Official Report: Minutes of Evidence

The Chairperson (Mr Brett): Gentlemen, you are welcome. Thank you for your patience. I will hand over to you.

Mr Stuart Anderson (Northern Ireland Chamber of Commerce and Industry): Thank you very much, Chair, and thank you, Committee, for your invitation to be here today.

By way of introduction, I am Stuart Anderson, director of public affairs at the Northern Ireland Chamber of Commerce and Industry. We represent over 1,000 businesses in Northern Ireland from right across the region, every sector and, indeed, right across every county. I am joined by Mark Huddleston, who is the chair of our workforce committee. We brought Mark in during the summer of 2024, once the employment Bill was announced, to support our work. I will let Mark introduce himself. As many of you will know, Mark is an experienced individual in the area of people and skills. He is also a former manufacturing employer, so he has a real, on-the-ground understanding of employment rights and how to work well within the existing framework.

You have all seen our response. I am happy, for the sake of time, to talk to that in a high-level way in our introductory remarks. However, if you got an email from me late last night — I trust that you all did — you will have seen that it was about the publication of our quarterly economic survey for Q4 of 2024. It sets a really important context. As an organisation, we do not like to sensationalise or to work off anything other than an evidence base. We have been doing that quarterly economic survey for decades, and it is useful in detecting trends in the marketplace. What we have seen, which is probably more concerning to me than it has ever been in the past three years since I took up the job, is the dip in business confidence throughout 2024 and into 2025. We saw that in Q3 before the autumn Budget, but what is really clear is that the Chancellor's Budget has had a profound impact on business sentiment.

You can go through that survey in detail, and we can talk to it another time. Today, I want to draw out two things. First, when you look at the views of the respondents on the prospects for their businesses in 2025, you see that 29% — more than one in four — tell us that they expect their business to contract in 2025. That should be an alarm bell for all of us to work together to urgently try to address the issues that are there. The second issue that I want to raise is the cost of employment, which, added to the broader basket of rising costs, means that nine in 10 respondents say that they will be under pressure to raise prices. That is because of employer National Insurance contributions (NICs) in particular but also rises in the national living wage in the context of low, if any, growth.

Looking at the employment rights Bill, I want to highlight three baskets of issues, and we can talk to them at length. It is useful to have this conversation because it is one that, I believe, we have not had for over 10 years. There are some positive things in the Bill. We have concerns about the prioritisation of the Bill when we do not have a clear outlook as to where we are going as an economy over the next 10 to 15 years. So, the question is this: what are we building good jobs for? Do we know what economy we are building good jobs for and which sectors we are interested in investing in? I am not sure that we can answer that question at this time.

On the specifics of the Bill and what is good in it, there are some really good things about removing the administrative burden, particularly from holiday reference pay. A number of our member organisations operate across the UK and Ireland and in Northern Ireland. They have to have separate administrative structures for dealing with holiday reference pay from those that they apply in GB, and they are keen to see that progressed.

We were happy to see that the consultation was pitched as a menu of options.

A question was raised in the previous session about understanding what is moving forward as guidance and what is moving forward as statutory codes of practice in legislation. That is a really important question. You will appreciate that when we push for a legislative amendment, it is as a last resort. When we talk to other Departments and push for legislative amendments in areas such as planning, we get a lot of pushback. There is real value in understanding what that is all about, because, when we legislate for things, as has been mentioned here on many occasions, the unintended consequences can be counterproductive to the stated intentions.

One of the concerns that have already been flagged here on a number of occasions is the scale of the Bill. Reference was made to the analogous Bill that is moving through Westminster. When speaking with colleagues in the British Chambers of Commerce (BCC), which is a separate organisation, but we are a member, they flagged to us that the Bill moving through Westminster was subject to 100 amendments from Ministers alone. That is just an indication that, if we move forward with this Bill, we are at real risk of unintended consequences, and those unintended consequences fall almost wholly and exclusively upon those whom we represent. Therefore, we have to think clearly about that.

We have been disappointed by the pushback on the timescales for consultation but also the pushback on prioritisation. Why do we not break this Bill up? Why do we not look at the issues that are of most concern and deal with them on a case-by-case basis? I will touch on what the point of consultation is. I am increasingly concerned about diminishing returns and diminishing value in consultation responses. I was contacted by members about five separate consultations of substance that are happening in GB and Northern Ireland. We have upcoming consultations on things such as the investment strategy for Northern Ireland (ISNI) and the Programme for Government (PFG) that is moving through. We have to be cognisant of the pressure on not only business but representative organisations such as ours. I have a team of three working across a significant number of consultations, so please be mindful of that.

We are also concerned about references to zero-hours contracts. We need to be very clear on the nuance in that. First, it impacts on such a small proportion of our economy, and, even relative to GB, it impacts on a relatively small number of our members. Those who use them do so because they work for employees and employer alike. An outright ban, as you indicated, has clearly been pushed back on by the likes of Visit Belfast and others that are central to the competitive proposition that we put forward as Northern Ireland being a place to visit and invest in.

I am also a little concerned about the ability of the system to cope with the changes. The funding of the Labour Relations Agency (LRA) was not touched on; nor was the backlog that exists in the industrial tribunal system. Access to justice is really important for not just employees but employers, so we need to understand where we currently are with that system. If we are introducing a significant body of rights, we must ask whether the system is able to cope with that.

On the question of the employee voice, the research that we as a business organisation look to is clear: employees who are engaged are the most productive. The 'Harvard Business Review' is clear on that, and our members are keen to engage with it. Whether employers are large or small, a lot of that is about direct employee engagement. There is almost nothing in the consultation about supporting employers to engage with their business, so there is an assumption that the only employee voice that is possible in our current business structures is through the trade union movement. It is important to draw a distinction between relationships between employer and employee and relationships between employers and the trade union movement.

