Employment Rights Bill (First sitting)

Nick Timothy Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[Chris Law]

Q This is a question for the whole panel but, Carly, you mentioned that regulations here set the minimum standards. Does this Bill go far enough, and which bits would you like to see go further?

Carly Cannings: It was not a criticism when I said that it was about minimum standards. As I said, creating a happy, thriving, engaged workforce is more than just legislation. It is not to be misunderstood as a criticism of those minimum levels, but equally, you do not want to tie the hands of good employers by making them jump through too many hoops around legislation.

For me, this Bill is about raising the standards of those employers who are not necessarily doing, and need a bit of encouragement to do, the right things. We need to be mindful of the balance. The previous panel mentioned the impact on small businesses and the importance of not going too far the other way in over-legislating that ties the hands of small businesses. It is very much not a criticism; it is a realistic statement of the Bill being part of the package.

Ben Willmott: We have done a lot of research over the last few years looking at the level of HR capability and people management capability in small firms, and what sort of support they need. The research has involved more than 500 small firms, and shows the very low level of HR knowledge and capability within them. They do not have in-house access to professional HR practitioners; most of them do not use any sort of external professional HR consultancy support either.

There are a lot of issues that you probably would not imagine. A lot of small firms may not even have written employment contracts or written terms and conditions of employment. There is a lot of informality still in that part of the economy. That is the point I was making earlier. We really do need to find ways of providing better quality, more accessible advice and support to help these small firms meet their obligations and improve the overall level of employment standards in the economy.

Cathryn Moses-Stone: From our perspective, we would hope that this is a broader catalyst and a driver to see better-led and managed organisations across the board. We want to see more investment in management and leadership in general. We have lots of evidence looking at the impact of better-trained managers in the public sector and how that can support public service reform. We have evidence for what that looks like in healthcare education settings. We have evidence for what that looks like for delivering green skills and AI, and for how that is a driver of more investment in management and leadership across the board, given the evidence we have and what it does for workplace growth, productivity, our economy and people’s happiness.

Again, I emphasise the point that 82% of people are accidental managers. We have all heard—I am sure everyone in this room has, in their time—about a bad manager and the impact that that can have on an organisation. We see this, hopefully, as a bit of a catalyst for further investment and the thought given to M&L in general.

[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.