Employment Rights Bill
Public Bill Committee, 28 November 2024.
(Morning)
Graham Stringer (Labour, Blackley and Middleton South)
We are now sitting in public and the proceedings are being broadcast. In line with the sittings on Tuesday, for each panel of witnesses I propose to call the shadow Minister to ask the first question, followed by the Minister and the Liberal Democrat spokesman. I will attempt to alternate between Opposition and Government Members. That will not always be possible, because sometimes three people from one side want to speak and nobody from the other, but I will aim to balance it up. We have to stick to the cut-off time specified in the programme order, and I will interrupt questioning if necessary.
Can I remind Members that they must declare any relevant interests when asking questions? Before we start hearing from witnesses, do any Members wish to make a declaration of interest that they have not already declared in connection with the Bill? Members should ensure that interests are declared before speaking or tabling amendments. If there are no questions or declarations, I will move to the first set of witnesses.
Examination of Witnesses
Graham Stringer (Labour, Blackley and Middleton South)
We will hear oral evidence from Claire Costello, chief people officer at the Co-op, Helen Dickinson, chief executive of the British Retail Consortium, and James Lowman, chief executive of the Association of Convenience Stores. We have until 12.10 pm for this panel. Would the witnesses be good enough to introduce themselves for the record—very briefly, as we are pressed for time?
Greg Smith (Conservative, Mid Buckinghamshire)
Good morning to the witnesses. This quite far-reaching Bill will have a significant impact on your direct employees and the employees of the businesses you represent. We heard evidence in previous sessions that some of the Bill’s measures will make many businesses more reticent to take on new employees, and certainly more reticent to take a risk on someone who might deserve a chance, or a second chance, in life. Do you share that assessment? Are you concerned about the direct implications of this legislation on hiringQ91 ?
Greg Smith (Conservative, Mid Buckinghamshire)
What would be the idealQ probationary period?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Has the Co-op done any modelling of what the provisions in this Bill would cost the whole business?
Greg Smith (Conservative, Mid Buckinghamshire)
Q This is my final question for you, and then I will bring in the others for the same set of questions. Do you believe, in principle, that the Bill will cost the Co-op money?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Thank you. Helen Dickinson?
Greg Smith (Conservative, Mid Buckinghamshire)
Please do.
Greg Smith (Conservative, Mid Buckinghamshire)
There has been a lot in the media, and I have seen this in my constituency, about workers in retail and convenience stores facing unacceptable abuse. Shoplifting is particularly problematic in many places at the moment. Do you think that some measures in the Bill will add to the difficulties in recruiting to the sector, because people are that bit more nervous about coming face to face with an abusive customer or shoplifter?Q
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Good morning, everyone. Like a number of other witnesses who have spoken, I think you are generally supportive of and positive about the impact of the Bill. Do you feel that it will help to raise standards across the board and create the level playing field that we are trying to achieve?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Claire, you have said that a lot of the things in the Bill are things that you do already. Could you expand on why these are things that you have done already, above and beyond your legal requirements? Is it about improved worker wellbeing? Retention? Productivity? What are the benefits that you see from taking these steps?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Thank you. Helen and James, is there anything you want to add to that?
Steve Darling (Liberal Democrat, Torbay)
I know from conversations that I have had with businesses in my community that the Budget is set to have a significant impact on employers. Although there is a lot to welcome, broadly, in the Bill, would taking a more staged approach to its implementation be of help, or are you confident that your businesses could take this in one big bang?Q
Graham Stringer (Labour, Blackley and Middleton South)
Please be brief, Mr Darling; we have a lot of people wanting to come in.
Steve Darling (Liberal Democrat, Torbay)
Q I will be brief. Tackling harassment is a really important duty and a really important part of this Bill to me. I would welcome your reflections on how the Bill could be strengthened to support employers in this area, which in Torbay hits hard, particularly for young women.
Alex McIntyre (Labour, Gloucester)
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?Q
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?
Peter Bedford (Conservative, Mid Leicestershire)
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?Q
Peter Bedford (Conservative, Mid Leicestershire)
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.
Alison Hume (Labour, Scarborough and Whitby)
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?Q
Sarah Gibson (Liberal Democrat, Chippenham)
My constituency has an enormous number of what I would call small businesses or even microbusinesses; the obvious ones are in retail and hospitality, but there are also innovative manufacturing businesses. We have mentioned the fact that some of these rules are quite onerous for very small businesses that only have three or four members of staff. Is there any scope for some exceptions to some of these rules for businesses under a certain size?Q
Graham Stringer (Labour, Blackley and Middleton South)
I call Michael Wheeler to ask a very brief question, which should receive a brief answer.
Michael Wheeler (Labour, Worsley and Eccles)
Thank you to the panel for your evidence so far.Q
I will just circle back to guaranteed hours. Although I appreciate that flexibility is of value in the sector, if the hours are there in the business and regularly being worked, would you not agree that that demonstrates there is a need for those hours in the business to be worked, and therefore, in the interests of fairness and financial security for workers, should those hours not be guaranteed for them?
