Employment Rights Bill (First sitting)

Peter Bedford Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[The Chair]

Thank you. Very briefly—question and answers—Peter Bedford.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

Q You mentioned the risks to recruitment and retention of staff. Specifically on youth unemployment and recruiting younger people, what impacts will this Bill have for your affected members?

Matthew Percival: This is a question of broader context as well. We have already mentioned the changes at the Budget and how the impact of the threshold element of the national insurance changes in particular is concentrated in sectors that currently employ a large number of young people. The Bill also ends up focusing on the same area, and those businesses often speak about a triple whammy, because they are the same businesses that are affected by national living wage increases. In all three aspects, you end up with a similar group of businesses that face particular costs, and therefore, where there are unintended consequences, they are disproportionately likely to be faced by young people.

Jane Gratton: I think it might just influence an employer’s choice at the recruitment stage. If they have someone who comes along who has no experience but who they could take a chance on, or someone who is more experienced, and then there is the cost and the risk through the day one rights, it might just influence that decision. That is a worry, because that is not going to help us to tackle NEETs—people not in employment, education or training.

Alex Hall-Chen: I agree with that. I spoke to an SME just yesterday who said, essentially, that they will have to change their current recruitment process of taking on younger people and training them up, because it is too risky, given the reforms happening in the space, so they will focus on more experienced employees who can demonstrate previous competence.

[The Chair]

That brings us to the end of the time allotted for the Committee to ask these witnesses questions. On behalf of the Committee, may I thank the three witnesses for giving us full and very clear answers? Thank you very much.

Examination of Witnesses

David Hale and Dom Hallas gave evidence.

Employment Rights Bill (Second sitting)

Peter Bedford Excerpts

Committee stage
Tuesday 26th November 2024 Public Bill Committees

[Chris Law (Dundee Central) (SNP)]

Q I am focusing still on fire and rehire. Listening to the comments made in the last five minutes, I think the consensus is that we want to see the end of fire and rehire, and I completely support that. However, when you look at the detail of the Bill, there could well be a loophole to allow it to continue. There is a clause that says that there is an exception for those in “financial difficulties”. What are your thoughts on that? For example, who defines what the financial difficulties are and who decides how that is to be negotiated? For me, using the term “financial difficulties” is a loophole to enable any employer to say, “We are going to have to let you go in this circumstance.” Do you agree with that, or do you think more work needs to be done on it?

Mick Lynch: I think we have to be very careful, because companies are very good at creating entities that are subsidiaries of subsidiaries that are based in other jurisdictions, with all sorts of measures that are far too complicated for a simple soul like me. I would like the reporting of a business to be very straightforward. Everyone will know whether a business is failing, and fire and rehire for a failing business is not going to work in many instances. Certainly on the onshore side, it is likely that the business will fold before such measures can be brought. And of course it is very difficult to do what P&O did because it relies on bringing people from overseas to replace people.

Grant Shapps, last year, or the year before, said at one stage that he was going to replace all the railway workers in Britain, so there was actually a Government Minister promoting fire and rehire during our dispute. So I think we have to be very careful not to allow loopholes. I know that accountants and auditors are very good at creating loopholes, but as far as possible it has got to be plain for the layperson to see whether a business is struggling and has genuine business needs to get any hint of an exemption, and they should be very rare indeed if they are to exist.

Martyn Gray: Quite simply, if directors can sign off the business as still remaining as a going concern, fire and rehire should not be an option. If we are looking at a scenario where directors are happy to say under companies legislation that it is a going concern but they need to do a complete restructure, strip away the employment rights, strip away the benefits, strip away working conditions—things that have been long fought over for many years of negotiation or long thought over for many years of discussions: all the benefits that sit within employment contracts—and strip them back to a minimum, that business is not in a position where it can consider itself a going concern. So I would set a really high threshold and then allow for scrutiny from the relevant bodies. If it turns out that that could have been avoided—fire and rehire in those scenarios—it is clear that those directors should not have gone through that and there must be consequences. So there is probably room for improvement, some tweaks and changes, but I would put it quite simply.

