Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022

Motion to Approve

That the draft Regulations laid before the House on 27 June be approved.

My Lords, I will also speak to the Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022, which was laid before the House on 24 June 2022. The purpose of the regulations is to lift the current ban on employers bringing in agency staff to help them cope with industrial action. The other instrument makes long-overdue changes to the maximum levels of damages the courts can award against trade unions that take unlawful industrial action.

I will start by explaining why the Government are making these changes. Our trade union laws are designed to support an effective and collaborative approach to resolving industrial disputes. They rightly seek to balance the interests of trade unions and their members with the interests of employers and the wider public. While the Government continue to support the right to strike, this should always be a last resort. The rights of some workers to strike must also be balanced against the rights of the wider public to get on with their daily lives. Strikes can, and do, cause significant disruption. This is particularly the case when they take place in important public services such as transport or education.

It cannot be right that trade unions can, as we saw in the case of the recent rail strikes, seek to hold the country to ransom if their demands are not met. Some trade unions appear to us to be looking to create maximum disruption in a bid to stay relevant, rather than constructively seeking agreement with employers and avoiding conflict. In light of this, the Government have reviewed the current industrial relations framework and have come to the conclusion that change is needed.

The first change we are making is to remove the outdated blanket ban on employment businesses supplying agency workers to clients where they would be used to cover official industrial action. Of course, employers can at the moment already hire short-term staff directly to cover industrial action, but this change will give them the ability to work with specialist employment businesses to identify and bring in staff. This change does not in any way restrict the ability of workers to go on strike. However, it will give employers another tool they can use when trying to maintain the level of service they offer to the public.

Moved by

At the end insert “but that this House regrets that the Regulations have been introduced without required or sufficient consultation, are opposed by employer and employee organisations, will do little to address the trained workforce shortfalls, could put workers’ safety at risk, will harm industrial relations, and may breach international law; further regrets that the associated Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 is unnecessary, as there are few if any occasions on which damages have been claimed, and an increase on the cap by 400 per cent is a threat that may inhibit the legitimate exercise of the right to strike; and concludes that the two instruments are simply a political exercise to deflect from the failure of Her Majesty’s Government to engage meaningfully with the organisations affected to resolve the disputes”.

My Lords, I thank the Minister for introducing this debate, but what I heard was a lot of gesture politics and nothing about how we improve industrial relations in this country. In moving this amendment, I will focus on the failure to consult, the lack of an impact assessment when the statutory instrument was laid, and whether the instrument will meet the Government’s policy objectives.

The Employment Agencies Act 1973 requires consultation before changes are made. Rather than consult on the new regulations, the Government are relying on a consultation conducted in 2015, when Ministers previously considered similar changes. I do not see how it can be justified for a seven-year old consultation to apply to legislation being laid in 2022. Things have changed considerably in those seven years, both industrially and politically. Even the department itself acknowledged that

“circumstances have altered in some ways”.

However, it did not think that these were

“particularly relevant to the changes”

proposed. Tell that to the employees of P&O Ferries, where agency workers were used to undermine a collective agreement and replace unionised jobs. P&O’s actions were met with condemnation from all political parties—including the Minister’s—unions and employer organisations alike.

Turning to the 2015 consultation, let us not forget that 70% of the respondents were of the view that the changes would impact negatively on employees, yet the Government still believe that they have got the balance right between the interests of individuals—by protecting their right to engage in industrial action—and the interests of the general public.

Despite what the noble Lord says, I think it has the completely opposite effect. They are not defending individuals’ rights. Rather than focus on supporting negotiations to resolve disputes, we have a Government determined to undermine workers and damage good industrial relations. The use of agency workers during a strike would increase tensions between workers and their employers. This is bound to make disputes more difficult to resolve amicably.

Agency workers recruited at short notice are unlikely to have received relevant health and safety training. Despite what the Minister says, this could lead to accidents and injuries in the workplace, with the safety of other workers or indeed the public being put at risk. Absolutely no one wants undertrained staff in food factories or working on track maintenance.

I have previously asked the Minister what assessment the Government have made of the compatibility of these regulations with the Human Rights Act, with the EU-UK Trade and Cooperation agreement, and with the UK’s commitment to the ILO’s fundamental conventions, including article 3 of convention 87. In response, he stated that the Government were confident that they were meeting all their international obligations —so what assessment has he made of the assertion by the International Labour Organization’s Committee on Freedom of Association that:

“The hiring of workers to break a strike in a sector which cannot be regarded as an essential sector in the strict sense of the term … constitutes a serious violation of freedom of association”?

That is something that the Minister has repeatedly said that the Government are determined to defend—it does not look like it to me.

