No 10 determined to pass workers’ rights Bill before Christmas despite setback

The latest stand-off comes as Sir Keir Starmer has nominated 25 new Labour peers to the red benches of the Lords, in a bid overturn the Tory majority in the upper chamber.

Ministers attempted to end a stand-off with peers over their workers’ rights legislation by ditching the day-one right to protections against unfair dismissal, and replacing it with a six-month qualifying period for the safeguard.

But alongside this, the Government introduced an 11th hour measure to scrap the compensation caps for unfair dismissal, which are currently the lower of 52 weeks’ pay or £118,223.

The UK Government insists this formed part of the compromise agreement reached with business groups and trade unions, although this is disputed.

On Wednesday, peers roundly rejected the latest Government attempt to break the deadlock, backing by 244 votes to 220, majority 24, a Tory call to force a review of the existing compensation limits.

The Bill will now return to the Commons for the fourth time, as part of the legislative process known as “ping-pong”, where it is batted back and forth between Parliament’s two houses.

The Prime Minister’s official spokesman insisted the Government still wants to see the Bill passed before the year’s end.

“We remain committed to passing this Bill before Christmas and will work with the unions, businesses and legislators to get this done in line with our implementation road map,” he told reporters.

The spokesman did not rule out the possibility of further compromises, adding: “We have always said since the outset we would always work with all parties, trade unions, businesses… in order to deliver the Employment Rights Bill.”

‘Under the bus’

The Conservatives suggested the Liberal Democrats ceased previous opposition to the Bill because the party had been granted five new peers, compared with only three nominated by the Tories.

“Five Lib Dems lords are leaping. That’s all it took for the Liberal Democrat party to throw every British business under the bus and expose them to the unimaginable liability of infinite tribunal payouts,” shadow business secretary Andrew Griffith told the Commons.

Downing Street would not be drawn into commenting on the suggestion, with the spokesman telling reporters: “You will appreciate it wouldn’t be for me to comment on political peerages. It is a longstanding precedent across the political spectrum that governments recommend new peers to the sovereign.

“We will continue to progress our reforms to the House of Lords while these new peers carry out their work to scrutinise legislation.”

Lords overhaul 

The UK Government remains committed to overhaul the Lords and replace it with “an alternative second chamber that is more representative of the nations and regions”, the spokesman said.

First, it plans to abolish the right of the remaining 91 hereditary peers to sit in the Lords.

Legislation to enact that change is currently in the “ping-pong” stage of scrutiny.

Further reforms expected in the new year include plans to remove peers who do not attend often enough, and to require members to retire at the end of the Parliament in which they have their 80th birthday.

In a sign of growing discontent within Government over the position of hereditary peers, business minister Sir Chris Bryant appeared to blame them for stalling the Employment Rights Bill.

He told the Commons on Thursday: “Why did we lose the vote last night? Twenty-five Tory hereditary peers. Why on earth would that be? Why do you think that they might not be willing to support Labour?”