Lord Moynihan of Chelsea:

Moved by Lord Moynihan of Chelsea

2: Clause 1, page 2, line 8, leave out from beginning to end of line 11 on page 4

My Lords, I rise to move Amendment 2. I apologise to noble Lords if anything in my moving of this amendment is maladroit or otherwise at fault: it is the first time I have moved an amendment, let alone a group of amendments.

Why am I suggesting that new Section 27BA be removed in its entirety? The primary reason is the onerous inflexibility that it imposes on employers, the creators of jobs. The Bill as it stands, in theory, works even for those key groups who, as has been reported widely, much prefer flexibility in their employment arrangements—to take just a few examples: students, working mothers, part-time creatives and casual workers of all stripes. It is acceptable to them because they do not have to accept the guaranteed hours that the employer is required to offer them. To them and other groups of workers, some of whom may indeed prefer to be offered guaranteed hours, the employers will be required to offer those guarantees, but, once the offer is made, the employees can accept them or not. Thus, this new section creates considerable additional flexibility on the demand side. Many people looking for jobs will find those jobs more attractive.

On the supply side, however, flexibility is enormously reduced, to be replaced by stark uncertainty for all employers, particularly for sectors such as the NHS, hospitality, retail, care work, the gig economy, delivery driving, Christmas work, warehouse work and so many more. The absolute importance of flexibility to the employer can hardly be better illustrated than in the reports on the Guido Fawkes website as to how unions and the Labour Party itself have happily offered zero-hour contracts in the past.

At Second Reading, I stated that this Bill in general will kill business across the country, serving to shrink rather than grow the economy. This unfortunate section is just one part of that but an important one. In general, as I have just discussed, on the demand side, the removal of significant elements of flexibility creates distortions in the employment market, leading to employers, in many cases, being far more reluctant to offer employment. In consequence, the level of employment will fall, not increase. For smaller businesses, just creating the offers required by this section in the first place will involve onerous costs in time and money, making the employer highly reluctant even to start the process of seeking new employees. Some of the subsections in the new section raise the likelihood, in real life, of employers doing their level best to covertly figure out which employees will be flexible and which will seek inflexible, guaranteed arrangements, and, having come to a conclusion, hiring the one who wants flexibility and not the one who does not. That destroys the whole intent of this clause. The Government might denigrate such behaviour by a small business employer, but few in the Government have ever run a business.

A further problem is that the new section envisages the employer having to go to all the lengths of creating the guaranteed-hours offer, and to present it to the candidate employee, without having any idea whether the candidate will take the offer. This imposes considerable friction and inefficiency on the economy and more unnecessary costs on the poor benighted employer.

Interestingly, I read through the several pages of this new section—quite possibly ineptly—but I cannot find anything about what happens in a hypothetical situation where an employer presents the required offer then says to the prospective employee, “Will you be wanting these guaranteed hours?” and, if the prospective employer says yes, the employer then does not make an offer of employment to them. It seems odd that I cannot find that; maybe it is there somewhere. In my view, if the ability of the employer to renege in that way after having been forced to make that offer is in fact there in the Bill, it would be a good thing. The Government may or may not agree, but, even if I were right in saying that this loophole existed in the current drafting and the Government, having been alerted to it, were to choose to close that loophole, it would just drive similar behaviour by employers underground.

The Bill is driven in great part by a belief in what is “fair” to employees, and so forth. I have seen in my short time here that “fairness” is often used in this Chamber; “outcomes” is not used so much. Whatever the Government’s view may be as to the crucial importance of fairness, with the best will in the world, the government drafters who focused on fairness will not have been able to bring to the issue anywhere near the level of seriousness as to outcomes with which a business owner facing survival or destruction for their business will view this matter.

This new section is just one component of an extensive and intrusive Bill that will, if implemented, see the UK’s economy further driven into the ground, with more and more parts of that economy and key players in it either becoming economically inactive or, as we are seeing on a daily basis, leaving the country. On Report, I imagine my party will oppose the entire Bill, but in the meantime, I state that it can be significantly enhanced by removing this new section in its entirety. I beg to move.

My Lords, I rise in support of Amendment 8 in my name. I declare my interests as stated on the register, in particular my role as chief executive of Next plc, the job I have held for 24 years, which makes me the UK’s longest-serving FTSE 100 chief executive. I add that Next employs over 25,000 part-time employees—and, I hasten to add, it does not use zero-hours contracts.

I start by assuring the Minister that I have sympathy with the intentions behind this section of the Bill. Zero-hours contracts can leave employees feeling obligated to accept hours from employers, who can feel no obligation to provide work. I commend the Government’s intention to tackle this lack of reciprocity. In the Minister’s polling, I would have come out as one of those people not in favour of zero-hours contracts.

Amendment 8 would increase the Bill’s effectiveness by clarifying the distinction between zero-hours contracts and legitimate part-time contracts, because there is a world of difference between tackling potentially abusive zero-hours contracts and eliminating the flexibility that legitimate part-time contracts provide to those who need and want them. My concern is that the requirement to offer additional contract hours to those who voluntarily work extra hours will inadvertently prevent those additional hours being offered at all.

I am not exaggerating when I say that if the threshold for low-hours contracts is set too high, it will take a wrecking ball to the UK’s part-time economy. It will deprive millions of people of a valuable source of flexible income, and multiple industries of the flexibility they need to offer excellent services in sectors where demand is variable and volatile.

It is important to understand the nature of flexible part-time work. The vast majority of part-time workers provide an important supplement to their household income but are not the mainstay. They are people such as a parent whose childcare responsibilities mean they cannot work full time, students balancing their studies with their earnings, carers for elderly relatives, and those seeking to transition into retirement. What this diverse group of people has in common is that they value the guaranteed regular income their part-time contracts provide but also appreciate and value the ability, at their discretion, to add hours of work when they have more time available: for example, during university holidays, during term time for parents of school-age children, or at times when household costs rise—for example, in the run-up to Christmas.

These reciprocal arrangements benefit all involved. From a business perspective, sectors such as retail, hospitality, health and travel can maintain excellent services despite the intrinsically variable nature of demand in consumer-facing businesses. These flexible additional hours allow businesses to respond to seasonal peaks and unexpected surges in demand, and to do so in a way that offers voluntary additional hours to those who want them.

I hope this gives some sense of how important flexible part-time work is for the 8.5 million part-time employees in the UK. This flexible work will be under threat if the threshold for low-hour work is set too high in the Bill. My worry is that the Bill will make it almost impossible for businesses to offer additional voluntary hours to workers with contracts below the low-hour threshold. There are two reasons why: first, the complexity of trying to comply with the law, and secondly, the risk it creates for businesses that offer additional hours to part-time staff that they will end up with permanent and unaffordable overstaffing.

I will start with complexity. Business will have to track who should be offered extra hours—as currently drafted, pretty much every day of the year—calculate correct entitlements and then determine compliant contract offers without clear guidance as to what a compliant offer will actually be. For the company I work for, I estimate that it would be at least a year of systems work and several million pounds of cost just to develop the system needed to manage this process. Small businesses will find this process overwhelming.