Gemma Griffin: A classic example is that during covid, overnight 80% of our business was gone and we had vessels that were worth a lot of money and a lot of crew. There were the inevitable discussions on redundancies or just stopping and what was going to happen. We made a deal with Nautilus and RMT that we would work on this together, because we were hoping things would come back. It was only in year two that we really had some sense that things would come back. But one of the things that we did was collectively go out to our workforce and say, “It is these jobs versus how about if we work together and we do a pay freeze for the two years and we just take that pain together so that we can have the jobs at the end of it.” And we did that together. If something is going to go bust, it is going to go bust. But if there was a way of keeping the money in a better way—suspending the training and non-essential stuff—we made operational changes. It is too easy to leave it in as a loophole. That loophole is like you are just taking the profits out of the pockets of your people. So I think we need to be careful there.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

Q Mick, you mentioned that you felt there should be further legislation, which suggests that the Bill is falling short. Could you elaborate on what you would like to see the Government do if the Bill is falling short?

Mick Lynch: Well, we would like it very straightforward that there is going to be provision—an amendment—for sectoral collective bargaining. If there is proper sectoral collective bargaining across the economy, many of the issues that people are dealing with as individuals—individual rights, which they have to enforce for themselves, in many cases—will be dealt with. There is a lot of discussion about probation. We have probation agreements with every employer that we deal with, and we do not defend people who are incompetent or incapable. We have a process, and if we have sectoral collective bargaining, all those things will be covered.

[The Chair]

Order. I am sorry, but that brings us to the end of the time allotted for the Committee to ask questions. On behalf of the Committee, I thank all our witnesses for their evidence.

Examination of Witnesses

Paul Nowak, Maggi Ferncombe, Dave Moxham and Hannah Reed gave evidence.

Employment Rights Bill (Third sitting)

Peter Bedford Excerpts

Committee stage
Thursday 28th November 2024 Public Bill Committees

[Alex McIntyre (Gloucester) (Lab)]

Q My questions are for Claire. I should declare that I am a Co-op member and a member of the Co-operative party. You mention having a positive relationship with your unions. I was an employment lawyer before I came to this place, advising businesses up and down the country. In terms of your view on the provisions around union recognition in this Bill, what do you think the benefits to business are of having a positive relationship with the trade unions that represent your employees?

You also mention an increase in employment tribunal claims. We would hope that most employers would follow the new legislation and therefore avoid those claims, but we both know that there are a small number of bad-faith actors who will always try to find a claim. There are already claims that individuals can bring from day one, but do you think you will see a big increase in bad-faith claims, or do you think they are already there in the system?

Claire Costello: I will take the point about unions first. The strong relationship we have with the union means that we can work in a very collaboratively challenging way together—do not get me wrong; it is not without having difficult conversations, but that is the point. A healthy relationship is like a healthy marriage. You do not just give up on each other. You have those difficult conversations with each other and face into issues and look for solutions. The key for me is looking for solutions. Having very progressive relationships means that you can talk about the direction of the business and what you need to do, and work together on finding solutions. That is what we have found with our relationships. It is not always easy, but it is absolutely the better way of going forward.

In terms of employment tribunals, I think you are right. The reason we think it would go up is that, as with all things, when something becomes more available, by virtue of that fact there will be more people who want to use it. We do not have the absolute evidence to say it, because it is not there today, but the reality will be that if you can take their employer to court, why would you not? There will be more individuals who would wish to do so. We have said before that it is about having clarity and making sure that we understand what reasonable looks like and what the steps are that would be expected. It is more about the onus of extra work that this will bring to each of the areas. As I said, we follow all of the processes very strictly, and we try to make sure that we have a very fair and open conversation with all of our colleagues. The challenge will always be that you cannot make everybody happy all the time.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

Q Ms Costello, you mentioned some statistics on those leaving your organisation quite early on after starting. Could you reflect on the impact on productivity of the day one rights and probationary period?

Claire Costello: Gosh, that is a good question. I do not see why it would make a difference to productivity itself, because at the end of the day you are still bringing someone new into the organisation. I think it would be a longer-term impact. If we did start to see more people raising a grievance because they want to leave or because we have said, “Actually, this is not the right role for you.”, it would be the time perspective that would be drawn on. That is more your line managers, store managers and leaders around the organisation that would draw on to that resource. I kind of see it as more of a longer play in terms of productivity.

[Mr Bedford]

Q On that longer-term point, if you have more employees raising more grievances, it takes up more staff time and manager time, and therefore it would have a detrimental impact on productivity.

