The next item of business, therefore, is the statement by the Minister for Housing and Local Government on the report of the Fair Work Commission. I call on the Minister, Julie James, to make her statement.

Diolch, Llywydd. In March 2017, the then First Minister of Wales made clear the Welsh Government’s commitment to make Wales a fair work nation. Since that time, a huge amount of constructive work has been done in tripartite social partnership between Government and our business and trade union colleagues to begin to turn that commitment into practical reality.

The Deputy Presiding Officer (Ann Jones) took the Chair.

I informed you all last July that we had appointed the Fair Work Commission, chaired by Professor Linda Dickens, to consider and work alongside our social partners to make recommendations on how Welsh Government can promote and encourage fair work in Wales. We felt it important for the commission to be independent of Government in order for it to be objective and to call it as it is. The report was drafted by the commission, free from editorial input from Welsh Government officials, and the commission was asked to report by March, and both the First Minister and I were delighted to receive the report when we met the commissioners at the end of March, and it's with great pleasure that we publish that report today.

Dirprwy Lywydd, I’d like to place on record the Welsh Government’s thanks to the commission for its commitment to what has clearly been a detailed piece of work over several months. It is a testament to the commission that they have not only reported on time but have produced an excellent and measured report. As acknowledged by the commission in its report, the Welsh Government is committed to fair work as a way of building a stronger, more resilient, more inclusive economy. 

I agree with the commission when they say that fair work accords with the long-established traditions in Wales of social solidarity and community cohesion. It is vital to addressing the inequality, poverty and well-being challenges we face in a twenty-first century Wales. I believe that the commission has developed achievable recommendations that provide a practical route forward to deliver that fair work Wales. It builds on the solid foundations we as a Welsh Government have already built, which include the ethical code on procurement in supply chains and our economic contract, which promotes fair work and inclusive growth.

The commission has made a total of 48 recommendations across eight areas for action. Firstly, it has sought to articulate why there is a clear need for us to embrace, promote and drive fair work across all sectors in Wales, the growing concern about the quality of jobs, the growth of low-paid, low-skill and insecure jobs, and the consequences of this in terms of low productivity, indebtedness, inequality and in-work poverty. The commission has developed a definition of fair work where workers are fairly rewarded, heard and represented, secure and able to progress in a healthy, inclusive environment where rights are respected. The definition will not only help Welsh Government use all its available levers to promote and encourage fair work, but it will also have meaning for employers and workers.   

Whilst we acknowledge there are limitations on what Welsh Government can do within the current devolution settlement, we asked the commission to consider the additional actions that could be taken, including the potential for new legislation. The commission has recommended how we might use the competence we have to drive fair work, and I’m pleased that it has endorsed the commitment we have already made as a Welsh Government to put social partnership on a statutory basis in order to embed social partnership more securely. 

The report has helpfully suggested how we might influence this vital policy area in non-devolved areas, an issue of particular importance as we leave the European Union. The Welsh Government has been clear that, in leaving the EU, there should be no weakening of existing employment rights, that new trade agreements should protect employment standards, and future UK employment legislation keeps pace with progressive EU employment law.      

The fourth area the commission considered was the use of economic incentives to promote fair work. Their proposals very much accord with the something-for-something ethos in the Welsh Government’s economic contract. We can already point to many instances of businesses of all shapes and sizes doing the right thing when it comes to fair work, and I am pleased at how the commission is helping us think about how that practice can be extended across Wales using the levers we have. 

Part 5 of the report considers the importance of trade unions and collective bargaining for fair work in the economy. The commission's research evidence consistently demonstrates that important fair work objectives are served by union and collective bargaining presence in the workplace. The commission states that trade union presence is important in embedding, monitoring and enforcing legal standards in workforce practice and in assisting effective enforcement of employment rights. We support the commission's fundamental assessment that trade unions and collective bargaining contribute to productivity and economic growth, while trade union weakness or absence contributes to inequality.

The commission has also considered how we might take action to create interest, enthusiasm and buy-in for the fair work Wales agenda and has recommended the steps we might take in assisting and supporting willing employers to be fair work organisations. This is a very important point. Fair work is a vital part of a modern, competitive economy and nobody has anything to fear from it. As a Welsh Government, we stand ready to work collaboratively with businesses and organisations of all sizes to build into a modern, competitive and productive twenty-first century economy.