It is not just the complexity of the compliance that matters; there is a more important problem. Restaurants and shops simply cannot afford to have as many people working in February as they do in December. That is a fact. They cannot take the risk that extra hours to cover seasonal peaks or summer holidays then become permanent costs for the rest of the year. Faced with the choice of managing an impossibly complex system, along with the inherent risk of having to contract staff for more hours than a business will need, we will have no choice: we will simply not be able to offer additional hours to those staff on low-hours contracts.

Consider the practical consequences. A retail business facing heightened demand at seasonal peaks will be unable to offer additional hours to its existing part-time staff—skilled staff. The only alternative will be to offer the work to additional temporary workers, depriving loyal, experienced and skilled employees of the opportunity to supplement their income at a time when they most need it. For a Government who I genuinely believe are committed to economic growth and supporting working people, surely this cannot be the intended outcome.

This amendment does not seek to undermine the Bill’s core objectives; indeed, it provides a number that at some point must be determined. By defining low-hours contracts as those requiring four hours per week—a single part-time shift—we create a clear boundary that protects vulnerable zero-hours workers while preserving valuable flexibility for those who genuinely benefit from it. Set at a reasonable level, this section of the Bill has a good chance of achieving its noble aim. Set it too high, and it will radically change the landscape of UK employment in a way that will be bad for employees and catastrophic for the service economy.

Some may argue that the threshold of four hours is too low. If the Government believe that a different threshold is more appropriate, I will welcome that discussion and debate, but that debate we must have. What is indefensible is the failure to include any threshold in the primary legislation. This is not a minor technical detail to be determined later; it is fundamental to the scope and impact of the Bill. If it is the Government’s intention to profoundly change the nature of and opportunities for part-time work in the UK, the Bill should be clear on this subject, allowing business and employees the time they will need to prepare for the change. By leaving this crucial definition to secondary legislation, Parliament is being asked to approve potentially far-reaching changes to our labour market without debate, scrutiny or consent.

I urge the Minister, if not to accept this amendment, at least to commit in Committee to including a clear definition of low-hours contracts on Report. If the low-hours threshold is set at the right level, the Bill will indeed succeed in addressing potentially exploitative practices—which, as noble Lords on the other side of the Committee have rightly pointed out, good employers want to be addressed as much as they do. The Bill can do so without dismantling the legitimate employment practices that work—for our economy, for our service industries, and, most importantly, for millions of working people across the UK. In that spirit, I commend Amendment 8 to your Lordships.

My Lords, it is with some trepidation but some pleasure that I follow that speech. I rise to speak to Amendment 4, which is in my name, and to offer support to Amendments 7 and 15 in the name of my noble friend Lord Goddard, although he will speak to those on his own account.

Speaking on the previous group, I said that there should be a change in the polarity of the guaranteed hours offer from an obligation to offer to a more streamlined right to request. We have heard in the previous two speeches that the aim is for this offer to be made to people who want it rather than there being an obligation to make it to everybody, when we know for a fact that a large number of people who will get the offer will not want to take it up. It is unnecessary activity when there is plenty to do in business. It is a very simple principle, and I genuinely do not think it subverts the intention of the Bill, in the same way as I think the noble Lord, Lord Wolfson, was trying not to subvert the purpose of the Bill but to help it succeed while helping business at the same time. In a sense, that reflects the point I made before withdrawing Amendment 1. It is really asking the Government to have some understanding of how these things will be delivered on the ground, in the workplace. That is why the previous speech was so helpfully revealing.

I think that a large part of the early part of this Bill is designed to deal, in essence, with a number of employers who the Government have in the back of their mind as not doing the right thing and not achieving what we would all like to achieve. I understand that. Unfortunately, it is dragging the whole business programme, from microbusinesses right up to huge businesses, into a series of practices to crack those particular nuts. Later in Committee, my noble friend Lord Clement-Jones will introduce Amendment 318, which targets the sort of employer who I think the Government have in their mind as bad or exploitative. It would create, in essence, a new class of employee, the dependent contractor, which is in fact in many cases what we are starting to look at. It would sharpen the regulatory focus, particularly on some elements of gig economy employers, but avoid the heavy-handed approach that we are in danger of using with this Bill.

Amendment 4, and I think there are a couple of others that are very similar, would simply reverse that polarity to: if employees ask for it, the employer is obliged to deliver it. Some obligation on employers occasionally to remind their employees that they are entitled to ask for this would help the process.

As for the rest of the group, I will listen with interest to the noble Lord, Lord Sharpe, when he comes to his amendments. I think much of this will be addressed also when we get to the issue of freelancers and to the amendment tabled by my noble friend Lord Clement-Jones, so I imagine this is not the last time that we will have some elements of this discussion, but some sign from the Government Front Bench that they understand that something should and could be addressed in this area would be a good starting point.

My Lords, I rise to speak in support of Amendments 3, 6 and 9 in this group, tabled by my noble friend Lord Sharpe of Epsom and supported by my noble friend Lord Hunt of Wirral. I also support Amendment 8 tabled by my noble friend Lord Wolfson of Aspley Guise, but for different reasons. I will not speak on that, but I like the idea of a low-hours contract. I will speak about zero-hours contracts, because I do not believe they are getting a fair look in.

These amendments would give workers the right to request, rather than putting an obligation on employers to guarantee hours. I think they are worth while and worth supporting. In the labour market this year, there are 33.9 million people employed. Of them, 1.3 million are on zero-hours contracts. There has been an increase since 2000 of 805,000 people on this type of employment contract. This is 3.1% of employment in the UK. Most are young people in the 16 to 24 age group. This is a popular way of working; the figures speak to that. There has been far more significant an increase in this type of contract than in the overall type of working arrangements chosen by employees and their employers.

Much of the popularity lies in the flexibility on both sides. The evidence is that the majority of people on zero hours, 60%, do not want more hours, although some, 16%, do. Amendments that would allow an employee to request guaranteed hours as distinct from obliging the employer to guarantee certain hours seem more in tune with people’s wishes. Of those on zero-hours contracts, around 1 million are young people. However, 946,000 16 to 24 year-olds are not in employment, education or training; that is around 50%. Yes, people on these contracts may work fewer hours than other workers—I gather the average is around 21.8 hours a week compared with 36.5 hours for all people in employment—but is it not better that there are jobs which people want and can get, particularly young people who may not yet be in the labour market or who may have been thrown out of the labour market or left it for one of the many reasons we hear about it? I am afraid that it seems from the Government’s approach that they do not think so.

This Bill and Clause 1 must be seen in the overall context of the party opposite’s approach to labour market and economy reform. Not only is the NIC tax hike on the productive sector along with the decrease in the NIC threshold taking £24 billion out, affecting 800,000 businesses and their ability to employ people and offer opportunity to the 16 to 24 age group, but other costs have been piled high, one on top of the other, since the party opposite came to power. Of those employed in December 2024, 27.8 million were in the private sector and 6.14 million in the public sector. If employers are obliged to move to guaranteed hours, that will most likely serve to cut the number of people productively employed under these arrangements, with a corresponding decrease in output and growth. Surely these amendments speak for themselves, and a Government whose priority is to increase economic growth should accept them.

