Baroness Jones of Whitchurch (Lab)

My Lords I thank noble Lords who have spoken. I am responding to the noble Lords, Lord Sharpe, Lord Hunt and Lord Jackson, and the noble Baroness, Lady Coffey, who have tabled amendments on the powers of the fair work agency and oppose Clauses 95 and 134. I accept the point made by the noble Lord, Lord Jackson, that some of his amendments are probing amendments. I will attempt to respond to each in turn. Forgive me if I repeat some points that my noble friend Lord Katz made in the previous debate, which covered similar ground. I think we covered some of this ground in debates on a previous day. I can assure the noble Lord, Lord Hunt, that I have no need to justify the unjustifiable in my response. I will speak first to the fair work agency’s investigatory powers and address the opposition of the noble Lord, Lord Jackson, to Clause 95. I listened to the noble Lord, but investigatory powers are common to all regulators. The fair work agency’s powers are based on those set out for existing enforcement bodies in the Employment Agencies Act 1973, the National Minimum Wage Act 1998 and the Gangmasters (Licensing) Act 2004. Employment rights enforcement agencies have had power to enter premises used as dwellings since their inception. For example, HMRC’s minimum wage inspectors can and do regularly visit business premises used as dwellings to gather evidence. It is right that officers should be able to gather evidence from such premises. Businesses operating from premises used as dwellings is nothing new. Pubs, for example, often have flats above the public area where the business’s documentation is kept. Today, more and more businesses operate from home. Current law makes no distinction for dwellings. This Government believe in stronger safeguards for such powers. That is why Clause 95 introduces a new requirement for a warrant to enter dwellings. Together with the additional safeguards in Clause 128 and Schedule 8, this clause strikes the right balance between protecting the privacy and rights of individuals and allowing the fair work agency to go about its job of enforcing labour market legislation. I hope that I have reassured noble Lords on this point, and that noble Lords can agree that Clause 95 should stand part of the Bill. The noble Lord, Lord Jackson, also addressed his amendments to Clause 128. I recognise the intent behind these amendments, but there are already extensive safeguards around the use of investigatory powers in Part 5, including the new requirement for a warrant when entering a dwelling. Clause 128 is a sensible provision that sets out that any enforcement officer has the right to execute a warrant and, as long as the enforcement officer is present, they can be accompanied by an authorised person or persons if they deem it relevant to the investigation—for example, an IT specialist. Turning to Amendment 271ZC from the noble Lord, Lord Sharpe, enforcement of holiday pay is a key part of the fair work agency’s remit. Large numbers of workers are missing out on their statutory right to paid annual leave. The Trade Union Congress estimates that 2 million people lose around £3 billion per year by not receiving holiday pay to which they are entitled. We recognise that this disproportionately affects the lowest-paid workers. The fair work agency will not be able to meaningfully support workers to recover the holiday pay they are owed if it cannot issue notices of underpayment. This is a power that is already available in the national minimum wage enforcement regime, which has been successful in ensuring that workers receive the arrears that they are owed. Therefore, I must respectfully resist this amendment. I turn now to the amendments to Clauses 116 to 121 inclusive, in the names of the noble Lords, Lord Jackson, Lord Sharpe and Lord Hunt, together with the amendments to Clauses 126 and 136. These pertain to the labour market enforcement undertakings and orders regime. Although these amendments touch on important aspects of the Bill, they either duplicate existing provisions and introduce unnecessary complexity, or risk undermining the careful balance that has already been struck in the drafting. The labour market enforcement regime was introduced by the 2015 to 2017 Conservative Government. Indeed, the noble Lord, Lord Jackson, at that time in the other place, voted in favour of this regime consistently during the passage of the Immigration Act 2016. It is a regime that works and works well. It promotes a compliance-first approach, as employers are first encouraged to enter into voluntary undertakings to correct their behaviour. Only persistent or egregious offenders are issued with a compulsory order to stop. As of March 2024, there have been 140 labour market enforcement undertakings and just 14 labour market enforcement orders. These amendments seek to water down the regime and increase legal tests and administrative burdens for its use. By making the labour market enforcement regime more cumbersome and less effective, the fair work agency would have to resort more often to prosecution, which could be disproportionate and time-consuming for all concerned. The effects of these amendments would be to make enforcement more heavy-handed, less efficient and less focused on helping businesses to comply. This is not what businesses or workers want or need, and it is not what the fair work agency is about.