Part 7 of the commission's report looks at the capacity for carrying the work forward in Wales and suggests that the existing institutions and mechanisms should be enhanced and additional mechanisms created, and has made recommendations as to how we might do this. In the final section of the report, the commission considers how we might improve and collect data in order to measure progress, which our knowledge and analytical service will need to consider in some detail.

Deputy Presiding Officer, I don't intend to go into that detail today, in advance of our formal response, other than to say that this report will help shape our thinking about how we use the powers and levers available to us to enhance employment opportunities in Wales. As the commission has indicted, fair work requires action beyond the scope of any single ministerial portfolio. Ministers will now discuss the report, its recommendations and implications for their portfolio areas with their officials to feed into the wider Welsh Government response.

I can, however, tell Members today that the Welsh Government will be accepting the six priority recommendations that the commission have developed. They accord with our commitment as a Government to drive fair work forward. They are that fair work will become the responsibility of all Welsh Ministers and officials; the proposed definition of fair work will be adopted and used across Welsh Government and in its promotion of fair work; the commission's findings will be used to inform the development of the proposed social partnership Act and how Welsh Government might promote trade unions and collective bargaining in consultation with social partners and stakeholders; a structure will be established and adequately resourced within Welsh Government to co-ordinate and drive fair work activities; and Ministers will monitor how fair work is being advanced within their areas to inform an annual Welsh Government report on fair work Wales.

The commission has invited formal responses from our social partners. We will provide the Welsh Government response that reflects their views in June. And, finally, as the commission has stated, our social partners will be crucial in carrying the fair work agenda forward. We will fully consult them on the implementation of the commission's recommendations on a tripartite basis and we will be hosting a fair work conference in June to develop an agreed approach. Diolch.

Well, 38 years ago, I was party to my thesis at university with two other students on industrial democracy, believe it or not, looking at many of these areas and experiments and proposals at that time, but, at core, recognising that a successful organisation listens to its customers, both externally and internally, and that an organisation that maximizes productivity and success, recognises employees, gives them responsibility, acknowledges their strengths, but also develops their potential—. How, within this, therefore, do you propose to recognise the need across all sectors, not just the private sector, to maximise the potential of effective performance management, where too often we hear, when the term is used, of appraisal only, which is meant to be a single snapshot of a year and not an opportunity to lecture an employee, when throughout the year the individual should be given voice to agree their needs, propose their own ideas and agree models and action plans to take that forward, including the training skills and involvement that they need to mutual benefit? Again, that seems to be something I couldn't pick out from the report thus far. 

You say that fair work accords with long-established traditions in Wales of social solidarity and community cohesion, and, clearly, it's disappointing that Wales, two decades after devolution, has the highest percentage of employees not on permanent contracts, the—once again—highest levels of unemployment and, of course, lowest levels of wages across the UK. 

You say the Welsh Government has been clear that, in leaving the EU, there should be no weakening of existing employment rights and I, of course, agree with you on that. What consideration have you given to the actual withdrawal agreement between the United Kingdom of Great Britain and Northern Ireland and the European Union and Council, where it, for example, refers to the rights of workers, the right not to be discriminated against on grounds of nationality, the right to equal treatment in respect of conditions of employment and work, and collective rights and so on, and also states that the United Kingdom should ensure no diminution of rights, safeguards or equality of opportunity as set out in the 1998 agreement entitled 'Rights, Safeguards and Equality of Opportunity' should result from withdrawal from the union. 

Beyond that, in your statement, you refer to collective bargaining and the role it can play in economic growth. A quick look at the UK Government website: it says you will need to work with the unions to discuss changes to employees' terms and conditions, but what discussions have you had or will you have with employers—private sector, third sector and statutory sector—to look at the potential implications of different models of taking this forward? As you know, at the moment, bargaining in the private sector is primarily conducted at company or workplace level, but industry-wide agreements or organisation-wide agreements are more common in the public sector. So, how will you ensure that the voice of employers, as well as employee representatives, are engaged in maximising employment and productivity and minimising absenteeism and labour turnover as we take this forward?

