Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021

Considered in Grand Committee

Moved by

That the Grand Committee do consider the Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021.

My Lords, I beg to move that the order, which was laid before the House on 17 March 2021, be approved.

I want to begin with some important background to this statutory instrument. The UK is unique in having three employment statuses for employment rights—self-employed, limb (b) worker and employee—when most other countries, including in the EU, have two: self-employed and employee. Those in the category of workers known as limb (b) workers have a more casual employment relationship than employees and are entitled to a basic set of rights, such as minimum wage and holiday pay. The limb (b) worker employment status allows for much-needed flexibility in the labour market.

Sections 44(d) and 44(e) of the Employment Rights Act 1996, which implements the EU health and safety directive into domestic law, gives employees the right not to be subjected to detriment by their employer for leaving or refusing to return to their workplace. It also gives employees the right not to be subject to detriment for taking steps to protect themselves or others in circumstances of danger that they reasonably believe to be serious and imminent.

Moving on to what this statutory instrument does, in May 2020, the Independent Workers’ Union of Great Britain brought a judicial review against the Secretaries of State for the Department for Work and Pensions and the Department for Business, Energy and Industrial Strategy. Following comprehensive proceedings, the High Court found in November 2020 that the UK had not fully implemented the EU’s health and safety framework directive into domestic law in Section 44 of the Employment Rights Act 1996, concluding that some protections were available only to employees while the court held that they should also extend to limb (b) workers.

The claim succeeded only in part: the court accepted that the UK was not required to extend unfair dismissal to limb (b) workers and had properly implemented the general obligations of the health and safety framework directive. The Government accepted this judgment and are therefore proposing this order, which will extend these protections from detriment in health and safety cases to all workers, not just employees—as had previously been the case. The court also held that the Personal Protective Equipment at Work Regulations 1992 should also be extended to limb (b) workers. I am assured by officials at the Health and Safety Executive that work is under way to consult and extend these regulations to all workers through an additional statutory instrument due to be laid later this year.

These important protections have proved even more essential for employees who have continued to work throughout the pandemic and for those who are returning to work as businesses emerge from lockdown. It ensures that employees have the legal protection that they need to act to ensure their own safety and the safety of others without fear of suffering detriment for doing the right thing. This includes protecting them against being denied promotion or training opportunities.

I thank the Minister for her explanation of what she quite rightly describes as a small but important change. I congratulate the Independent Workers’ Union on its court victory and the work done in relation to tackling what is not a new challenge but something that emerged many years ago with the lump, the dock labour schemes and the challenges of ensuring that those who were not self-employed but not directly and fully employed obtained the rights that the rest of the nation and employees take for granted.

Thinking back to my time as Work and Pensions Secretary, it is strange that we always assumed that workers and employees were one and the same thing. It has to be said, I had never come across “limb (b)” before. I hope I do not again, because I do not find it a very attractive proposition. With the vast changes now taking place in the labour market, securing rights for these workers—who, strictly speaking, are not employees, at least at the moment, but have the partial rights that employees have—needs to be taken with the view of what is happening, the challenges that will come and the way in which people find themselves in a kind of limbo.

I hope that, when she winds up, the Minister will concede that there is still much to be done; for instance, on the TUPE, or transfer of undertakings, rights of these workers—let us call them limb (b) workers—where there is a change of owner of the company that, strictly speaking, employs these workers, whose health and safety rights we are securing today with this clarification arising from the court judgment last November.

It is important that we get on the record that there is still work to be done in this area. I note that there will be a further statutory instrument later in the year, but it would be really helpful—given the Minister’s welcome commitment to workers’ rights in the context of being a great country in which to work and to be employed—if we indicated that consideration of these further areas is being undertaken. This will ensure that the flexibility in the workforce that she described morphs into something more acceptable in terms of the Ubers of this world, and that those who find themselves working in entirely different ways to the past—sometimes knowingly and with their consent, sometimes because of necessity and without their wholehearted willingness to do it—obtain the rights and privileges that others have.

My Lords, it is always a great pleasure to follow the noble Lord, Lord Blunkett, who clearly knows a thing or two in this area, not least from his time as Secretary of State for Work and Pensions. I thank my noble friend Lady Bloomfield for setting out so clearly the effect of the order. There is a particular significance in these provisions. At the moment, the effect of the order is to extend protection, or to recognise the extension of protection, which according to the law—and I agree with it—should have been there anyway, to workers as well as to employees, or limb (b) workers as they are termed. Like the noble Lord, I do not particularly like the term.

