, or whatever it may be. No country has ever taxed and regulated its way to a higher standard of living. It feels as if that is what this Government are about. They need to get real about how prosperous economies are actually created.

Michael Lorimer: If I were speaking to him, I would say, “Listen well to those who matter most.” To go back to the White Paper, you simply cannot create jobs without the private sector on board. You can listen to all sorts of people who will give you incredibly important stakeholder advice, but if you want to create jobs and grow the economy, the business community has to be on board. If we want to create prosperity, the private sector is where it is going to happen. I would say, “Listen well to those who matter most.”

Secondly, I would say, “Take your time and consult widely on this.” I feel that at the minute the consultation is not wide enough. We are here today: there are two of us speaking, broadly on the same message. Take time and do not rush it through for the sake of meeting a timescale. Take time and speak to business. Go out to the country and speak to small and medium-sized businesses and employer groups.

A lot of this stuff is not controversial. It is tick-box and—to go back to the first question—it is reinforcing a lot of stuff we do in the business anyway. We have 600 employees; at the minute I think we have three people in total on long-term sick, so we do not have a lot of problems. We have an engaged workforce and we are delighted to pay people well, at above the national living wage. All that stuff is about us trying not only to help our people to prosper, but to help our customers and the Banbury community to prosper. All this feels quite counterproductive and could have a lot of unforeseen consequences.

[Michael Wheeler]

Q As the Minister says, we have heard from businesses and their representative groups, which have said that good employers have nothing to fear from the measures in the Bill; in fact, they welcome the level playing field to prevent undercutting. Given that the purpose of the Bill is to promote good-quality employment, what are the specific measures in it that you think do not contribute to that aim?

Luke Johnson: It has already been raised, but if you introduce lots of rights like paternity rights and flexible working rights from day one, you risk having more problems, and that will be a cost. For example, there is a new obligation to protect employees from harassment. That sounds wonderful, but if you are in the licensed trade, as I am, that means that a single remark from a single customer could lead to a harassment claim for which you are responsible. How on earth are we to police that?

I do not know whether you are at all familiar with the state of the hospitality trade, but it is pretty dismal. We had two years where we were barely allowed to open; we have had unprecedented energy costs; we have higher rates; we obviously have all the costs for NIC and so forth from the Budget; and we have at best flat, if not declining, sales. I fear that hundreds more—if not thousands more—hospitality businesses will shut next year for good. That is obviously not the fault of this legislation, but it is petrol on the flames.

I suspect that a lot of the organisations you are hearing from are very large corporates with huge HR departments. In a way, they want to keep out new, young and innovative competition, because that is how big companies often behave. Building walls of regulation suits them, but that is not how you get a growing, vibrant and innovative economy. You get that through lots of smaller, younger businesses growing, coming up with new ideas and challenging the incumbents.

[Michael Wheeler]

Q Michael, let me ask you the same question: given that the purpose of the Bill is to promote good-quality employment, what are the specific measures in it that you think do not contribute to that aim?

Michael Lorimer: It goes back to what Luke said about a lot of this day one stuff. I do not want to paint a picture that we do not do a lot of this stuff already, because we work on the basis that if you recruit well and you train and develop well, you will not have as many problems down the line. But it is easy for us because we have an HR department and legal advice, so if we do hit the buffers we can deal with it. For smaller businesses—the entrepreneurial businesses that Luke mentioned—the perception, which of course is always stronger than the reality, is that it will create a lot of fear and concern.

I was in a shop recently and it took a long time for me to pay for a pair of Wellington boots. I said, “Are you busy?” He said, “No, but so-and-so left and we are not replacing him, because we’re very fearful. We’re a small business with two or three employees, and we’re anxious about what’s coming down the line.” You just need to be very mindful. That is where wide consultation comes in: you need to speak to people and see where the sore points are going to be.

[The Chair]

I am afraid that that brings us to the end of this panel, because we are not allowed to go beyond 3.40 pm. Thank you both very much for sharing with us your knowledge and experience, based on your work as employers.

Examination of Witnesses

John Kirkpatrick and Margaret Beels OBE gave evidence.