Graham Stringer (Labour, Blackley and Middleton South)
Order. I have to bring this session to an end. We have run out of the allotted time, and sadly, there are some Members of the Committee who did not get the opportunity to ask the questions that they wanted to ask. However, I thank the witnesses for the time they have spent with the Committee.
Graham Stringer (Labour, Blackley and Middleton South)
We will now hear oral evidence from Joanne Cairns, head of research and policy at the Union of Shop, Distributive and Allied Workers, and Liron Velleman, head of politics at Community. This session can continue until 12.40 pm.
Greg Smith (Conservative, Mid Buckinghamshire)
Q I am sure you are aware that the independent Regulatory Policy Committee has found the impact assessments on the Bill to be, in its words, “not fit for purpose”. Are you concerned that the impacts of the Bill on your members, or indeed on the wider economy, have not been properly assessed?
Graham Stringer (Labour, Blackley and Middleton South)
I should have asked you to very briefly—in a sentence—introduce yourselves. Will you do so at the start of your answers? Thank you.
Greg Smith (Conservative, Mid Buckinghamshire)
Sorry, £30 million?
Greg Smith (Conservative, Mid Buckinghamshire)
Q On Tuesday, we heard a witness from a different trade union say that the Bill will lead to the re-unionisation of the economy. Do you concur with that assessment? If you do not, or perhaps even if you do, are there any areas in which your unions feel the Bill should actually be going much further?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Good morning. One of the issues the Bill is trying to tackle is the level of insecurity at work. Could you explain a little bit about how the current framework impacts your members in terms of insecurity?
Steve Darling (Liberal Democrat, Torbay)
Q I have one short question. How do you see the Bill impacting the United Kingdom’s productivity?
Laurence Turner (Labour, Birmingham Northfield)
For context in respect of a previous question, the record shows that “re-unionisation of the economy” was language used in a question by the shadow Minister, not in an answer from a witness.Q
The Bill covers part of the “Make Work Pay” agenda. Are there other measures in the “Make Work Pay” document published earlier this year that should be included in the Bill?
Chris Law (Scottish National Party, Dundee Central)
IQ want to ask Joanne a little bit about USDAW’s experience dealing with Tesco. Tesco is one of the biggest employers in my constituency and it has a live case in the Livingston distribution centre regarding fire and rehire. I know that USDAW has put a lot of resources into taking Tesco to court over its distribution centres elsewhere—it won and then unfortunately lost on appeal. In our attempt to ban fire and rehire, do you think it is reasonable to include in this Bill a clause that basically allows a “get out of jail free” card? If we look at those who have tried to exploit fire and rehire so far, it is P&O, British Gas, Tesco, British Airways—they are not small companies. The clause says that if the company is in financial difficulties then fire and rehire could be continued. Do you think that should be taken out of the Bill altogether?
Anneliese Midgley (Labour, Knowsley)
In our evidence sessions earlier this week we heard concerns about changes to collective redundancy, and particularly the changes to the “one establishment” rules. What are your views on the provisions in the Bill?Q
Nick Timothy (Conservative, West Suffolk)
Further to a point that Mr Turner made, my recollection of the session on Tuesday was that re-unionisation was first mentioned by Mick Lynch, but we might want to check the record about that.Q
You are obviously pleased with the legislation, and I know you think it could go further; I just want to ask a little about how you would characterise your engagement with the Department. Was it very welcoming? How many meetings did you have with Ministers and officials? Were draft clauses shared with you? How constructive was it?
Nick Timothy (Conservative, West Suffolk)
But could you answer specifically my questions about how many meetings you have had with Ministers and officials and whether clauses were shared with you?
Nick Timothy (Conservative, West Suffolk)
But you are not answering my question. I am asking you a question; I would like you to answer it.
Nick Timothy (Conservative, West Suffolk)
Did you see draft clauses?
Nick Timothy (Conservative, West Suffolk)
Okay. Joanne Cairns?
Uma Kumaran (Labour, Stratford and Bow)
Thank you both for your evidence today. How important is managing work and caring responsibilities to your members? How will the Government’s “Make Work Pay” agenda and the Bill help to address those issues?Q
Graham Stringer (Labour, Blackley and Middleton South)
As there are no further questions, let me thank our two witnesses for attending.
Examination of Witness
Graham Stringer (Labour, Blackley and Middleton South)
We will now hear oral evidence from Nye Cominetti. We have until 1 pm for this panel. Could you briefly introduce yourself, Nye?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon. May I come back to the question I put to the previous panel about the Regulatory Policy Committee’s verdict on the impact assessments for the Bill? I am confident—unless you shout me down instantly—that the Resolution Foundation will have looked at that and have done some research around it. Do you share the Regulatory Policy Committee’s assessments, including that eight of the impact assessments for the Bill are “not fit for purpose”?