Many of those workers will be working in the gig economy, and they will now share the right not to be subjected to a detriment if they leave their workplace or refuse to return to it because they believe that they are in serious or imminent danger. This could be, for example, protection from disciplinary action or suspension of pay. Thus if a worker were reasonably to believe that Covid-19 posed a serious and imminent danger, refusing to return to work would be protected. That seems to me entirely right.

As my noble friend noted, in the case involving the Independent Workers Union of Great Britain last year, the High Court recognised that many members of the union who are in the gig economy, often acting as private-hire drivers or couriers and providing essential services during the pandemic and who have been feeling at risk, should be protected by these provisions along with people who have contracts of employment. Such feelings could be due to inadequate PPE, for example, or failure to implement social distancing by particular businesses, making workers fearful of their position.

These regulations may therefore be much used as we emerge from lockdown, despite the R rate coming down. I hope they will help highlight the importance of social distancing and hygiene as we emerge from the shadow of Covid. I applaud the Government for being committed to updating the legislation and taking this action following the court case—quite rightly.

My Lords, I join the applause for the Minister and the Government for introducing this statutory instrument, but the Government need to go further than this limited extension of rights. They should also remedy the unjustifiable exclusion of various classifications of workers for other key rights. A worker’s legal status determines the suite of rights to which she is entitled. Many employers seek to arrange for their workers the status to which the fewest rights attach—hence the profusion of litigation, most recently in Uber and in the case brought by the IWGB as to what the status of given workers is. The law on workers’ status is both complex and illogical, a situation that benefits only employers and lawyers.

There are now in fact five classifications of worker, by which I mean those who earn their living by supplying their labour to another. They are: the employee, with full statutory rights; the limb (b) worker, with limited statutory rights—this designation relates to Section 230(3)(b) of the Employment Rights Act; the false self-employed worker, with next to no statutory rights; the personal service company worker, who has no statutory employment rights other than hypothetically against the company of which she is the owner; and, lastly, the genuinely self-employed, in business on her own account with her own customers or clients but without statutory employment rights.

We need legislation to sort this out which adopts a binary solution, with, on one side, workers entitled to all statutory employment rights and, on the other, those genuinely self-employed, in business on their own account with their own customers or clients. I hope the Minister will tell us that the long-awaited employment Bill will do that and that it will be announced in the Queen’s Speech in May. In case not, I have entered such a Bill in the Private Members’ Bills ballot. Otherwise, anomalies will persist, as this statutory instrument shows. It gives protection against detriment for refusing dangerous work to both employees and limb (b) workers, but protection against dismissal for the same refusal—Section 100 of the Employment Rights Act—is reserved to workers only while limb (b) workers remain excluded.

My Lords, it is a pleasure to follow the noble Lord, Lord Hendy, who is very knowledgeable from his legal background in employment law. I thank the Minister for her explanation of the regulations, which I welcome. I welcome the extension of the protection to workers as well as employees, but, like the noble Lords, Lord Hendy and Lord Blunkett, I believe there is a need to go further.

There is a belief that by making only this limited change the Government have failed to address other, similar shortcomings in the law that disadvantage a vulnerable group of workers. While supporting these regulations, I, like other noble Lords and the TUC, believe that the Government need to go further. They should also remedy the improper exclusion of workers from other key rights, which should include protections when a business is taken over and rights to collective consultation in redundancy situations that have been the subject of legal cases.

There is now an important opportunity to remedy some key unfairnesses in UK employment law that disadvantage many of the most exposed members of our workforce. Limb (b) workers should be accorded the same basic rights as employees. What steps will the Government take to remedy this anomaly in future legislation—perhaps bringing forward an employment Bill in the Queen’s Speech? This issue has become more apparent during the pandemic because many limb (b) workers have limited employment rights. They include carers, food delivery workers and parcel delivery workers. Many of these people have been the backbone of our economy during the pandemic and have been most exposed to the risks of Covid. They took many risks and placed their health and security in jeopardy. It is important that they are not forgotten as the UK rebuilds its society and economy.

