Employment Rights Bill

Nusrat Ghani Excerpts

Monday 8th December 2025 Commons Chamber

Consideration of Lords message

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Before we move to consideration of the Lords message, I can confirm that nothing in the Lords message engages Commons financial privilege.

Clause 1

Right to guaranteed hours

[The Parliamentary Under-Secretary of State for Business and Trade (Kate Dearden)]

I beg to move,

That this House insists on its disagreement with the Lords in their amendment 1B but proposes amendments (a) and (b) to the Bill in lieu of that amendment.

[Madam Deputy Speaker]

With this it will be convenient to consider the following:

That this House insists on its disagreement with the Lords in their amendments 23 and 106 to 120, does not insist on its amendments 120C, 120D and 120E, and proposes amendments (a) to (f) to the Bill in lieu of Lords amendments 23 and 106 to 120.

That this House insists on its disagreement with the Lords in their amendments 23 and 106 to 120.

That this House insists on its disagreement with the Lords in their amendment 48B but proposes amendments (a) and (b) to the Bill in lieu of that amendment.

That this House does not insist on its amendment 72C in lieu of Lords amendments 61 and 72, but disagrees with the Lords in their amendments 72D to 72H in lieu and proposes further amendments (a) and (b) in lieu of the Lords amendments.

That this House insists on its disagreement with the Lords in their amendment 62, but does not insist on its amendment 62C in lieu and proposes further amendment (a) to the Bill in lieu of the Lords amendment.

[Kate Dearden]

I am pleased to return to the Employment Rights Bill for the consideration of Lords amendments for a third time.

The Government’s plan to make work pay, on which we were elected and in which we committed to deliver the Employment Rights Bill, will bring employment rights legislation into the 21st century, extending the protections that many British companies already offer to their staff to all. By doing so, we will endeavour to end the unfair market competition in which some firms seek to beat their competitors not by better quality or increased value, but by cutting the pay and conditions of their workforce. That is why this Bill is truly pro-business and pro-worker, pro-growth and pro-competition, and contributes to the creation of a fair and flexible labour market.

This Bill is a win-win for employers, employees and a more competitive British economy. By delivering this change together, we will back businesses that do the right thing while giving hard-working people the job security and opportunities that they deserve. That is why we must press ahead with delivery. Too many workers are waiting too long to feel the benefits of these reforms, and too many businesses face the uncertainty of when this Bill will become law and want clarity on its implementation. The Government are seeking the support of this House so that we can secure Royal Assent and finally be able to move towards implementing change.

First, I will speak to the Government amendments in lieu, which relate to unfair dismissal. In late November, I convened a series of constructive conversations between trade unions and business representatives, and I am extremely grateful for the positive and productive contribution of both sides of industry to that dialogue. It is a testimony to their leadership, and I thank them for it.

I am pleased to report that we have come to a workable agreement with trade unions and business representatives on the unfair dismissal provisions. The Government’s amendments in lieu will reduce the qualifying period for unfair dismissal from 24 months to six months, while maintaining existing day one protections against discrimination and automatically unfair grounds for dismissal. The implementation road map sets out that the changes related to unfair dismissal will come into force in 2027. That is the timeline that businesses have been working towards.

It is also important to limit the time that employees must wait for their rights to be strengthened while implementing changes in a way that is manageable for business. That is why I am pleased to tell the House that the six-month qualifying period for unfair dismissal protections will be brought in from 1 January 2027.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Colleagues should note that the debate will have to conclude by 7.55 pm, so only a couple of Back-Bench Members will get in. A speaking limit of eight minutes will apply to Back Benchers. I call the shadow Secretary of State.

[Andrew Griffith (Arundel and South Downs) (Con)]

Two weeks ago, the Chancellor stood at the Dispatch Box and delivered a Budget that contained not a single measure to support growth. Today, in moving the motion to disagree, the Minister has signed the warrant for a war on jobs. She is at the Dispatch Box representing the Government, but everyone knows that it is the former Deputy Prime Minister, the right hon. Member for Ashton-under-Lyne (Angela Rayner), who is calling the shots. We discovered this morning that Labour Together is already auditioning for the Prime Minister’s replacement. Perhaps the Minister has an outside chance at the job, but my money is probably more on the right hon. Member for Ashton-under-Lyne. Perhaps the Labour party could have its first female Prime Minister just before the Conservatives have our fourth. Given all that job insecurity, it is no wonder that Labour Members seem so keen on employment rights.

