Seòmar agus comataidhean

Thank you, convener. Good morning to you and to the rest of the committee. This supplementary LCM should be read in conjunction with the Scottish Government’s previous memoranda on the Employment Rights Bill, dated 11 December 2024 and 3 April 2025.

The Scottish Government has been working closely with care providers, trade unions, local government and regulators for a number of years to deliver fair work in the social care sector, but, as you are aware, the Scottish Government’s ability to act in this area is constrained by the devolution settlement. Nevertheless, we have continued to deliver what we can by using the powers that are available to us, including enabling payment of a real living wage to all social care workers, delivering direct care and commissioned services, developing an effective voice framework for the sector, which is nearing the conclusion of a pilot phase, and working with the sector to identify priority areas for enhanced terms and conditions in due course. However, the Employment Rights Bill and subsequent amendments now confer some limited powers on the Scottish ministers, and it is for those reasons that a supplementary LCM is required for those provisions.

It is important to note that a lot of work has also been carried out to develop and design a process for delivering a voluntary sectoral bargaining model for Scotland. When the Employment Rights Bill was introduced, it included provisions relating to the social care sector in England, most notably for the establishment through regulations of a negotiating body to consider pay and terms and conditions for the adult social care sector.

The outcome of those negotiations, once accepted by the secretary of state, was to be enacted through regulations to deliver fair pay agreements for workers who were in scope. The Scottish Government recognised the opportunity to potentially underpin much of the work already undertaken in Scotland on sectoral bargaining by seeking to extend the scope of the bill to Scotland. That will provide the Scottish Government with the option to regulate for negotiated fair pay agreements for the sector as an alternative to the aforementioned voluntary process.

We have also succeeded in securing broader applications of those bill provisions to children’s services, not just services for adults, and we look forward to continuing to work closely with the UK Government to build on our fair work principles and help to maximise the bill’s positive impact across Scotland.

The amendments to which the LCM pertains clarify that negotiating bodies can set only minimum terms and conditions of employment for social care workers and cannot adversely affect those workers’ existing terms and conditions or prevent employers from offering better terms and conditions than those agreed by the negotiating body. They also establish the parliamentary procedure for approving codes and guidance. Together, these measures protect social care workers from being forced on to worse contracts, safeguard fair pay and conditions, and help to maintain a competitive and sustainable workforce across the sector.

Thank you, convener. I am grateful for the opportunity to introduce the regulations.

When I appeared before the committee in June last year, you were considering the Scottish Pubs Code Regulations 2024 and related Scottish statutory instruments. The Scottish pubs code will improve the position of tied pub tenants through the creation of a statutory framework to govern the relationship between pub-owning businesses and their tied pub tenants.

At the time of the committee session, I was aware of significant stakeholder concerns about the regulations and, in particular, the code. I was not able to withdraw the regulations in June, but I undertook to carry out a further focused and targeted consultation on the pubs code. My stated intention was to introduce an SSI to make amendments to the code and to bring the legislation into force as soon as possible. The SSI that the committee is considering today is the result of that further consultation.

My officials and I have engaged fully with stakeholders in the development of the legislation. The consultation process involved the receipt of written proposals from stakeholders, followed by workshops and a formal written consultation. The intention was not to reopen fundamental policy debates about the Tied Pubs (Scotland) Act 2021; the focus has been on key areas of concern that were raised by tenants, pub-owning businesses and their representative organisations. I am grateful to stakeholders for their continued engagement in that work.

The policy area remains difficult, with stakeholders diametrically opposed on certain matters. A difficult balancing act is required, and it has not always been possible to reach consensus. However, the purpose of the code is to improve the position of tied pub tenants, and I believe that it will now achieve that purpose more effectively. The SSI will ensure that the code fulfils the intentions of the 2021 act and is consistent with its regulatory principles.

I am conscious of the significant challenges for all businesses at this time, so I have sought to ensure that we do not put unnecessary demands on pub-owning businesses while still improving the position of tied pub tenants. The SSI will result in some aspects of the code, including the guest beer arrangement and information provisions, coming into force on 31 March 2025. In response to concerns from some pub-owning businesses about their preparedness, the provisions on market-rent-only leases, rent assessment and review will come into force on 30 June.

Once in place, the code will be monitored and enforced by the Scottish pubs code adjudicator. The adjudicator and her office have been working hard to prepare for when the code comes into force, and I am pleased that that has involved good engagement with the sector. The 2021 act requires that the adjudicator’s work and the code be reviewed after 31 March 2026, and every three years thereafter. We must continue to ensure that the code is proportionate and in keeping with the obligations of the act.

I am happy to take any questions that the committee might have.

In the first instance, I will be meeting stakeholders in the coming weeks to discuss their specific concerns in more detail. Those meetings will help to inform what we will do regarding consultation.

The intention is for the consultation to be launched in mid-August and run for eight weeks. I will write to the committee relatively soon to update members with more detail about what we expect the consultation to include. I want it to be informed by my more detailed engagement with stakeholders in the coming weeks.

No. The position had already been filled. It was originally intended that the regulations would come into force in early October, so her appointment preceded the commencement of the regulations anyway.

