Employment Rights Bill (Twentieth sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 14th January 2025 Public Bill Committees

[Steve Darling]

I welcome the Minister’s reassurances and I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 12

Substitution Clauses

“(1) Any agreement, whether a contract or otherwise, between—

(a) an employer or a contractor of services, and

(b) an employee, worker or dependent contractor

must not include provision for the employee, worker or dependent contractor to appoint a substitute to supply services or undertake work on their behalf.

(2) For the purposes of subsection (1)(a), “contractor of services” means an organisation that—

(a) enters into an agreement, whether a contract or otherwise, with a supplier or dependent contractor to supply services,

(b) does not require the supplier or dependent contractor to supply services, and

(c) pays the supplier or dependent contractor according to tasks performed rather than hours of work.

(3) For the purposes of subsection (1)(b), "dependent contractor" means an individual who—

(a) is appointed to perform work or services for an employer or contractor of services,

(b) is paid according to tasks performed rather than hours of work,

(c) depends partially or primarily on the employer or contractor of services for employment and income,

(d) is not required to perform services for the employer or contractor of services, and

(e) is not specified as an employee or worker within a statement of employment particulars or a contract of employment.”—(Nick Timothy.)

This new clause would prohibit the use of “substitution clauses”, which allow companies to permit their suppliers – including some delivery couriers – to appoint a substitute to supply services on their behalf.

Brought up, and read the First time.

[Nick Timothy (West Suffolk) (Con)]

I beg to move, That the clause be read a Second time.

[The Chair]

With this it will be convenient to consider amendment 111, in clause 118, page 104, line 32, at end insert—

“(aa) section [Substitution clauses];”

This is a consequential amendment to NC12, to ensure its implementation.

[Nick Timothy]

Despite the differences of opinion expressed during these weeks in Committee, we all believe that the rights of workers are essential. In that spirit, I hope that Members across the political divide can see the merit in what I am proposing today.

The labour abuse that the new clause seeks to address is the use of substitution clauses to flout labour laws and fuel the employment of illegal workers. Transparency is essential to guarantee fairness and justice in the labour market, and the unlawful labour of undocumented migrants and others who might be paid less than the minimum wage or be given no legal protections is obviously not good for the workers themselves, for our society, for taxpayers, or for anyone who wants a law-abiding society.

It is my understanding that Ministers will be consulting on employment status, and that they are considering moving to a two-part legal framework that identifies people who are genuinely self-employed as part of their work in the gig economy. That is obviously worth doing, but the new clause addresses a narrower issue that is clearly causing significant abuse and exploitation right now. I want us to take the opportunity to act swiftly and decisively.

There are 4.7 million gig economy workers in the UK, including 120,000 official riders—and many more non-official riders—at Uber Eats and Deliveroo, two of the largest delivery companies in the country. For years now we have heard stories of the rampant abuse and fraud committed under the auspices of these companies. In late 2018 to early 2019, there were 14,000 fraudulent Uber car journeys, according to Transport for London. In addition to Uber and Deliveroo, Amazon and Just Eat have been caught up in accusations of related labour market abuses. Some of these examples have related to the legal loopholes created by substitution clauses.

With its substitution clauses, Amazon tells couriers that it is their

“responsibility to pay your substitute…at any rate you agree with them”,

and

“you must ensure that any substitute…has the right to work in the UK”.

It is a dereliction of duty on the part of these big employers to pass the responsibility for compliance with criminal and right-to-work checks on to their workers. They clearly have an interest in maintaining the status quo where undocumented migrants are taking the lowest fees in the delivery apps. Data from the Rodeo app shows the impact of this abuse on riders’ order fees. Just Eat riders saw their fees drop by 14.4%, from £6.53 in 2021 to £5.59 in 2023. There was a 3.4% drop for Uber Eats order fees during the same period, and Deliveroo has blocked its order fee data from being published. Although those numbers are not adjusted for inflation, it is clear to see how pay and conditions have worsened for riders. By undercutting domestic workers and exploiting those with no legal right to be here, companies are privatising profits and socialising costs. Promises from the companies to introduce tougher security checks have not made this problem go away, and nobody should be above the law.

Action is sometimes taken by the authorities, but progress has been too slow. In 2021, the Supreme Court ruled that Uber drivers are employees and entitled to statutory rights. As a result, VAT was added to Uber journeys that year, but Uber accounts are still being used for journeys by unauthorised drivers, despite a temporary licence removal in London. In 2023, the Supreme Court ruled that Deliveroo drivers are independent freelancers, not employees entitled to certain labour rights. My argument is that we cannot wait for judges to act; it is our job as parliamentarians to legislate when there are clear abuses of power and clear social problems caused by behaviour that the law currently allows.