This is not a Bill for employment rights; it is a charter for a jobless generation. Thanks to measures in the Bill, thousands of young people will struggle for opportunities because the rungs of the ladder have been sawn off. Since Labour entered office, 144,000 payrolled jobs have been wiped out. Manufacturing, the oil and gas sector, construction and hospitality are all unable to make ends meet due to high energy and employment costs. The unemployment rate has been higher every month of this Government. Half the jobs lost belong to the under-25s.

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[Angela Rayner (Ashton-under-Lyne) (Lab)]

To the shadow Secretary of State’s point, of course I declare an interest as a trade union member. Like millions of people who have been wanting this Bill for many years—as my hon. Friend the Member for Altrincham and Sale West (Mr Rand) said, the Conservatives failed to deliver following promise after promise—I am really pleased that we have got to this point. I am frustrated by the delay we have had, so I welcome what my hon. Friend the Minister said in her contribution, and I welcome her and the Secretary of State getting us this far. Hopefully, Conservative Members will no longer frustrate what was a key manifesto pledge for us.

We have seen the decline, and we can tell which side the shadow Secretary of State is on—it is clear. We have been really clear that we are pro-business and pro-worker, and there are many good businesses here in the UK who welcome the Bill and recognise the importance of giving people job security and fairness at work. If someone is on a zero-hours contract, they cannot plan for the future and do not know what is going to happen from one week to the next. That is not fair or reasonable for many workers in the UK. I say to the shadow Secretary of State that I met more businesses that absolutely understand that there has to be a fair balance. I think we have struck the right deal.

I welcome the changes that have been brought forward, especially to timescales. Of course, because of the complexities, the original deadline was October 2027. With the changes, which have been welcomed by trade unions and business, we can now bring that forward, so that, instead of the measures being frustrated, people can have the rights that they absolutely deserve and need.

In that context, on Lords reason 120F, Government amendments (a) and (b) in lieu, which reduce the qualifying period for workers to gain protection from unfair dismissal for six months, I know that Ministers faced difficult decisions and difficult discussions with employers and worker representatives, but I strongly believe that the work that has been done has been necessary and that we should now be able to move forward. I thank the Minister for her work on that.

To those in the other place, I say that there is now no more time to waste. Vested interests worked with the Tories and the Lib Dems—cheered on by Reform and backed by the Greens—to resist the manifesto on which we were elected. Now there can be no excuses. We have a mandate for a new deal for working people, and we must and will deliver it. That includes replacing exploitative zero-hour contracts with an offer of guaranteed hours. For low-paid workers, the security of knowing what they will earn is not just a “nice to have”; it is the basis on which they can plan their lives. I know that the Minister will have them foremost in her mind when considering the low-hours threshold and definition of regular work.

Those rights will operate not just on paper, but in practice. That is why we need robust fines for employers who illegally deny unions the opportunity to meet with workers or lawfully seek recognition. We must ensure that they cannot simply defy the law and shrug off a paltry fine.

It has been a battle to pass this Bill, but progress is always a struggle that we fight for. Its passage will be a historic achievement for this Labour Government. It will benefit working people now and in the future. Now is not the time to blink or buckle. Let us not waste a minute more. It is time to deliver.

[Madam Deputy Speaker]

I call the Liberal Democrat spokesperson.

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to follow the right hon. Member for Ashton-under-Lyne (Angela Rayner).

As this Bill has progressed through Parliament, the Liberal Democrats have welcomed many of the principles underpinning it, and we are keen to see it progress. We welcome the fact that the Bill increases support for carers, boosts statutory sick pay and gives workers on zero-hours contracts more certainty. There is a lot in the Bill that we support in principle and that moves us in the right direction. However, we are also clear that the changes must happen in a fair and practical way that truly benefits workers, small businesses and our economy as a whole. That is very much how we are approaching the amendments in today’s debate.