My Lords, I declare my interests as laid out in the register. I regret that I was unable to speak at Second Reading. As someone who has been an employer for over 40 years for various small businesses, and knowing that these amendments were coming up, I spent the weekend speaking to small and medium-sized businesses, particularly the small businesses in my home city of Leicester. All were very concerned about the impact that the Bill may have, if it becomes law, in providing a set amount of guaranteed hours.

I come from the home care sector—that is one of my businesses—which really does work on contracts in which we do not, and cannot, guarantee hours, simply because of the nature of the job. We do not know when people will require care or for how long, how long they will be in hospital for, or whatever. The hospitality sector is in exactly in the same place.

Although we all want to be great employers, enforcing things that employers will find incredibly hard to deliver will just stop employers taking people on. That will restrict the ability of those who want to work for only a few hours a week—for example, just to have a change from caring duties in their homes. The intention is right, as my noble friend Lord Wolfson said, but the outcome will be very detrimental to the business community, particularly to small businesses, which are, as we all know, the backbone of our country.

Bad employers will be bad regardless of what the Government bring in because they will find ways of circumventing the legislation that is being introduced here. There needs to be more thinking around what we want to see as greater flexibility. I firmly believe in flexible working, but I believe that should be a contract between the employer and the employee; it should not be for government to mandate what needs to be done.

My Lords, I will speak to my Amendment 7 in this group, as well as my Amendment 15. I also apologise for not being able to speak at Second Reading. I am walking somewhat of a tightrope this evening. For 15 years, I was a senior shop steward for the GMB as a national negotiator. I also have my own company with 20 employees. I do not think that I will be able to cope with the ramifications of some of this legislation. Also, I have some guests up in the Public Gallery: they are small business men who employ people. Dinner could get quite difficult if I say the wrong thing in the next 10 minutes, which I hope I will not do.

My first amendment would set the initial reference period for the right to guaranteed hours to 26 weeks, to give flexibility to industries that rely on a seasonal basis for operating and employing people. It would also give greater flexibility to the labour market itself. When Members see this amendment, they automatically think of seasonal workers as fruit and veg pickers harvesting crops, but nothing could be further from the truth. Work has changed. We are now essentially a service-led economy, with no more enormous factories employing thousands of workers every day, producing goods to export across the globe, clocking in and clocking out, as I did back in the 1970s. Flexibility is the key, and work/life balance for many is crucial. The days of the nine to five are well and truly over, in my opinion, especially for small businesses. That flexibility is not only for the agricultural industries but for tourism, retail, hospitality and events—things that bind our country together.

We welcome this Bill. One could argue that it is 30 years too late; that was probably the time when unions were most under attack, when our beloved Margaret was in charge. Perhaps that was when people should have risen up, but we are where we are. However, the Bill should be proportional and reasonable; those are the two things that we would wish to persuade the Government to embrace, through not only some of our amendments but those of other parties. Reasonableness and proportionality are what we are proposing. We will support the Bill, but its architects must accept that the labour market has evolved. Flexibility for workers and protecting workers’ rights go hand in hand.

I will now speak to my Amendment 15. Other amendments in this group have rightly raised challenges regarding the right to be offered guaranteed hours. My Amendment 15 strikes a necessary balance between protecting workers and allowing flexibility for genuine short-term employment situations. This amendment would not undermine the main principles of the Government’s legislation. Instead, it would make a reasonable accommodation for short-term contracts while maintaining safeguards through proper disclosure requirements and strict time limits.

For seasonal workers, this amendment offers significant advantages. It would increase their employability, as businesses could confidently offer work during peak periods without complicated hour guarantees that extend beyond the season. Many seasonal workers prefer concentrated work periods with higher hours, allowing them to earn more money during these limited timeframes. Additionally, this flexibility would enable workers in industries such as tourism, agriculture and entertainment to secure multiple seasonal positions throughout the year, improving their overall financial stability. Many industries in our economy, including agriculture and education, are connected to seasonal events. We need this practical provision.

I urge the Minister to consider this amendment, or at the very least be cognisant of the challenges these seasonally dependent sectors face. If this legislation is designed correctly, we can arrive at a set of provisions that will protect workers while acknowledging the realities of our diverse job markets.

Finally, my noble friend Lord Fox and I met Amazon a couple of weeks ago in Portcullis House. Amazon employs 75,000 people in the UK and is not unionised. It has evolved its own democratic in-house solutions. I am not commenting on that, but it shows that, sometimes, legislation is not the only way to protect people at work, guarantee earnings and pay reasonable rates. That is the kind of bigger picture thinking that this Bill is missing.

My Lords, this group of amendments deals with the hugely important issue of zero-hours and short-hours contracts. As the noble Baroness, Lady Lawlor, said, well over a million people in the UK work on zero-hours contracts. In sectors such as retail, it is also common for workers to have a small number of guaranteed hours but to work the equivalent of full-time hours.

These arrangements are not a win-win for worker and employer. More than eight in 10 zero-hours workers want regular hours of work. Without guaranteed hours, workers do not know whether they will be able to pay their bills or organise their caring responsibilities. The flexibility is invariably on the employer’s side. Research has shown that more than half of zero-hours contract workers have had shifts cancelled at less than 24 hours’ notice. Many experience being sent home mid shift and very few are compensated. The vast majority of those who ask for guaranteed hours are turned down, so I fear a right to request would not resolve that issue.

There is also significant evidence that employers do not use zero-hours contracts just as stopgaps but will often park workers in these insecure arrangements long term. Two-thirds of zero-hours contract workers have been with their employer for more than a year, and one in eight for more than a decade.

As well as causing financial uncertainty and disrupting workers’ private lives, this distorts workplace relations, with workers fearful of challenging inappropriate conduct in case it leads to them losing their work. Recent accounts of poor behaviour at McDonald’s branches, where zero-hours contracts are prevalent, included a 17 year-old reporting that she had been asked for sex in return for shifts. Also, when employers rely on zero-hours contracts, what incentive do they have to invest in skills? The answer is: little or none, with predictable consequences for productivity.

The Bill implements measures first developed by the Low Pay Commission, with the support of both trade union and employer-side representatives. An employer will have to offer a contract based on a worker’s normal hours of work in line with a 12-week reference period. That gives a clear indication of a worker’s usual hours while evening out peaks and troughs. Any period longer than that, such as 26 weeks, would simply allow employers to park workers on a zero-hours contract for a prolonged period.

The Bill contains powers for Ministers to specify the notice period for shifts that employers must give to workers and compensation for cancelled shifts, and these are an essential part of the package. Currently, workers on variable-hours contracts bear all the risk of any changes in demand, and they are usually low-paid workers who can ill afford the sudden changes to income.

In the House of Commons, the Bill was amended to ensure that those rights also apply to agency workers. That is crucial in order to close the loophole that could have led to employers hiring zero-hour staff by agencies and entirely subverting the intent of the legislation. I know the TUC would strongly oppose any amendment that would exempt agency workers or fixed-term contract workers on variable-hours contracts from these provisions.

Employers will still be able to put in place arrangements for coping with fluctuations in seasonal work—for instance, via fixed-term contracts. What will change is that workers will not bear alone the burden, in reduced wages, of sudden changes in demand. The current situation allows manifest injustices to take place. It is time that we level up the labour market.