It is worth noting that an employment tribunal recently found, in a non-binding judgment, that a limb (b) worker falls within the scope of “employee” for the purposes of TUPE, something that has already been referred to by the noble Lord, Lord Blunkett. What legislative steps will the Government take to address this anomaly in relation to the TUPE rights highlighted by that tribunal?

My Lords, I am delighted to follow the noble Baroness, Lady Ritchie. I join in the thanks to my noble friend the Minister for her clear and comprehensive introduction to the regulations.

Like the noble Lord, Lord Blunkett, I had not been familiar with the term “limb (b) workers”, but I recall that when I was first elected as a Member of the European Parliament there was a group of workers—known at the time, as I understand it, as agency workers —who gave rise to particular concerns. I believe that that has now been addressed in both UK and European legislation. There was a particularly tragic case where a worker from Essex went to work on a site in Germany which had dangers and, very sadly, was fatally injured. That was a catalyst for changing those regulations to make sure that agency workers were brought within the remit.

I welcome the regulations and want to pursue a couple of questions with my noble friend—I would be grateful for her response. If I understood her correctly, she said that the rights extended to limb (b) workers were restricted. I think I heard her say that there would be minimum rights and holiday pay. To what extent might other statutory rights be extended? I imagine that minimum rights include sick pay and other statutory rights that any worker is entitled to.

Secondly, in what regard can limb (b) workers be equated to or differentiated from zero-hour contract workers where they are excluded from other rights—if not in respect of danger—to which permanent and full-time workers are entitled? I entirely endorse my noble friend’s desire for a flexible workforce, and I know that there are many part-time workers, particularly women, who may be returning to work either having had a child or having completed caring duties for parents and other relatives. It is in the interest of the Government and especially employers to ensure that we are deemed to be as flexible as possible.

My Lords, as the Explanatory Memorandum states, this SI has been prepared by the Department for Business, Energy & Industrial Strategy, or BEIS. It amends Section 44 of the Employment Rights Act 1996. The Act currently gives employees the right not to be subjected to a detriment by their employer for leaving or refusing to return to their workplace or for taking steps to protect themselves in circumstances of danger which they reasonably believe to be serious and imminent. This amendment will repeal Section 44(1)(d) and (e) and insert a new provision at Section 44(1A) which will provide other employees and limb (b) workers with the right not to be subjected to detriment in health and safety cases. The territorial application of this instrument is to England, Wales and Scotland.

Following the judicial review brought by the Independent Workers’ Union of Great Britain against the Secretaries of State for BEIS and the Department for Work and Pensions, this order is being introduced in response to the High Court’s judgment. The High Court found that the UK had failed to fully implement two EU directives in domestic law, as protections were applied only to employees, while the court held that they should also extend to limb (b) workers. Limb (b) workers tend to have a more casual employment relationship and are entitled to a basic set of rights such as the minimum wage and holiday pay.

As a result of the High Court judgment, the Government have committed to updating the legislation quickly to ensure clarity as to workers’ rights and will consult directly key trade unions, ACAS and the citizens advice bureaux in preparation for employers and workers contacting their organisations.

This is an important instrument to protect workers from bad employers who have used zero-hours contracts and other tactics to exploit workers.

My Lords, having served for a number of years—about 20 I think—as a member of an industrial tribunal, I have a particular interest in this subject. I read with interest yesterday a Times article headed, “U-shaped pandemic jobs crisis hits older and younger workers”. My comments today focus on what steps the Government can implement to help workers, whether employees or limb (b) workers, in the current climate and beyond.

It is clear that those over 50 years old, and the 16-24 age category, are being hit by job losses at a greater rate than the others. While some of these jobs may return, many will do so in the gig economy as flexible workers rather than as employees. In some cases—mostly the youngsters—this may suit the person in question; but in many cases, it is all that is on offer, so workers have a stark choice. The changing nature of our workforce needs to be reflected in legislation and move with the times. We ought not to see permanent employee jobs replaced with flexi-workers just to avoid employment rights and protections. I fear that as furlough ends, we will see many employers looking for this softer option. Today’s order recognises the rights of workers to protections currently afforded to employees, and I urge the Government to look beyond this to see what else they could introduce to help people as we emerge from this pandemic.