Claire Costello: Absolutely, and I think that was what James was referring to as well, when you think about the smaller stores within the convenience sector. But for us, it absolutely is about the time that it takes for line managers and regional managers. Do not forget that we are not just a retail provider, so it would be within our funeral homes, when we should be out looking after clients at the most difficult times in their lives, and our insurance organisations, as well as legal services. It is across the whole organisation for us.

But yes, it is the line management time that goes into following these processes, doing them well and making sure that everybody is having the right hearings that they should be having. It is a time-consuming process. It is right because, absolutely, we want to make sure that everybody has a fair hearing and that the right decisions are being made for the right reasons. However, it is time-consuming and that is the concern.

[Alison Hume (Scarborough and Whitby) (Lab)]

Q Mr Lowman, do your members guarantee hours and provide reasonable notice of shifts, or make some payment when they cancel shifts at short notice? If not, what do you think the effect is on their employees—in other words, do the employees struggle to pay their bills?

James Lowman: By and large, we set out shifts; we have clear shifts that are worked to. It would be rare that a shift got cancelled at short notice. With convenience stores, fundamentally we are open for those hours; we need to fill those hours. It would have to be something pretty extraordinary that would lead to a cancellation, for example a massive disruption to delivery. We would be bringing in extra colleagues to deal with a delivery, which then gets cancelled, so that work is not there for them to do. However, even that is relatively rare, so we provide consistency of hours.

It is more common that the challenge is dealing with sick leave and then having to fill shifts, and additional shifts coming in. That is when you might get some later changes and later notice, because someone has phoned in sick that morning, so you need to fill the shift that morning; you need to have a person in the store, or—worst case—the store could not open. Again, however, a lot of that is done colleague to colleague, in terms of filling those shifts.

Regarding the impact, there are a whole range of people working in our stores, for some of whom it is a second income in their household. But for many, it is the first income in their household, so it is very important that we provide that local, flexible and secure work to people. In many ways, this Bill is enshrining and codifying things that are already common practice in our sector.

Employment Rights Bill (Fifth sitting)

Peter Bedford Excerpts

Committee stage
Tuesday 3rd December 2024 Public Bill Committees

[Greg Smith]

I am clear that it should be 500 or fewer. I will not pretend to guess how some of the misdrafting may have occurred; it happens to all parties when they are in government and in opposition. I can remember a couple of errors in Bill Committees when I was sat on the Back Benches on the opposite side from the then Opposition. I apologise to the Committee for any errors. For the clarity of the record, we mean 500 or fewer employees when we are defining an SME.

To be asked to give Government the power to make regulations with no idea what the regulations imposed on businesses will be, is clearly not a position we want to be in. The Government admit that the day one unfair dismissal rights could have negative impacts on employment and hiring, which could include incentivising employers to turn to temporary or fixed-term workers. The day one unfair dismissal rights could make it more difficult for those unemployed or economically inactive to access jobs, through overall negative impacts on employment and/or a strengthening of insider power. Alex Hall-Chen from the Institute of Directors warned the Committee that

“under the current system, employers are very likely to take a risk on hiring a borderline candidate who may not have quite the right experience or qualifications, but they will now be much less likely to take that risk because the cost of getting it wrong will be considerably higher.”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 8, Q2.]

There are important questions about what that means for people on the fringes of the labour market, especially as they are precisely the people the Government say that they need to get back into work to meet their 80% employment rate target.

We should all reflect on this point from the evidence that we heard last week: very many people in our society deserve a second chance in life. They might have made mistakes before, or be on a path to rehabilitation from offending or something else—whatever it might be—and I would hate it if people who found themselves in that position were not able to get a second chance. Employers that are willing to give second or even third chances should have the best empowerment to do so, to get people who find themselves in that position into work and on to the path to a better life.

I fear that the unintended consequence of the legislation will be to shut many people who find themselves in that position out of the ability to get a job, to improve their lives and to get themselves on to a better path. SMEs will feel the burden of the new regulations particularly acutely without large HR and legal teams, as I have said.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

The Bill as drafted seems to skew a competitive advantage in favour of large businesses. Earlier, my hon. Friend mentioned that small and medium-sized businesses are the key to economic growth in our country. These amendments will enable them to compete evenly because, as he says, they do not have large HR functions, or the support mechanisms that large businesses have. The amendments will redress the unfairness in the Bill.

[Greg Smith]

I am grateful to my hon. Friend for that input. He is absolutely right, and his argument hits the nail on the head. The point we are trying to get across through the amendments in my name and that of my hon. Friends in Committee is that small businesses sometimes just do not have the resource to go through the heavy, burdensome regulations that big businesses can navigate. Mega-businesses probably have more employees in their HR or legal department than most small businesses have altogether.