--- Later in debate ---

[Uma Kumaran]

Q We heard from two business voices today that were not perhaps entirely reflective of the rest of our views. I have more than 12,500 businesses in my constituency of Stratford and Bow, of which more than 5,500 are small and medium-sized businesses. I have met lots of them over the course of the last year. I have certainly not heard similar views. We also heard from legal experts, who said that the Bill brings us closer to OECD norms than perhaps was said. Can you tell us how businesses will benefit from the Bill?

Justin Madders: There is generally an acceptance, both in the economic analysis we have heard from some of the witnesses today and from businesses themselves, that getting a motivated, engaged and retained workforce is good for productivity and the business overall. Having a more engaged and well-remunerated workforce has been shown to actually boost profits. The fact that the OECD was referred to by the Resolution Foundation as a body that believes that greater workers’ rights actually improve the economic outcome of the country is a really important factor that we need to emphasise.

[Michael Wheeler]

Q Picking up from the last question, we have heard how the Bill will benefit employers; what other groups of people in the country do you think it will benefit?

Justin Madders: There are an awful lot of people who will benefit if we get this right. I am talking about people who do not know from one week to the next how many hours they will have or whether they will be paid enough to put food on the table. Our reforms on zero-hours contracts will really help with that. People who can be arbitrarily sacked for no reason for the first two years of their employment—about 9 million people—will benefit from that. The 1.6 million people in the social care sector will benefit. There are 900,000 people a year who will benefit from bereavement leave entitlements. Overall, as ACAS has suggested, the cost of disputes to the economy can be up to £30 billion a year. Just imagine what a difference it would make if we could shave a fraction off that. I think that the Bill is setting a new culture in our country about how we do workplace relations. It is putting the value of the worker/employee relationship with businesses at the heart of everything we do.

Employment Rights Bill (First sitting)

Michael Wheeler Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[The Chair]

Thank you. It looks like we have a host of interests.

[Michael Wheeler (Worsley and Eccles) (Lab)]

I also refer to my declaration in the Register of Members’ Financial Interests, and my membership of the Union of Shop, Distributive and Allied Workers and GMB.

[Anneliese Midgley (Knowsley) (Lab)]

I also refer to my declaration of interests. I am member of Unite and GMB.

--- Later in debate ---

[Steve Darling]

Q In my constituency, there are a lot of small and medium-sized businesses. Will the two witnesses be kind enough to share whether they have seen any sectors that are particularly hard hit by the proposals, or any ameliorations to take account of that?

David Hale: That is a slightly difficult question. You could think of Torbay and pick out hospitality, which might well have particular issues with the proposal. But you could also pick out larger businesses that recruit people when they are young and allow them to gain worthwhile skills in hospitality; they will miss out from the proposal. So it is a difficult question.

It is easier to identify the workers, or potential workers, who are most likely to miss out—that is, people who will present as a risk in a recruitment scenario. Certain businesses are more likely to recruit people who will present as a risk in a recruitment scenario. Such businesses tend to be smaller and will probably—more than usual, if not overwhelmingly—include sectors like hospitality.

The other businesses that will struggle are those that are mainly paid by the Government—the Government set their prices, in effect—such as social care and childcare. Those businesses will struggle because other businesses can put up costs, but they can only put up costs if the Government and Parliament agree to put up how much they pay and, in particular, the way they pay it—the way in which social care tariffs work very much encourages a zero-hours model. As a consequence, that would probably have to be changed to make the proposal work. But this is across the board for recruiters—there are different impacts for different businesses.

Dom Hallas: Speaking as a tech start-up and scale-up ecosystem organisation, in practice this proposal does not disproportionately affect any individual part of the ecosystem. Broadly speaking, it has the same impact.

[Michael Wheeler]

Q So far, we have heard an awful lot about flexibility and risk, from you and from previous panels. Would the panel accept that, currently, flexibility is too far in favour of the employer, that the risk is borne by the employee and that this Bill seeks to rebalance that? In which areas do you believe that the measures in the Bill do not work towards that?

