Lord Sharpe of Epsom (Con)

My Lords, I am very grateful to my noble friend Lord Lucas for introducing this group with his Amendment 21A. I could not agree with him more that flexibility is a key part of an efficient economy. That deserves to be written in stone. I am also grateful to my noble friends Lady Lawlor and Lady Noakes for their support for various amendments in this group and to the noble Lord, Lord Fox, for his positive comments. I shall speak to Amendments 22, 24 and 28 in my name. There are many circumstances in which an employer has no choice but to make a request or cancel a shift on short notice—my noble friend Lady Lawlor gave us some very useful examples of that. But to go on a bit, for example, if a colleague calls in sick, which is something that is likely to increase in frequency with changes to statutory sick pay governed in other areas of this Bill, or if events beyond the employer’s control intervene, such as local flooding or public disturbances, payment for unworked cancelled shifts becomes an additional financial burden at precisely the time when a business is already experiencing a downturn. It is not simply about inconvenience; it is actually about viability. To give another particular example, we have heard from the hospitality industry that the proposed rights around notice and cancellation of shifts could severely undermine existing staffing practices. For instance, in the case of pubs, which as we know are under pressure anyway, those with outdoor garden spaces in particular operate in a highly unpredictable environment. One representative of the sector made it very clear to us when he said: “The new right to notice of shift allocation and cancellation could undermine a pub’s ability to offer voluntary overtime”. During the course of the discussion, the examples were magnified to some extent—and to some extent the example that I am about to give is the flipside of the one that my noble friend Lady Coffey highlighted with regard to restaurants in a previous group, and the fact that they are pre-charging for tables. The representative of the industry pointed out to us that in many cases, for example, offering food in a pub Monday to Wednesday is a highly marginal business, and they often let their staff go early, and so on. He is of the opinion that, as a result of the Bill, much of that work will simply disappear; they will not bother to open, because it will be too complicated to administer. Not the least of it is that it is not just the administration but the costs of offering the compensation that is governed by this clause. That would obviously not be very good for consumer choice, plus of course there are implications for tax receipts and a whole host of other areas as well. In practice, these businesses rely heavily on flexibility, which includes voluntary shift swaps and short-notice availability. As we have discussed on numerous occasions, if the weather turns—and in Britain, let us be honest, that is not a small variable—a pub expecting a busy day may suddenly find itself very overstaffed. Under the Bill, cancelling those shifts could result in mandatory compensation. I turn to Amendment 24. Another flaw identified in the Bill is that it presumes that, in every instance, a cancelled, moved or curtailed shift entitles the employee to compensation. This rigidity, however, does not account for the unforeseen events which, as noble Lords across the House will know, are a common occurrence throughout the working world. We have heard many examples of those. The assumption that the employer is always somehow at fault does not reflect the realities of working life. Our amendment therefore seeks to clarify and incorporate a degree of flexibility into the Bill. As the noble Lord, Lord Fox, pointed out, we are proposing that the conditions that govern this entitlement to compensation should be subject to regulation in this case. There is a strong case to be made for this exception to our general principled dislike of the amount of regulation on which the Bill relies. As defined by the Secretary of State, this could be nuanced to ensure greater parity in the employer/employee relationship. It is vital that we remember throughout these debates that we are discussing a piece of legislation that will profoundly affect workers and employers across the country. I am concerned that, in certain elements of this Bill, an ideological assumption is made about the relationship between the worker and the employer, which leads to absolute positions—another point that the noble Lord, Lord Fox, raised in a previous group. We all have a duty to ensure that the Bill meets the practical demands of the real workplace and does not just speak to such assumptions. This amendment would balance the relationship between the employer and the employee and would make sure that those who provide the work are protected, alongside those who undertake it. There is an essential symbiosis that needs to be maintained in order for us to have a thriving economy, with good jobs available for workers. We cannot fall prey to inflexible, absolute stances that upset this relationship. Our amendment seeks to correct this mistake in the text of the Bill. I am very grateful to my noble friend Lady Noakes in particular for her support for Amendment 28, because she raised unarguable points. The reasonable belief test outlined in the Bill raises several concerns. One of the most substantial is that the term “reasonable” is incredibly broad and creates a great deal of uncertainty for both workers and employers. As noble Lords across the House will know, this part of the Bill is designed to make working entitlements clearer and provide greater clarity and certainty to workers about the shifts they are working and the sort of income they can therefore expect to receive. However, the text in its current form is wide open to a massive range of interpretations and fails to provide clarity or protection for either workers or employers. How is either party to know what constitutes a reasonable expectation? Redefining this element of the Bill so that a formal confirmation of a shift is required for entitlement to compensation will provide clarity for both parties and will create a mutual responsibility between the worker and the employer to make expectations and duties clear. It is my understanding that the Government intend this section of the Bill to place an obligation on the employer to clearly communicate shift assignments to workers in order to avoid misunderstanding. We agree that this should be the case, although the current text of the Bill uses language that is far too vague. If the Government want to promote the clear communication of shift assignments, surely providing for a formal commitment of work, rather than the belief of being needed, is the way to make sure that that obligation is met. Our proposal of a formal confirmation requirement would mean that both employer and employee know where they stand and what is expected of them and would address the shortcoming in the text as it stands. I will say just a few brief words on Amendment 27, in the name of the noble Lord, Lord Fox. Forty-eight hours seems to us a perfectly reasonable notice period regarding the time before a shift is due to start. A survey from the Association of Convenience Stores found that 90% of colleagues in the convenience sector report that they have never had a shift cancelled with less than 48 hours’ notice. Unless a reasonable notice period is reflected in the new requirements, it is likely to lead to a cautious approach to staffing by many hospitality and retail businesses. This would mean restricting operating hours and/or staff numbers during periods of uncertain footfall, rather than offering shifts that may ultimately be surplus to operational needs on the day, thus incurring compensation costs for late cancellations. Moreover, there is a notable asymmetry in the Bill as drafted, because there are no reciprocal requirements for employees to provide notice when they are unable to work at a scheduled shift. That gap will have significant implications. One of the biggest challenges for employers, particularly in retail, is managing last-minute cancellations by employees due to illness, childcare needs or other issues. When employers must find cover at short notice, how are they to meet the same reasonable notice requirements that they themselves are held to? We need common sense in this legislation, so I urge the Government to accept my and other amendments, or to be honest about why they will not.