--- Later in debate ---

[Alex McIntyre]

My experience in business goes way back. My parents ran a small business and, although I would not say I was a worker at it, I helped out from the age of nine. I got my first job at a small business when I was 12, and I worked in the hospitality trade throughout my school and university years, all at small and medium-sized enterprises. I spoke last week about the fact that I was on a zero-hours contract for the most part while I was there. I then became an employment lawyer advising businesses, from start-ups to FTSE 100 companies and global conglomerates. So I have some experience in these matters, and I am very grateful to be on the Committee.

Let me go back to my experience on a zero-hours contract. We are talking about amendments that would take out SMEs from many of these provisions, and I want to draw on two of my experiences and say why I think this issue is important. I mentioned the first last week: when I was on a zero-hours contract at the hotel that I worked at in my later teens, everybody in that business was on a zero-hours contract. As a 15-year-old, I was quite happy to be on a zero-hours contract. I had to balance it with playing rugby and my studies, but in the summer I could flex up and work longer hours. However, for many of my colleagues, that was their full-time job; it was the job that paid their rent or mortgage—if they had been lucky enough to buy a house—looked after their kids and provided the heating each winter. But when it came to it, it was open to abuse, and the manager I had would vary hours based not on demand, but on whether she liked the individual or not.

I remember vividly that one week a colleague refused—quite rightly, I would say—to take the manager’s personal shopping up to her fourth-floor flat, because he was really busy behind the bar; he was the only barman on shift. He usually worked between 50 and 60 hours a week; for the next month, he was given five hours a week. He had two children, and rent to pay. I just do not agree with the amendment suggesting that that is fine and that that abuse of someone’s rights could continue indefinitely.

[Mr Bedford]

The example the hon. Gentleman has just given would be covered anyway by employment law. If an individual is being discriminated against, they could take that to a tribunal under current employment law. The amendment would not in any way dilute the rights that currently exist in that respect.

[Alex McIntyre]

Well, the individual would be able to raise a grievance, but discrimination requires it to be related to a protected characteristic, and there is no protected characteristic saying that just because someone disagrees with a manager, he would be able to bring a claim under the Equality Act 2010 for discrimination. He might be able to raise a grievance about that, but that requires an employer to have a fair grievance process and to actually follow through. Is that individual, who is already on very low pay and struggling to pay his rent and feed his kids, going to take that grievance through a tribunal system that the previous Government allowed to really suffer? Eighteen to 24 months is the standard waiting time to get any form of justice, so I do not think it is appropriate to say that he would be able just to go to a tribunal. What he really needed was guaranteed hours and small businesses being prevented from abusing people by saying that they can continue to work 60 hours but not offering them a regular-hours contract.

My second point is on sexual harassment or harassment by third parties. When I was 15 years old, I worked at a Christmas party for midwives at that same hotel, and during that party I was sexually assaulted in the workplace. I was groped by the midwives and told that because I was only 15, they would be able to teach me a thing or two. When I approached my manager about it, he said I should enjoy that kind of attention because I was a man. I am really conscious that female colleagues suffered way worse than I did. Just because businesses are smaller, that does not mean that the impact on victims and people working there is any less.

However, the wording of the Bill is “all reasonable steps”, and the “reasonable” test is taken into account when tribunals consider such matters and what reasonable steps need to be taken by businesses. The size of a business is often something that tribunals will take into account when they look at what “all reasonable steps” would mean. In my example, there were reasonable steps that could have been taken, but I was told that I had to get back in there and carry on working with that party. Excluding small businesses would prevent them from having the duty to look after their employees when they are suffering harassment in the workplace.

To come back to the point made by the hon. Member for Mid Leicestershire about competing evenly, my hon. Friend the Member for Birmingham Northfield has already talked about some of the perverse outcomes that the amendment might lead to. Unscrupulous employers who want to get around the legislation in whatever way they can might end up setting up umbrella companies in order to do that if this amendment were passed. A two-tier employment system would be a barrier to growth for companies, because it would say, “If you grow your company and continue to do well, you are going to put additional regulation on to the company.” There would be a perverse incentive for businesses to grow to 499 employees and stop there.