Dom Hallas: I think that cuts to the question that Steve asked, which was about the different sectors and impacts. I can only speak for the tech start-ups and scale-ups that we work with. In practice, as I said, you have a very highly paid and mostly highly skilled sector, where the benefits and rights afforded to employees way outweigh any current statutory requirements. It is a highly competitive labour market, but that comes with the trade-off of flexibility. These businesses scale and they fail very frequently; that is part of the nature of the business. I think that, in truth, both employers and employees go into that relationship in our particular space with their eyes pretty open to that. So in our particular part of the world, I would challenge that assertion a little bit.

What I would say more broadly though—I think this is important and cuts to an area where we think the Bill could be improved for our space from both an employer perspective and an employee perspective—is that one area where we see potential further progress is banning non-compete agreements. In California, where really successful technology ecosystems have been built in silicon valley, one of the cornerstones of that has been that there are no non-compete agreements allowed in law. That offers more flexibility from a labour market perspective in many cases, but it also benefits employees significantly, because that flexibility comes to their benefit as well.

From our point of view, employers are, frankly, scrambling like hell to try and find the employees to fill these tech jobs, and the employees are very highly paid. If those businesses fail, or their needs change, that is, in our view, part of the trade-off with those kinds of businesses. I appreciate that that might not be the case across every sector, but providing that flexibility is a core part of that trade-off.

David Hale: Typically, flexibility is a demand from employees rather than a demand from employers. Most employers would love the same people to turn up each week for the same shift; most employees would like to be able to work their shifts around their day-to-day lives. Most workplaces come to an accommodation on that, with things like shift-swapping.

What I am not clear on is where there is gain. Take zero hours and the scenario where this Bill ends up meaning that somebody who has worked the same hours for 12 weeks in a row is offered a contract. Somebody who an employer has employed for the same hours for 12 weeks in a row is likely to be either somebody they would like to give a contract to or somebody who has worked in a seasonal role. Those are the two scenarios. That employee is unlikely to be the employee who wants more hours or regular hours, because the employer is already giving them that. So there is not really a gain that is very obvious. What there is, is a lack of flexibility, because the response to the legal risk will be for employers to say to employees, “Actually, I need to keep an eye on precisely how many hours you are working each week for a reference period. So, no, you are not allowed to swap shifts.” That is a damage to flexibility, with no obvious gain for people who have been working 12 weeks in a row, who, frankly, the employer probably wants to agree a permanent contract for, but does not.

[Laurence Turner]

Q We heard quite a balanced account from the previous panel; there were measures in the Bill that they welcomed, alongside measures that they wanted to see changes to. Mr Hallas, I notice that you have said that gaps in employment law are becoming an increasing challenge. So I want to ask the same question to both of you: are there individual measures in the Bill that you welcome and, if so, what are they?

Dom Hallas: When I talked about employment law in that context, it was as part of a broader range of work we do with what we call platform businesses. They might be traditionally known as gig economy platforms, sharing economy platforms or online marketplaces that have two sides—someone who wants to sell something and someone wants to buy something, whether that is services or goods. The gaps in law that exist there are an increasing problem, because many of these platforms want to be able to offer support to the people who leverage them, but they are not able to do so because of the restrictive nature of employment law.

The challenge at the moment is that the Bill does not necessarily address that. There is clearly a way of potentially having further conversations on that. Obviously, some of that is being discussed down the line, including whether there is a single status for workers. We are not sure whether that is exactly the right approach, but there is a conversation to be had with Government about what is the right approach.

In the meantime, what we have is a structure built by court case, which I do not think is helpful for anyone concerned. It is frustrating for a number of unions and workers’ rights organisations that have been campaigning on this issue, but also for a wide variety of platforms—they are not the very biggest ones that are taking things all the way to court. They would prefer some clarity so that they could potentially offer additional benefits to people who leverage their platforms. That is the first thing to say.

A significant portion of the Bill is made up of things that we either have no view on or that, broadly speaking, would be fine. The reality is that I am not going to sit here and say that it is going to be catastrophic for the tech start-up community. In truth, it is not going to be.

David Hale: There are steps in the Bill on strengthening paternity and maternity protection, and that is one of the reasons why I talk about splitting the Bill up. Those seem like good things that probably have a positive impact on the workforce as a whole. As I said, because of the overwhelm, we are still going through the detail, but those seem like good measures. Would it not be better to focus on good measures, and things where the risks, costs and trade-offs are understood, and to make a decision to proceed positively with those?