My Lords, what will the noble Lord do when all those small businesses—I emphasise small businesses—start to close down because of this rigid approach to flexible hours?

I say to the noble Baroness that I have more confidence in the adaptability of British businesses to cope with intelligent, progressive legislation like this to even up the labour market.

My Lords, I am sorry that I find myself disagreeing for the second time today with the noble Lord, Lord Fox, specifically on the proposition that the right to be guaranteed regular hours should be replaced by a right to request.

My noble friend Lord Barber reminded us that this proposal originally came seven years ago from the Low Pay Commission. In that room were nine commissioners, who produced a unanimous report. There were three independent labour market experts, three representatives of workers and senior representatives from the Federation of Small Businesses, the CBI and big business, and, as I say, the recommendation was unanimous. In that discussion, the Low Pay Commission considered, in the words of the noble Lord, Lord Fox, whether a right to request could operate more effectively than a guaranteed offer on the ground and in the workplace, and the conclusion was that a right to request would not be a better option. That was primarily because you would be asking workers who have the least power in the labour market—the most vulnerable workers—to assert their rights. As we have been reminded, the vast majority of those workers who at the moment request guaranteed hours are turned down.

Another problem, from my point of view, with the group of amendments that are suggesting that there should be a right to request is that they are all silent on the consequences of a denied request. That is a major problem with the propositions in the amendments. In this context, I suggest that a right to request is no effective right at all.

My Lords, I have a small point on Amendments 7 and 11 to 13, which seek to extend the reference period from the current 12 weeks in the Bill to 26 weeks. Last year the Chartered Institute of Personnel and Development published some figures showing the number of workers who stayed in their job for a three-month period, which I take to be some 13 weeks rather than the 12 weeks in the Bill. Some 1.3 million workers worked for less than that period of time, meaning that under the Bill 1.3 million workers will never reach the end of the reference period in order to claim the right. The figures show that if the period were extended to 26 weeks, as the amendments propose, that would cover some 8.9% of all employees, which comes to 2.7 million workers. So the effect of those amendments would be to exclude a further 1.4 million workers from ever being covered by the reference period.

My Lords, I was not going to speak on this group but the noble Lord, Lord Barber, has painted a horrific picture of the impact of zero hours on some workers. For some people I know who have been on the receiving end of zero-hours contracts, sometimes it has been even worse. I know of people who have been required to turn up at work at 4 am for a shift and been sent home again at 5 am, so I know how bad this is. However, my noble friend Lady Verma makes a strong argument as to why just removing all the measures, which would happen by virtue of the Bill, would also have a detrimental effect.

So far, I have not heard from those on the other side a response to the argument put forward by my noble friend Lord Wolfson, which is that we have to find a way forward on this matter that addresses the employment rights issue, which the Minister has said is the purpose of this legislation, but also allows business to deliver the kind of economic growth that the Government are also saying is the purpose of the Bill.

The noble Lord, Lord Empey, is not in his place at the moment, but we have to take heed of the point that he made in the debate on the first group: we should not be in a situation where this is a stand-off. Hopefully, through some responsiveness and empathy from the Minister, we will find ourselves in a position where the Bill will not have a detrimental effect on business but will address the worst work practices, as described by the noble Lord, Lord Barber.

My Lords, I think I am allowed to come back in Committee. I want to respond to the noble Baroness, Lady Carberry, because I probably did not articulate terribly well what I was proposing. I certainly was articulating a right to request, but I was also assuming there would be an obligation to meet that request, given certain thresholds that the noble Lord, Lord Wolfson, was talking about. It would not be an option for the employer as long as the request was within those thresholds. I suspect that is not what the noble Baroness thought I was proposing, and I just wanted to set the record straight.

My Lords, I support Amendment 8. I commend my noble friend Lord Wolfson on his excellent speech, bringing the reality of employing so many people into the heart of this debate, along with the constraints and the concerns being raised, while still recognising that I understand why so many people consider casual work and zero-hour contracts to be particularly poor when people are trying to have certainty of employment over some time. I also support Amendments 7, 12 and 13—in essence, any amendment that refers to specifying the reference period in the Bill.

I say that because, when thinking of 26 weeks, I think in particular of the hospitality industry in coastal areas. There are a number of employers around the country who literally shut down their businesses, or move to a much lower level of needing people, at certain times of the year, and then, in the summer, are desperately trying to find people. We need to give flexibility. The 12 weeks simply does not recognise that, as has been referred to. It is perfectly usual for people to work at different points throughout the year, potentially in on annualised-hours contract, but varying the number of hours expected to match the demand of customers requiring a particular service. I fear that the 12 weeks does not address that sort of business.

Across the country, 2 million people work in the hospitality industry. It is one of our biggest industries, and for many families it is key to how they support their household income. For the flexibility that employers want, and—thinking of how many people lose their childcare at certain times of the year—for employees to have flexibility around their hours worked, bringing in casual staff is a key element in how employers keep those businesses going.

There is another element that needs thinking through. While I appreciate that the Government seek to reduce the number of agency and bank workers in the NHS, let us not get away from the fact that, unfortunately, many NHS trusts are actually terrible employers. A lot of people leave or reduce their permanent contracts because they simply cannot get the flexibility that they need working in the NHS. That could be for caring reasons, for all sorts of people—it does not matter whether it is men or women; people provide care to their families and to their friends. I am concerned, and I intend to discuss further with NHS Professionals how this will impact on the NHS fulfilling its expectations for people right across the country. I appreciate that it is not simply NHS Professionals; many individual trusts have their own bank. That is intended to provide flexibility based on need, and recognises that simply not everybody can work the NHS shifts expected.

Thinking of the 26 weeks or the 12 weeks, I am also concerned that, at the other end of the Corridor, 650 Members of Parliament are all individual employers. They have to sign contracts, which are provided, but when people are ill or go on maternity leave, MPs can and do take people on through certain term contracts. I am concerned that there will be unintended consequences for the provision of services. As a real example, if you had to guarantee hours beyond when the employee came back, you could end up in a situation that you simply could not manage.

It is for those reasons that we need to think very carefully about the reference period when we are considering the different employment situations that small employers find themselves in, as well as the large sectors, such as hospitality and retail, which have already been discussed.

My Lords, Amendments 3, 6 and 17 stand in my name and that of my noble friend Lord Hunt. Before turning to the detail, I would like to frame the debate in its proper context.

At the heart of this issue lies the question of incentives. Much of the discussion around zero-hours contracts rightly concerns the security and well-being of workers. We must not lose sight of the fact that only a relatively small proportion of the workforce is employed on such contracts, or in other forms of temporary work. Many of these individuals are young people—as my noble friend Lady Lawlor illustrated in her very detailed speech—who are starting out in their careers. Others are disabled people, who may be able to work only a limited number of hours due to their personal circumstances. If we make the regulatory environment too rigid, we inadvertently create a disincentive to hire precisely these groups. We reduce the number of vacancies, reduce opportunities and end up harming those we most wish to support. Good intentions do not alone lead to good results. It is the incentives that lead to results.