There are other issues that you touched on that I am happy to come back on. We see the Bill as a bit of a missed opportunity in the broader concept of "good jobs". We agree with the Minister's proposition that quality of work is more important than the creation of jobs, but that is already being dictated by the market conditions. We have a tight labour market and have had for many years. We have full employment. For anyone who is looking for a job, the availability in the market to move around is very clear. Our economic survey shows that the recruitment challenges that each of our employers experience are at the front and centre of their concerns. When you look at the reference point that the Minister has used to define good jobs, you see that, clearly, key elements are missing from that. When we approach our members about what they consider to be the most important aspects of good jobs, we find that those are career advice, skills and childcare. This consultation does not touch on any of those issues. Given that this is, fundamentally, an employment rights Bill, the question that needs to be asked is this: to what extent does it shift the dial on the question of good jobs? I will leave it there. Mark may have something to add, and then I will be happy to take questions.

Mr Mark Huddleston (Northern Ireland Chamber of Commerce and Industry): Thanks, Stuart. I will dial into the manufacturing element in particular. I know that some members brought up how sectors look at the moment. The Make UK/PwC survey of manufacturing in the UK came out this week. I will give a couple of headlines. Some 92% expect employment costs to rise, which is unsurprising, given the recent Budget. Another challenge is the cost of living and, as Stuart alluded to, continuing to be an attractive employer. Another interesting thing is that 51% still see energy and input costs as a huge challenge. So, industry as a whole is in a challenging landscape, never mind the emerging fiscal landscape in the UK. Another interesting piece was that 57% of employers feel that the UK Government's industrial strategy will increase their plans for investment. We do not have a similar plan for Northern Ireland, and, in conjunction with legislation of this nature, it is always useful to see — I appreciate that the Minister has four very positive pillars — an economic vision. The pillars are not underpinned with an industrial strategy to support that, and I think that it would be very useful to business to see a comparative industrial strategy that covers all elements of current business activity. As Stuart mentioned, this is potentially a missed opportunity. Our colleagues from the Department mentioned repeatedly that the Bill was instituting minimum levels. We engaged with the Fair Work Convention in Scotland during our work on this, and it was clear that, at best, legislation gets you 20% of the way; the rest is about social partnerships and building engagement, collaboration and trust between all parties. We wholly concur with that.

We are concerned that only some elements of the Carnegie framework are being addressed. Recent work by the Work Foundation and the Enterprise Research Centre in the UK particularly homed in on modernising health and safety laws and occupational health. Those are also necessary parts of good work. Nothing in the proposed legislation suggests that departmental officials or the Minister are considering how they might address mandatory occupational health for larger employers, for example.

There is concern around how the Bill will address the other economic pillars. Will it support them? How will it enable the Department's arm's-length bodies, never mind the wider public sector? Questions have been raised here this morning about Invest NI, the colleges, InterTradeIreland and Tourism NI, all of which are critical parts of the Department's delivery. How will they be supported? How will the Bill enable them to deliver on their remit and support good jobs?

Before we conclude, I will make a final point, which is that having legislation without having any ability to enforce or support it is deeply concerning. We have not heard anything yet about how the LRA, the Industrial Court or tribunals will be funded or how their operating procedures and mandates, which are already dealing with a huge backlog and challenging situation, will be supported to enable delivery of the legislation and, where necessary, its enforcement.

The Chairperson (Mr Brett): Thank you very much. Philip?

Mr McGuigan: Thanks, Chair. I was not expecting to be called so quickly.

You probably heard the conversation that we had earlier with the Department. We are in a very early part of the conversation. You will have heard Committee members asking for details and firm proposals, but we are not at that stage yet. There are lots of moving parts to building a successful economy. Obviously, whatever Bill comes before the Assembly, we have to get it right re improving protections for employees while protecting businesses.

Stuart, I think, asked what type of economy we intend to build. The economy is evolving and changing. As I mentioned earlier, we in the Committee have had presentations on two key aspects that are holding back our economy: productivity and getting the economically inactive back to work. I see parts of the Bill addressing both of those issues. Surely it makes sense that the greater the protections, the better the jobs that we can provide. We will be able to get people who are currently economically inactive back into work. As an elected representative, I engage nearly weekly with sectors that are struggling to get people into them. The Bill has the potential to address that issue, so I want to ask a question about that.

You said that you have concerns about zero-hours contracts and having greater protections for unionisation. What, do you or businesses think, could be enacted to protect workers better than currently is the case?

Mr Anderson: Thank you for your questions. I will take them as they come. The first one, on whether we think that the Bill will move the dial on productivity and the challenges around economic inactivity, is a really good question. The consultation responses are clear that a disproportionate number of women, in particular, rely on zero-hours contracts. I suggest that that is a symptom of the problem rather than the problem itself, which is that women find themselves locked out of the employment market because of an inability to properly deal with things like childcare.

We lag significantly behind the rest of the UK and Ireland in that respect.

If we want to address economic inactivity challenges, there is flexibility afforded in the existing arrangements. We are clear that the challenging, inappropriate and wrong practices around zero-hours contracts need to be addressed. Our membership has no issue with things such as exclusivity in contracts, but as regards employers in the hospitality sector, for example, that employ women with caring responsibilities who do not want to be tied down but do want flexibility in their work, there is a risk that more people would be taken out of work if the Bill were to follow the conclusion that there should be an outright ban on zero-hours contracts. If you do not address the issue appropriately, you could find that those who currently enjoy the status of being an employee shift to being self-employed under the current structures because the employer will no longer be able to deal with the cost, taking into account the employer's NICs issue and everything else. We need to tread carefully when drawing assumptions. I still need to be persuaded that the Bill will move us forward in terms of productivity: that reflects the view expressed by our membership.

