Lord Hunt of Wirral (Con)

My Lords, Amendments 141BA to 142B stand in my name and that of my noble friend Lord Sharpe of Epsom. Collective redundancies often occur in the context of an insolvency. Increasing the penalty for failure to inform and consult will exacerbate the difficulties for insolvency practitioners. Under the Insolvency Act 1986, administrators are required to act in the best interests of creditors as a whole. However, keeping employees in employment beyond the 14-day window afforded to administrators to decide whether to adopt the contract, to carry out an information and consultation process, in effect makes those employees super-priority creditors. This would elevate their claims above those of other creditors and reduce the funds available for ordinary creditors. In some cases, the resulting employment costs could make administrators reluctant to take on their role. This may lead to fewer contracts being adopted, increasing the liabilities that ultimately fall on the National Insurance Fund. Amendment 141BA gives insolvency practitioners clear legal guidance to apply the single establishment rule during consultations. This helps them make faster decisions without dealing with complex, entity-wide assessments, reducing delays and protecting insolvency processes. It supports rescuing businesses and, of course, maximising creditor returns. I turn to Amendments 141C and 141E. Clause 27 significantly expands the duty to consult on collective redundancies. It requires employers to start a consultation if 20 or more redundancies are proposed in total across multiple establishments, even when those redundancies are unrelated. This overreaches, because simultaneous job cuts can result from distinct decisions, such as automation in a warehouse, reduced demand in customer service or restructuring in head office, affecting different people in different locations. Yet, under Clause 27, those decisions could be swept into a single mandatory consultation process simply because the total number affected crosses the arbitrary threshold. This means that HR and management teams would have to delay necessary action while they co-ordinated across unrelated departments. This means that representatives and employees would be dragged into consultations about matters with no relevance at all to them, and it risks undermining the quality of consultation itself by overloading it with conflicting priorities and timelines. This would introduce legal uncertainty, particularly for mid-sized employers who may not have the resources to second-guess whether redundancies in different divisions are connected enough to trigger a combined consultation. If they get it wrong, they will face a protective award. If so, the risk-averse approach is to consult everyone about everything all at once. These amendments would make it clear that where redundancies across different establishments arise from a common underlying business reason, or from a connected series of events, a combined consultation is indeed required. However, where they are unconnected, made independently and for distinct reasons, the employer may conduct separate consultations at the level where the impact is felt. Moving to Amendment 141D, we have continued to make the point that the one-sized central planning approach that this Bill uses is not appropriate. Many sectors rely heavily on seasonal or fixed-term workers. Agriculture, hospitality, logistics and retail businesses scale up and down, predictably, year in, year out. They take on workers for peak periods—the summer season, the Christmas rush, the harvest—and release them at the end of the contract. These are not sudden decisions; they are built into the business model and are clearly understood by all parties. For example, a national employer may let 12 seasonal workers go at a distribution hub in the north in July. A month later, it may make seven short-term administrative contracts redundant in the Midlands. In September, it might end six fixed-term roles in a tourist-focused retail unit in the south. Those are unconnected, expected and localised decisions. However, under Clause 27 as drafted, those 25 redundancies must be aggregated, triggering a full collective consultation process across all three events as if they were part of one co-ordinated business strategy. Is that really the policy intention? Amendment 141F tackles the risk of retroactive liability—the possibility that employers who have already commenced consultations in good faith could be told after the fact that their earlier actions were invalid or insufficient, simply because the later redundancies pushed the total over the threshold. This problem arises from the way in which the 90-day window operates. It is measured forwards and backwards from any given proposal, which means that an employer making a set of redundancies today must ask, “Did I make others 30, 60 or 89 days ago?” If so, they now need to be bundled into a new retroactive consultation process. Let us say that an employer consults properly with a small team—five redundancies, full process, representatives informed; and then some weeks later, it identifies the need to make redundancies in another part of the business. The total now crosses the threshold and suddenly, it faces legal uncertainty. Was the earlier consultation valid? This creates a legal trap for employers acting in good faith. It penalises those who move early, communicate openly and begin consultation promptly—the very behaviours the law should be encouraging. This amendment would bring common sense to the process. It says that where meaningful consultation on a proposed dismissal has already begun, whether individually or collectively, those redundancies are not to be re-counted towards a later threshold. It prevents the law demanding the impossible: that employers retroactively reconvene consultations that were lawfully and properly carried out before a threshold was even triggered.