Greg Smith (Conservative, Mid Buckinghamshire)
Well, the Regulatory Policy Committee has said that eight of the impact assessments for this Bill—the separate columns—are not fit for purpose. Do you think the Bill had its tyres kicked hard enough before it went into Second Reading and Public Bill Committee?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Has the Resolution Foundation attempted to put a number on the impact on the economy, positive or negative, of this Bill?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I appreciate that you will probably put caveats around this, given your previous answer, but do you have a view on whether the Bill will ultimately—ballpark—result in more jobs in the economy, the same number or fewer?
Greg Smith (Conservative, Mid Buckinghamshire)
What do you base that on?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q What is your assessment of the current landscape, in terms of security and income, for lower and middle-income earners?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q I assume that it would be quite difficult to quantify in economic terms the impact of removing that anxiety for 2 million workers, but if you were able to have a go at that, I would be interested to hear it.
Steve Darling (Liberal Democrat, Torbay)
Q My constituency, Torbay, is sadly in the upper quartile of the most deprived constituencies. I would welcome your reflections on how the Bill could have an impact on constituencies such as mine where there are high levels of deprivation.
Chris Murray (Labour, Edinburgh East and Musselburgh)
CouldQ you say more about the impact of the current system of zero-hours contracts on the individual and, more broadly, on the wider economy and the labour market? I am thinking about poor retention, disengagement and the impact on the benefits bill. How does that system affect the economy currently?
Chris Murray (Labour, Edinburgh East and Musselburgh)
What about worker retention? That was the other question—
Graham Stringer (Labour, Blackley and Middleton South)
Order. Excuse me, but we are getting very tight for time.
Sarah Gibson (Liberal Democrat, Chippenham)
Q I have a quick question. Do you think that some of the reforms in the Bill will genuinely help people who are disabled to go back into work in a more flexible and safer environment, and will therefore encourage them to take on employment where perhaps they are not doing that at the moment?
Laurence Turner (Labour, Birmingham Northfield)
Q I was struck, in the impact assessments, by the statements that a number of the costs, but particularly more the benefits, or potential benefits, of these measures cannot currently be quantified. There are, of course, well-advertised problems with UK labour market statistics at the moment. Realistically, what more could the Government do in respect of future measures to better capture the full range of costs and benefits associated with employment law?
Chris Law (Scottish National Party, Dundee Central)
Q I am sure you welcome some of the proposed changes to statutory sick pay. One key problem with it is the level of sick pay. People still go to work ill because the level of sick pay is simply not enough: £116.75 averages 18% of the average weekly wage at the moment. That is half the equivalent percentage when it was introduced in the 1970s, and it is the lowest of all OECD countries. Would you like to see a threshold put into the Bill by which that is measured, so that we can get statutory sick pay that stops people going to work when they are ill?
Graham Stringer (Labour, Blackley and Middleton South)
I am afraid that brings us to the end of the time allotted for the Committee to ask questions of this witness, and for this sitting. I thank you very much for coming along this afternoon and answering the Committee’s questions.
Examination of Witnesses
Christopher Chope (Conservative, Christchurch)
Welcome back. Will the witnesses introduce themselves, please?
Greg Smith (Conservative, Mid Buckinghamshire)
Good afternoon, gentlemen. I will put the same question to you as I put to the other trade union representatives we have heard from so far. The Bill is wide-reaching. Some people from other trade unions have even suggested that it would re-unionise the economy, to use words we heard on Tuesday. Do you share that assessment, and do you feel—because this is an important test—that your unions believe the Bill goes far enough?Q127
Greg Smith (Conservative, Mid Buckinghamshire)
Q So you do not think that there is any part of the Bill that is deficient, and that your union would rather see strengthened or modified in any way.
Greg Smith (Conservative, Mid Buckinghamshire)
Q What does that look like?
Greg Smith (Conservative, Mid Buckinghamshire)
Q You mentioned the 20% unionisation rate. Do you have a target that you want to see?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q It is a pleasure to see you in the Chair this afternoon, Sir Christopher. Good afternoon, gentlemen. Generally speaking, do you think that the Bill will improve working conditions, particularly for those in low-paid and insecure work?
Sarah Gibson (Liberal Democrat, Chippenham)
I am curious about whether you feel that the Bill’s provisions will encourage and support those who have been long-term unemployed, or those who find it difficult to get back into employment. Are the flexibilities embedded in the Bill going to help people back into work, as opposed to helping only those who are already in workQ ?
Anneliese Midgley (Labour, Knowsley)
Before I ask this question, I refer Members to my entry in the Register of Members’ Financial Interests. I am also a member of the GMB.Q
I want to ask about balloting. What are the practical implications for your unions of paper balloting? What sort of difference do you think electronic balloting will bring?