There is broad consensus amongst those that we have consulted with to date that they enjoy really good relationships when it comes to trade union activity. Mark can speak to that, as he has experience of working directly with trade unions in his business. However, the direct relationship between businesses and their employees needs to be prioritised more than anything else. As I stated in my opening remarks, that is where you grow productivity and improve relationships, before there is a need to go to the fallback of introducing a third party, which arguably creates more of a challenge than having a small business with 10 to 15 employees in which there is clearly direct connection between managers and those who are not managers.

There is another question around lowering the threshold for trade unions. I am a former solicitor — I used to work for a corporate practice in Belfast — and am well aware of those who work in unionised environments. The cost to employers of doing the right thing when dealing with those environments can be managed by larger businesses that are able to call on suitably qualified lawyers to help them. If you introduce those as requirements for microbusinesses or small businesses, they will not be able to avail themselves of such advice and could unwittingly put themselves at risk. The focus needs to be on direct employee engagement, and we can take it from there.

Mr Huddleston: There is massive benefit to be had from having good relationships between trade unions and employers, and from trade unions and employers working together in the workplace for the employees or union members collectively. I have experience of working with Unite the Union with a business in the north-west of England around COVID. Philip, we spent significant time together to ensure that we shaped the support for the workforce before that business used furlough, while it was using furlough and on the employees' return. I note the benefit that that had in upskilling and reskilling the workforce. The Unionlearn activity was of significant benefit. Unionlearn, or anything related to skills, does not get a mention in the proposed legislation. There is a huge gap in support for the Department's policy on lifelong learning. That gap could be addressed by the Bill, supporting growth.

I will talk to Stuart's point about some of the challenges, which also relates to earlier questions from members. On the Information and Consultation of Employees Regulations 2005 (ICE), the reduction of the threshold, with requests for information going from 10% to 2% and the number of workers being reduced, means that microbusinesses and SMEs could have a significant burden of additional information being presented with little value added for either the employee or the employer. During our consultation, we considered the work of Matthew Taylor in the 'Good Work' review, which was carried out under the Theresa May Administration circa 2017-18. His note was:

As an employer, I can say that I have failed at that and been on the other end of a trade union dispute. That was because we, as a business, failed to follow those. There is an element where ensuring union voice and union representation is right and proper and will support that, but, again, if we are going to achieve good work, what is the Department also doing on promoting leadership and management capability within the employer sector? We are now over a decade without a leadership strategy from the Department for the Economy or its predecessor, the Department for Employment and Learning, and that, again, is a gap. While, as Stuart said, we welcome a lot of this, there is a huge swathe of other things that will support good jobs. It would be good to see a complete picture from the Department, which is why I mentioned that a wider industrial strategy or similar type of document would be welcome.

Mr McGuigan: OK. Thank you. It is clear from today that there has to be an awful lot more engagement on that. Stuart talked about females on zero hours, and he is absolutely right. We need to progress other policies: childcare policy is one and carers policy is another. I see this Bill working in tandem with other Executive priorities to try to improve the economy and also the impact on workers. Thank you for coming. A lot of stuff has been raised. It is a big Bill: it is important that we get everybody's opinion and get it right.

Ms Nicholl: It is really good to see you both. Stuart, you started with the point about the Labour Relations Agency. I meant to ask the departmental officials about that in the previous session. You said that there is a need to manage some of the proposed changes. What does that look like? Is that more resources? Is it a wider remit? Is it restructuring the organisation? What do you think that should entail?

Mr Anderson: There are two things. There is raising of awareness, which is a key role that the LRA, along with organisations like ours, should assume some degree of responsibility for. However, there is also a question over the capacity of the system as a whole — all the constituent parts — including the role of the LRA and the role of the Courts and Tribunals Service, to manage any growth within the employment rights space.

I will touch on a point that was made earlier, Kate, about the number of responses. We encouraged all our members to respond if they felt that they were being impacted. We did our best to encourage our members to respond to this consultation. We also asked for an extension to the consultation, because, as you know, it took place throughout the summer period. I am slightly uncomfortable with the assumption that 66 responses from the private sector is sufficient. Perhaps it would be useful to do a simple exercise like writing out to 10 businesses in your constituency, selected at random, to see whether they are aware of or familiar with this Bill.

I would contend that, at the moment, most businesses are so caught up in ensuring that they are profitable and can continue to operate that they simply do not have time for this. Look at Brexit: we are continually trying to meet new obligations as and when they arise, but, to my knowledge, a significant proportion of firms are still not sufficiently prepared for some of those changes. This is another area, and we do not have a road map. I know that colleagues in the BCC were particularly keen to see that in their own legislation that is coming forward. We just need a road map that says when this legislation will be brought forward and when each change is proposed to be introduced, because it is not only about changes in systems and processes; it is about changes in actual business operations.

Take the example of employers' NICs. I was talking to an economist yesterday who had had a conversation with a small practice that has decided to undertake a redundancy programme to reduce its headcount to account for the costs of employers' NICs. That is just in order to retain its profitability. Although there are questions about enforcement and about knowledge and raising awareness, the context of how the current economic climate that we are operating in is impacting on businesses' ability to engage is probably more important than anything else.

Ms Nicholl: That is a powerfully made and useful point. The Department said that business organisations like you are responding on behalf of thousands of members, but, if you have asked your members to respond and we have had only 192 responses, that is something to take on board. How much of it is about lack of awareness, the pressures of the economy or the fact that there is not enough detail? Are you going to respond to a consultation if you do not know what it means for your business?