Of course, at UK level, the UK Government commissioned a report from Matthew Taylor regarding modern working to ensure that employee rights are protected and upgraded as we leave the EU and the UK labour market is successful and competitive as it evolves. The resulting 'Good Work' plan is part of the UK Government's modern industrial strategy and includes and upgrades the rights of millions of employees to ensure we benefit from fair and decent work. So, what assessment has the Welsh Government made of the UK Government's 'Good Work' plan and the opportunities that it represents for enhancing employee markets, conditions and terms in Wales in areas over which the Welsh Government has devolved responsibilities? What plans has the Welsh Government made to adjust the strategic objectives of Business Wales and the Development Bank of Wales in relation to the promotion of collective bargaining? What practical measures is the Welsh Government itself taking to support fair work, or the 'Good Work' plan, potentially, in employment in Wales? What assessment—finally—has the Welsh Government made in relation to how much public money will be involved in the adoption of the report's recommendations, for example, its suggestion that the Welsh Government continues investment in the Wales union learning fund, and the suggested promotion of fair work through other measures, including the development of a communications and marketing strategy to create widespread awareness of the agenda? Thank you. 

I thank the Member for that comprehensive contribution. I think I got up to 24 questions in all. I don't think I'll be able to answer all of them today. I may be wrong, it may have been 27—I lost count there at one point—but, nevertheless, a tour de force in terms of some of the issues raised.

Unfortunately, I have to disappoint the Member and perhaps please the Deputy Presiding Officer by saying that, of course, all we're doing today is publishing a report and accepting the broad reach of the recommendations. Much of the detail that the Member referred to is embedded inside the more detailed parts of the report and, as I said, the commission is asking for responses to its report—and perhaps the Member would like to consider making one—from social partners and others across Wales. The Government will then respond towards the end of June, and we will then hold a fair work conference in order to take this forward in tripartite working. 

I think the Member pointed out quite a few of the things that we agree on, but perhaps he and I take a slightly different slant. The report, I thought, was a very well-balanced one. The employers have broadly greeted it with the same enthusiasm as the trade unions. So, I want to just once again take the opportunity to thank the commission for the really thorough piece of work they've done to welcome the Member's contribution, and to say that, if he wants to submit a response along those lines, we'll be very happy to consider it when we respond formally in due course.  

Can I welcome the Minister's report on the publication of the Fair Work Commission's report? Of course, on this side, here on the Plaid Cymru benches, as we've expressed quite recently, we believe in the fair work agenda because of all the background that the Minister's outlined in her statement—the growing concern about the quality of jobs, the growth of low paid, low skilled, insecure jobs, and the consequences of this in terms of low productivity, indebtedness, inequality and in-work poverty.

So, I'd like to welcome the fact that the Welsh Government are taking this forward. I particularly welcome the fact that the Government will not only consult with the relevant stakeholders, as it is key to get them on board, but also the fact that this will be the responsibility of all Welsh Government Ministers.

Now, obviously, going forward, our job on this side of the Chamber is to ensure that implementation of the fair work agenda happens, and that it is consistently considered in legislation drafted by this Government, because, as we have seen in the past, and, as a former member of Cabinet has expressed in a session of the Finance Committee, the future generations Act can be and has been overlooked in the drafting, say, of a budget, and in other pieces of legislation as well. So, can I ask first of all that the Minister can assure us that due regard will be paid to the provisions of the future generations Act as we move forward with the fair work agenda?

In addition, can I ask: how will the provisions of the Fair Work Commission's work be reflected in future public procurement? We've heard, obviously, there's a lot of work being done at present, and the Minister emphasised all the work that is happening now that matches up with the Fair Work Commission's agenda, but what will change then in the future, because we've got the Fair Work Commission's report—how will that facilitate any change, particularly as regards future public procurement provision? And, finally, can I confirm the timeline when we can see some of the fair work agenda actually being brought into operation? Thank you. 

Yes, thank you very much for those points, Dai Lloyd. I'm very, very happy to confirm that we're looking very carefully to ensure that we enhance the well-being of future generations Act when we do this work and, indeed, when we do other work. You'll know that, in my previous portfolio, I was instrumental in getting a piece of research done to make sure that we don't inadvertently weaken that Act by subsequent legislation, and we're very keen to make sure we carry that forward into this Act as well. If necessary, we need to amend that Act to strengthen it, but that will be part of the consideration in taking forward the social partnership Act.  

In terms of public procurement, the report makes some very detailed recommendations about the use of public money as leverage in order to get particular types of response. That will be one of the things we'll be very carefully considering. The report has already been discussed with social partners and so on, so the timeline is that we will respond at the end of June once all the social partners, and anyone else who wants to make a contribution, have been able to do so. That's a very tight timescale in one way, but, in a sense, we've developed this in social partnership, so it's a timeline that people are happy with and happy to take forward. We'll then have a conference in June, which we'll be inviting a large range of stakeholders to, in order to shape it to go forward.