The evidence of a serious crisis in our labour market is there and growing. The Home Office found that two in five delivery riders stopped during random checks in April 2023 were working illegally. That same month, 60 riders at Uber Eats, Deliveroo and Just Eat were arrested in London for immigration offences, including working illegally and holding false documentation. Insurance companies have also encountered problems with unauthorised riders involved in motor and personal injury cases. This is happening because undocumented migrants are renting rider accounts for between £70 and £100 per week. In some instances profiles have been bought for fees as high as £5,000. The i Paper found that over 100,000 people were in Facebook groups in which identities have been traded over the past three years. One group gained around 28,000 members in less than 18 months. This is clearly a significant problem.

There is plenty of evidence that this is acting as a magnet for illegal migrants, and obviously it has an incredibly negative effect on the illegal migrants themselves. The Observer has reported that 30 migrants, mostly from Brazil, had been working for Uber Eats and Deliveroo while living in caravans in central Bristol. Working for less than the minimum wage, they were unable to rent a proper home. The Home Office raided the encampment in October. The undocumented migrants who find themselves in these situations are being exploited for profit by some of the country’s biggest and richest companies.

People working legally have reported problems to the police and the Home Office, but this has helped to fuel tensions as riders compete for orders. It sometimes even leads to violent clashes between those working legally and those working illegally in places such as Brighton and London, including physical beatings and damage to some riders’ bikes. It is shameful that riders who are working legally and following the rules are being intimidated for reporting on illegal working. They should not be punished for helping to tackle a problem that Parliament itself has been negligent in failing to address.

A spokesman for the App Drivers & Couriers Union—we like to listen to unions in this Committee—has said publicly

“there is this loophole that allows some bad people to come through. They are not vetted so they could do anything.”

For example, undocumented workers have been found to commit sexual harassment and violence against women, but they cannot be tracked by the authorities because they have been using other riders’ accounts. Riders are getting away with very serious crimes. We have been aware of this problem for a number of years now, and it has been growing.

In May 2024, it was reported that a delivery driver forced his way into a young woman’s home where he sexually assaulted her. Last June, ITV reported on a woman being sexually assaulted by a Deliveroo rider who lured her out of her home by claiming to be lost. ITV has found further examples of inappropriate texting, verbal abuse, indecent exposure and even rape involving Uber Eats and Deliveroo drivers. A freedom of information request discovered that, between 2020 and 2023, 12 cases of sexual harassment in the west midlands and seven cases of indecent exposure in Devon and Cornwall involved delivery riders. Sadly, most of the forces did not record this data, so they were unable to give the researchers a national picture. I appreciate that the new clause will not solve the problem completely, but it can surely act as an important part of the solution in helping the police to catch criminals by creating a documentary chain for them to investigate and by stopping these criminals from hiding behind anonymity.

I will now talk about the practicalities of enacting the new clause, which proposes the abolition of substitution clauses from workers’ contracts outright. Amazon, Uber, Deliveroo and the rest would have to do their due diligence just like any other company, and ensure that all their riders are who they say they are and have the right to work in this country. Introducing such a change would reduce labour abuse, protect our communities, and deliver a fairer system. It also fits within the internal logic of the Bill.

--- Later in debate ---

[Nick Timothy]

I thank the Minister for his constructive reply. If he is willing to have further conversations with me about what solutions we might be able to bring to bear on this problem, I will be happy to withdraw the new clause now. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 13

Rates of statutory maternity pay, etc

“(1) In regulation 6 of the Statutory Maternity Pay (General) Regulations 1986 (prescribed rate of statutory maternity pay) for ‘£184.03’ substitute ‘£368.06’.

(2) In the Statutory Paternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations 2002—

(a) in regulation 2(a) (weekly rate of payment of statutory paternity pay) for ‘£184.03’ substitute ‘£368.06’; and

(b) in regulation 3(a) (weekly rate of payment of statutory adoption pay) for ‘£184.03’ substitute ‘£368.06’.

(3) In regulation 40(1)(a) of the Statutory Shared Parental Pay (General) Regulations 2014 (weekly rate of payment of statutory shared parental pay) for ‘£184.03’ substitute ‘£368.06’.

(4) In regulation 20(1)(a) of the Statutory Parental Bereavement Pay (General) Regulations 2020 (weekly rate of payment) for ‘£184.03’ substitute ‘£368.06’.”—(Steve Darling.)

This new clause sets out rates of Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay and Statutory Parental Bereavement Pay.

Brought up, and read the First time.

[Steve Darling]

I beg to move, That the clause be read a Second time.

I thank my hon. Friend the Member for Twickenham (Munira Wilson) for assisting in tabling the new clause, which is about ensuring that we put the family at the heart of our society by doubling the rates of maternity, paternity, adoption, shared paternity and parental bereavement pay, which are really important when people are on leave. Sadly, a lot of men choose not to take up these opportunities. We will discuss later our proposals on kinship care and fostering, and this is all part of that bigger picture. By supporting families with these four proposals in the three key areas that they cover, we are putting family at the heart of our world. One only has to reflect on social care and children’s social care, and the significant cost where there is family breakdown, to see that the more the state can do to support families, the better.

I would like to move on to kinship care, where there are real opportunities. I know that the all-party parliamentary group on kinship care has discussed these measures and sees this as a real opportunity for the Government to move positively to support kinship carers.