My Lords, this draft statutory instrument is the tip of the iceberg which noble Lords on this side of the House warned would appear over the horizon during the debates on the Retained EU Law (Revocation and Reform) Act 2023. Workers’ rights are on a collision course with it. We said that the Act would be used to remove workers’ rights. We moved amendments to try to protect those rights, but they were all rejected by the Government. For example, the then Minister, the noble Baroness, Lady Neville-Rolfe, said:
“I should say straightaway, as my noble friend Lord Callanan already has, that this Government have no intention of abandoning our strong record on workers’ rights, and nor are the delegated powers intended to undermine the UK’s high standards on workers’ rights.
Our high standards were never dependent on our membership of the EU. Indeed, the UK provides for stronger protections for workers”.
She then gave some examples.
4.30 pm
The noble Baroness continued:
“These proposals do not remove rights or change entitlements but instead remove unnecessary bureaucracy in the way that these rights or entitlements operate, allowing business to benefit from the additional freedoms that we have through Brexit. The proposed conditions on workers’ rights in the”—
particular amendment under discussion—
“are unnecessary”.—[Official Report, 15/5/23; cols. 116-7.]
The noble Lord, Lord Callanan, had said much the same thing in debates on 6 and 23 February.
Of the four things that this statutory instrument proposes, I will deal with the first, which proposes to remove the protection against rolled-up holiday pay. The purpose of the elimination of rolled-up holiday pay was to remove a disincentive on workers to taking their holidays with pay, as required under EU law, in particular for the protection of health and safety at work—see the case already cited, Robinson-Steele v RD Retail Services.
Secondly, the proposed statutory instrument will also reverse the judgment of our own Supreme Court in Harpur Trust v Brazel that annual leave entitlement is to be calculated by accrual on the basis of 12.07% of annual hours worked, instead of a standard 5.6 weeks to be taken when the worker reasonably requests it. The effect of the statutory instrument in that regard will be to cut holiday pay entitlement for many workers.
The impact assessment calculates this loss at no less than £248 million per annum. It describes that as a “transfer to employers”, and so it is. In the middle of a cost of living crisis, this Government are putting their hands into the pockets of workers to extract, each year, £248 million and transfer that sum to employers—presumably to celebrate Brexit. It is as if the Government were urging workers to strike for higher pay.
Thirdly, the statutory instrument, in effect, removes the requirement on employers to keep adequate records to show that working time does not exceed 48 hours per week. For the purpose of guaranteeing health and safety, such a record system must currently measure the duration of hours worked by each worker and, as the noble Lord mentioned, must be objective, reliable and accessible—see Federación de Servicios de Comisiones Obreras v Deutsche Bank. One would have thought that it was essential, not just for health and safety but also for the calculation of pay, for employers to keep objective, reliable and accessible records of hours worked. However, under the proposed statutory instrument, the requirement is merely to have records that
“are adequate to show whether the employer has complied”.
Clearly, the quality of record keeping is going to fall and more workers are going both to unlawfully exceed the maximum working time and to find that they are not paid for all the hours that they actually work.
The fourth aspect of the statutory instrument is the amendment to the TUPE regulations, the effect of which would be to exempt consultation with worker representatives, prior to transfer, for certain classes of
workers. Existing law already exempts small employers with fewer than 10 workers; the statutory instrument will exempt employers with up to 50 workers.
I looked earlier this afternoon at the government statistics for October 2023, which show that there are 1,448,000 employers in this country, of whom only 43,615 employ more than 50 workers. In other words, this statutory instrument will exempt 97% of all employers from the consultation requirement in that regard. That means that, for them, prior consultation on TUPE transfers is effectively a dead letter. I hope the Government will make it clear to the constituencies in the red wall that that is what they voted for when they voted to “get Brexit done”.
Many other points were eloquently made in the other place by the shadow Minister, Justin Madders—no doubt my noble friend will make more in a moment—but I will not develop them here. However, I end with a question to the Minister: how can these reductions in worker protection, particularly in the field of health and safety at work, be squared with the United Kingdom’s obligations under the trade and co-operation agreement?
At the risk of going on longer than I should, I remind noble Lords that Article 386.1 of the trade and co-operation agreement defines labour and social levels of protection as
“the levels of protection provided overall in a Party’s law and standards, in each of the following areas”,
which include
“occupational health and safety standards”.
Article 387.2 states:
“A Party shall not weaken or reduce, in a manner affecting trade or investment between the Parties, its labour and social levels of protection below the levels in place at the end of the transition period, including by failing to effectively enforce its law and standards”.
Clearly, transferring costs from employees to employers does affect trade or investment, but there is more to it than that, because Article 399.5 says:
“Each Party commits to implementing all the ILO Conventions that the United Kingdom and the Member States have respectively ratified and the different provisions of the European Social Charter that, as members of the Council of Europe, the Member States and the United Kingdom have respectively accepted”.
I will not go through all the ILO conventions, but I will mention ILO convention 187—the Promotional Framework for Occupational Safety and Health Convention —which the UK ratified. However, the European Social Charter of the Council of Europe provides, at Article 3:
“With a view to ensuring the effective exercise of the right to safe and healthy working conditions, the Contracting Parties undertake … to issue safety and health regulations … to provide for the enforcement of such regulations by measures of supervision … to consult, as appropriate, employers’ and workers’ organisations on measures”—
blah, blah, blah. Clearly, reductions in working time health and safety protection will breach ILO and European Social Charter standards and, hence, the trade and co-operation agreement. Would the Minister be good enough to explain how that circle is to be squared by these regulations?