Employment Rights Bill (Seventh sitting)

Peter Bedford Excerpts

Committee stage
Thursday 5th December 2024 Public Bill Committees

[Justin Madders]

We are taking this approach because we want to be reasonable and engage with businesses and trade unions on what the shape looks like. That is why the full consultation, which will look at the broad range of issues, is not yet ready. It is not really in the spirit of that for us to nail down everything in the Bill. Most employment rights have their detail in secondary legislation.

There are some clear principles about the levels of compensation that we will set out. Clearly, a worker should not be compensated for more than the number of hours that he or she has lost. If other heads of loss occur, there are already principles about wages, for example, whereby ongoing losses have to be compensated for. That is the kind of thing where the detail ought to be put into secondary legislation and consulted on fully, which is what we intend to do.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

The one thing that businesses do not like is uncertainty. Unfortunately, there are so many gaps that need filling in the Bill that it makes it very difficult for businesses to plan for the future—for example, about how many people they will employ, what risks they will take on, and how to budget. Does the Minister accept that the Bill is so full of gaps that it causes more uncertainty for businesses and makes it harder for them to plan?

--- Later in debate ---

[Justin Madders]

There is a danger that we will get too prescriptive about this. There will be a relatively small number of cases in which there is detriment, but they are all going to be very fact-sensitive. That is why we have framed the amendment in this way.

[Mr Bedford]

The hon. Member for Dundee Central referred to how a lot of businesses will have insurance for various eventualities. As a maximum is not specified, have the Government considered the unintended consequences of such provisions on businesses’ ability to insure against such instances?

[Justin Madders]

We are not talking about the general running of a business, with reference to shift notice and cancellations; we are talking about a very specific set of circumstances in which an employer’s act is considered to be detrimental to the employee and gives rise to an employment tribunal claim. I am sure that there are insurance products that cover all employment tribunal claims, but this is about individual acts of penalisation against employees or workers. This is not a departure from existing legal principles; it is well set out and understood by lawyers and HR practitioners. I do not envisage that this is a provision that will be greatly used, but it is an important principle to have in the Bill.

Amendment 48 agreed to.

Amendment made: 49, in schedule 1, page 107, line 39, leave out from beginning to end of line 11 on page 108 and insert—

“(7A) Where—

(a) the complaint is made under section 48(1BA),

(b) the detriment to which the worker is subjected is the termination of the worker’s contract, and

(c) that contract is not a contract of employment,

any compensation must not exceed the compensation that would be payable under Chapter 2 of Part 10 if the worker had been an employee and had been dismissed for a reason specified in section 104BA.”—(Justin Madders.)

This amendment relates to the maximum award of compensation by an employment tribunal in a detriment claim under section 48(1BA) of the Employment Rights Act 1996. The change achieved by the amendment is that the maximum award in cases involving the termination of an arrangement that is not a worker’s contract is at the tribunal’s discretion.

Ordered, That further consideration be now adjourned. —(Anna McMorrin.)

Employment Rights Bill (Ninth sitting)

Peter Bedford Excerpts

Committee stage
Tuesday 10th December 2024 Public Bill Committees

We are also worried about the burdens of the third-party harassment provisions on pubs and the hospitality sector. They already have to contend with increased employer’s national insurance contributions and with the possible loss of small business rate relief; there is now a risk that they will have to become responsible for some form of policing. I am not referring to areas that I have already spoken about, such as sexual harassment, which should absolutely be cracked down on, criminal forms of racial abuse, abuse of someone’s sexuality or whatever it might be; I mean areas that get into the realms of free speech. There are some jokes that may be told in pubs and are probably not funny, but do not stray into the very serious categories that I have spoken about. It will put a burden on pub, restaurant or bar owners to somehow police that which most of us, under a reasonability test—but not guaranteed under a reasonability test—would call more innocent banter.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Mundell. On the point about the hospitality and pubs sector, on which I held a debate in Westminster Hall a few weeks ago, there is real concern about this part of legislation, in particular about freedom of expression and freedom of speech. Does my hon. Friend agree that one consequence of the legislation might be that industry take actions beyond those intended? For example, people might self-censor beyond what could be seen as an off-colour or offensive joke, because they are scared that they could be held liable later for not protecting their employees. My hon. Friend gave an example, but another one is a comedy club, which would be conscious of and concerned about who they invite to entertain because of the perception that some of their staff could be offended, and the reasonableness of how that could be interpreted in the context of harassment. Does my hon. Friend agree that this is a concerning unintended consequence of the legislation?