Chris Law (Scottish National Party, Dundee Central)
We have heard a general consensus breaking out around fire and rehire, but part of one of the clauses in the Bill has a bit of a loophole, to put it bluntly—“likely” financial difficulties. We have heard already today, and we heard on Tuesday, that that could be a back door for employers. I would like to hear your views on that more generally, but, Andy, you raised the situation with statutory sick pay. The witness from the Resolution Foundation was asked earlier today whether the Government have gone far enough, and he said that they have only gone “halfway”, in particular because statutory sick pay currently stands at £116.75, which is less than one fifth of the average weekly wage, and it has halved since it was introduced. It is the lowest of all the OECD countries. I want to ask both of you if that is something you want to see improved in the Bill, because there is no mention of any increase whatsoever.Q
Chris Law (Scottish National Party, Dundee Central)
Q Can I press a little bit further on that, Mike? I understand that there should be some room for employers who are under extreme financial stress, but the employers we have looked at so far—British Airways, P&O, British Gas, Douwe Egberts and Tesco—are not small companies. They have deep, deep pockets. They could exploit this loophole in the Bill. I wonder what you think about the language and whether it needs to be tightened or removed completely.
Michael Wheeler (Labour, Worsley and Eccles)
This is a question particularly for Mr Prendergast. What do you think will be the impact of reinstating the school support staff negotiating body—a measure that your union has long called for—on your members in schoolsQ ?
Nick Timothy (Conservative, West Suffolk)
I think that you, like all the other witnesses from the trade unions, were quite pleased with the Bill, and understandably so. I know you said that you felt shut out over the 14 years of government until the general election. I want to ask about your engagement with the Department and with Ministers, and indeed with No. 10. How many Q meetings have your organisations had with officials, special advisers and Ministers, and were you involved in any of the drafting of the clauses of the Bill? Did you see any in advance before publication, and that kind of thing?
Christopher Chope (Conservative, Christchurch)
Thank you very much. I am afraid that we now have to go on to the next panel of witnesses.
Christopher Chope (Conservative, Christchurch)
Dr Tidball, do you wish to make a declaration of interest now?
Marie Tidball (Labour, Penistone and Stocksbridge)
It may be that I do not ask a question, but for clarity, Professor Alan Bogg was my professor for labour law many years ago, and we were at one point work colleagues.
Christopher Chope (Conservative, Christchurch)
I do not know what the collective noun for professors is—a proliferation, perhaps. Anyway, could you please introduce yourselves briefly?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon to the witnesses. You are professors of law, but we have heard from other witnesses that the Bill has a lot of holes in it and is very reliant on secondary legislation further down the track. Given that it is such a reforming piece of proposed legislation, do you believe it to be a good proposal, in terms not of its content but of the way you should go about making law?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I am sure you will have seen that the Regulatory Policy Committee has been quite damning of the impact assessments done on the Bill. You said that it has been delivered at lightning speed, so perhaps we should not be surprised that the impact assessments do not necessarily add up. How concerned are you on a point of law, or indeed a point of employment law, that legislation is coming through for which the impact assessments have been branded by a very well-respected independent body as “not fit for purpose”?
Greg Smith (Conservative, Mid Buckinghamshire)
Q My final question is off the back of that. On Tuesday, Mick Lynch—let us name him—told us that the Bill will lead to the re-unionisation of the economy. Is he getting overexcited?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Just to aid the witnesses, it was the shadow Minister who used the term “re-unionisation” in the evidence session on Tuesday, rather than one of the witnesses. That may be why it is not something that is particularly resonating with you.
I want to ask you in particular, Professor Deakin, about the impact of the regulations on increased productivity and innovation—the general economic benefits. Do you think that that will have a positive impact on such issues?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Professor Bogg, do you want to add anything?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q I am a simple lawyer, too. Could I ask you, Professor Bogg, how you feel the fair work agency will help improve the employment landscape?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Professor Deakin, anything to add?
Sarah Gibson (Liberal Democrat, Chippenham)
Q Interestingly, earlier today, the Resolution Foundation mentioned that small businesses without HR departments will struggle without clearer legislation and guidance if the Bill is passed. Many retail businesses in my constituency are closed because of flooding this week, so we had a lot of time to discuss the Employment Rights Bill while scrubbing floors. People from those businesses joked that they would not be able to understand it. They also saw themselves in lengthy tribunals, with the tribunals not sitting. Of course, a lot of their employees are not unionised. A huge percentage of the population, especially in rural areas, have no union representation. Both sides are in a difficult situation. Are there elements of the Bill that lack clarity and that will lead small businesses into trouble and, therefore, their employees into difficulty? Or is that something that should be picked up elsewhere?
Alison Hume (Labour, Scarborough and Whitby)
I cannot resist the temptation of having three professors in a row in front of us. If you could make one change to the Bill, what would it be?Q
Nick Timothy (Conservative, West Suffolk)
Q I thought that I would quickly clear up the disagreement that seems to have broken out between the two sides of the Committee, so I have gone through the record of Tuesday’s session. Paul Nowak said:
“It is very likely that we will see increased unionisation as a result of the Bill”––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 67.]
and Mick Lynch said that the Bill will mean that “many workers”—more than 50%, he hoped—
“are covered by collective arrangements in one form or another.” ––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 62.]