Compared to the last speakers, we are less likely to have a particular view on the trade union aspects of the legislation. On the trade union aspects, it is fairly well understood what the measures are and what their impact will be—that is decision-ready. The bits that are not decision-ready are the proposals around unfair dismissal and zero-hours contracts. The bit that could be decision-ready but is not is probably around SSP and the question of a rebate.

--- Later in debate ---

[Nick Timothy (West Suffolk) (Con)]

Q Employment standards are obviously important and can contribute to higher productivity, but also, if you guarantee and legislate for certain standards, there will be trade-offs, because that brings cost and opportunity costs through lost time. Real improvements to productivity come from things like investment in tech and training.

May we explore the trade-offs a little? With this kind of legal framework, to what extent will managers be able to focus properly on the core purpose of their businesses, as opposed to compliance with the law? To what extent will managers be able to invest properly in training and new technologies to aid productivity, rather than have the costs set out in the impact assessment?

Ben Willmott: That is a really important point. I alluded to it earlier. We know that one of the things that will drive productivity will be looking at how businesses can identify and address skills gaps, which will require thinking about how we train and develop our staff and managers. We know that responsible technology adoption will, to a large degree, depend on the people element—things like job design, or making sure that people are trained and have the right skills to use technology, and that we are consulting employees in advance so that their views help shape how the technology is implemented.

Businesses only have so much bandwidth, so I think that there is a real challenge there, particularly for our members, who are on the frontline of trying to ensure compliance. At the same time, the business will be asking them to help improve workplace productivity through those other activities. That needs to be thought about when we think about how regulation interacts with other factors that might support workplace productivity.

Carly Cannings: You are right—there is an inevitable trade-off. Even employers who are now broadly compliant or doing good things will have some costs associated with bringing in changes to policies that reflect the actual detail of the Bill, for example. They might be broadly doing something good in that space, but it might not quite align with the provisions of the Bill. It is important to make the point that it is going to have an impact on employers, even those that are doing good things in that space already. But the way to offset that is by phasing the changes through—not dumping them all on employers all in one go, but helping them to navigate the changes. This has already been alluded to, but it is making sure that they have that support through the implementation phase.

Cathryn Moses-Stone: I am pretty much in agreement with Carly. Obviously, there will be an initial trade-off, and investment will be required, but I guess our point is that it is for longer-term gain. Once we have got those happier and more supported managers, and therefore workplaces, these things will become elements that save the business money in the long run. Understanding that broader piece is important, and making sure that the process is there in order to upskill and train people in the right ways. It will be about a clear understanding of, “Will this agency be there to support them in the right ways?”, rather than just being a place to go as a last resort, assuming a slap on the wrist and ill intent. What is the support package alongside this to manage some of those trade-offs?

[Michael Wheeler]

Q I want to drill down into something Ben talked about earlier: how can the Bill best meet its aims while supporting smaller businesses that might not have dedicated HR support? Carly, the Happy Business School describes itself as being

“on a mission to help organisations build people-centric workplace cultures, where happy people can thrive.”

Which measures in the Bill will be most transformative and help you in that mission?

Carly Cannings: Not to labour the point further, but this is about setting minimum standards, and creating happy, thriving workplace cultures is far broader than employment legislation. On the stuff around flexibility, some of which has already come in through previous legislation, a common theme with organisations I work with is that having good, flexible working policies generally goes down very well with employers. As with everything, there is a balance to be struck, but some of the firming up of the flexibility rights is good. But as I said, lots of the businesses I work with are already doing good things in that space. It is more about bringing up the standards for the others. This is just a small part in that bigger picture, but a move in the right direction. I suppose it is raising the profile of those rights and broadening them.

[Alison Hume]

Q Carly, you have experience in supporting businesses, including SMEs, to transform their processes and culture to become happy workplaces. How do you see the measures in the Bill making happier workplaces for people with disabilities and health conditions?

Carly Cannings: That is a good point. Arguably, from my reading of the Bill, there is not a lot of specific focus on those rights. It is about standards across the board. There are already some protections, particularly unfair dismissal rules. Even though the qualifying period is likely to change, there are still the protected characteristic rights—the day one rights that already exist.