[Greg Smith]

My hon. Friend is right that there needs to be greater clarity about that which is already covered in criminal law—sexual harassment, direct racial abuse or abuse to someone on the basis of their sexuality, which clearly has to be actioned under criminal law and it must be ensured that the perpetrators are brought to justice—compared with satire or cutting jokes. Those are things that do not stray into the criminal, but perhaps some people might be offended by them, for whatever reason.

There are quite a lot of comedians openly talking about whether comedy is in fact becoming a thing of the past in this country. They are finding themselves unable to tell jokes that, while not going into the criminal, do risk offending some people. If that ends up shutting down comedy clubs or open-mic nights in pubs, it would be an unintended consequence that I cannot imagine the Government would want to bring about.

Employment Rights Bill (Tenth sitting)

Peter Bedford Excerpts

Committee stage
Tuesday 10th December 2024 Public Bill Committees

[Alex McIntyre]

I thank the hon. Member for setting out the difference. The difference is the “all reasonable steps” test. If an employer harasses someone in the workplace, there is no “all reasonable steps” test that they can take; for a third party, there is.

In tribunals, “reasonable” takes into account, for example, the circumstances of the case, the size of the business, the sector it operates in, the policies it has in place and the training it provides for employees. These points of reasonableness are taken into consideration in tribunals every single day in other areas. For example, there is already a test in section 109 of the Equality Act that deals with a defence that employers have. They cannot be held liable for the actions of their employees if they have taken all reasonable steps to train their employees to avoid issues such as discrimination in the workplace.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

The hon. Member mentions reasonable steps being taken by small businesses. Does he accept that an impact assessment on the consequences of bringing in this kind of legislation for these businesses should be conducted up front, so that businesses can at least understand how much time and money it will cost them and how much additional bureaucracy it will create for them?

[Alex McIntyre]

The Minister will answer about what the Government are doing on impact assessments, but the impact on small businesses is that they have to think a little bit about harassment in their industry. That will vary from business to business. Some small businesses are not public facing. The impact in a small café will be different from that in a small office, because of interactions with the general public, but I do not think it is unreasonable to ask a small café or a small bar to think about what they can put in place to deal with someone coming in and abusing or harassing staff.

Again, if somebody comes in and is abusive, these provisions will not necessarily be triggered, because the abuse and unwanted conduct has to be related to their protected characteristic. I know from closing up a number of Christmas parties when I worked in hospitality that people get a bit out of hand. That was not harassment under the Equality Act; it was because people were drunk and disorderly, which is a separate antisocial behaviour issue. There are different channels to deal with that. We are talking here about specific cases where there is abuse of people because of a protected characteristic. Those are very narrow circumstances where people have to think about what kind of policies they have in place.

The hon. Member for Chippenham spoke about how MPs would not operate in similar circumstances. We would not, for example, be alone with individuals in a private room. It is appropriate to have policies in place where we try to think about some of the circumstances.

This proposal does not use the word “requires”, and it does not say that every single step has to be taken—it mentions “all reasonable steps”. That is part of the tribunal, and there will be guidance to set out some examples of things that employers can do to take reasonable steps. It is really important that we do not create a two-tier system where we say that small employers do not have to deal with these issues, because actually it is often in small and medium-sized enterprises that some of this bad behaviour takes place.

I gave an example last week. I went to my boss and said, “I have just been groped by a midwife and was told, ‘I’m going to show you a thing or two’”. When I said that I was only 15 years old, my boss said I should enjoy it: “You are a bloke. Go back in there. Toughen up.” That is not acceptable. Actually, a reasonable step in those circumstances would be the manager saying, “Alex, why don’t you go and work in another part of the business for the rest of the week? Work on the bar this evening, rather than in the function.” It is about having a policy that deals with those kinds of incidents in the workplace. There are different steps that businesses can take.

Let me move on to the argument around free speech, which the Minister talked about at great length. I have set out how some of his arguments do not apply in this instance as this provision is about specific incidents of harassment under the Equality Act. A point that the shadow Minister might have raised that would perhaps have been more legitimate is cases where two protected characteristics are in play. A lot of the free speech cases that have made the press have engaged with two. For example, in some cases someone has expressed their religion, but that might be opposed to someone expressing their sexual orientation; or people have expressed protected views on gender-critical theory, but others have a protected characteristic of a different gender identity.