The whole purpose of this is, of course, to take the private sector, the public sector, the trade unions and the Government, including all of us here, along the same path together to a shared goal. And I think it's clear that there are shared goals here. The big question will be how can we get the most leverage in place in order to achieve those shared goals, and I think that, rightly, you'll be holding us to account on how fast we do that. 

Can I first of all welcome what is a very timely and a very comprehensive report on fair work? I think at a time when the two great challenges within our society and globally, really, are that of emergency climate change and the need to tackle that, but also the other great destabilising social factor, and that is the inequality of wealth and income—. And, in the UK, 60 per cent of all wealth is inherited; it's not earned, it's not created, it's inherited wealth, and we know the consequences of that. We are also aware that, year after year, for the last 10 years, the income for the poorest 10 per cent of society has gone down and the income of the top 10 per cent has increased. The figures for 2018 are that the poorest 10 per cent decreased by just under 2 per cent; the richest one fifth increased by almost 5 per cent, and that has been a trend really across Europe, and I think it's a destabilising factor.

There are many aspects to this report that are very important. I think this really adds support to the commitment by the First Minister to the introduction of a very timely social partnership Act, and that will put social partnership between trade unions, business and Welsh Government on a statutory basis. But can I just highlight one bit in there that I'm very pleased is in the report? It is recognising the link between collective bargaining, trade union membership and poverty. And we see this actually globally across Europe. The International Labour Organization has recently published incredibly valuable information, and it actually shows that, where there is collective bargaining, where working people actually have a voice within what happens within the industry, within society, their actual terms and conditions are better and the wealth gap—they're not pitted one against the other on a downward spiral to the lowest common denominator.

And might I suggest that there are three key criteria in a social partnership Act? One is obviously putting that partnership on a legislative footing. The second one is using our procurement of £5 billion to £6 billion a year. If companies want a share of that public funding, surely it is not unreasonable for us to establish and to set ethical standards of employment. Because if there was one fundamental principle that we can underwrite within this Assembly, within Wales, within the UK and further afield, it is this: if someone works hard for a full week's work, then they should be entitled as a matter of right to a decent standard of living. That surely must be the minimum standard, and us using our procurement power to do that seems to me is right. And then the fundamental point that follows on from that—and the reason for an Act—is that monitoring and enforcement must be the case. We have seen the disregard to the enforcement of the minimum wage, and we mustn't make that mistake. So, it seems to me that that's very important.

So, in terms of the three questions I'd like to ask you, one is about a potential timetable for the introduction of the promised social partnership Act. Secondly, do you think there might be an opportunity within that to incorporate some of the International Labour Organization convention on fair work? And, thirdly, perhaps a timeline in respect of the commitment also—the very valuable commitment—to the implementation of section 1 of the Equality Act 2010, which the Tories in Westminster have refused to implement, but which would enable us to take further action in terms of the promotion of a socioeconomic duty within our society.

Thank you for that contribution. I entirely agree with the points that you've made. The report, I'm delighted to say—and I'll take this opportunity to just thank all of the fair work commissioners, who were, Deputy Presiding Officer, Professor Linda Dickens MBE, emeritus professor of industrial relations at the University of Warwick; Sharanne Basham-Pyke, the consultant director of Shad Consultancy Ltd; Professor Edmund Heery, Professor of employment relations at Cardiff Business School; and Sarah Veale CBE, who was head of the equality and employments rights department of the TUC until she retired in 2015. I think they've done a tremendous piece of work in a very short period of time. We set them a very tight deadline, with some trepidation, I have to say. I'm delighted by the piece of work that they've produced, but the timescale was driven by our desire to get the Act in place and the timing of it inside the Assembly term. So, that is the timetable, effectively.

They produced that piece of work; it's a very good piece of work. There'll be a rapid turnaround of our official response to that, then the conference in June for the taking forward of this in the tripartite social partnership—because that's, of course, the crux of it—with a view to getting a draft Act onto the Assembly floor as soon into the next autumn term as we can conceivably manage it. Mick Antoniw will be as familiar at least as I am, if not more familiar, with how far you've got to come back from the introduction of an Act in order to be able to get the instruction right, so time is of the essence. So, we want to get that in.