That is up from 22% today. So I think it is fair to describe that as re-unionisation. I do not really understand why the Labour party would be so ashamed of doing such a favour for the Labour movement, of which it is a part. But anyway, you just mentioned P&O. I just wanted to ask you, who did you think was right about P&O? Was it the Transport Secretary or the Prime Minister when he slapped her down for criticising them?
Nick Timothy (Conservative, West Suffolk)
It is about employment rights. We have been discussing P&O throughout the whole—
Christopher Chope (Conservative, Christchurch)
If nobody wants to answer the question because you don’t know the answer, that is fine.
Nick Timothy (Conservative, West Suffolk)
Q Okay, you don’t want to answer that; I will ask another one.
One of my concerns about labour market regulation relates to the use of substitution clauses by firms like Amazon and Deliveroo, where they give a licence to a courier and the courier is then entitled to share that licence with others. The expectation is that responsibility for checks for things like the status of the substitute, in terms of whether they can work legally and so on, and responsibility for the pay that will be provided to that person, all lies not with Deliveroo or Amazon, but with the person that they have contracted with in the first place. That is not dealt with in the Bill at all; I think it should be. Can you expand on that, please?
Marie Tidball (Labour, Penistone and Stocksbridge)
Q You have mentioned where the Bill places the UK internationally in terms of strike law. Where do you think the Bill broadly places the UK compared with other developed nations, when it comes to the level of employment rights?
Chris Law (Scottish National Party, Dundee Central)
Q We have heard from each of you about what you would ideally like to see in the legislation. One thing we have heard is that it is going either too fast or too slow for businesses. What are your thoughts on how much time will be required for businesses and employees to be ready for this legislation?
Christopher Chope (Conservative, Christchurch)
I am sorry; we do not have time for any more contributions, but thank you for your attendance.
Christopher Chope (Conservative, Christchurch)
Good afternoon. Thank you very much for coming along. Would each of you introduce yourself, please?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon, gentlemen. This is a far-reaching Bill. We have heard from the Government and from other witnesses that there is potentially a £5 billion cost to the economy associated with it. Others have suggested that that might even be a small c conservative estimate. From the perspective of your business interests, what is the likely impact of this Bill on the bottom line economically, as well as to overall job numbers in the economy?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I certainly recognise the picture you paint of Banbury; it is very close to my constituency and I am sure you have people from Buckinghamshire on your payroll. What modelling and projections have you done—on the presumption that the Bill becomes law and obtains Royal Assent at some point next year—on employment numbers in your businesses?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Good afternoon. A number of witnesses, including many from the business community, have welcomed the intention behind the Bill to increase workplace protections. Do you feel that the current employment law landscape is too favourable to employees, too difficult for employees or about right?
Sarah Gibson (Liberal Democrat, Chippenham)
Q I am glad to hear that you share my concerns for small and medium-sized enterprises. As you have probably all noticed—it is in my declaration of interests—I have run a small business both here and on the continent for most of my adult life, so I feel for them. It was the first thing that came up once I started to read the Bill.
You mention that you are concerned about day one rights. I wonder about the changes in the probation period. We seem to be in agreement that it might affect where you draw your prospective employees from. Can you suggest any amendments to the Bill that might encourage the entrepreneurial small businesses we so rely on to continue to take on staff from areas of deprivation or the long-term unemployed—those who currently struggle to get work?
Laurence Turner (Labour, Birmingham Northfield)
Q I apologise to the panel for returning to an earlier dispute in this quite disjointed way, but just for the record, earlier this week one of our witnesses, Paul Nowak, said:
“I do not think there is a direct link; you do not pass a piece of legislation and trade union membership and collective bargaining go up”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 67.]
Another witness, Mick Lynch, said that personally he hoped to see 50% collective bargaining coverage. That is compared with 39% now. It seems like thin margarine to me and certainly not a unionisation of the economy, but there we go.
My question to the panel is the same question that was put to employers’ federations earlier this week. We all understand the points that you have made, but are there specific measures in the Bill that you welcome?
Nick Timothy (Conservative, West Suffolk)
It is quite conspicuous that you are the first two witnesses, I think, who actually run businesses yourselves, and your evidence is rather different from much of the—
Nick Timothy (Conservative, West Suffolk)
I would have to leave that to them.
Nick Timothy (Conservative, West Suffolk)
Q Indeed. With not just the Bill, but the increase in employer’s national insurance contributions and things like the equalisation of the national living wage for young people—you also mentioned energy prices, Mr Johnson, which are a particular concern of mine—you sound very worried about the future of innovation, investment and ultimately jobs in this country. You have a platform today to send a message to the Prime Minister and all the Ministers who are involved in this legislation. What would that message be?