On the SI relating to tort and increasing the damages, I would like to hear what the Minister would say to trade unionists who demanded a 400% increase in salary if they had not had an increase in the previous five years. Are we going to apply that principle to wage negotiations? Will it apply to the employees of BA who have suffered cuts, or to other employees who throughout the pandemic had their salaries and conditions lowered? Are we going to see the Minister defend that? Of course not. The Government want this increase but there is little rationale for the change.

This element of the legislation is barely used; in fact, the department’s own evidence shows that the last time there was a case under it was in 2003. What justification is there for doing this apart from having a chilling effect on industrial action? A £1 million fine would seriously damage the finances of a trade union and indeed could cause some to collapse. That is not because unions deliberately break the law, as the Minister well knows. It is easy for even the most careful trade union to fall foul of the many requirements on issues such as timescale and giving notice. On top of that, they may face huge legal bills to protect that right which the Minister considers fundamental. What consultation has been conducted on this increase? What impact assessment has been made in respect of the trade unions?

From the report of the SLSC and the evidence of both employer and employee organisations, it is difficult not to believe that the two instruments we are considering are simply a political exercise to deflect from the failure of this Government to engage meaningfully with the organisations affected to resolve disputes. It is political gimmickry that does nothing to support our workers and good industrial relations.

My Lords, there is not a lot of competition on these Benches to speak, so I hope I shall be forgiven. We normally begin by making a declaration of interest. Mine is quite simple: I left school at 16 and I joined a trade union straight away. I have been in a TUC trade union ever since, and I am currently the president of BALPA, the pilots’ union. I have been the president of the British Dietetic Association. From being a branch official at the age of 16, I have in some way or other been an active trade unionist for longer than I have been an active politician.

I say that because I just cannot see the purpose of the regulations. They deal with an Act passed by a Conservative Government, the Employment Agencies Act 1973. They do not appear to have had the requisite consultation. I would not be surprised if, at judicial review, they did not manage to stand up. There could be a judicial review that the Government had not fulfilled what the regulations were meant to do. I have had briefings from UNISON, the TUC and the British Medical Association. When you get those three in one pot, you really have trouble, I will tell you—with the BMA, particularly.

My first question for the Minister is this. What has changed since 2015, other than that we have a different Prime Minister and that Prime Minister’s trade union envoy no longer seems to have much resonance around the Conservative Party? In 2015, this was dropped; it was not proceeded with. We have the impact assessment and the report of the scrutiny committee. I should like to read just a little into the record. The fact that the impact assessment of the department was

“unable to ‘robustly estimate the size’ of the policy’s impact because of a lack of evidence raises questions as to the effectiveness of the change proposed by the draft Regulations … The lack of robust evidence and the expected limited net benefit raise questions as to the practical effectiveness and benefit of the proposed”

My Lords, the critique by the noble Lord, Lord Collins, was absolutely stunning. Last month, the Minister told this House that it was “outdated” to talk about workers and bosses because apparently:

“We are all working together for the good of the country.”—[Official Report, 29/6/22; col. 645.]

I say to the Minister: go and tell that to the 3.6 million kids in poverty. Go tell it to them.

The Minister even claimed that the trade unions were a “minority profession”, which “do not represent anybody”. So I ask him again whether this is now the Government’s official position: that 6 million trade unionists do not count. Is this the justification for hobbling trade unions which are fighting for better pay to offset rampant inflation? We are still waiting for the mythical employment Bill—much talked about, but never seen. I remember the Government’s crocodile tears at P&O’s use of agency staff to undermine trade union rights and drive down pay and conditions, yet here they are now, proposing to enshrine such despicable practices into law. I asked the Minister who has been consulted over these changes, and he replied that there had been no consultation—as the noble Lord, Lord Collins, said—since 2015.

My noble friend is right. The economy has changed significantly over the past seven years: Brexit, Covid and now the cost of living crisis. It is “wholly inappropriate” to rely on a seven year-old consultation, especially given

“the wider economic and political context”.

Those are not my words but those of the Recruitment and Employment Confederation, the REC, which represents agency firms—the employers—and of the TUC, representing trade unions. The REC even warned that these proposals leave employment agencies and their workers in an unfair moral position because of the pressure to break strikes. Let us stop pretending that this Government are on the side of working people, especially when they are slipping through major changes so underhandedly, with only a couple of hours of parliamentary debate.

I applaud Mr Shelbrooke for saying this and for voting with his conscience against the Government. It is the very first time he has broken the Whip in his 12 years as a parliamentarian. At least one Tory has seen the light; I sincerely hope others follow in his place.