Conservatives win key victory on Unemployment Bill

The Conservatives won a major victory last night [Tuesday 28 October] as the House of Lords backed four crucial amendments to Labour's Unemployment Bill.

Peers voted to support changes to the Bill including:

• Preventing the introduction of day-one unfair dismissal rights that would have allowed a new starter to begin at 9am and file a costly claim by lunchtime;
• Reversing plans to scrap the 50 per cent minimum turnout required for strike ballots, which would have allowed militant activists to shut down vital services at will;
• Ensuring union members get a genuine choice over whether their subscriptions fund partisan political campaigns; and
• Protections for seasonal work, ensuring farms, hospitality and retail businesses do not suffer from restrictions on working hours.

The Conservatives have campaigned against the Bill from the start, highlighting the enormous costs it will heap on the shoulders of businesses already smarting from the blow of Rachel Reeves' tax hikes. Even the government's own impact assessment said it would cost businesses £5 billion.

And a chorus of voices from business has appealed to the government for compromise. Last week, 13 business groups representing the employers of millions of people wrote to peers calling on them to support the amendment on unfair dismissal, fearing that otherwise the job market would be crippled. With unemployment rising every month since Labour took office, this would be disastrous.

The Bill as drafted also amounts to a Strikers' Charter, empowering the unions to wreak havoc on our towns and cities like the RMT did in London just weeks ago.

A new report from the Chartered Institute of Personnel Development revealed recently that more than half of firms fear industrial action will increase over the next year, with majorities opposing the measures to loosen strike rules and rules on political funds.

The fight is far from over, however. The amendments will now return to the House of Commons for MPs' consideration. Labour are expected to instruct their MPs to vote them down, which would be a disaster for our economy. But these MPs will at least have the opportunity to put country before party and limit the damage this Bill will do to the jobs market.

Andrew Griffith MP, Shadow Business and Trade Secretary, said:

“These amendments were absolutely crucial to mitigating the negative economic impact of Labour's disastrous Unemployment Bill.

“What we have seen today amounts to a cross-party rebellion against a Bill that threatens to tie struggling businesses up in red tape and send unemployment even higher.

“The government should listen to what the Lords and the business community are saying: compromise now before it is too late.

“Labour have wrecked the public finances and stifled growth. In contrast, the Conservatives will always back businesses to deliver a Stronger Economy.”

ENDS

Notes to Editors

Three of these four crucial amendments were brought by the Conservatives. The amendment on political funds was a cross-party amendment.

The unamended Bill:

• Unleashes waves of low threshold, zero warning strikes, by reducing the notice period for strikes and making it easy for unions to be imposed on workers. Labour are giving new powers allowing trade unions unleashing waves of low threshold, limited warning strikes by repealing the Trade Union Act, cutting thresholds for union recognition and requiring fewer people to vote for strike action, which the government has admitted could increase strikes by up to 35 per cent. [UK Parliament, Employment Rights Bill, accessed 4 March 2025, link; UK Parliament, Employment Rights Bill, 11 October 2024, link.]

• Contains powers which the Attorney General said were a ‘strike at the rule of law', such as Henry VIII powers. The Attorney General said that skeleton legislation, delegated powers and Henry VIII legislation ‘not only strikes at the rule of law … but also at the cardinal principles of accessibility and legal certainty' despite the inclusion of such powers in the Employment Rights Bill. [Attorney General's Office, Press Release, 15 October 2024, link.]

• Despite 66 per cent of consultation respondents wanting to keep the 6-month strike mandate, Labour are increasing it to 12 months anyway. Of respondents to the Department for Business and Trade's consultation on ‘creating a modern framework for industrial relations', 66 per cent of those who answered on trade union mandates stated they wanted to retain the six-month mandate for strike action compared to 27 per cent who wanted to increase it 12 months of longer. [DBT, Government Response: Creating a modern framework for industrial relations, 4 March 2025, link.]

• Despite 59 per cent of consultation respondents asking for more information or opposing the right for unions to access, Labour are pressing ahead with plans anyway. Of respondents to the Department for Business and Trade's consultation on ‘creating a modern framework for industrial relations', 59 per cent of those who answered wanted either more information of disagreed with the proposal of allowing the CAC to enforce access agreements, the government are doing it anyway, and providing ‘digital access'.

• Despite 55 per cent of respondents agreeing that trade unions should remind members every 10 years of their contributions to unions political funds, Labour are ending the requirement for a reminder. Of respondents to the Department for Business and Trade's consultation on ‘creating a modern framework for industrial relations', 55 per cent of those who answered agreed that trade union members should be reminded every ten year of their contributes to the political fund,

• Despite 53 per cent of consultation respondents agreeing that trade unions should ballot every ten years on political funds, Labour are scrapping the requirement for ballots anyway. Of respondents to the Department for Business and Trade's consultation on ‘creating a modern framework for industrial relations', 53 per cent of those who answered wanted trade unions to continue balloting every ten years on the existence of their political fund. Despite the support, the government is scrapping the need for the ballot.

• Despite 48 per cent of consultation respondents disagreeing with the proposal to simplify the information that unions provide to employers, Labour are simplifying it anyway. Of respondents to the Department for Business and Trade's consultation on ‘creating a modern framework for industrial relations', 48 per cent of those who answered disagreed with Labour's plan to simplify the information provided to employers, but Labour are doing it anyway.

• Despite 58 per cent of consultation respondents supporting retaining the 14-day period for notice of industrial action, Labour are shortening it to 10 days.Of respondents to the Department for Business and Trade's consultation on ‘creating a modern framework for industrial relations', 58 per cent of businesses wanted the 14 day requirement for strike action maintained with 7 per cent wanting a period greater than 21 days. However, Labour have ignored the consultation and are reducing the notice period to 10 days.

• Is a rushed job, with the impact assessment mentioning uncertainty 302 times with Justin Madders admitting that ‘not every element of policy was ready'. The impact assessment for the Employment Rights Bill mentions ‘uncertain' and ‘uncertainty' 302 times and the words ‘risk' and ‘risky' 432 times. Justin Madders said: ‘He will be aware that it was a manifesto commitment to introduce the Bill within 100 days, which we are very pleased to have been able to adhere to, but that meant that not every element of policy was ready' [Conservative Research Department Analysis, 21 October 2024, available on request; DBT, Guidance, 21 October 2024, link; Hansard, Public Bill Committee, Employment Rights Bill, 5 December 2024, link.]

• Costs businesses £5 billion, according to an impact assessment by the Department for Business and Trade. The Department for Business and Trade's impact assessment of the Employment Rights Bill said: ‘Our assessment that the costs to business will be in the low billions (between £0.9 billion and £5 billion) per year is based on a cautious assessment of the range of likely costs. We expect this figure to be refined as policy development continues and our evidence base improves'. [DBT, Economic Analysis, 4 March 2025, link.]