Mr Anderson: That was a big part of the conversation. We, as a workforce committee, met three times over the summer. We surveyed our members. We had a conference. We invited Lisa Wilson from the Nevin Economic Research Institute, who is an independent adviser to the Minister on these issues, on two occasions. We have engaged with the Minister as much as we can. The big issue is the question of what we are responding to. We talk about unintended consequences. Those are unintended consequences without seeing what is being proposed. I have some sympathy for the Department as it tries to undertake impact assessments when there is no clarity on what is being proposed. A fair degree of work needs to be done in that regard.

Ms Nicholl: The point about the Westminster Bill having 100 amendments from Ministers alone is shocking.

In your consultation response, you talked about careers advice being key for your members, with 40% saying that it is essential to deliver good jobs. The Committee has taken a keen interest in careers advice. Do you have any views on what best practice in careers advice looks like? What would employers really like to see in schools?

Mr Anderson: Mark was a skills commissioner at one stage, so I will let him discuss that.

Mr Huddleston: There is a huge opportunity. There is a challenge to employers. As members have said, we are primarily a microbusiness and SME community in Northern Ireland. How do you get those small businesses to engage with schools? We have seen diminishing returns in partnerships between schools and colleges. Those partnerships do not sit in a formal setting at the moment; they are certainly not as active as they could be. It has proved challenging for employers to take time to engage with schools.

There are pockets of good examples. In my sector of manufacturing, we have three clusters that have done a huge amount. The mega-cluster in mid-Ulster, which was initially supported by Mid Ulster District Council and Invest NI and now delivers a lot of that activity by itself, has shown the benefit of direct school engagement. A lot of careers advice now is about emerging opportunities, rather than saying, "This is a particular career that you should consider". There is the generating engineering and manufacturing excellence (GEMX) cluster in the north-west and the manufacturing task force in mid- and east Antrim. What does good careers advice look like for the manufacturing task force? It runs a science summer scheme with Brian Cox — it brings him over each summer — which has a series of events. The Northern Ireland Science Festival is coming up. Those are examples of emerging good and best practice.

There is also wider labour market data. The skills barometer, which was introduced in the Department for Employment and Learning and continues to exist supported by the Ulster University Economic Policy Centre (UUEPC), is of huge benefit and shows a lot of the forward view. That needs to be supported and widened, along with work that we used to do at the UK Commission for Employment and Skills around employer surveys, to understand how far behind we are and where the gaps are. The skills barometer tends to take a forward view, and we have a gap currently: putting the two together creates a complete picture for young people to be able to make decisions.

The other challenge with careers advice now is that it has to be about the whole of the workforce, because technology is moving so fast. The UK Government have just presented their AI strategy. That will revolutionise many sectors. Careers advice needs to step in. Going to Philip's question, that is where trade unions can add a lot of value. Trade unions and employers working together to reskill and upskill their workforce is careers advice for the current workforce. We estimate that, over the next decade, in the manufacturing sector alone, anywhere between 80,000 and 100,000 people will need to be reskilled and upskilled. Some of that will be careers advice to enable people to move into other sectors and take that knowledge elsewhere. Other advice will be about improving people's skills within the sector. How do you deliver that with, for example, further education colleges seeing further cutbacks and challenges when they should be the primary driver for that reskilling and upskilling? There is a huge piece of work to be undertaken there. Careers advice for those who are in work and those who are outside the workforce is vital.

Ms Nicholl: I feel as though we could have a whole day's conversation on that. Maybe I will pick it up with you offline.

Finally, I thank the chamber for the work that you are doing on childcare and for reminding the Committee that that issue has a massive impact. Every party leader said that childcare was a policy priority. It would be worth checking with the Department, which is part of the childcare task force, to see what work it is doing on supporting that in the light of the "good jobs" Bill. Thank you for your work.

Mr Delargy: Thanks, Mark and Stuart, for your presentation. It has been really interesting. It is good to hear a range of views. The importance of the Bill has been underlined by everybody today, but it is good to get that range of views on how we can make it better and make it work for everyone.

Mark, I was particularly struck by your point about upskilling and reskilling the workforce. That is a pertinent point that can be taken away from the meeting. The Department has a range of upskilling programmes on productivity, in particular, that have been really beneficial. However, as you said, businesses are already so busy; how do they make time for that? How do you get those programmes embedded? That was a really interesting point.

To be honest, most of my questions have already been answered, so I do not really want to labour them. I am cognisant of all the issues that you have raised. I am conscious of getting a regional balance and to see whether that is the experience in other areas across the North. It might mirror that or there might be slight differences. With the Bill, the Department has a role and will be responsive, as it seems to have been already, to those suggestions and to hearing what you and other chambers have to say, and, as Philip mentioned, how we can make it work for everybody, because it is about having good jobs that work for employers and employees alike. I am keen to hear more from you and other chambers, particularly around the economically inactive, how they will be engaged in the process and how it will be successful for them as well. It is just a comment from me because, as I said, my questions have been answered. Thanks for your time.

Mr Honeyford: Thanks, Stuart and Mark, for coming in. As I said earlier, I broadly support the Bill. The difficulty that I have — with the Department, not the Bill — is that we are talking about building a successful economy, but we are looking inwards. Everything that we see is inwards. We are not looking at growing jobs and creating more employment. We do not have a manufacturing strategy. We have nothing for green jobs. That is the issue; we are not looking outwards. I want to touch on that. Does the Bill help with productivity? You talked about it earlier. Will the Bill help productivity to start to grow our economy?

Mr Anderson: I will begin by saying that the conversation around quality work is really important. It is definitely the space that businesses are in. As we know, it costs an awful lot more to employ someone today, as a result of the autumn Budget and for many other reasons. Even recruitment costs are higher: you have 20%-plus costs for a recruiter if you are trying to hire someone in a really challenging market. It is important that you get someone into a job, they stay in the job, you train them and you keep them for that purpose. It is really important that the Department is asking those questions.