Michael Wheeler (Labour, Worsley and Eccles)
Q As the Minister says, we have heard from businesses and their representative groups, which have said that good employers have nothing to fear from the measures in the Bill; in fact, they welcome the level playing field to prevent undercutting. Given that the purpose of the Bill is to promote good-quality employment, what are the specific measures in it that you think do not contribute to that aim?
Michael Wheeler (Labour, Worsley and Eccles)
Q Michael, let me ask you the same question: given that the purpose of the Bill is to promote good-quality employment, what are the specific measures in it that you think do not contribute to that aim?
Christopher Chope (Conservative, Christchurch)
I am afraid that that brings us to the end of this panel, because we are not allowed to go beyond 3.40 pm. Thank you both very much for sharing with us your knowledge and experience, based on your work as employers.
Christopher Chope (Conservative, Christchurch)
We now come to the next panel. Good afternoon and thank you for coming along. Can I ask you both to introduce yourselves briefly?
Christopher Chope (Conservative, Christchurch)
Sorry; I think that is enough. Perhaps if you have more to say, you will be able to bring it out in answer to questions.
Greg Smith (Conservative, Mid Buckinghamshire)
Q I have a straightforward question that will probably provoke some debate. Impact assessments of any bit of legislation are clearly hugely important to the Equality and Human Rights Commission. Who is right—the Government or the Regulatory Policy Committee—in their condemnation of the impact assessments?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I appreciate that, from the perspective of the Department of Business and Trade, there might be a more clearcut answer, but from your perspective, Mr Kirkpatrick, given your answer earlier, do you think there is a high risk that the measures in the Bill could reduce the number of jobs in the UK economy?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q May I ask you, Margaret, for your views on how the fair work agency might help in the enforcement landscape?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Could you give us some examples of the sorts of areas or issues that might benefit in that way?
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q Do you both feel that the Bill and the fair work agency in particular will help to protect people with protected characteristics at work?
Sarah Gibson (Liberal Democrat, Chippenham)
Q Quite a few witnesses have said of the improved employee rights that, in fact, the existing employee rights are often not exercised because the tribunals are slow and expensive—they prove expensive for both sides. We have poorer enforcement than most of our OECD colleagues around the world. That is particularly true for industries that, as you just highlighted, are not necessarily unionised, such as hospitality.
Are there any specific areas of the Bill that you think could be simplified? Obviously, we have been discussing other things outside the remit of the Bill, but within the Bill itself are there any specific areas that, if they were simplified, would make enforcement easier and more effective?
Chris Murray (Labour, Edinburgh East and Musselburgh)
Margaret, I have a question for you, specifically about the Gangmasters and Labour Abuse Authority. It strikes me that a lot of our discussion is about things like zero-hours contracts and wage enforcement, but the GLAA deals with a different set of labour market challenges: the excluded or isolated groups, such as shellfish workers, or the victims of modern slavery. It is a first responder to the NRM—the national referral mechanism—so it has a different set of responsibilities.Q
First, what is your assessment of how effective the GLAA has been, given how it was constructed, and how has it been able to perform its functions? Secondly, specifically on modern slavery—thinking about those the GLAA was set up to protect, such as the Morecambe Bay cockle workers—how do you see those functions working in a single enforcement body?
Steve Darling (Liberal Democrat, Torbay)
I experienced a conversation with sixth-formers in Torbay who were sexually harassed in the workplace. I would welcome your thoughts on how the Bill could be strengthened so that it is supportive of employers in their support for people who experience such a situationQ .
Christopher Chope (Conservative, Christchurch)
Do not worry about the bell.
Uma Kumaran (Labour, Stratford and Bow)
Thank you, John and Margaret for the important work that you both do in your respective roles. How do you believe that the measures in the Bill could improve opportunity for workers of all backgrounds? I am thinking specifically on class, race and disabilityQ .
Christopher Chope (Conservative, Christchurch)
If there are no further questions, may I thank you both for coming along and sharing your expertise with us this afternoon?
Examination of Witness
Christopher Chope (Conservative, Christchurch)
Dr Stephenson, would you please introduce yourself briefly?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Good afternoon, doctor. Given the work you do, which you have just described, what is your assessment of what the Bill will do for women and men in the workplace?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I hesitate to interrupt you, but can you give us an indication of where you think statutory sick pay should sit? What should its value be?
Greg Smith (Conservative, Mid Buckinghamshire)
Q That is a hugely comprehensive answer, and I am very grateful for it. One bit of evidence we heard from other witnesses earlier in the week, which I do not think you covered in your list, was a disappointment that there has not been an extension to bereavement leave in the horrible, sad circumstances of a pregnancy loss. Is that also on your list of things that you would like to see?
Greg Smith (Conservative, Mid Buckinghamshire)
That is very helpful. Thank you.
