The government has vowed that there will be no more concessions on the employment rights bill and that it will force the Lords to vote on it again next week, after Conservative and cross-bench peers blocked it on Wednesday night.
Ministers and trade unions expressed fury that the bill was voted down again in the House of Lords by peers protesting against the lifting of the compensation cap for unfair dismissal, calling it “cynical wrecking tactics that risk a constitutional crisis”.
The bill will return to the Commons on Monday and will be back in the Lords by Tuesday, a government source said, suggesting that it would then consider further sittings to pass the bill by Christmas.
The lifting of the cap was part of a deal brokered by the government with unions and business lobby groups, which included a major concession on rights for protection against unfair dismissal.
The government agreed for workers to qualify for protection after six months, instead of the current two years, despite day-one rights being a Labour manifesto pledge. Unions agreed to this climbdown alongside the lifting of the compensation cap for unfair dismissal.
A government source said there was no chance of backing down on the cap and suggested that if peers persisted with blocking the bill, they would anger business leaders who had agreed the deal to see the bill pass by Christmas. “A deal’s a deal,” the source said.
The employment rights minister, Kate Dearden, said it was time for the Lords to deliver the bill. “Tory peers and cross-party peers decided to vote against the government. And we’ve been really clear. This is a mandate that we were elected on,” she said.
“We want to deliver for millions of people across this country who voted for us, so that we can extend statutory sick pay for people from April next year, day-one paternity leave, and give the Fair Work Agency the enforcement powers that it needs to get on with the job.
“So we’re saying really clearly, when it goes back to the Commons on Monday and then back to the Lords, that they need to get behind this bill, so we can deliver for the millions of people who voted for us with this mandate and with a really clear message to make work pay again.”
Mike Clancy, the general secretary of the union Prospect and the Trades Union Congress lead on the bill, said: “This deal was struck after painstaking negotiation to find a compromise that all sides could agree with. The amendment passed by the House of Lords undermines that compromise by reversing the decision to lift the cap on compensation for unfair dismissal.
“The behaviour of the House of Lords can no longer be seen as constructive scrutiny and increasingly looks like cynical wrecking tactics that risk a constitutional crisis. Further delay is in nobody’s interests and only prolongs uncertainty: the bill must pass before Christmas, including lifting the caps on compensation.”
One union source said the government should show it was prepared to face down the Lords and potentially use the Parliament Act to restore the bill in the next session, which would mean peers could no longer amend it. That would mean that the original day-one rights on protection against unfair dismissal would be restored, making the bill worse for businesses.
They suggested that the Conservatives and businesses should accept that the terms of the bill were now the best they could get – hinting that any future Labour leadership battle would be likely to involve candidates promising to strengthen the bill.