Going back to the point that I made at the outset, the first question — an exam question — that we need to answer is this: what kind of economy are we trying to build? Look at the impact of things like our climate change targets and the role of digitalisation, data and AI. What does that mean for every job as we look forward? What does it mean for concepts like lifelong learning? Those are questions that are not addressed in the consultation. The starting point has to be what we have been calling for. We have limited levers in Northern Ireland to address those problems. We appreciate that the Minister and the Executive as a whole have limited tools to respond. We welcome so much of the progress that we have seen, around getting a Programme for Government and a Budget. Stability in the region is important when there is so much instability around us.

The missing piece is a long-term economic strategy. ISNI, which will look to 2050, will be coming out. Why are we building infrastructure if we do not know what type of economy we are trying to build? If we had that, you could look at the question of good jobs in a clear context. We will not get everything right and it will not be entirely clear, but it would give business a bit of confidence. Our energy companies are effectively infrastructure companies. Their investment cycle is 10 or 12 years. They do not know where we will be in 10 or 12 years from now.

Mark can talk to the manufacturing end, but, as a broad principle, the point that I want to land today is that we are really supportive of the concept of building quality work over mere job creation. However, we need to get a sense of a direction of travel that we can all get behind and agree on.

Mr Huddleston: It is one element of what creates a good job and one element of what delivers for the entire economy and will support productivity. Innovation and investment are a huge part of that for the private sector. How will that private sector continue to innovate? We have lower levels of innovation in Northern Ireland than there are in the rest of the UK. There is an argument that that data may be incorrect, and some officials in the Department would say that we need to look at that data again. However, we have a track record of having difficulty in accessing finance in the same way as the rest of the UK does. I know that Invest NI has brought forward new packages of support on that, which are to be welcomed. However, on this work and the Carnegie principles, the fact that job design and the nature of work have not been included in the proposal for legislation raises a concern as to whether, as Stuart said, the Bill will move the dial on productivity.

I recently threw this anecdote at Stuart and his colleagues at the chamber. It is going back a while. In the financial crisis of 2008, the Department for Employment and Learning responded very quickly to industry's challenges around the nature of work and the potential risk to employment by bringing forward support for business improvement technique training. The Minister at the time was Sir Reg Empey. He listened and quickly recognised the impact that it could have. As an employer, we used that and trained our entire workforce up to NVQ level 3 standard in business improvement techniques. The benefit of that was that we retained the employment of everybody in the workforce. We had to make some temporary layoffs, but we retained the employment overall. We improved our productivity. How did we do that? Employee voice was increased, because employees now understood why they needed to raise and flag issues in the factory. The overall benefit was a growth in productivity and value in the business that was able to be distributed both in investment in new technology and in a growth in wages in the years post the financial crisis. The big challenge for us was that one of the mistakes made was in stopping recruiting apprentices at that stage, and that had a massive impact on growth. Will this have a positive impact on apprenticeship recruitment, particularly in SMEs that continue to struggle to do it? As Stuart alluded to, we do not see that complete picture.

A big concern for many of us is access to labour. We have a growing challenge around sickness in the workplace. The stats show that as many as 2·8 million people are absent from the workplace across the UK. It is a big issue in Germany, and they are now being challenged as to whether benefits and rights went too far the other way. There is always a balance to be struck with these things. It could be argued that we are slightly on the wrong side of that. Is that about occupational health being mandated in the workplace and other support mechanisms being there for people within work?

Another challenge is the fact that men, particularly those between 16 and 35, are disengaging from the workforce. Will the legislation start to turn the dial on that? We feel that there is a real missed opportunity here to bring in young men from across our community who have disengaged. In the UK, male economic inactivity will potentially outstrip female economic inactivity, even with, as Stuart and I mentioned, the wider burden that female employees face as carers, given the challenges with the social care sector and childcare.

Mr Honeyford: I want to pick up on the issue of disengagement of men aged between 16 and 35. What could be added to or changed in the Bill to address that issue?

Mr Huddleston: There are three things. The first is the Department addressing the 14-19 strategy, which has sat as an ongoing cycle of engagement, probably since the late 90s. While there is a proposal — it cannot be a single Department solving the problem — the big piece in the legislation should be about the right to learn. The right to learn is not included here, and it needs to be included for both those outside the workforce and those inside the workforce. The World Economic Forum presented data this week on what drives businesses globally. If we are looking for FDI here, we should note that the top three drivers are funding for reskilling and upskilling; provision of reskilling and upskilling; and improvements in education systems. It would be wrong not to say that we need to address all three of those in Northern Ireland still. The Skills Council and others are doing fantastic work to flag that issue. The Skills Council chair, Kathleen O'Hare, and others are doing a lot of work around that, and the Department is interested, but the fact that that does not sit anywhere in the Bill is definitely a missed opportunity.

Mr Honeyford: I mentioned that protection of workers is fundamental. Again, we are looking inwards. I want to return to the issue of the self-employed. I was shocked by some of the responses. I do not understand how this would work in practice. What is the chamber's view on that?

Mr Anderson: I do not disagree. We spent some time, even just yesterday, talking about that at length. It is so intertwined with taxation that the view of HMRC, as was discussed earlier, is absolutely crucial. We need to move in lockstep with whatever is happening in GB on that, or at least —

Mr Huddleston: I am sorry to interrupt you, Stuart, but I would add the Department for Work and Pensions to that. There is a potential knock-on impact on universal credit and other elements that are important to people. If we are thinking of carers and reduced hours, formalising contracts and minimum hours could have a knock-on impact on a person who is on universal credit. The former chief economist at the Joseph Rowntree Foundation (JRF), Ashwin Kumar, recently put a piece out for the abrdn Financial Fairness Trust that flagged that issue. I am happy to pass that on to the Committee.