I thank my noble friend Lord Moynihan and the noble Lords, Lord Fox and Lord Goddard, for their contributions in this group, and I will come on to others. My noble friend Lord Moynihan made a compelling argument to leave out this part of the clause altogether, because it is simply unworkable in its current form. I look forward to hearing what the Minister has to say in response.

I turn to the specifics of my amendments. Job security is vital, and there can be no disagreement on that point, but we have to recognise that guaranteed-hours contracts are not always practical or appropriate across all sectors of the economy. The principle that we wish to uphold is simple: autonomy. Workers themselves are best placed to judge their own circumstances and to decide whether a guaranteed-hours contract would suit their needs.

Research from the Chartered Institute of Personnel and Development, published in its report on zero-hours contracts, found that workers on such contracts often report a better work-life balance and higher well-being compared with other workers. This is an important reminder that flexibility, when genuinely chosen, can be empowering rather than exploitative.

Not every worker wants a rigid schedule. Young people, parents with caring responsibilities and disabled people may actively prefer the flexibility that variable hours allow. A one-size-fits-all approach simply does not reflect the realities of the modern labour market. Sectors such as retail, hospitality and tourism, and other seasonal industries, are heavily dependent on flexible staffing to meet seasonal demand. It is these very sectors that offer the vital entry-level opportunities to workers who might otherwise struggle to find employment.

Despite the Government’s understandable ambition to improve labour market fairness, the Bill as currently drafted risks reducing that flexibility rather than enhancing it. The automatic obligation placed upon businesses to offer guaranteed-hours contracts once certain thresholds are met would impose significant and disproportionate administrative burdens, even when the worker involved may have no desire to change their current arrangements.

The problem is particularly acute for larger employers, such as national retailers, as we have heard from my noble friend Lord Wolfson, who delivered an expert speech. They would be forced into a continual cycle of recalculations and offers, simply because an employee’s working patterns have shifted slightly. As my noble friend Lady Verma explained, that affects small businesses as well. In practice, firms would face a daily or weekly obligation to offer a new contract based on changing patterns, resulting in huge and unnecessary administrative costs. This would not only create inefficiency but would discourage businesses offering overtime and additional work voluntarily, thereby reducing opportunities for those who value flexibility.

The amendments I propose take a different approach. Instead of an automatic right to be offered a guaranteed-hours contracts, we propose a right to request a guaranteed-hours contract. It entirely respects the spirit of the Government’s intentions. As the noble Lord, Lord Fox, has already explained, it would impose the same the obligations on employers as the Government’s Bill. This would preserve the choice for workers, empowering them to seek greater stability when they wish, but it would avoid imposing blanket obligations on employers that may lead to perverse outcomes. The Government’s current drafting, with an automatic right to guaranteed hours, risks creating a bureaucracy that neither workers nor businesses have asked for.

On the subject of businesses, it is worth referring to the letter received from five employers’ organisations. For reference, those are Make UK, the CBI, the IoD, the Federation of Small Business and the British Chambers of Commerce. They say in that letter:

“Not every job can be made compatible with every possible need. This reform means businesses incur admin costs whenever an employee works variable hours. The result is that firms are discouraged from offering variable hours even when the flexibility is requested by workers, including voluntary overtime. The cost associated with administering and calculating contract offers on a rolling basis whenever staff work additional hours is also disproportionate and provides no clear benefit to workers”.

I could not have put it better myself.

There has been some reference on the other side, by the noble Baroness, Lady Carberry, to the Low Pay Commission, which met seven years ago. That ignores the fact that, over the last seven years, working practices more generally through the economy—whether on flexible-hours contracts or not—have changed very dramatically, partly as a consequence of the pandemic. I note that the FSB has now signed the letter which includes the quote I have just delivered, so it has clearly changed its mind.

I recognise that there may be an even simpler and more effective alternative to the right to request, which would be an automatic offer of a guaranteed-hours contract combined with the right for the worker to opt out if they so wish, so Amendment 17 introduces a worker opt-out mechanism. A qualifying worker may opt out of receiving a guaranteed-hours contract provided that the employer has provided clear written information about the guaranteed-hours system, the worker has given written notice in a prescribed form, and the employer reminds the worker at regular intervals, at least every six months, that they can opt back in at any time. Under that model, every eligible worker would be enrolled on to a guaranteed-hours contract after the reference period by default.

However, those workers who genuinely value the flexibility of their zero-hours arrangement—and there are many, particularly, as we have already discussed, young people, carers and so on—would have the right to decline the offer by providing written notice. This approach would strike a better balance, because it would ensure that guaranteed hours are the norm unless the worker themselves chooses otherwise, thereby protecting workers who might otherwise feel pressured not to request more security. Equally, it would avoid the unnecessary administrative burden on employers of offering contracts that in many cases would be rejected. We would be sparing businesses the cost and disruption of a process that delivers little practical benefit where flexibility is mutually valued by both employer and employee. It would ensure that the choice remains a real and continuing one, recognising that workers’ needs and circumstances evolve.

The Government have rightly said that they seek a labour market that is flexible and fair and works for everyone. These amendments deliver precisely that balanced, two-sided flexibility, preserving opportunity and autonomy for workers while sparing businesses disproportionate costs that could otherwise lead to fewer jobs and fewer opportunities.

My noble friend Lord Wolfson spoke with real authority and expertise on Amendment 8. I have to say, before I get into the meat of Amendment 8, that I wonder whether the noble Lord, Lord Barber, listened to what my noble friend said, because he pointed out, and I think I am quoting him correctly, that:

“Restaurants and shops simply cannot afford to have as many people working in February as they do in December”.

That is the motivating factor behind the extension of the reference periods: to iron out seasonal quirks.

For all the Government’s talk about providing clarity for businesses through these reforms, it is remarkable that the Bill as drafted fails to define “low hours” at all, despite introducing a raft of measures that depend on this very concept. This omission is not a minor drafting point; it goes to the heart of the Bill’s workability. It is crucial that the threshold for what constitutes a low-hours contract is set appropriately. If the threshold is set too high, we risk severely constraining businesses’ ability to adjust staffing levels in response to short-term changes in demand. This will increase administrative complexity, bring more workers unnecessarily into the scope of guaranteed-hours provisions and in doing so undermine operational flexibility, which is vital in sectors such as retail, hospitality, holiday parks and many others, as we have heard.

Conversely, if the threshold is set too low, particularly when combined with an excessively long reference period, businesses will face a constant churn of reassessing and amending employment contracts. This administrative burden would divert resources away from core operations, disrupt workforce stability and erode the very flexibility needed to respond to seasonal peaks, staff turnover and fluctuating consumer demand, particularly in the convenience and service sectors. Moreover, setting the threshold poorly could have serious unintended consequences for workers. There is a real risk that if the rules around low hours are unclear or overly restrictive, employers may be discouraged from offering low-hours roles altogether. That could shut out individuals from the workforce: those who, for very legitimate reasons, such as caring responsibilities, disabilities or study, may be able to work only for a limited number of hours per week. We should not inadvertently deny these workers opportunities to participate in the labour market.

