Employment Rights Bill

Viscount Colville of Culross Excerpts

Committee stage
Tuesday 3rd June 2025 Lords Chamber

Moved by

[Viscount Colville of Culross]

129: After Clause 26, insert the following new Clause—
“Prohibition of unpaid work experience for a period exceeding four weeks(1) The National Minimum Wage Act 1998 is amended as follows.(2) After section 3(3) (exclusion of, and modifications for, certain classes of person) insert—“(3A) “No provision shall be made under subsection (2)(a) in respect of persons participating in a scheme designed to provide work experience for a continuous or non-continuous period which exceeds four weeks.””(3) After section 41 (power to apply Act to individuals who are not otherwise “workers”) insert— “41A Application of this Act to persons undertaking work experience(1) The Secretary of State must, in exercising the powers under section 41, provide that this Act applies to a person undertaking work experience with the same employer for a continuous or non-continuous period which exceeds four weeks.(2) The Secretary of State must make regulations in accordance with subsection (1) within a period of six months, beginning with the day on which the Employment Rights Act 2025 is passed.(3) Such regulations must provide that a person undertaking such work experience who has ceased to be of compulsory school age, but has not attained the age of 26, is eligible to receive the national minimum wage at the rate specified for workers of the person’s age.(4) In this section—“employer” has the meaning given to it by subsection 54(4) of this Act (Meaning of “worker”, “employee” etc.), and also includes any organisation which provides an individual with work experience;“work experience” means observing, replicating, assisting with and carrying out any task with the aim of gaining experience of a particular workplace, organisation, industry or work-related activity.””Member’s explanatory statement
This amendment seeks to ensure that unpaid work experience cannot be used to avoid National Minimum Wage regulations.

[Viscount Colville of Culross (CB)]

My Lords, I declare an interest as a freelance TV producer. The noble Lord, Lord Holmes, whose amendment this is, has waited and waited to be able to debate it, but now, when the big moment arrives, he is prevented from taking his place in the Chamber by an unbreakable commitment—so the Committee has me.

This amendment is an attempt to address the wretched, exploitative workplace faced by far too many people wanting to enter work. It attempts to create a new definition of “work experience”, which would ensure that participants are educated, and not exploited, as they attempt to join the workforce. I am sure that noble Lords would agree that it is important for new entrants to spend time in a workplace, finding out whether they like the work environment and, even better, whether they are seen as a possible fit for the company.

Much energy has been spent focusing on how to get young people, and people returning to employment, back into the workplace. I am glad that there has been reform and improvement to the apprenticeship schemes, but that is for those who want training in a specific sector. However, many people do not know what they want to do and, for them, internships have been a way to discover whether they can engage with a particular industry and whether it can engage with them. Unfortunately, so many of these internships have turned out to be exploitative.

I have worked in the creative industries all my career, so I have first-hand experience of young people coming in to find out about the industry, only to discover that they are expected to work for either no pay or well below the minimum wage. This is happening not just in the creative industries but across the economy. I have been told about a strengthening coach, working for a major professional sporting body, who was initially on a short-term internship, which became a two-year, daily commitment. During all that time, he was not paid. He loved what he was doing so was afraid to ask for payment and was forced to take a second job to sustain himself.

Internships are essential, and they are covered by the National Minimum Wage Act, so any intern who qualifies as a worker, under the criteria laid out in the Act, should be paid. A new survey by the broadcasting union BECTU reveals that 49% of people joining the creative industries have been pressurised to work for free. In their desperation to get into this competitive industry, many succumb and work for free. The highly respected Sutton Trust found last year that 61% of internships undertaken by recent graduates were underpaid or unpaid. The largest percentage of these jobs are in the south-east, where accommodation is notoriously expensive. It means that those people from the regions and nations, or from more socially disadvantaged families, who cannot afford the accommodation, are prevented from taking up those places. For a Government who are determined and dedicated to getting people into work in well-paid jobs, this is a failure that must be rectified rapidly. Social mobility realises the talent of the whole population; it is the only way to ensure that our nation succeeds economically.

The body charged with enforcing the minimum wage Act is HMRC. Part of the problem is that if the intern is not paid, they do not appear on HMRC’s radar. This is not helped by the fact that so many small companies do not have anybody focusing on personnel issues and, even when they have an HR department, surveys show they are not well enough informed about the law. I ask the Minister: how many prosecutions against employers have there been under the National Minimum Wage Act for unpaid internships?

Amendment 129 is an attempt to sort out the complicated and often exploitative system for those trying to get into the job market. It is crucial to ensure that there is a difference in law between interns, who should be paid, and those undertaking work experience, who should not. Proposed new subsection (4) in the amendment sets out a new legal concept of “work experience”, defined by

“observing, replicating, assisting with and carrying out any task with the aim of gaining experience of a particular workplace, organisation … or work-related activity”.