Mr Honeyford: That would be useful.

Mr Anderson: Thank you for that, Mark: it was a useful intervention. We are concerned about the fact that, as mentioned, no formal proposal has come to us. We have the benefit of having a number of law firms in our membership that can help support us with our response to this issue. The salient point, however, is that this is really complex, so do not get it wrong by not consulting properly with the relevant UK Departments and agencies. We can come back to you once we have a concrete proposal from the Department.

I will also say is that there are sectors, particularly construction, that rely heavily on certain structures and where self-employed individuals are paramount. Those sectoral voices are really important in this conversation as well. To go back to my earlier point about zero-hours contracts, if the takeaway from this consultation is an outright ban on zero-hours contracts or an inappropriate response to it, you risk pushing an awful lot of people into that insecure environment of being self-employed because employers can no longer take the risk of having them on their books.

Mr Honeyford: Thank you.

Mr Middleton: Thanks to you both. Our conversation — I will not call it a "consultation" — with you has been extensive. The Minister outlined his broad economic vision, but, for all of us, it has always been about what that means as a plan and about some of the definitions that have been used. The Department referred to the speed at which the Westminster Government have been able to introduce legislation. You noted the number of amendments to that that have been tabled. Bringing things forward quickly is not always a good idea. It can be seen as moving forward on manifesto commitments, but, in reality, there are unintended consequences and outworkings.

Will you call for a further formal consultation on the Minister's priorities and views on what to recommend, or are you content with the ongoing engagement that the Department talked about?

Mr Anderson: First, we welcome the engagement that we have had, both individually with the Minister and more broadly with the Department, and the fact that the Minister is on record as saying that the closing date of the consultation was not the end of the consultation process. That was an important point. There is a wider discussion about the fact that, in many cases, we do not know what we are being consulted on beyond a range of potential options. In some cases, such as on the right to disconnect, there is not even a range of options but a request for opinion. Even with the best intentions, that could lead, again, to significant unintended consequences.

We would welcome further formal consultation, but I say that with this significant caveat: be very careful about diminishing returns from the number of consultation processes that we are dealing with.

Mr Middleton: I take your point. The Minister's timescales have been highlighted, but, obviously, the Committee is not bound by them. We have our timescales for consideration. It is clear from listening to you that there is a huge piece of work to be done, not least on the other priority areas that the Committee has been dealing with, such as careers advice, skills and childcare. Those very important issues cannot be considered in isolation.

I will make this my final point, because I am conscious that a lot of questions have already been asked. Missed opportunities were mentioned in relation to the skills piece. Could things be added to the Bill? I appreciate that we have talked about the scale of it, but could that be dealt with in a more efficient way in order to include such things rather than some of the more difficult issues on which there may be a lack of data?

Mr Anderson: There are a couple of things — I will let Mark come in on the skills piece — particularly in one area. There was a discussion about the omission from the consultation of holiday pay and the backstop. Having had conversations with lawyers who are engaged in mergers and acquisitions processes, I asked, "Does holiday pay come up in negotiation of shared purchase agreements?". They said that it still very much features because there is still so much uncertainty in that area, relative to GB. It all comes back to the question of competitiveness. There is certainty that workers in GB will be compensated, but there is, at least, protection for employers against a windfall. It is not clear why the Department has never moved that forward and why it was not consulted on in this case. Certainly, when we have raised it privately with the Department, we have not received positive responses on bringing it forward, but it is worth exploring because, in my advisory capacity, I am getting a strong view that it would be very welcome. I do not know whether Mark has anything else.

Mr Huddleston: One challenge that we have goes back to the scope and sheer breadth of the Bill, and one thing that came up from the Committee was this: is there opportunity to phase it? We know that elements of it are directly linked to bringing us, as the only element of the UK with devolved responsibility for employment rights, in line with the rest of the UK. A lot of the larger employers are keen to see that, as it would simplify their activity. We then have the emerging legislation of the Westminster Government. There is an opportunity to build on that as a potential next phase. As Stuart noted, there is a lot of legwork still to happen around that, with significant amendment potentially coming forward there. Then there are elements where we go beyond all of that, some of it aligning ourselves with the rest of the island and some of it going beyond that again based on various inputs from different organisations. It is about whether we decide to do that as a complete single entity or maybe take a more pragmatic view that there are steps to take here.

On something that was noted, we would like to understand where advisory information is going to be presented or secondary legislation is going to be presented. We would like to understand what is likely to come forward in that area and whether there are certain principles that are guiding and directing it all. Matthew Taylor talked about a fair balance of rights and responsibilities and said that everyone should have a baseline of protection. It is very hard to find anybody who would disagree with that, but, as presented at the moment, the consultation on the legislation certainly left a lot of gaps. It gave a lot of examples of other best practice, but we want to see more on that.

On where there is missed opportunity, we go back to the fact that it addresses only four of the seven Carnegie principles. Does the Department have a plan to address the other three? That is a key question that we have. There are some other types similar to the Carnegie principles. If we all accept the Carnegie principles, where are we in addressing all of those? That is a key question, and that goes back to having a wider framework for the whole of the economy alongside that.

Ms McLaughlin: Thanks to Stuart and Mark for the detail of the considerations that they have given to date and for the breadth of their engagement with their membership in and around all of this. I think that we are all very clear about the Bill's complexity and breadth. If anybody is looking into this, we are in danger of them thinking that we are not supporting of good jobs. We absolutely are supporting good jobs and quality jobs and good employers into the bargain. It is just that we need to get this right. I know that businesses are currently operating in an extremely challenging environment. The cost of doing business has risen quite significantly in the past couple of years, and, indeed, the Budget has put further strain on those businesses. Therefore, it is important that we do not do anything that will put extra pressure or extra compliance burdens on businesses that depletes their viability where we are in danger of doing damage to our economy. It is important that we do get it right.

