Falling short of what was promised: many of the new rights in the Employment Rights Bill have defects or escape loopholes that all need addressing, writes Lord John Hendy KC
The Employment Rights Bill begins its passage through the House of Lords today. At 300 pages in length, spiced up by 250 government amendments in the Commons, it remains thin gruel, leaving trade unions, like Oliver Twist, asking for more — in the shape of a second industrial relations Bill during this parliament.
The Bill is a long way short of the full (but hardly gastronomic) menu in Labour’s green paper, A New Deal for Working People, drafted by a committee composed mostly of trade union leaders under Andy McDonald MP and adopted by Labour conference in 2021, reaffirmed in 2022, and loudly proclaimed by the leader and deputy leader on many occasions since.
Of course, the hunger for more does not detract from the gratitude the movement feels at a Bill of fare which will remove the Strikes (Minimum Service Levels) Act 2024, and most (but not all) of the Trade Union Act 2016 — and do a lot more besides. But restaurant critics are surely entitled to judge the meal on how it measures up to the menu on the door rather than compare it to the starvation rations offered by the previous management.
The Bill’s offer of a guaranteed hours contract for many zero-hours workers, the right to request flexible working, improvements to statutory sick pay entitlement and to paternity, parental and bereavement leave, protection against third party harassment, day one protection against unfair dismissal (subject to probationary periods), greater protection on collective redundancy and for seafarers, are all welcome. So too are the introduction of consultative bodies for adult social care workers and school support staff, the new right of unions to seek to agree access to workplaces, some improvements to union recognition procedure, simplification of notices for industrial action and for industrial action ballots, and the creation of the fair work agency with power to enforce some workers’ rights.
But the demand for more is based on some major items scratched from the menu. A New Deal for Working People committed the Labour Party to introduce sectoral collective bargaining arrangements for each sector of the economy which would have resulted in “fair pay agreements” setting minimum pay and conditions in each sector of the economy (which could be improved by local bargaining).
But the Bill doesn’t do that. There is no mechanism for the establishment of sectoral bargaining in any sector of the economy. The arrangements for adult social workers and school support staff are consultative only, rather like the existing pay review bodies but without the “independent” members to make a recommendation to government. The Bill specifically states that they do not constitute collective bargaining and any agreements reached are not collective agreements. The industrial parties to these arrangements cannot decide for themselves the composition of their delegations nor can they agree what subject matter they wish to discuss. If the parties’ consideration does not result in an agreement the minister can impose his decision; if the consideration does result in an agreement the minister can override it. Local bargaining which increases base sectoral levels will specifically not have any legal effect.
Without sectoral collective bargaining underpinned by legislation where not achieved voluntarily (and there are a number of sectors still with voluntary sectoral bargaining), it is hard to see how the government’s commitment to raise living standards can be achieved. That is the reason why the EU has required all member states which have not yet reached 80 per cent coverage of workers by collective bargaining to do so within five years. That percentage matches the coverage of collective bargaining in this country from WWII until 1980 when Thatcher declared war on the unions.
The New Deal also promised to bring UK law on industrial action into line with the UK’s international obligations. The fact that the restrictions imposed on unions by the Thatcher legislation of the 1980s are not compliant with our ratified duties under the International Labour Organisation and the European Social Charter have been pointed out to successive governments since 1989. Most recently, in November 2023, the ILO reminded the then government that the ban on sympathetic industrial action needed to be remedied in consultation with unions and employers. For nearly 40 years UK governments have simply ignored the rule of law in this respect.
Another crucial commitment in the New Deal was to introduce a single status for workers, ie all workers (other than those genuinely in business on their own account) would have the same legal status and the same rights. The Bill does not do this, though the government promises future consultation on the matter. Meanwhile the Bill doles out the various different rights to different categories of worker thus creating an incentive for employers to avoid giving workers the rights reserved for one category under the Bill by putting them in a different category.
The Labour Party promised to end zero-hours contracts (and, subsequently, to end exploitative zero-hours contracts). Despite spending 35 pages on the subject, the Bill does not ban ZHCs and contains a number of routes by which employers can evade the obligation to put workers on guaranteed hours contracts.
The party also promised to end “fire and rehire” after the P&O Ferries scandal three years ago. But, though the Bill makes some significant tweaks to the relevant legislation, it does not end F&RH and its changes would not be sufficient to prevent an unscrupulous employer duplicating the P&O Ferries operation by setting aside sufficient cash to pay the easily calculable maximum compensation (plus limited fine if the exercise was done in relation to seafarers) and then recouping it from the savings achieved from low-paid replacement workers. The obvious tools to prevent repetition (a right to an injunction to stop the dismissals coupled with a right to organise sympathetic industrial action, as required by the ILO) are not available under the Bill as drafted.
There are many more shortcomings in the Bill, such as the absence of a trade union right to demand access on employers’ premises (a union can only seek agreement, and, if access is refused, can apply to the Central Arbitration Committee, the orders of which cannot be enforced by an injunction or contempt of court proceedings). So many of the rights in the Bill have shortcomings or escape loopholes that all need addressing.
Perhaps the problem is that the Bill appears to have been drafted by a group of employers’ lawyers. Whatever the explanation, the above is perhaps enough to indicate why unions are demanding a second industrial relations Bill in the next four years.
This article first appeared in the Morning Star on March 28th.
