MPs have rejected amendments to the Employment Rights Bill tabled by the House of Lords, which the government said would have weakened the Bill, including watering down the day one right to protection from unfair dismissal and limiting those able to benefit from the ban on ‘exploitative’ zero hours contracts.
The Employment Rights Bill returned to the House of Commons yesterday with MPs debating Lords’ amendments for around four hours before two hours of votes rejecting all but straightforward technical amendments, and those put forward by the government.
Peter Kyle, the new business and trade secretary, began by paying tribute to his predecessor, Jonathan Reynolds, the former deputy prime minister Angela Rayner and Justin Madders, the former employment rights minister, all three of whom are no longer involved with the Bill’s passage, following this month’s government reshuffle.
Kyle told the Commons: “The task this government have set themself is formidable: to update employment law and make it fit for the age in which we live; and to reward good employers, and ensure that the employment protections given by the best are extended to millions more workers.”
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He added: “The Bill reflects the best standards that are already in use right around the country by the very best employers – indeed, by most employers. Those employers have nothing to fear and a lot to gain from this legislation.”
Kyle said the government would “continue to listen” and that businesses can engage in formal consultations on measures being implemented.
Shadow business secretary Andrew Griffith said: “This is the wrong Bill at the wrong moment. Rather than proceed with a Bill which, on the government’s own assessment, will reduce employment and growth, now is the time to put the national interest first. But they cannot do that.
“The secretary of state cannot do what he himself believes, because they are too weak. They have a Prime Minister who is incapable of providing the leadership we need at this time. In time, they will come to realise that this is a moment they walked themselves to the end of a plank with an anchor tied around their feet.”
The debate covered numerous provisions in the Bill and the proposed amendments made by the Lords, but in a series of votes, MPs later proceeded to reject most of Lords’ amendments. These included:
- Replacing the day one right to claim unfair dismissal with a six-month qualifying period
- Altering the requirement for employers to offer a guaranteed hours contract to zero-hours, low-hour, and agency workers, making it a right for workers to request one
- Defining “short notice” on compensation for shift changes and cancellations for zero-hour, low-hour, and agency workers as less than 48 hours
- Expanding who can accompany a worker at disciplinary and grievance hearings to include a “certified professional companion”
- Extending whistleblowing protections and placing a requirement on large employers to investigate protected disclosures
- Softening trade union reforms on industrial action ballots and political fund contributions.
Kyle concluded the debate, saying: “One of my predecessors as President of the Board of Trade once argued that workers need protection because, without it, ‘the good employer is undercut by the bad, and the bad employer is undercut by the worst’.
“That predecessor was Winston Churchill. He knew that the best employers need protecting from unfair competition by companies who trade at the expense of rights at work. The Bill protects workers from exploitation and protects businesses from unfair competition. That is why the Bill is pro-worker and pro-business.”
Kyle will now convene a committee to explain the reasons to the Lords for disagreeing with their amendments. The Bill now makes its way back to the Lords, potentially entering a “ping-pong” phase between the two Houses.
‘Lack of clarity’
Kate Palmer, employment services director at Peninsula, said, “Understandably, this continued lack of clarity is likely to be extremely frustrating for many employers who just want to know what changes are coming under the Employment Rights Bill, and when. With some of the changes expected to be implemented shortly after Royal Assent, it’s concerning that at this late stage, we are still unsure about what some major reforms included in the bill will look like.
“Employers cannot simply adapt to these changes overnight; they will need time to devise and implement new policies and procedures in alignment with the reforms. Currently, almost half the businesses we surveyed have not started to plan for the implementation of the Bill, with only 12% stating that they feel ‘very prepared’. And it’s no real surprise that so many are feeling unprepared given the lack of solid information coming out of government.”
Alex Hall-Chen, principal policy advisor for employment at the Institute of Directors, said: “A perfect storm of government policies via the Employment Rights Bill, above-inflation increases to the national living wage, and the increase in employer national insurance contributions have significantly weakened the business case for hiring staff.
“An IoD survey of over 600 business leaders last month found employment regulation is the biggest regulatory blocker to business growth in the UK, with 45% citing it as a barrier to their company growing. At the same time, six in 10 cited employment taxes as negatively affecting their organisation.
“The government’s refusal to engage with sensible amendments made to the Employment Rights Bill in the House of Lords is sending a clear signal to businesses that their concerns are being ignored.”
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