Those are difficult cases, which can go all the way to the Supreme Court. What is important to note, however—this is where the shadow Minister could have gone, to give us a stronger discussion—is that if we are at the stage where the Supreme Court has to give an opinion on these things, no tribunal in the land will say, “Well, an employer should reasonably have seen that and therefore taken reasonable steps to avoid such scenarios happening.” No, this is the exact example of where tribunals will take “reasonable steps” and say, “What is reasonable in these circumstances for these employers?”

Having represented the NHS for a number of years as an employment lawyer, I should point out that the A&E example that was given unfortunately did not make any sense. First, the NHS operates a zero-tolerance approach. In several instances, policies are in place where individuals can withdraw their support for someone if they are being abused in the workplace. Scenarios and planning are in place to make sure that everyone is looked after, without people being subjected to harassment in the workplace.

To sum up, “all reasonable steps” does not mean that an employer has a duty to stop something altogether. We have to be sensible. There is no point scaremongering so that individuals think this will have a broader impact, closing all comedy clubs and stopping people making jokes in the workplace. That is not the case. This is about specific examples of harassment under the Equality Act—that has to be unwanted conduct related to a protected characteristic, creating an offensive, hostile, degrading or humiliating environment. These are specific examples. It is important that we extend this to third parties, given all the evidence we have heard, and I encourage everyone in the Committee to support the legislation.

Employment Rights Bill (Seventeenth sitting)

Peter Bedford Excerpts

Committee stage
Thursday 9th January 2025 Public Bill Committees

[Justin Madders]

Indeed it is, and the usual parliamentary scrutiny will apply, but I was talking specifically about the role of the fair work agency. There will be that role, and no doubt as more detail emerges there will be more parliamentary opportunities to talk about the role and functions of the agency.

My hon. Friends the Members for Worsley and Eccles and for Birmingham Northfield talked about the broad support for the agency’s establishment, as indeed did the hon. Member for West Suffolk. I have a list of all the supportive witnesses at the oral evidence sessions, and it is a broad and impressive cast. It includes the CBI, the British Chambers of Commerce, the British Retail Consortium, the Chartered Institute of Personnel and Development, the Recruitment and Employment Confederation, the Food and Drink Federation, the Co-op, Margaret Beels, and of course all the trade unions. There is support across the board for this single enforcement body.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Mundell. There are a few points about the creation of the agency that I would like the Minister to address. I am broadly supportive of synergies and of the rationalisation of public bodies, particularly to ensure that the taxpayer is getting value for money, but have the Government considered the cost of this new body and whether it will result in savings for the taxpayer? Will they consider locating it outside London so that it is more broadly reflective of the country at large?

[Justin Madders]

As a regional MP—a north-west Member—I am always looking to see where we can get more Government agencies out into the rest of the country. It is probably too early to say, but those kinds of decisions are being looked at.

At the moment, His Majesty’s Revenue and Customs deals with minimum wage enforcement. Moving such a specific task across to another body will take some time, so there may well be a period during which HMRC continues to undertake that work, albeit that it is within the remit of the fair work agency. Such operational details will be discussed and dealt with in due course.

The hon. Member for West Suffolk made a point about the powers of individual officers. Initially, we envisage that officers will move into, effectively, their existing roles. It will be a matter for operational consideration in due course whether it is beneficial to extend people’s remits. It will not be required of anyone without sufficient training and safeguards in place, but as the agency develops, it may well be considered advantageous to broaden the role of enforcement officers. One of the rationales for the body is that there are often several aspects to an employer’s breach of obligations, so we want the fair work agency to be able to tackle these things as a whole. However, that is an operational matter that will be dealt with in due course. I commend the clause to the Committee.

Question put and agreed to.

Clause 72, as amended, accordingly ordered to stand part of the Bill.

Schedule 4

Legislation subject to enforcement under part 5

Employment Rights Bill (Nineteeth sitting)

Peter Bedford Excerpts

Committee stage
Tuesday 14th January 2025 Public Bill Committees

[Sir Ashley Fox]

Government amendments 201 and 202 are designed to address a key aspect of the transition process under the Bill. Specifically, they are designed such that any information that was obtained prior to the coming into force of part 5 of the Bill by officers operating under existing legislation and is currently held by the Secretary of State, can still be used or disclosed in accordance with the provisions outlined in clause 98 of the Bill.