Justin Madders (Labour, Ellesmere Port and Bromborough)
Q The shadow Minister was right: your response to the initial question was a comprehensive critique of the Bill. I will ask you a bit more about sexual harassment and the issues with preventing that and dealing with third-party harassment. Have you been concerned about that?
Sarah Gibson (Liberal Democrat, Chippenham)
Q Do you think that the measures in the Bill go anywhere in the way of supporting those with family or carer responsibilities?
Alex McIntyre (Labour, Gloucester)
One of our previous witnesses, Luke Johnson, said that one thing that he thought was bad for business in the Bill was increasing access to paternity leave. Mr Johnson publicly backed the now Leader of the Opposition in her leadership campaign, and she of course said that maternity pay had gone too far. Do you think, in reflecting on your evidence, that those comments belong to the 1950s, and do you see the benefits for both business and workers in protecting mums and dads in the workplaceQ ?
Anneliese Midgley (Labour, Knowsley)
Q I want to follow on from the last question. A previous witness today said, “I think, if you introduce lots of rights like paternity rights and flexible working rights from day one, you risk having more problems and that will be a cost.” I just want to go a bit deeper into your assessment of that and whether you think family leave and flexible working should be viewed as a net cost.
Uma Kumaran (Labour, Stratford and Bow)
Q Thank you, Dr Stephenson. I am really proud that my constituency is the home of the match girls’ strike; the fight for women’s rights in the workplace runs deep in the history of my politics. How do you think the measures in the Bill will benefit women’s workforce participation? You have talked about some of the broader views, but if there is one thing in particular that you think will mark a real difference, I would be keen to know it.
Alison Hume (Labour, Scarborough and Whitby)
Q Some 20% of all employees in my Scarborough and Whitby constituency work in the hospitality sector, and obviously a large number will be women. According to the latest Office for National Statistics figures, 50% of women in part-time jobs in my constituency were paid below the living wage. Can you drill down a little more into how the Bill will lead to greater income security for women working in hospitality?
Marie Tidball (Labour, Penistone and Stocksbridge)
Q I have two questions. First, to pick up on your point about the economic inactivity of women with caring responsibilities, can you reflect on the value of the maternity leave and paternity leave protections in the Bill for women and their job retention and economic activity? As part of that, what other opportunities are there in relation to paternity and parental leave to strengthen women’s economic activity?
Secondly, we heard from an earlier witness that they were not certain whether the Bill would lead to a decrease in jobs among people with protected characteristics. What is your perspective on the role of the Bill in positively affecting those who have protected characteristics, particularly women and disabled women?
Laurence Turner (Labour, Birmingham Northfield)
Q Dr Stephenson, I would like to ask about outsourcing and outsourced workers, an often-overlooked part of the labour market. We know that women and people from ethnic minority backgrounds are more likely to be outsourced. What is your opinion of the clauses in this Bill in relation to the extension of gender pay gap reporting to outsourced workers and the restoration of the two-tier code for outsourced workers from the public sector?
Christopher Chope (Conservative, Christchurch)
Thank you very much for coming along and giving your evidence.
Christopher Chope (Conservative, Christchurch)
We now come to the finale—the Minister. Can you briefly introduce yourself for the record, please?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I am slightly bemused by having a member of the Committee also answering questions. Many of the things that I and my colleagues from the official Opposition will be asking you will come in the line-by-line sessions in the coming weeks, but may I briefly ask you about the Regulatory Policy Committee? I fully appreciate that you are going to want to stand by your Bill and defend it rigorously, and fundamentally I am not going to criticise you for that, because that is your job. However, it is pretty unusual in the legislation of this Government and previous Governments of all political persuasions—I accept that we are still in early days—to have a body such as the RPC so comprehensively say that the impact assessments are not fit for purpose. Do you accept any of its criticisms, and what are you and the Department doing to answer those criticisms?
Greg Smith (Conservative, Mid Buckinghamshire)
Q Thank you for that answer; we will explore that more in coming weeks. I accept the political narrative of doing something in 100 days. That is well-established for Governments around the world, and Conservative Governments in the past may well have been guilty of it too. However, this is a big, reforming piece of legislation—I might not agree with all of it, but I accept that it is a big, reforming piece of legislation, on which we have heard a lot of evidence. It is obvious to anyone who reads the Bill that it has an extraordinary requirement for secondary legislation down the line. Beyond the political optics, was there any reason to get it published in 100 days, given that you have a mandate of five years through to August 2029?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I have two more points, if I may. First, clearly, some of the most striking evidence we heard that did not agree with much of the Bill was from Luke Johnson and Michael Lorimer earlier. Do you feel that the Government have engaged those who run businesses and employ people in the private sector, as opposed to representative bodies of businesses, enough in the research and drafting of the Bill?