The most important criterion for what constitutes work experience is that it is voluntary, and participants are not under the control of anyone else. It has to be a learning experience, and must ensure that participants are shadowing and not actually doing the job. Work experience is already part of many T-level courses for young people. Some universities facilitate work experience, but not nearly enough of these places are available. It is a crucial pathway into work life. At a time when we are hearing of so many people who are out of the workforce, it is important that this stage of their career is clearly established and legally defined.

I am pleased that the amendment has a time limit on what counts as work experience. A maximum of four weeks seems like a good duration. It would allow the participant sufficient time to get a grip on what happens in a specific workplace and to decide whether they want to embark on a career there, but, in my view, is not enough time for them to become established as an unpaid intern. So many underpaid or unpaid internships carry on for many more than four weeks, and this amendment would ensure that that does not happen.

The highly respected Sutton Trust says that access to the workplace is a central obstacle to social mobility. I beg the Government to take the suggestion in this proposed new clause seriously. I ask the Minister to examine it as part of a possible solution to the crisis facing new entrants to the creative and other industries. I hope your Lordships will discuss this further when the Committee gets to my noble friend Lord Clancarty’s Amendments 286 and 287 on establishing a freelance commissioner.

Meanwhile, this amendment is focused on the many thousands of young people who want to get into work but do not know what they want to do. If the Government take up the work experience category laid out in this amendment, it will give those people a taste of the workplace, which is crucial to engaging them and crucial to getting them engaged in the job market. I beg to move.

[Baroness O’Grady of Upper Holloway (Lab)]

My Lords, as somebody with long experience of campaigning against unpaid internships, I have a huge amount of sympathy with the motivation behind this amendment.

Certainly, it is true that a key reflection of the reversal of social mobility in this country has been the growth of unpaid internships. It started with the creative industries, where, in the past, a young person from a working-class background used to be able to start as a runner in broadcasting, or as a cub reporter on their local newspaper, and then found their path to national newspapers or progression within broadcasting blocked by the parachuting in of very often young people from wealthy backgrounds, often to senior positions, on an unpaid internship that nobody from a working-class background could afford to take. It costs thousands of pounds, particularly if the position is located in London and you do not live in London. I absolutely agree that unpaid internships have been a block and a major barrier to young working-class people’s progression.

My concern is that, from my perspective, the problem is not the law but the enforcement of the law. As trade unions, we have campaigned to get HMRC to take this seriously. There was a flurry of action around cracking down on unpaid internships, but, since Covid in particular, there has been an uptick—you have only to scan any recruitment agency website and you will see that they are brazenly advertising unpaid internships that lock young working-class people out of the professions, and doing so in flagrant abuse of the law.

Sadly, I cannot support this amendment. I fear that bad employers would be able to offer rolling unpaid internships, shoving young people through a revolving door of not getting paid as they are entitled to be for the productive work that they do. They should be paid at least the national minimum wage. What I would support is the proposed fair work agency launching a major crackdown on young people being robbed of their dreams and opportunities through the exploitative practice of unpaid internships.

--- Later in debate ---

[Lord in Waiting/Government Whip (Lord Katz) (Lab)]

My Lords, I thank all noble Lords who contributed to this short but focused and interesting debate. I too regret that the noble Lord, Lord Holmes of Richmond, was unable to attend; with my Whip’s hat on, I note that perhaps if we had made better progress on earlier days of Committee then we would have heard from him directly. I pay tribute to him for tabling Amendment 129, which seeks to prohibit unpaid work experience for a period exceeding four weeks. I thank the noble Viscount, Lord Colville of Culross, for stepping into the breach and making a more than worthy understudy in moving the amendment. I thank my noble friend Lady O’Grady of Upper Holloway and the noble Lords, Lord Goddard and Lord Sharpe of Epsom, for contributing to this debate. This is an important issue, and the noble Lord, Lord Holmes, and others are right to raise it. I pay tribute on the record to his previous work campaigning on this issue, not least through his Private Member’s Bill in the 2017-19 Session.

This Government made a commitment to deliver the biggest upgrade to workers’ rights in a generation. This includes tackling unfair working practices. As we heard from the noble Viscount, there are examples not simply in the creative sector—although that area of our economy is rife with them—but beyond it. This Government absolutely stand by the national minimum wage, and on 1 April delivered an increase of 16.3% to the 18 to 20 national minimum wage rate to make it £10 an hour—a record amount in both cash and percentage terms, making progress on closing the gap with the national living wage. This is an increase of £2,500 to the gross annual earnings of a full-time worker on the NMW. It was the first step in the Government’s plans to remove the discriminatory age bands and ensure that all adults benefit from a genuine living wage, making a real difference to young people.