In light of these concerns, we have tabled an amendment to define low hours clearly and appropriately:

“Clause 1, page 2, line 30, leave out from ‘for’ to end of line 32 and insert ‘four hours or fewer per week (“the minimum number of hours”)’”.

We believe that a four-hour threshold strikes the right balance, ensuring that truly minimal-hours arrangements are captured without sweeping in a wide range of normal part-time work or creating unnecessary bureaucracy. In legislation as significant as this, as we discussed at some length on the first group, clarity is not optional. Leaving concepts such as “low hours” undefined creates uncertainty for employers and workers alike. It opens the door to confusion and disputes, and ultimately undermines the stated aims of the legislation. I urge the Government to reflect carefully on this amendment. If their aim is truly to provide clarity and certainty for businesses and workers, there can surely be no good reason to leave this important definition to be sorted out later by regulations or, worse, by litigation.

I will speak briefly to Amendments 31 and 32 but firmly to my amendment to Schedule 1. This amendment seeks to remove the Secretary of State’s power to make regulations transferring the duty to offer a guaranteed-hours contract from the hirer to another party involved in the supply of agency workers. This power is both unnecessary and, I argue, undesirable. It risks creating confusion and uncertainty about where legal responsibility properly lies. In any employment or engagement relationship, it is vital that workers, whether employees, agency workers or freelancers, have clarity about who is responsible for their rights and protections. The Bill as currently drafted would allow the Secretary of State, through secondary legislation, to move the duty away from the hirer to some other party in the supply chain—perhaps an agency, perhaps another intermediary. This raises serious practical concerns.

First, the hirer is the party who exercises day-to-day control over the worker’s activities. It is the hirer who sets the hours, determines the workload and understands the nature of the work the individual is undertaking. The hirer is therefore best placed to judge whether the worker meets the qualifying conditions for a guaranteed-hours contract and to make a meaningful offer. Passing this duty on to another party, who may have no direct operational relationship with the worker, risks unfairness to the worker and administrative chaos for the employer.

Secondly, we must remember that many agency supply chains, particularly in sectors such as logistics, health and social care and construction, are already complex. Introducing additional legal uncertainty about who bears responsibility will not improve outcomes for workers. Instead, it risks creating disputes, legal challenges and a compliance minefield that ultimately harms both workers and businesses.

The Government may argue that the regulation-making power is simply a backstop or a flexibility mechanism, but such broad and loosely defined powers should not be handed over lightly, especially when we are talking about the fundamental rights and protections of working people. If there is a clear principle here—that those who control the work should be responsible for offering security of hours where appropriate—we should put that principle into the Bill, not delegate it out through regulations after the fact. Therefore, I urge the Government to consider this provision. Let us provide clarity and certainty for businesses and workers by ensuring that the duty to offer guaranteed hours remains firmly with the hirer, the party best placed to discharge it fairly and effectively.

Finally, I thank the noble Lord, Lord Goddard, for his Amendment 15. This amendment addresses an important gap in the current draft of the Bill, particularly for workers in industries such as hospitality, retail and other seasonal or temporary employment areas where fluctuating demand and short-term contracts are the norm. I believe it is vital to recognise that many workers in these sectors actually value the flexibility that comes with non-guaranteed hours. For some, the opportunity to accept irregular work, tailored to their availability and lifestyle, is not just desirable but essential. For students, people looking for part-time work and those balancing other commitments, this flexibility is often more important than the certainty of a fixed number of hours. I am particularly curious to hear the Minister’s thoughts on this amendment, as it seems to me to offer a practical and reasonable solution to the challenges posed by the Bill’s current provisions. The introduction of flexibility, in a way that empowers both the employer and the employee, can only enhance the working arrangements available to those in temporary or short-term roles.

My Lords, I thank the noble Lords, Lord Sharpe of Epsom, Lord Goddard of Stockport, Lord Moynihan of Chelsea and Lord Parkinson of Whitley Bay, for tabling their amendments to the clauses on zero-hours contracts. I will begin with Amendments 7, 11 and 12, which seek to amend Clause 1 to set the initial reference period for the right to guaranteed hours at 26 weeks. They would also remove the power to define the length of the initial reference period in regulations, or would render it obsolete. I say to the noble Lords that the length of the initial reference period will be set out in regulations, and of course we will consult further on this issue, but it is expected to be 12 weeks—that is the figure we are currently thinking about.

The noble Lord, Lord Goddard, urged that the measures be proportionate and reasonable. We feel that our proposals as they stand are exactly that. I am grateful to my noble friend Lord Hendy for reminding us that 1.3 million people will never reach the reference period if it is 26 weeks, as their employment will not be that long. There is a very good reason why we should not extend the period.

We believe that 12 weeks is the appropriate length. It would be long enough to establish the hours that the workers regularly work while allowing qualifying workers to be offered guaranteed hours reasonably soon after they start a job, or after the right to guaranteed hours comes into effect. If the initial reference period was set at 26 weeks, workers in precarious and unpredictable work would have to wait six months to access their right to guaranteed hours. We believe this is too long in the current labour market circumstances.

Similarly, Amendment 13 would specify in the Bill that the subsequent reference period for the right to guaranteed hours is 26 weeks. The length and frequency of the subsequent reference periods will be set out in regulations. Subsequent reference periods may well be of a different length and frequency from the initial reference period. This is because, unlike the initial reference period, subsequent reference periods are not qualifying periods. Therefore, a different balance needs to be considered. It is necessary to set out both the initial reference period and subsequent period lengths in regulations to allow changes to reference periods to be made, for example in response to emerging evidence about how this novel right is working in practice or in light of evolving working practices. As I said, we intend to consult on the length and frequency of subsequent reference periods.

Amendment 9 seeks to amend Clause 1 to take workers on fixed-term contracts out of scope of the right to guaranteed hours. This could lead to avoidance behaviour, whereby employers move workers from open-ended zero-hours contracts to fixed-term zero-hours contracts. We also believe that workers on limited-term contracts lasting longer than the duration of the reference period should be entitled to a guaranteed-hours offer. This is because such workers may experience one-sided flexibility in the same way as those on permanent contracts.

I emphasise that the right to guaranteed hours will not prevent employers using limited-term contracts. Employers can make a guaranteed-hours offer resulting in a limited-term contract if it is reasonable for that contract to be of a limited term. For example, as has been mentioned several times, it might be reasonable to provide a worker with a limited-term contract only to cover the increase in retail demand during the Christmas period. If a limited-term contract is shorter than the initial reference period, then the worker would likely not qualify for a guaranteed-hours offer, but that would depend on the conditions as to regularity or number and whether it was reasonable for the contract to be of a limited term.

Amendment 8 seeks to amend Clause 1 to set the hours threshold in the Bill at a maximum of four hours a week. It would also remove the power to set the hours threshold in regulations. I listened carefully to the arguments, in particular from the noble Lord, Lord Wolfson, on the interests of part-time workers, but under this amendment workers who are guaranteed more than four hours per week would not be eligible for the right to guaranteed hours.