Greg Smith (Conservative, Mid Buckinghamshire)
Q I hope my last point might be more consensual as we move forward. I was very sympathetic to one of the sides of this coin before the Committee started, and the evidence today has given me food for thought on the other one. The first part is bereavement leave in the event of pregnancy loss, which is a position I have a lot of sympathy for. The other is the differential we heard about from Dr Stephenson around maternity pay versus maternity allowance and how that intersects with universal credit. I thought that was a powerfully made point. I am not expecting a cast-iron answer now, but are the Government willing to consider changing the Bill to incorporate those two asks?
Greg Smith (Conservative, Mid Buckinghamshire)
And on bereavement leave?
Sarah Gibson (Liberal Democrat, Chippenham)
Q I have three short points to make. I am assuming that you are quite concerned that we have heard various sides talk about the fact that the Bill will not encourage employers to take on new staff. That goes strongly against what you are hoping to do in terms of getting Britain working again, which is something to be applauded. I am particularly concerned about how small businesses will cope with the changes on probation periods, and I wonder whether you will be prepared to consider changes to those periods.
Sarah Gibson (Liberal Democrat, Chippenham)
Q I have to say that if you considered that to be two questions, then I have four. My second question—your third—is to do with the fact that we have had quite a lot of evidence concerning sick pay and the fact that it is so much lower than almost everything else. As any employer will know, having employees limp in when they are sick is counterproductive to them getting better and being on 100% form, and it affects those who are not sick. Is the amount of pay for people on sick leave something that you are interested in considering?
Sarah Gibson (Liberal Democrat, Chippenham)
Q Fair enough. My last point is one that was made earlier by one of our witnesses—it possibly also comes under the Department for Work and Pensions—about losing your universal credit when you take on employment. If that employment is flexible because that is what you need in order to get yourself back into work in a gradual way, because that flexible work can vary, you can end up—I have cases of this in my constituency—trying to juggle the numbers between what you are entitled to in universal credit and what you think you will earn, only to find that you did not earn that much, or earned slightly more and are penalised. I have to say, having sat down to try to do the maths with people in that situation, that it was unbelievably complicated to work out whether they were in breach or not. I feel that some kind of simple guidance is needed—I can imagine there being a website where you just put the numbers in and it tells you—so that people do not feel so scared about taking on part-time or flexible work while claiming universal credit.
Chris Murray (Labour, Edinburgh East and Musselburgh)
Q May I ask about the evidence we heard about industrial relations, both from representatives of business and from the many trade unions that we have heard from? How do you see this Bill affecting industrial relations in Britain, and what do you think will be the long-term impact of that on the economy?
Nick Timothy (Conservative, West Suffolk)
Q Do you personally want to see increased unionisation in Britain, and do you hope and/or expect that the Bill will deliver it?
Nick Timothy (Conservative, West Suffolk)
Q Thank you. Can you name a CEO of a real business—not a representative body—employing more than, say, 100 people who would say that this Bill is unambiguously good for the economy? How many of them do you think there are?
Nick Timothy (Conservative, West Suffolk)
Can you name some?
Nick Timothy (Conservative, West Suffolk)
Q But the only real businesspeople who have been here have been unambiguously against it.
Nick Timothy (Conservative, West Suffolk)
That is true. That is a correction.
Alison Hume (Labour, Scarborough and Whitby)
Q Minister, we have touched on adult social care today. There are 1.6 million workers in the sector. I know that news of the adult social care negotiating body has been warmly welcomed. Can you expand on why a fair pay agreement is so important for the adult social care sector?
Uma Kumaran (Labour, Stratford and Bow)
Q We heard from two business voices today that were not perhaps entirely reflective of the rest of our views. I have more than 12,500 businesses in my constituency of Stratford and Bow, of which more than 5,500 are small and medium-sized businesses. I have met lots of them over the course of the last year. I have certainly not heard similar views. We also heard from legal experts, who said that the Bill brings us closer to OECD norms than perhaps was said. Can you tell us how businesses will benefit from the Bill?
Michael Wheeler (Labour, Worsley and Eccles)
Q Picking up from the last question, we have heard how the Bill will benefit employers; what other groups of people in the country do you think it will benefit?
Marie Tidball (Labour, Penistone and Stocksbridge)
Q Seven children in every classroom of 30 in my constituency of Penistone and Stocksbridge are in poverty. Can you set out more broadly the economic benefits of the Bill, many of which were set out in the TUC’s report this week? In particular, while you have mentioned some just now, can you focus on the economic benefits for working people and working families?
Anneliese Midgley (Labour, Knowsley)
Q Minister, you spoke earlier about some of the engagement you have had on the Bill, and some of the witnesses earlier today spoke about tripartite meetings that they had been at between the Government, unions and businesses. Could you set out some of your planned future engagement on the Bill?
Laurence Turner (Labour, Birmingham Northfield)
Q Minister, over the past two years, we have seen some of the highest levels of industrial action since the 1980s. Could you tell us what effect you think the Bill will have on the conduct of industrial relations?
Christopher Chope (Conservative, Christchurch)
As there are no further questions, I thank the Minister on behalf of the Committee for his evidence.