Stuart, you talked about a sweeping set of new proposals that could have been arrived at in relation to skills and other issues that were pertinent to good jobs. Do you think that the Minister should have had more detailed engagement with you and other organisations and sectoral groups at the start to avoid this appearance of hindsight to the overall approach, looking not just at workers' rights but at a whole set of issues, even including all those official statements that had been made from the outset and how they can be embedded into other industrial strategies that would help to really promote good jobs and quality jobs? Do you think that the cart has gone before the horse in a way?

Mr Anderson: Thank you for your question and reflections, Sinéad. We enjoyed a lot of engagement with the Minister early on. He was about a week into the job when we first met him and had lengthy discussions prior to his taking up the role. More broadly, there is an issue, which we flagged in our response to the Programme for Government, around the notion of business partnership. We are fortunate as an organisation to have so many businesses willing to step up and answer some of the questions that the Executive are trying to solve. When you look at other jurisdictions, however, you see that Scotland, in particular, got things fundamentally wrong because they did not engage business in the process early enough. They responded to that by looking at a new deal and partnership model with business. That involved a careful analysis of policy development in every Department in Scotland on areas of policy that impacted on business, and then raised the question of engaging with businesses at an appropriate stage. That is a learning that we need to take with not just this process but more broadly across the Executive as a whole.

We are where we are, and we welcome the fact that the Minister continues to want to engage with us. We are meeting him tomorrow through the vehicle of the LRA. There are still opportunities to address the questions that we have asked. I am often asked whether I think that Ministers listen to us. We are certainly engaged a lot, and, when you look at things such as the Finance Minister's response to the autumn Budget, you see that the creeping up and uplift in non-domestic rates took account of the impact of the autumn Budget. However, if we are going to ask whether businesses are listened to, look at our response to the consultation and the responses from the Federation of Small Businesses (FSB) and others, and we will see how those are reflected in the final Bill. That is when you can make that judgement.

Ms McLaughlin: You have suggested that legislation should or could be a tool used to focus on where practices are below standard or exploitative and to give employees choices. How do you see that? Would you look at that, as Mark suggested, being in a phased approach? If the breadth and depth of the Bill means that it becomes so cumbersome that it holds everything back, what areas of the Bill should be progressed at pace to get things through?

Mr Anderson: That is a good question, and one that I would come back to you on. I would like to understand the Department's intentions with regard to what areas it sees as priorities and those that it would like to move forward with as quickly as possible. If you are a business dealing with this, the point about preparation is a good one.

If you are a small or micro-sized business, as most of our businesses are, your accounts manager, business development manager, CEO and HR lead are all the same person. Therefore, we have to be careful in allowing them the time to be compliant. We have to understand that the narrative here is a little bit challenging and is sometimes a little bit challenging for businesses to hear. The overwhelming majority of our businesses want to do the right thing, and the Department has to facilitate their ability to meet their obligations. Therefore, we will be calling for a road map or, at least, a draft road map that we can engage with, and then take it to our members to decide which they can deal with and resource properly first. We would need to engage with our membership on which of those areas they would want to deal with first, and that is not a question that we have posed to date.

Ms McLaughlin: You spoke about a holistic, workable framework. Is that your road map?

Mr Anderson: Correct.

Ms McLaughlin: Yes?

Mr Anderson: Yes.

Ms McLaughlin: OK. That is grand. There is a lot more work to do — I suppose that it is government's role — to make the business environment conducive to doing business and growing the economy. At the minute, the Bill is very cumbersome, and there has to be some way that we can move through it without holding good pieces of legislation back in any shape, form or fashion.

Mr Buckley: Thank you, Stuart, for the presentation. In brief, I, for one, think that the Bill has "unintended consequences" written all over it. It is certainly a grave concern to me, particularly given where the economy is at present. There has not been enough focus on the huge increases in costs for businesses following the Budget, particularly National Insurance contributions. How difficult do you see the environment becoming? If a Bill like this were to go forward, there would be an added increase. Businesses are pushing costs associated with doing business on to the consumer — it is their only way to survive — and therefore fuelling the inflation aspect of the entire debate at present.

Mr Anderson: I will come in on this first, Mark. We have to be cognisant of the fact that we have at least the flexibility in the organisations and businesses that we represent so that they have the ability, in many cases, to pass those costs on in order to cover their costs. However, this Bill is for employers in the widest possible sense and includes the public sector, the third sector and social enterprise, which will not have the ability to pass those costs on. Therefore, you need to think about the consequences of that. An important discussion took place before we were here about impact assessments. I think that the cumulative burden of this Bill is unclear because we have not had an impact assessment on the cumulative burden of what this Bill will mean. It is really difficult to answer your question.

There is also the time frame. When the Bill takes effect, what environment will we be working in? What will the world look like in two years' time or more? There are a lot of open questions and certainly unintended consequences, and what has happened in GB with its Bill to date is a really important point for us all to sit up and take notice of.