I have to say that, from my reading, the Bill does not scream out that there is lots in there that will help specifically those with disabilities and long-term health conditions. Flexible working is definitely part of that picture, but the big change was making it a day one right, which has already been done. The legislation is just tightening that up further. Being able to have flexibility is a big issue for people in terms of accessing work, so that is probably the biggest one. But as I say, a lot of that work has been done in making it a day one right.

Employment Rights Bill (Second sitting)

Michael Wheeler Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[The Minister for Equalities (Dame Nia Griffith)]

I refer to my entry in the Register of Members’ Financial Interests and my membership of USDAW, the Union of Shop, Distributive and Allied Workers.

[Michael Wheeler (Worsley and Eccles) (Lab)]

I refer to my declaration in the Register of Members’ Financial Interests and my membership of the GMB and USDAW.

[Anneliese Midgley (Knowsley) (Lab)]

I refer to my declaration of interests and my membership of Unite and the GMB.

--- Later in debate ---

[Steve Darling]

Q My second question is to you, Neil, although I do not know whether you will be able to answer it—I listen with interest. How could the legislation impact on employment opportunities for individuals who have a disability, whether that is a sensory, physical or learning disability?

Neil Carberry: I regret that we are not at the end of the session, because it would have been lovely to meet Jennie.

Let me reflect on the REC’s experience. Over the past two years, we have placed 3,200 people into work from long-term unemployment through the Government’s restart scheme, and many of those people have faced barriers associated with disability. Allen reflected earlier on the flexibility offered by hospitality. Agency work also gives us a chance to do things a bit differently; it is not nine-to-five in the office. Access to Work is obviously an excellent scheme, but it only goes so far.

I will give you an example from Birmingham, where we have placed a single father into work. His challenge was not his own disability; he has a severely disabled child. The school to which one child goes is on one side of the city and the mainstream school the other child goes to is on the other side of the city, so he cannot do a nine-to-five. We have been able to place him into work on a flexible contract—when he can work, on a zero-hours contract. That is creating some opportunity.

What is really important in the whole Bill is to meet the workforce where they are, and they are somewhere different from where they were 10 or 15 years ago. This need for flexibility is how people manage. Let me round off with my favourite example. We have a member which fills Christmas shifts for John Lewis up at Magna Park in Milton Keynes. That is 3,000 jobs every day between August and Christmas, making sure that you get your Christmas presents. Ten years ago, they needed 3,500 candidates to fill those jobs because people got sick, had a week off, and obviously did not work seven days a week. Now they need 12,000 candidates, because people have greater choice: they are sitting at home, signed up to five or six of my members, and they are taking the shifts they want. For instance—this is an example that we have used in our own “temp work works” campaign—we have a temp worker who is managing a chronic illness, and they are working in the ways that they can work. If we think about the Government’s agenda today, I think embracing flexible work and agency work on that front, as an enabler for people, is really important.

[Michael Wheeler]

Q This question is primarily for Allen and UKHospitality. How big of a challenge is retention in the hospitality sector? Do you agree with the Nationwide Caterers Association that one benefit of the measures in the Bill around guaranteed hours will be reduced staff turnover?

Allen Simpson: Turnover is higher in hospitality than in many other sectors. Part of that is what you might call non-regretted turnover—that is, people who are in hospitality for a period and move on to their wider career, people who were students, or people with caring responsibilities. There are also people who move on for other reasons.

For people who want to be on a fixed-hours contract and are currently on a flexible contract, I absolutely agree that the ability to move from one to the other should help with retention—that seems absolutely true, yes. Equally, there are other elements of the Bill that provide a really suitable balance towards the worker and that will have exactly the same effect. The question is balancing that real value, which is absolutely there, against the unintended consequences of, as Neil has indicated, creating a hurdle rate, which means that it is hard to bring people into the workforce.

We saw, I think today, that there are 2.8 million people in the UK who are unemployed for health reasons. This is a sector able to bring those people in, and we need to make sure that we are both retaining and giving opportunities to people already in the sector and providing access to the sector for those 2.8 million people.

[The Chair]

Before I call Nick Timothy, we do not have long left now, and other Members are indicating that they want to speak. Could questions be quick and answers be slightly shorter, too?