First and foremost, we are glad to see that the Government have finally agreed to set the qualifying period for unfair dismissal claims at six months. That is a fair and sensible shift that will equally benefit workers and business. Employers have finally been given the necessary clarity to make hiring decisions with confidence, and we have avoided the danger of unnecessarily slowing down the labour market even further, which would have deprived so many people of vital employment opportunities. We are proud that Liberal Democrats in the House of Lords were instrumental in securing that crucial improvement to the Bill.

However, it is disappointing that the Government have effectively hijacked that breakthrough to abolish the cap on compensation for unfair dismissal at the last minute. The Minister will be well aware that abolishing the cap was not agreed in recent negotiations between employer groups, trade unions and the Government. Most businesses would have been happy for the cap to have been increased, but completely scrapping it, without any consultation or negotiation, has understandably left employers feeling deeply worried and facing yet another nasty surprise. There is real worry among businesses that doing away with the cap, which currently stands at £118,000, risks undoing much of the progress achieved by the six-month compromise, creating open-ended liabilities and encouraging litigious behaviour. I expect the Minister would agree that no one wants to see failed water company bosses jamming up the already-strained tribunal system, seeking eye-watering payouts.

More broadly, one has to reflect on how the Government’s approach to this last-minute change affects the relationship between Government, businesses and workers. Does the Minister not understand that springing the change on us at the 11th hour undermines business confidence and unnecessarily strains labour relations? The Liberal Democrats had hoped that today we could support the Government in setting the qualifying period at six months, but in the light of this abrupt change, it simply is not possible to support the motion in its current form. At the very least, will the Minister listen to concerned businesses and commit to setting a new, higher cap through secondary legislation following consultation with all relevant stakeholders?

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[Sarah Olney]

indicated assent.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I assume the intervention will be short. We have we only got 30 minutes left in the debate, so I assume that Ms Olney is coming to a conclusion soon.

[Chris Bloore]

I thank the hon. Member for Richmond Park (Sarah Olney) for letting me intervene. She must realise that it is macroeconomic conditions, not improving employment rights, that affect a company. What is certain is that when people have zero-hours contracts, they cannot pay their mortgages when downturns and recessions happen, because they cannot get in the money that they need. She talks about the burdens on businesses, but what about the people who cannot even pay their basic bills because of the exploitative contracts they are on?

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[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

The speaking limit is now five minutes.

[Justin Madders (Ellesmere Port and Bromborough) (Lab)]

May I first declare my entry in the Register of Members’ Financial Interests and the donation from USDAW trade union, as well as my membership of the GMB and Unite trade unions? I declare an interest as someone who represented working people before I came into this place and as someone who wants to see this Bill come into law. I also declare an interest of someone who wants to see my constituents get some decent protections at work after so long.

This has to be it. This has to be the line in the sand. This Bill was introduced more than a year ago, and the delays have been so long—it was in the Lords for nine months—that even our modest statutory sick pay proposals are at risk of being delayed. The message to the Lords has to be, “This is enough.” This Bill was a clear manifesto commitment, and it pains me that we have had to jettison part of it to get it over the line. I understand why that had to happen, and I commend the Minister for finding a way through, because this legislation matters to my constituents. What she said about employment tribunals is important, too. We need to do an awful lot more work to ensure that people enjoy real justice.

The Lords cannot keep coming back because they do not like what is in this Bill. It is a promise we made to the British people, and we have to deliver on it. We have to let democracy win. If the Lords block the Bill again, let them explain to the 7 million people who still have to go into work when they are ill that they cannot get the day one SSP rights because the Bill has been delayed. Let the Lords explain it to the father whom they have denied day one rights to paternity leave, if he has a child after April, by blocking the Bill again. Let the Lords explain why we cannot have a fair work agency, which is something even the Tories used to promise they needed to deliver. Let us meet every day until Christmas, if the Lords block this Bill again. Let us keep going back. Let us show some steel. Let us show that we will not let this Bill lie in the sand for too much longer. If the Lords complain about having to work extra hours, let us advise them to join a trade union.