The hours threshold will be crucial to determining how many workers are included in scope of the right to guaranteed hours. It is partly intended to act as an anti-avoidance measure, preventing employers avoiding the duty to offer guaranteed hours by moving a worker on to a contract guaranteeing only a very small number of hours. Setting it to only four or fewer hours per week would mean, for example, that any worker with only five hours guaranteed per week would fall out of scope of the new provisions, even though they may experience unpredictable hours and income in the same way as other zero-hours workers. Similarly, if we were to set the threshold too high, it could have unintended consequences and impact the overtime arrangements of workers who already have sufficient predictability and security.

Additionally, given the novelty of these provisions, it is important that the Government retain the flexibility to amend the threshold in future, for example in the light of evolving work practices. I reassure the noble Lord, Lord Wolfson, and others that we intend to consult on the hours threshold, including the issues raised today, as part of the consultation. Including the threshold in the Bill at this stage would remove the opportunity to have that consultation and for unions, employers and workers to feed in their views.

Would the Minister accept that having a maximum number in the Bill would be enormously important so that business can prepare for this? The number of hours set as the threshold will determine the number of employees who need to be dealt with. If it is 3% of our workforce, that will be one thing; if it is 50%, that will be another. While I accept that the Government need flexibility, would they at least consider setting a maximum number of hours in the Bill so that business can start to prepare now, as we will need to do if we are to have the systems in place in one year’s time to implement this Bill?

As we have said when other people have suggested fixed rates, we need to avoid unintended consequences or the gaming of those arrangements. I am inclined at the moment to resist what the noble Lord has said, but we can consider that further as the Bill progresses.

My Lords, in adult social care or care, you are at the mercy of people going into hospital or passing away and those hours suddenly becoming contracted. Where are the safeguards for the employers at that point? There is no guarantee that people will come out of hospital. You cannot wish more hours to happen; you are at the mercy of people wanting care. I do not understand how this will work in the care sector, so it would be really helpful to understand the Government’s thinking on that.

The same thing would apply as for seasonal workers, in the sense of that unpredictability. The Bill allows seasonal work to continue; fixed-term contracts can be an effective way for an employer to meet temporary or seasonal demands for work—

Forgive me; I thank the Minister for her patience. Seasonal work is incredibly different from care, which is about the elements around you. We cannot predict when somebody will fall sick, go into hospital for long or short periods or pass away. It is a very different discussion point. I want us to be mindful, in thinking about the overall picture, of how certain sectors fit in.

Obviously, we want all sectors to have the right facilities for them. I am not sure whether the noble Baroness is talking about home care or the care home sector. Perhaps we can have a conversation outside; I will attempt to set up a meeting with her, because I do not want to be misconstrued.

Amendments 10 and 31 seek to amend the Bill so that agency workers do not have a right to guaranteed hours. We are determined to ensure that agency workers who seek more certainty of hours and security of income are protected. Some workers choose agency work because they value flexibility, but they can also experience one-sided flexibility in the same way as other workers. Failing to include agency workers in the scope of the Bill could also see employers shift to using more agency workers to avoid the zero-hours measures altogether. As with other eligible workers, agency workers who prefer the flexibility that agency work provides would be free to turn down the guaranteed-hours offer.

After public consultation, the Government brought forward amendments to the Employment Rights Bill so that hirers, agencies and agency workers are clear where responsibilities will rest in relation to the new rights. However, we recognise that some measures may need to apply in a different way to agency workers because of the tripartite relationship between the end hirer, the employment agency and the agency workers. The Government will consult further and continue to work in partnership with employers’ organisations, the recruitment sector and trade unions to develop the detail of regulations in a way that avoids unintended consequences for employment agencies and hirers.

Amendment 32 seeks to remove from the Bill the power to place the duty to make a guaranteed-hours offer on the work-finding agency, or another party involved in the supply or payment of an agency worker instead of the hirer. We included this power in line with the responses to the Government’s consultation on applying zero-hours contract measures to agency workers. Responses from stakeholders were split about whether this new duty should lie between the hirer, the agency or another party in the supply chain. We are clear that, as a default, the hirer should be responsible for making the offers of guaranteed hours because they are best placed to forecast and manage the flow of future work.

However, given the unique and complex nature of agency worker relationships, which vary in different parts of the economy, the power is required to allow the Government flexibility to determine specific cases in which the responsibility to offer guaranteed hours should not sit with the hirer. For instance, this could be the case with vulnerable individual hirers who receive or procure care from agencies—I am not sure whether that is the point to which the noble Baroness referred earlier—where instead the agency might be in a better position to offer guaranteed hours. We are aware of the importance of this power and the impact these regulations could have on agency workers, hirers, agencies and others in the supply chain. For this reason, this power will be subject to the affirmative procedure, ensuring both Houses of Parliament get further opportunity to debate its use.

Can the Minister talk us through the agency question a little bit more? If you need emergency care, you go to an agency and it finds you someone, then you pay a very large sum of money for agency care. Is the Minister suggesting that in future, and considering the ups and downs, the agencies will have to guarantee those who are involved in emergency care these very high salaries, which they will have to pay, even if they do not find clients? Is that how she thinks it will work out in practice? Is it enough to say it is going to go into regulations, when this is so important for the care sector and emergency care?

I was making the point that this has complications because there are some people who are individual hirers. Some people get benefits to employ people directly, so it is not always done through a third party. That is why we need to have clearer rules about this. I am happy to write to noble Lords or explain this in a little bit more detail if that helps.

The problem with direct payments is that you are making the person who receives the payment into the employer. They are usually individuals who are looking after their own care; they will not have the facilities to go through the quagmire of rules and regulations. I say this just to give some assistance.

I take that point. I was attempting to explain in my description, which I obviously need to develop a little bit more, that we understood some of those issues and are trying to find a way through it.

Amendments 3, 4 and 6 seek to change the model for the right to guaranteed hours from a right to be offered to a right to request. We have debated this at some length. These amendments would mean that a qualifying worker experiencing one-sided flexibility would need to make a request to their employer to access their right to guaranteed hours. Noble Lords underestimate the imbalance of powers that employees in this circumstance face. The noble Baroness, Lady Lawlor, mentioned young people, which is the group that is likely to be the most intimidated by having to request guaranteed hours. Therefore, we are attempting to make sure that these rights are balanced in a proper and more effective way.

I am grateful to my noble friend Lady Carberry for reminding us that the Low Pay Commission also looked at a right to request and, understandably, rejected it for exactly that reason. It understood that the people in those circumstances had the least power in the labour market and would therefore, quite rightly, feel intimidated about coming forward. She also raised the issue of what happens if the request is denied. I know the noble Lord, Lord Fox, attempted to address that, but I do not know that the amendments necessarily do so. The noble Lord, Lord Sharpe, says that employment has changed since those days. I would say that employment has become even more unpredictable and unreliable. Nothing that the Low Pay Commission said—or indeed that I said—addresses the potential exploitation which the commission identified. There is an imbalance, and it is very difficult for people to come forward and make that request; that is why we are insistent that it is done in the way that we have suggested.

After receiving an offer, the workers would then be able decide whether to accept it, based on its specific terms. That would empower the worker to decide for themselves, having seen the offer on the table. This addresses the point that some people do want to work flexible hours, and we understand that.