As I said, my intention is to bring forward the coming-into-force date if possible, but that will be contingent on the engagement that we have over the summer and on that consultation, about which I will keep the committee updated. The adjudicator will be able to start developing her role now that she has been appointed.

I appreciate that point. I refer members back to a point that I made at the previous committee meeting: it would have been the Government’s desire and intention to have had further consultation and engagement but, because of the circumstances in which we found ourselves, with which the committee is familiar, that was not possible. At the previous meeting, we brought forward the regulations and set out the rationale for the approach that we are taking.

I am not going into this with an expectation that we will be able to find a pub code that will satisfy absolutely everyone, because I recognise that there are strong views about the code. However, I will seek to build as much consensus as possible.

As I said at the previous meeting, we are in a situation where the pubs code does not satisfy either pub-owning companies or tied publicans. I hope that, through engagement with representatives and stakeholders and through the consultation that we intend to launch in August, we can build a greater degree of consensus so that there can be confidence when the code comes into force. As I said previously, there is a requirement in the legislation to have a review in the future, which will provide a further opportunity for consideration, once there has been an opportunity for the code to operate.

Thank you very much, convener, and good morning to the committee. I offer my congratulations to new members of the committee, and to Michelle Thomson on her appointment as deputy convener. I am very grateful for the committee’s consideration of the draft SSI this morning.

As I indicated to the committee on 5 June, the draft regulations extend the coming-into-force date to 31 March 2025 for both the Scottish pubs code and the Tied Pubs (Fees and Financial Penalties) (Scotland) Regulations 2024. That will create much-needed space and time to carry out further discussions on the code with the sector. If I can bring forward the coming-into-force date, I will do so. In any event, I plan to bring forward a further amending SSI to make changes to the code following consultation.

The draft regulations before you correct drafting errors that the Delegated Powers and Law Reform Committee identified in the Scottish pubs code and fees and financial penalties instruments. They meet the Government’s commitment to the DPLR Committee to make an amending instrument to make the necessary changes. The regulations clarify that the rent assessment procedure ends two weeks after the offer of a market-rent-only lease. The regulations also clarify that the maximum financial penalty for not complying with the code is capped at 1 per cent of total group turnover where that is applicable.

I thank the committee for its consideration of the instrument.

We can give some background to the workplace equality fund and how it has operated in relation to a number of priority groups for whom there have been barriers to employment and referring to some of the work that has taken place to date and how we can apply it. I do not know whether Stephen Garland wants to add anything to his earlier remarks.

As I mentioned, we provided funding for the public social partnership. The partnership looked at identifying and developing solutions to deal with some of the gaps in understanding and expertise that employers might feel they have. We also provided funding over a number of years for the workplace equality fund, which looked at barriers to employment for a range of priority groups, including disabled people. There will be independent evaluations of those pieces of work, which will help to inform the work that we as a Government take forward with a range of partners.

Engagement is taking place, and I recognise that many employers do excellent work already. I also recognise the important work of the Federation of Small Businesses, which I know that you took evidence from. The Government is undertaking that work, and we will continue to take that partnership approach.

It struck me, from the evidence that the committee has received, that one way of looking at it is that a large employer with a well-developed administrative apparatus, human resources staff and so on, could be perceived as being in a better position to provide support for disabled people in employment. However, we also heard the experience of people in small businesses, where close relationships and a less formalised working environment can allow for the flexibility and support that is required.

I know that the committee will have taken evidence on the challenges that can exist in large organisations in respect of the co-ordination of approaches between various members of staff who have different responsibilities, and on the challenges and concerns for smaller operators, such as the time constraints, time pressures and their concern of getting it wrong. Large and small operators can have concerns, but I recognise that both have particular strengths. That tells me that, with continued work and engagement, we can support employers to build their understanding so that they have the confidence and the means not only to attract and recruit but to retain disabled people in employment.

Stephen, would like to add anything?

First, I have been made aware of those concerns directly. I know that the member and the committee will appreciate that it is not for me, as a minister, to comment on the commercial relationships that exist in that space. That point gets to the heart of striking the balance between the desire for the code to come into effect as soon as possible and the need for the code to be understood and perceived by tenants as being of value, not of detriment. That concern has been expressed.

I recognise that what we have is far from an ideal set of circumstances. The path that I am trying to take is to give the certainty that the code will come into effect, but also to work intensely with stakeholders to address those particular concerns, including those that the Scottish Licensed Trade Association has articulated in its correspondence.

I touched in my opening statement on the need not just to gain employment but for it to be fulfilling and sustainable. That is a priority: it cannot merely be a numbers game about trying to get as many people into work as possible. We must also create a structure and a package of support that enable people to sustain employment.

I will be engaging closely with partners over the coming weeks and months on those issues in order to fully identify and understand their views on what the drivers and causes are. Clearly, there are instances in which people are sustained in employment, and I want to make sure that we learn from that best practice. However, at the heart of our approach is recognition that everyone is an individual and that a range of circumstances could influence why someone does not sustain employment beyond a certain period, whether it is three months, six months or nine months.

Claire—is there anything that you want to comment on in terms of our wider learning and understanding?