By John Hendy
The House of Lords’ repeated delays to the Employment Rights Bill have become a test of how — and for whom — Britain’s democratic institutions function.
Parliamentary ‘ping-pong’ occurs where the House of Lords fails to agree a piece of proposed legislation with the House of Commons. The Commons sends a bill it has approved to the Lords, who then amend it and send it back to the Commons.
If the Commons rejects those amendments, the bill goes back to the Lords, which may seek to reintroduce their amendments (or ones very similar to them), and the bill goes back to the Commons.
The conventional limit is three sessions of ping-pong, but on occasion the process lasts longer. There is also the Salisbury convention that bills fulfilling the government’s manifesto commitments must be allowed to pass. If ultimately the Lords and Commons cannot agree, the bill falls. There is then the backstop of the Parliament Act 1911, which allows the Commons to reintroduce the Bill in the next session of Parliament and override the Lords, but this takes time and is very rarely used in practice.
Obstruction and delay
The Employment Rights Bill has been subjected to a series of Lords amendments which have been rejected by the Commons on each of the three ping-pong rounds so far. However, in late November five unions and the TUC met with a range of employers’ organisations and reached a deal under which the government would amend the bill by inserting a six-month qualifying period for entitlement to unfair dismissal rights, together with the removing of the statutory limit on unfair dismissal compensation in return for the bill being allowed to pass.
The first element of this deal, the six-month qualification period, had been targeted by Lords’ amendments. The Commons and the unions opposed these changes, since the government manifesto commitment was that all rights should be available from day one of employment. In reality, the government had all but abandoned that commitment through an early amendment to the bill providing for mandatory probationary periods, mooted to be nine months, during which protection against unfair dismissal would only be partial.
The second element, the removal of the cap on compensation, was not in the manifesto but was a prominent part of the original statement of Labour Party policy, A New Deal for Working People.
The agreement reached was honoured by the government which put forward amendments to give effect to the deal. The Commons approved them on Monday 8 December. However, when the bill reached Lords on 10 November, the Tories accepted the amendment requiring a six-month qualification period but moved two further amendments. One was defeated but one succeeded.
In contrast, the Liberal Democrats and a cross bencher, who had previously insisted on other amendments rejected by the Commons, decided not to put them to the vote, recognising that it was not appropriate to continue opposing the elected House.
The upshot is that the Bill will go back to the Commons today, Monday 15 December, where the government has announced that they will make no further concession and will reject the Tory amendment. The Bill will return to the Lords on Wednesday 17 December.
The single outstanding amendment on which the Tories have staked their resistance to the bill is the proposal to remove the statutory limit on unfair dismissal compensation. The current limit on compensation for unfair dismissal is £118,223, or one year’s salary, whichever is lower. It is to this that the Tories object, notwithstanding that the change would only benefit high-earning claimants, to whom the Tories might be expected to be sympathetic.
The change obviously will be of no use to the ordinary claimant earning less than £118,223 per annum. In contrast, the net median annual wage is less than one third of that figure, and the current median award for unfair dismissal compensation is a miserable £6,746.
If the Tories continue to press for an amendment to remove the government’s removal of the statutory limit on unfair dismissal compensation, this will be the ultimate proof that obstruction of the bill is their objective rather than an objection to highly-paid unfairly-dismissed individuals receiving the full measure of their loss.
In fact, the real problem with unfair dismissal compensation — quite apart from how low it is — is that so few of those who are awarded it actually receive it. The latest government survey in 2013 found that only 49 percent of those awarded compensation had been paid in full. A further 16 percent had received only part of their award. That means that over one third of successful claimants never receive any part of their award. Despite repeated enforcement initiatives, most unpaid tribunal awards still go unenforced, and the Bill does little to change that, yet even this limited reform faces obstruction.
The struggle over the Employment Rights Bill, and the House of Lords’ repeated attempts to block the government’s elected programme of stronger employment protections, is more than a quarrel about constitutional etiquette. It is a test of whether our democracy still has the capacity to deliver for working people.
Lord John Hendy KC is a Labour peer and labour lawyer. He is the chair of the Institute for Employment Rights (IER) and Vice Chair of the Campaign For Trade Union Freedom This article appeared in Tribune December 12th.