Amendment 15 would allow workers on limited-term contracts of four months or less to voluntarily waive their right to guaranteed hours. We believe that workers should be able to retain the flexibility of a zero-hours contract or arrangement if they wish, which is why those who are offered guaranteed hours will be able to turn them down and remain on their current contract or arrangement if they wish. This amendment would add an additional opt-out mechanism for workers that could create needless confusion for both employers and workers.

Amendment 17 would provide workers with the ability to opt out of receiving guaranteed-hours offers. We understand the importance of workers being able to retain the flexibility of zero-hours contracts or arrangements if they wish, which is why those receiving a guaranteed-hours offer will be able to turn it down. However, to ensure that all qualifying workers will benefit from the legislation, all workers should be able to receive a guaranteed-hours offer. We want to ensure that employers and workers are starting from a position of equal bargaining power. Therefore, through the Bill we have allowed for employers and unions to collectively agree to opt out of the zero-hours contract measure, if they agree. Unions can make these deals based on their knowledge of the industry and a holistic view of what is best for the workers. We feel it is more appropriate than individual workers opting out of receiving offers. After receiving an offer, qualifying workers would then be able to decide whether to accept, based on their individual circumstances.

Finally, Amendment 2 would remove from the Bill the right for qualifying workers to be offered guaranteed hours. We think that all employers should be required to offer their qualifying workers guaranteed hours, as this is the best way of addressing one-sided flexibility in the workplace and ensuring that jobs provide a baseline of security and predictability.

Without guaranteed hours, workers do not have any form of certainty as to their earnings, making it difficult to apply for credit or a mortgage, to rent a flat, to plan for major events, or even to manage their day-to-day life expenses. As I have previously iterated, those who are offered guaranteed hours will be able to turn them down and remain on a current contract or arrangement if they wish. We believe that this is the right balance. I therefore hope that I have persuaded noble Lords not to press their amendments.

The Minister is relying a great deal on the fabled consultation that we are going to have. Can we have some idea of when that consultation is likely to take place? Can I suggest that it perhaps takes place before we get to Report, because it will iron out a great many of these arguments? The Minister asserted that some businesses have supported the 12-week reference period. Can she say which ones?

The Bill sets out, in a number of ways, that there will be regulations that will be consulted upon. This goes back to the issue of when that consultation will take place, but there is a framework for that set out in the Bill which should cover that point.

Noble Lords:

And the second point?

As I said, I read out the names of a number of businesses that are broadly supportive, but we have not gone through clause by clause asking which particular pieces of the Bill they are supporting. However, businesses that are household names are in support of the Bill.

My Lords, very quickly, large businesses may be able to be supportive. Could the Minister name any small business that she has come across that supports this?

Again, there is a list of SMEs that support the basis of the Bill. I do not think it is going to help anybody if we go back and ask them for the specifics of whether they agree with each clause. The fact is that they agree with the direction of travel and a number of businesses, big and small, are already carrying out many of these practices, so it will not be unusual to them. This is about good employment practice and I am sure a lot of businesses will support it.

My Lords, the debate on this group of amendments has been invigorating and useful. I thank all those noble Lords, in particular, the Minister, the noble Baroness, Lady Jones, who have contributed to it.

My noble friend Lord Wolfson of Aspley Guise commended the intention of the Bill to counter the ill effects of zero-hours contracts, which his company does not use. I honour his intent and indeed his extraordinary contributions to the nation’s employment and its economy in general. I note that he tended to agree with my proposal overall, in respect of the dysfunctionality of this clause. I would be happy if the wording of the clause, if it is incorporated into the Bill, incorporated his wording but removed the rest of the clause from the Bill.

The noble Lord, Lord Fox, who does not appear to be in his place, spoke to Amendment 4, which, in the case that Section 27BA is retained in the Bill, switches the origination of a flexible-hours discussion from employer to employee. Clearly, this is a more sound and flexible approach, although I of course cannot go along with his later statement that he meant there to be an obligation on the employer to provide what the employee demanded.

My noble friend Lady Lawlor spoke movingly on the many things this Government have already done to depress economic activity and said—better than I—how this clause would make things much worse. She added the crucial point that the ill that this clause purports to address is in fact a good, much preferred by the majority of those working flexible hours.

My noble friend Lady Verma spoke with the authority of one who has great experience as an employer. She implored the Government to get their nose out of what should be a more relaxed and less formal relationship between employers and employees. The Government should pay her heed. My noble friend Lady Coffey spoke forensically about the wreckage this clause would create in the hospitality industry and also, very worryingly, in the NHS. Over and again, we heard noble Lords speak about the need for flexibility; this clause creates the opposite.

My noble friend Lord Sharpe of Epsom pointed particularly to the appalling outcomes this clause will create on the numbers of youth unemployed. Earlier, my noble friend Lady Meyer mentioned French youth unemployment at 19.2%. Have the Government any clue how that occurred? They did not intend that to happen, obviously. They do not want one in five of their youth unemployed who are seeking work. It occurred from precisely the sort of legislation that the Government are proposing to introduce here. Do we really want our youth unemployment to be one in five of those wanting to be employed? That is what I mean by outcomes rather than this notional and very generic idea of fairness—because it is not fair, either.

The Minister confirmed that the reference period will be in the legislation. This is welcome news, but it would have been better were it in the draft legislation right now, so that we could debate it right now—the time that we are supposed to be debating it. The Minister showed an impressive ability to wade through the latest iteration of what is an extraordinarily complex proposed set of rules, but creating and explaining such rules misses the entire point. This Government believe that “We know best” and therefore that if we create this perfect machine, these wonderful processes, all will be well. They do not know best; the market knows best and the market should be left to itself to sort out most of these matters. I urge the Minister to heed the words of the noble Lord, Lord Wolfson, and the noble Baroness, Lady Verma, to provide clarity as soon as possible and to provide flexibility in the way that they have just urged her.

The Minister sought to provide clarity on agency workers. With respect, her words did not reflect reality. Let us take as one random example the interim management sector. These individuals take jobs to fill gaps that suddenly appear in a company, to fill the period before a permanent replacement can be found. The appointment of an interim manager may last a day or it may last a year, depending entirely on events that will only be happening in the future. To guarantee hours for these individuals is, quite frankly, entirely impossible. That is just one of many different sectors and different possible examples, as the noble Baronesses, Lady Neville-Rolfe and Lady Verma, made clear just now.

I remain convinced that the outcome of this clause, if passed into law, will be significantly fewer—not more—jobs. Having said which, there are of course other ways of improving this clause if it is not removed entirely. These are ways that my noble friends and the noble Lord, Lord Fox, have offered with their own amendments, the vast majority of which I have indicated that I agree with, not least after listening to the experienced voices of business from these Benches.

To conclude, the removal of flexibility from employers cannot possibly be a good thing. The more employment flexibility that is created in an economy, the more creative are the ways that entrepreneurial employers find to grow the economy, to create more jobs, to improve living standards and indeed to provide the Government with more tax revenues to meet the depressingly larger and larger commitments that this Government continue to take on. Having said all of which, I reserve the right to bring this amendment back on Report. In the meantime, I beg leave to withdraw it.

Amendment 2 withdrawn.

Amendments 3 and 4 not moved.