Employment Rights Bill (Eleventh sitting)

Steve Darling Excerpts

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Sarah Gibson (Chippenham) (LD)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I will speak principally to our amendment 5, but Opposition amendment 155 is also relevant.

We broadly welcome the Government’s intention to clarify some issues around probation. However, we feel that these measures will make it too difficult for small businesses, which we all know are the backbone of our economy, to take staff on. If we are not careful, the Bill, albeit not by design, could be catastrophic for some small businesses.

I would like the Minister to assure me that small and medium-sized enterprises can be confident that they will not be unduly penalised if they need to give notice during a probation period. Our amendment would put a number on the period, albeit that it allows a range. Both amendments aim to find out whether the Government have an idea of the timescale for the probation period.

When I speak to some of my small innovative businesses, especially those in renewable energy, one thing that concerns me is that they are taking staff on who do not have experience in the field. There simply are not enough people with experience, so businesses are taking people on speculatively who they hope to encourage, teach and train on the job. If they realise early on that that is not possible and that the employee is not suitable for the sector, they need to be able to start again and try again without feeling penalised. There is no way they can do this over a 10-minute coffee, as one Government Member suggests, because these people have no experience in the field. They are on a learning curve as much as the employer is. This probation period is vital for both sides to understand whether the sector, which is new to many people, is appropriate.

I am very concerned that the period, which is the only thing we know about, is not defined as a set amount of time to give small businesses confidence that they can continue to take on staff about whom they are concerned. If the timescale cannot be set out in the Bill, I would like some idea from the Minister of when we might hear it.

[Steve Darling (Torbay) (LD)]

It is a privilege to serve under your chairmanship, Ms Vaz. I want to unpick another issue on which I would welcome some reassurances from the Minister.

I have spoken to a gentleman from the Torbay Business Forum who supports a charity that works across Devon, particularly by supporting people with learning disabilities into employment. One often finds that it can take a bit longer for people with learning disabilities to find the right place and get a firm contract. What safeguards are there for charitable organisations and not-for-profit companies working in that sector to prevent them from ending up in the difficult position of having people on their books who, sadly, over an extended period of time, they realise are not fit for purpose because of challenges in their lives? There will no longer be the opportunity to offer extended flexibility.

Like my hon. Friend the Member for Chippenham, I broadly welcome the Bill’s direction of travel, but I would like to see some of the rough edges knocked into shape for Torbay residents.

[Justin Madders]

I am grateful to Opposition Members for tabling their amendments and asking a series of questions.

The hon. Member for Chippenham seeks to set the boundaries for the statutory probation period at three and nine months. The hon. Member for Torbay seemed to argue for a lengthier period; I do not know whether he was asking for nine months or beyond, but I take his point. The hon. Member for Mid Buckinghamshire asked us to put six months on the face of the Bill, so there is quite a range of options. We have decided that the best thing to do is work with businesses and consult with them on the detail of the proposal as we move forward. We have expressed a preference for nine months as a result of the engagement that we have undertaken.

As the hon. Member for Mid Buckinghamshire indicated, businesses have said that generally six months is about the right period, but in some circumstances they may need a bit longer to ensure that the person is the right fit. That is why we alighted on the proposal for nine months, but we do not want to tie our hands by putting it on the face of the Bill; we want to continue to work with businesses and trade unions to understand whether that is the right figure. Putting a number in the Bill would be premature, because we will have further conversations. As we develop the light-touch process in our deliberations, that may help people to firm up their views about whether nine months is indeed the right amount of time.

The hon. Member for Mid Buckinghamshire questioned the evidence base. Of course there can be no evidence base for people being unfairly dismissed under two years’ employment, because there is no right protecting them from unfair dismissal before then, except for those who may seek to hang their hat on an automatically unfair dismissal. As we have discussed at length, people sometimes do that because they have a sense of grievance about the way they have been treated, and they may well have a legitimate claim.

Hon. Members generally accepted that the labour force survey statistics are not particularly helpful, but there is quite a lot of evidence about the impact of job insecurity more generally and the fact that the two-year qualification period creates uncertainty for individuals. Business in the Community surveyed 4,000 employees, of whom 66% say that their mental health and wellbeing is affected by their personal job insecurity. In written evidence to this Committee, the Union of Shop, Distributive and Allied Workers notes:

“Being dismissed on spurious conduct or capability grounds, without a fair investigation”—

as can happen at the moment under two years of employment—

“can have devastating consequences for an employee. It can destroy the individual’s morale and confidence and…living standards”.

This is happening to people already, and it is having an impact.

There is also evidence to suggest that there are further advantages for the wider economy. The Resolution Foundation has done some research on the cooling effect of people not moving jobs because they do not have job security. Someone who is considering moving from one job to another may be more likely to take the leap if they have that window of protection, so it is important for individuals as well.