Employment Rights Bill

Commons Amendments

Motion A

That this House do not insist on its insistence on Lords Amendment 1B in respect of which the Commons have insisted on their disagreement; and do agree with the Commons in their Amendments 1E and 1F in lieu of Lords Amendment 1B.

My Lords, I shall speak also to Motions A1 to E1. Given the developments that have taken place since the Bill was last debated by the House, I would like to take some time to set out the context of those changes. I therefore must ask for the indulgence of the House with regards to the length of my speech.

Before to turning to the specifics of the amendments in the name of the noble Lord, Lord Fox, I want to provide a general update. Throughout the passage of this important Bill, which delivers on multiple manifesto commitments, we have gone through careful deliberation, scrutiny and debate. Noble Lords will have seen my statement given to your Lordships’ House last week where I outlined how the Government had convened tripartite discussions with trade unions and business representative organisations. Those discussions were focused on finding a way forward on unfair dismissal. This is an issue which business and many in your Lordships’ House, including His Majesty’s loyal Opposition, told us was their number one priority. Solving it was the only means of breaking the current impasse between this House and the other place.

I am glad to report that we have secured an agreement between trade unions and business representative organisations on that issue which has unlocked a path to get this much-needed Bill on to the statute book without further delay. This is acknowledged in the joint statement made by business representative organisations involved in the negotiations, which accepts that any remaining concerns with the Bill can be dealt with in the regulations to come, which will be informed by open and transparent consultation. This negotiated outcome has now been debated and agreed by the elected House. We will, of course, debate it in detail this afternoon, but I ask your Lordships’ House to endorse the agreement reached by worker and employer representatives.

The success of these discussions sets a clear example of the benefits of working together in a tripartite manner. This commitment was front and centre of the Labour Party’s plan to make work pay, and I am pleased to see it in action as part of these discussions. We must not stand in the way of, and further delay, these long-promised improvements to workers’ rights.

As the recent agreement centres on unfair dismal, I shall speak first to Motion B and Amendments 120G to 120M tabled by the Government in the other place, and Motion B1 and the amendments to the Commons amendment tabled by the noble Lord, Lord Sharpe of Epsom, relating to unfair dismissal.

The Government’s amendments in lieu will reduce the qualifying period for unfair dismissal protections from 24 months to six months, all while maintaining existing day-one protections against discrimination and automatically unfair grounds for dismissal. To further strengthen these protections, the Government have also tabled amendments which will ensure that the qualifying period for unfair dismissal protections can be varied only by primary legislation and that the compensation cap for claims will be removed. That will remove both the 52 weeks’ pay and the £118,223 cap. In practice, few awards get anywhere close to these caps, with the median average award for unfair dismissal being £6,746 in 2023-24. Removing the cap would not impact the methodology for how an employment tribunal calculates these awards.

I will now speak to Motion D and Amendments 72J and 72K, tabled by the Government in the other place, and Motion D1 and Amendments 72L to 72N and Amendments 72P to 72R, tabled by the noble Lord, Lord Burns, relating to political funds. I thank the noble Lord, Lord Burns, for engaging with me and with my noble friend Lord Collins of Highbury on this important issue which I know is of great importance to him. The Government remain committed to repealing the Trade Union Act 2016, a commitment set out in the Plan to Make Work Pay, which we have a clear and substantial mandate to deliver.

Part of this repeal includes reinstating the long-standing practice that existed for 70 years before the Trade Union Act 2016 whereby new union members are automatically included as contributors to a political fund unless they choose to opt out. This is on the basis that they are already making an active choice to join a voluntary organisation which has democratically decided to maintain a political fund. If an individual does not agree with the use of their union’s political fund, or for any other reason does not want to contribute, they can take the decision to opt out. Every new union member will be clearly informed on their application form that they have the right to opt out of contributing to a political fund.

The Government have listened with care to the noble Lord’s perspective and have tabled amendments responding to these concerns while not undermining the manifesto commitment to return to a default opt-in system. Under the pre-2016 legislation, an opt-out notice could take effect only on 1 January in the year after it was given. Under the Government’s amendment, opt-out notices will now have effect on either 1 January the following year after it has been provided or on a day specified in the union’s rules—whichever comes first.

The amendment affirms flexibility under the legislation, allowing unions more quickly to process a member’s request to opt out. The Government’s additional amendment in this area places a statutory duty on the Secretary of State to issue guidance within three months of this clause coming into force. That will set out the kinds of provisions that unions should include in their rules about the timing of giving effect to opt-out notices. This will help to enable unions, as a matter of best practice, to action opt-out notices promptly. However, if this is not the case, or if there are developments in this field, the amendment provides that the guidance can be updated.

Furthermore, to help with transparency, existing government guidance on political funds will be updated to reflect the changes that are being made by the Bill. The decision to contribute to a trade union political fund is entirely one for each individual member. For those who choose not to do so, the government guidance will be clear that exercising that choice must be properly available and practically possible.

Given his long-standing interest in this topic, we would of course be happy to meet again with the noble Lord, Lord Burns, following Royal Assent and prior to the government guidance being published. We believe that these amendments will enable the Government to deliver our manifesto commitment of repealing the 2016 Act and returning to the default opt-out model.

I will speak now on Motion E and Amendment 62E, tabled by the Government in the other place, and Motion E1 and Amendment 62, tabled by the noble Lord, Lord Sharpe of Epsom, relating to the 50% turnout threshold for industrial action ballots. Repealing the 50% ballot threshold is a manifesto commitment linked to the repeal of the Trade Union Act 2016, legislation which imposed unnecessary bureaucratic barriers on the ability of trade unions to organise and negotiate on behalf of their members. Repealing the threshold aligns union democracy with other established democratic practices, such as parliamentary and local elections, which are considered legitimate without the need for turnout thresholds.

However, recognising the strength of feeling on this issue in your Lordships’ House, the Government have reflected on their approach. The Government previously tabled an amendment in lieu that will require the Secretary of State to have regard to any effects of e-balloting on the proportion of those entitled to vote in industrial action ballots who actually do so. The Government have since further built on this amendment by placing a statutory duty on the Secretary of State to lay a Statement before Parliament when making regulations to repeal the 50% threshold to demonstrate how the Government have met the duty to have regard to the impact of e-balloting. We hope that the amendment will assure parliamentarians that, when the 50% threshold is repealed, we will have looked at those issues in the round and aligned the repeal with the establishment of e-balloting.

In conclusion, the Government have listened to the concerns of your Lordships’ House. They have gone away and worked collaboratively with employers and trade unions to find a compromise and have now delivered on that compromise as part of a package deal to get the Bill to Royal Assent. I now respectfully ask your Lordship’s House to acknowledge the movement made by the Government and allow the Bill—a manifesto commitment—to progress on to the statute book so that working people can start to benefit from these important and popular reforms to workers’ rights without any further delay. I beg to move.

Motion A1 (as an amendment to Motion A)

Leave out from “disagreement;” to end and insert “do disagree with the Commons in their Amendments 1E and 1F in lieu of Lords Amendment 1B; and do propose Amendments 1G and 1H in lieu of Commons Amendments 1E and 1F—

1G: Clause 1, page 3, line 24, at end insert “and that period must be not less than 26 weeks”

1H: Schedule 1, page 153, line 13, at end insert “and that period must be not less than 26 weeks””