That Act will, I think, look to give teeth to the ethical procurement code of practice that we have so that people are rewarded for complying with it and for signing up to it, and we'll have to look to see whether there's something we can do where people breach it once they have signed up and so on. I think there is a whole set of things in the report—I know there's a whole set of things in the report about how we can embed proper collective bargaining across tiers of operation in our economy, not just in individual employers and so on. He will know at least as much, if not better than I do, how much trade union bargaining of that sort drove not only levels of pay—because this is not just about levels of pay; this is about levels of equality and share in the production that your labour produces. The report is very strong on that, I thought; I was very pleased to read that.

I would like to emphasise, at this point, that it is not causing our social partners any problem. That's why I'm able to say that this is consensual and very much in accordance with the Welsh traditions; I'm very pleased at that. And then, in terms of the equality Act duty, I completely agree with what he said. He will know that the Deputy Minister is taking forward the piece of research about how we can best encompass a rights agenda inside our legislation, building on the well-being of future generations Act and ensuring that we do enact the section 1 duty in the best possible way and how that leads across into the new Act that we are proposing.

I just want to say one final thing on this: this isn't just about procurement, although a procurement spend is very important and represents billions of pounds in our economy; this is about all Government funding. So, we will be looking to see what levers we can use to get fair work right across the economy in Wales, using all the levers of Government funding, and they are much more varied than just the procurement spend.

I'd like to welcome what I think is a very detailed and comprehensive report by the commission, Minister, and obviously it addresses issues that affect very many people right across Wales. In fact, I met with the commission as part of their evidence gathering as Chair of the Equalities, Local Government and Communities Committee, and I was very pleased with the commitment that I think they demonstrated at that meeting. There was a clear commitment to drawing up proposals that were workable and really would make a difference, which is entirely what I wanted to see. And, of course, the committee that I chair has carried out inquiries that are very relevant, particularly the inquiry on making low pay less prevalent across Wales, and also on parenting and employment, 'Work it out'. It's very pleasing, again, that many of the recommendations that we've made chime with the work and the recommendations of the commission, and we're very pleased to see that.

In particular, the commission has made recommendations identifying a voluntary living wage as the minimum wage floor for all fair work and seeking to establish guaranteed minimum hours as a default position for employment, both of which were recommendations from my equalities committee. And it's very encouraging that they say there should be no trade-off between the characteristics of fair work, highlighting the interaction between levels of pay and number and security of hours, which, I think, is really, really important and, again, something we highlighted in 'Making the economy work for people on low incomes'.

Minister, in terms of the recommendations that we've made in both those reports, the Government stated that it couldn't provide detailed responses while the Fair Work Commission was undertaking its work. Now that the report has been published, I would like to ask if the Government will now provide a more detailed response to my committee on those relevant recommendations. They were recommendations 18, 20, 21 and 22 in 'Making the economy work' and recommendations 9, 12, 28 and 34 in the parenting and employment report. Thank you.

Well, I'm more than happy to make that commitment, because that is exactly what we said: we wanted to see what the Fair Work Commission said. In developing our response to the Fair Work Commission's report on social partnership, I'll be very pleased to make the commitment that we will respond in detail to your committee's report. You're absolutely right in pointing out that it's really pleasing to see the read-across between them. We are indeed on the same page, so to speak, so I'm very happy to make that commitment. We can make sure that we take into account all the evidence that the committee took into account as well in working up our conference in June, which I hope you'll be able to be a part of.

Because we're almost saying trusims here. It's quite clearly obvious to me, anyway—and actually, from what Mark Isherwood said, across the Chamber, so far—that you should be able to earn enough money in your place of work that you don't need any kind of Government benefit, otherwise, the work that you're doing clearly isn't fairly remunerated and you're unlikely to have a secure place of work. That does not contribute to any of the things that we hold dear—family or community cohesion, economic growth, proper career structures in Government and so on. But also, from the business point of view, it doesn't contribute to them being a viable and economic entity likely to grow. If you're not able to pay your employees a fair remuneration, you're unlikely to have a good business plan in place that allows your business to grow properly. These are the flip sides of the same coin and we really do need to be able to help our businesses get to the point where they see that.

And that's why I'm so pleased that we're taking this forward in social partnership. And our social partners very much take that on board. So, there's been no disagreement here. And as we develop our response to the recommendations in detail, I'm not anticipating that we will have any kick-back from that. We need to take our employers with us along this journey, so that they too can turn into the vibrant, viable businesses that we need to make our workers have secure and economically fair jobs.

Thank you very much, Minister.