That is crucial because, as enforcement functions transfer to the fair work agency, there needs to be continuity in how information is handled. By allowing the Secretary of State to continue using and disclosing this information under the new framework, the amendments ensure that no critical data or intelligence gathered under the previous system is lost or becomes unusable during the transition.

This provision is particularly important for maintaining continuity in enforcement activities. The information collected by officers acting under earlier laws may be vital for ongoing investigations or enforcement actions. For instance, data about businesses that are non-compliant with labour laws, or evidence of potential worker exploitation, could be crucial for future legal proceedings or further investigations.

[Mr Peter Bedford (Mid Leicestershire) (Con)]

Does my hon. Friend agree that it would have been better and more efficient for the Bill to come before the House in a more final version, which may have put at ease many of us with concerns about the cracks that may still exist?

[Sir Ashley Fox]

My hon. Friend makes a valuable point. The reason that the Bill is in such poor condition is that the Labour party was under a political obligation to its trade union friends to bring it forward within 100 days. Had it waited a month or two, we would not have needed such detailed scrutiny and so many Government amendments. Occasionally one hears a tut or a groan from Government Members as we try to scrutinise the Bill, but really it is entirely the Government’s fault for bringing forward such a poorly drafted piece of legislation.

As I was saying, without amendments 201 and 202, confusion or legal obstacles could prevent the use of such information, creating gaps in the enforcement process. By making it clear that the Secretary of State has the authority to use and disclose such information under clause 98, the amendments ensure that the enforcement process remains uninterrupted, effective and legally coherent.

Overall, the amendments are sensible and necessary to guarantee that nothing falls through the cracks as the responsibilities for enforcing labour laws transition from existing structures to the fair work agency. As the Bill centralises enforcement functions, it is essential that any information collected under the old system remains accessible and usable by the new agency. That is particularly important given the potential impact on ongoing investigations, compliance checks and prosecutions. By ensuring that previously collected information can still be used effectively, the amendments will help to prevent disruptions or delays in enforcement, safeguarding both workers and businesses.

It is worth noting that the transition to a new enforcement structure can often be fraught with challenges. The Bill will alter not only the bodies responsible for enforcement, but the way in which information and data are managed. The amendments will help address the practical aspects of the transition, ensuring that the fair work agency has the resources and information it needs to continue performing its duties effectively. In doing so, they will create a smoother handover of powers and responsibilities from the previous enforcement regime to the new framework.

Throughout the Committee’s proceedings, we have debated many Government amendments of a similar nature. Amendments 201 and 202 are necessary to fine-tune the Bill and ensure that all aspects of the transition are fully addressed, but the sheer volume of amendments at this stage leaves me with some concern, as it suggests that the Bill may not have fully accounted for all the transitional issues at the outset, and there may still be elements that have not been addressed. Given the complexity of centralising such a significant portion of the enforcement process, it is natural to be cautious about whether any areas may have been overlooked. While these amendments are clearly intended to provide clarity and ensure continuity, the volume of amendments suggests that there may still be unanswered questions or unforeseen gaps in the transition process, which leaves me somewhat nervous that issues may have been missed in the initial drafting of the Bill. We have certainly seen that happen often enough thus far. It is crucial that all challenges or concerns relating to the transfer of enforcement powers are adequately addressed before the Bill passes. As such, I believe it is important to consider whether there are any outstanding issues that might affect the long-term success of the transition.

Given the number of amendments and the complexity of the transition, I would appreciate the Minister’s reassurance that there is a comprehensive understanding of the full scope of the changes and that no essential elements have been left unaddressed. Are the Government confident that all necessary steps have been taken to ensure a smooth and effective transition? In particular, can the Minister assure us that the fair work agency will be fully equipped to handle its new responsibilities, including that it will be able to utilise critical information from the prior enforcement system without any disruptions? I would also like to hear about the monitoring processes that will be in place to oversee the transition period and ensure that any unforeseen issues are quickly addressed, which is vital for maintaining business confidence and worker protections throughout the period of change.

While the amendments are crucial for ensuring that enforcement activities continue smoothly during the transition, they should ideally have been made earlier in the process to avoid the need for these later clarifications. Having a more comprehensive and cohesive framework in place at the outset would have reduced uncertainty and provided greater assurance to all parties involved. Never-theless, the amendments go a long way to addressing the issues that could arise during the handover of enforcement responsibilities, and ensuring that the transition to the fair work agency will be as smooth and effective as possible.