Mr Huddleston: There is the potential that this will impact on certain sectors more than others. Jonathan, one of your colleagues asked a question earlier about the sectors and whether the Department understands which sectors will be truly impacted. Take some of the information that is coming from the British Retail Consortium about the challenges facing it. It is saying that the NICs increase, the national living wage increase, the employment legislation compliance and the packaging levies that are all coming forward across the UK would have a knock-on impact on food inflation of around 4·2%. That is really significant. Inflation came in today at 2·5% more broadly in the UK, but that is a rise of that amount again. We can argue about whether we are on the cusp of coming out of a cost-of-living crisis or are in an ongoing cost-of-living crisis, and it is probably the latter rather than the former. When you put all that together, that is what will appear on the shelves. That will impact on our farmers, because Tesco is not going to take a cut in its margin; it will look at the customer and the supplier. That is where the big retailers will fight that. Our hospitality and retail sector will see a further squeeze, and the incoming Government in Ireland are proposing, in their Programme for Government, a VAT reduction in that sector.

Mr Buckley: It has been announced at 9% or something.

Mr Huddleston: Yes.

Mr Buckley: The difference is staggering.

In a previous session, one member suggested that this was a Bill for productivity. Am I reading this wrong? I see this as a productivity killer. I understand that it is important to have a balance between employer and employee rights. That is crucial, but are we not negating the fact that there are certain people who will attempt to use some of the mechanisms that the Bill may provide to stymie productivity in the workplace and therefore essentially hamstring some employers when it comes to recruitment, productivity or efficiencies? I certainly have a concern about some people. I am saying "some", not "all"; I do not want to be misrepresented. Is there the ability for certain individuals to game the system if some of these proposals become reality?

Mr Anderson: Your question about productivity is one that the Committee should be pushing all the time, in the context of the Bill and across the four pillars — of course, one of them is productivity — of the Minister's vision. Again, unless we know what kind of an economy we are trying to build, it is very difficult to understand how we move the dial on productivity. The UK Government launched their AI plan on Monday, and we know from the research that that will have a significant impact on productivity. The question will be this: where is Northern Ireland when we are having a debate about that?

We remain to be persuaded that what is in the Bill will shift the dial on productivity. As has been discussed, however, I think that the opening question about encouraging the employee voice is a good one, but the starting point for that has to be direct engagement and encouragement, particularly with small employers, on how to engage properly and meaningfully with their employees, so that employees themselves can feel that they are a part of a business that they are driving forward. That is how you get those productivity gains in the first instance. That is a question that was a missing piece in the consultation.

Mr Buckley: I will finish on this point, because we are tight for time. At this early stage, is it your assessment that the Bill potentially either stifles or creates productivity?

Mr Huddleston: I do not think that it is as black and white as that, Jonathan, although I do not mean to sit on the fence. Employee voice is a really important part of productivity. Will that one element help to drive productivity forward? There is a lack of detail to be able to say yes or no to that right now. That is why we say that there is a missed opportunity here. There is a range of other elements that the Department needs to urgently consider. Employee voice is vital in that: I have experienced that as an employer, both with trade union representation and direct employee voice. Will that do it on its own when we are not addressing the cost of energy or supporting growth and innovation or supporting and funding skills growth, while the Department is sitting with one of the toughest Budget outcomes of any of the Departments in Northern Ireland when we want to drive economic growth and success here? That impacts public-sector productivity as well as that of the private sector. The public sector, like the private sector, essentially pays a tax on employment in Northern Ireland through the apprenticeship levy, and that is not being addressed either.

Mr Buckley: Thank you.

Ms D Armstrong: Discussing all of this has been really interesting. A lot of questions that came to mind for me have been covered, but I want to return to that last point about productivity and employees' rights. Employees need to be engaged in their institution or their place of work in order to get the best productivity. However, I do not think that we have heard enough about employers' rights in all this. As an employer, if you are facing into headwinds with more and more regulation — it is right that we have to protect workers in a fair and reasonable manner — what are the employers' rights? They have a right to representation and to tribunals. Has that been mentioned?

Mr Huddleston: It is certainly something that the legislation needs to look at. If we are going to increase employer voice, we want to have — I have always benefited from having it — full-time representatives from the trade union movement on the other side of the table who understand the sector and its priorities and requirements. Where you have that, that creates a really positive relationship between the employer and the employee. Where that is missing challenge can be created, and different unions will have different views and responsibilities. I would look to health and safety legislation, which very clearly outlines the role of the employer and the employee in ensuring a healthy and safe working environment. The Department — it has responsibility for that — should look to those elements internally to address that and have balance.

Ms D Armstrong: I am sorry to cut across you. That touches on what Jonathan said: you do not want to be in the situation where someone is coming in to stymie productivity. That is where that sits in the piece about employers' rights. It is about that relationship.

Mr Huddleston: That has been the nature of employment from the get-go. You are always going to have that challenge. You are sitting in a vacuum with no formal social partnership structures in Northern Ireland. In Scotland, where it was assumed that there was the potential to win the independence vote in 2016 or just before that, the Scottish Government created the Fair Work Convention. That organisation was created to be independent of government but to create a social partnership in order to have those dialogues and discussions, with the view that there was the potential for devolution of employment rights. That would certainly go a long way. Having been a member of a social partnership across the UK between the trade unions, the third sector and employers of all sizes and my predecessor, Bill McGinnis, having acted in that role, I know that there was huge value at that time in having the TUC, the CBI, the major trade unions and the major employers as well as devolved representatives in the room together, engaging around the challenges and how we collectively work to address them.

Ms D Armstrong: Thank you very much.

The Chairperson (Mr Brett): Thank you for that, colleagues. Stuart and Mark, that was very useful indeed. The fact that your remarks represent 1,000 businesses across Northern Ireland that represent 105,000 employees is important for members and for the public who are listening. I trust that the remarks that you have made today will be taken seriously by Committee members and by the Department. We will, no doubt, be in touch with you in the coming months, when the Bill eventually makes its way through the drafting process and we see what it contains. We really appreciate your insights at this early stage. Thank you very much.

Mr Anderson: Thank you. Please reach out to us at any time.

The Chairperson (Mr Brett): Yes. Thank you.