Employment Rights Bill

Industrial relations law in this country must move from the 20th century to the 21st. It has to recognise that certainty and security are essential for people at work, that the best relationship between employer and employee is best exemplified by fairness and trust within a framework for recruitment and retention that values both, and that dignity at work is as vital to the effective functioning of modern society as the dignity of work.

Some will seek to use this issue to entrench the idea that employers and employees have opposing interests that must always inevitably result in dispute and strife, and I reject that view. The very best trade unionists know, as do the best employers, that such a view only represents failure. For this Labour Government, success is to be measured not in division, but in the shared economic growth that we achieve, the opportunity and security we build and the prosperity we create, and that is at the heart of the Bill.

Today I ask the House to reaffirm its support for this important legislation as we move through the latest round of parliamentary ping-pong. We have listened carefully to the concerns that have been raised, and in response we are offering, where possible, amendments in lieu that we believe strike a fair and workable compromise with the proposed amendments. Although we appreciate the range of perspectives offered, we will be unable to support certain amendments that conflict with the fundamental principles of the Bill and may compromise its intended impact.

We acknowledge that Lords amendment 1B, which relates to zero-hours contracts, is an amendment in lieu, intended as a compromise. It proposes a shift from a full right-to-request model to one in which employers must notify workers of their right to a guaranteed hours offer, and make a guaranteed hours offer unless the worker declines or opts out. I appreciate the sentiment behind the amendment, but it would undermine the Bill’s core aim of ending exploitative contracts and providing security for the workers who need it most. We therefore cannot accept it.

The Government are committed to ending one-sided flexibility so that workers are not left guessing about their hours or pay. These reforms reward fair employers, modernise the system and come with clear guidance to help everyone prepare. For employers, clear expectations mean better staffing and lower recruitment costs through better retention. We also appreciate that some groups, including younger workers, value the flexibility of zero-hours contracts. That is why workers will be able to decline a guaranteed hours offer and remain on their existing arrangement if that works best for them.

The Government are also committed to supporting young people into work. The youth guarantee will include a targeted backstop under which every eligible and unemployed young person on universal credit for 18 months without earning or learning will be provided guaranteed paid work. The scheme forms part of the Government’s aim to provide targeted support for young people at risk of long-term unemployment. Further details will be confirmed at the autumn Budget, following further engagement, including with employers.

Let me turn to Lords amendment 48B on seasonal work. The Government recognise that work in certain sectors fluctuates seasonally, and that there are ways in which employers may account for that and remain compliant with the legislation. They may, for example, use annualised hours contracts, which offer variable numbers of hours at work at different times of the year. Additionally, the Bill already allows guaranteed hours offers to take the form of limited-term contracts where reasonable—for example, a fruit-picker could be engaged on a contract tied to the end of the picking season. In such cases, after the initial reference period, the employer would be required to guarantee hours only for the duration of that limited-term contract rather than on a permanent basis. The Bill also already provides powers to address seasonal work through regulations, ensuring flexibility as workforce needs evolve. Consultation with employers, trade unions and stakeholders will take place before such regulations are made. We therefore do not support the amendment.

Let me turn to unfair dismissal. Lords amendments 23 and 106 to 120 propose retaining a qualifying period of six months for unfair dismissal. These amendments have returned to this House as the Lords have insisted on them. We remain committed to delivering unfair dismissal protections from day one—not two years, not six months, but day one. That was a clear pledge in our manifesto and it will ensure that about 9 million employees who have worked for their employer for less than two years are protected from being arbitrarily fired. Crucially, day one protection from unfair dismissal will not remove the right of businesses to dismiss people who cannot do their job or do not pass probation, but it will tackle cases of unfair dismissal in which hard-working employees are sacked without good reason. A six-month qualifying threshold still leaves employees exposed to dismissal without good reason in the early months of a new job, which is why the Government cannot accept the Lords amendments on maintaining a qualifying period.