I think it is worth saying in passing that we welcome, on this side of the House at least, the Conservative Party’s conversion in recent years to supporting the national minimum wage. However, as a member of the party that introduced it in the first place, in the teeth of some quite vehement opposition at the time, I assure noble Lords that this Labour Government are absolutely committed to supporting it and making sure that it applies in all cases where it should.

Work experience or internships can offer individuals, especially younger people, invaluable opportunities and experience. We do not want to close the door on these opportunities, but we do want to ensure that they are open and fair. Most importantly, where workers are due payment, they should be paid the wages they are entitled to, and I have to say that the current legislation already protects them.

As my noble friend Lady O’Grady of Upper Holloway—to whose years of campaigning in this area, through the TUC, I pay tribute—said, there is an aspect of this amendment, very well-intentioned though it is, that would create unintended consequences and raises the spectre of, as she put it, rolling internships of four weeks, on and on.

As we know, according to the Department for Education’s 2022 employer skills survey, around 5% of employers had offered internships, either paid or unpaid, in the preceding 12 months, and there were around 200,000 people on internships. The vast majority of these—88%—were of two weeks or more in duration, and nearly 30% were over six months. It is only right that these people should be paid the national minimum to which they are entitled.

As we have heard, the national minimum wage legislation provides for a number of exemptions to recognise the importance of gaining work experience. It is important to recognise that these examples have a strong and firm place in the economy, including students on placements for up to one year, as required as part of a UK course of either further or higher education, pupils below the compulsory school age, participants in certain government programmes to provide training, work experience or temporary work, and—the noble Lord, Lord Goddard, made this point—voluntary workers employed by a charity or voluntary organisation, providing they receive no monetary payments, except for expenses.

The Government are committed to banning unpaid internships, unless they are part of an educational or training course. Because of the way legislation is drafted, they are already largely banned. For national minimum wage purposes, the crucial fact is whether someone is considered a worker due to the nature of the work they do. Employers cannot simply call someone an intern or say they are doing work experience and not pay them. What matters is whether the arrangement they have makes them a worker for minimum wage purposes. However, one valid exception is work shadowing, which is where individuals are observing others perform tasks and are not performing any work themselves.

There is a risk that the broad-brush nature of this amendment could create loopholes, leaving interns or individuals on work experience open to abuse. Where an intern is carrying out tasks, they are a worker and therefore entitled to the national minimum wage. Accepting the amendment could mean that these individuals could be recruited for short-term roles and lose their entitlement to the minimum wage, even if they are performing work. The Government will be consulting on this issue soon. We want to engage with businesses and individuals who carry out internships or work experience. This is how we introduce change to ensure that individuals are protected and treated fairly.

We have heard from both the noble Viscount, Lord Colville, and my noble friend Lady O’Grady that enforcement is the issue here. The noble Viscount, Lord Colville, asked about the number of prosecutions. I am afraid I do not have that number to hand, but I will certainly undertake to write to the noble Viscount. Enforcement of any law is important, and I am sure that part of the consultation will cover issues of enforcement. Creating more laws but not solving the problem of enforcement would not actually get to the heart of the issue, which is making sure that, when people work, they are paid the national minimum to which they are entitled.

In that vein, I hope that we can deal with the issues the noble Lord, Lord Holmes, wishes to address most effectively outside the Bill. I therefore ask the noble Viscount, on behalf of the noble Lord, Lord Holmes of Richmond, to withdraw Amendment 129.

[Viscount Colville of Culross (CB)]

My Lords, this has been a short but informative debate and I am grateful to noble Lords who contributed. I listened very hard to the comments from both the Minister and the noble Baroness, Lady O’Grady, on making sure that we enforce the national minimum wage. The national minimum wage has been in force since, I think, 1998. That is a long time for it not to be enforced, and it includes a time when there was a Labour Government. I very much hope that this will be an extra nudge to make sure that it is enforced and HMRC is given very direct instructions to make sure it happens. As the noble Baroness pointed out, the lack of enforcement is very deleterious to getting working class people into work.

On the noble Baroness’s and the Minister’s concern about it creating a revolving door, surely it cannot be beyond the wit of us to work out that, after you have done your four weeks of work experience, you are not allowed to go back or to stay—that is why we have a four-week block. It is useful to carve out a particular role for people who are there just for educational or work experience reasons, which is quite separate from being an intern.

I hope very much that the Minister and the Government will take on board this amendment and these thoughts as they contribute to the effort to stamp out unfair work practices. On that note, I beg leave to withdraw the amendment.

Amendment 129 withdrawn.