Mr Norman Lamb (North Norfolk, Liberal Democrat)

I beg to move amendment No. 29, in page 57, line 8, after 'writing', insert

'in the form of a statement.'.

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

With this it will be convenient to discuss amendment No. 30, in page 57, line 12, at end insert—

'(3) Where the employer contemplates dismissing or taking disciplinary action against the employee for a reason other than redundancy, then the employer must investigate fully before preparing the statement.'.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

Welcome to the Chair, Mr. Conway. I am not sure whether protocol dictates that I should have welcomed you when I intervened earlier. I hope that it will be a pleasure to serve under your chairmanship, although if I make to many mistakes, I may regret saying that.

Amendment No. 29 is a tidying amendment. Paragraph (2) of step 1 of the standard procedure refers to ''the statement''. Paragraph (1) of step 1 states:

''The employer must set out in writing the employee's alleged conduct or characteristics'',

but it does not refer to a statement. I am sure that the statement referred to in paragraph (2) is what the employer would have written down under paragraph (1), but it would achieve greater clarity if paragraph (1) included the words

''in the form of a statement''.

Amendment No. 30 deals with the inter-relationship between the ACAS code and the standard procedure. As the Minister said, the standard procedure sets out the minimum standards that employers must comply with—the bottom line, as it were. We believe that, as well as what is already included, the bottom line must include the principle of investigation. The standard procedure already sets out certain basic requirements. For example, there must be a meeting, and something must be set out in writing beforehand, but the procedure says nothing about the need for an employer to investigate the matter before calling the meeting. We would all agree, I am sure, that that must be a requirement of a fair procedure. It would give sensible and helpful guidance to small employers as well as large.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Perhaps, taking up the example given by my hon. Friend the Member for Tatton, the hon. Gentleman could explain what could be investigated if the basis for dismissal was that the employee had punched the employer. What investigation would he expect the employer to undertake before giving the employee a written statement saying that he was on his way?

Mr Norman Lamb (North Norfolk, Liberal Democrat)

The schedule deals with the law that the tribunals already work under. The level of investigation will inevitably vary, depending on the facts of the case. I agree that there have been some stark examples of misconduct—for instance, of someone being hit in the face—but those people may have been provoked. For a tribunal not to investigate the facts that surround such an incident may render a dismissal unfair under existing law. Is the hon. Gentleman suggesting that it is not appropriate to investigate?

Mr George Osborne (Tatton, Conservative)

To build on the point raised by my hon. Friend the Member for Runnymede and Weybridge, would the hon. Gentleman expect the employer to investigate a serious case of sexual harassment in a two-person company where there is only an employer-employee relationship?

Mr Norman Lamb (North Norfolk, Liberal Democrat)

The hon. Gentleman is referring to an employer who sexually harasses an employee, and that employer would hardly bring disciplinary proceedings against himself. I am not sure that I understand the hon. Gentleman's point, but I suspect that it is rather trivial. We all understand that there is a basic principle of investigation.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I accept that we are using slightly absurd examples, but the underlying issue is important. In amendment No. 30, the hon. Gentleman seeks to require an employer to investigate every case. Although investigation will be appropriate in many cases, it clearly will not be appropriate, or even possible, in every case.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

In all my experience of employment law over about 10 years, I have never come across a case in which it was not appropriate to investigate the circumstances of an allegation against an employee before conducting a meeting to determine his guilt. The level of investigation inevitably varies from case to case—sometimes it is quite complex, but sometimes it can be completed without much delay. It must, however, be appropriate to investigate all cases.

Step 1 makes it clear that we are talking not simply about dismissals that could result from an allegation of misconduct, and the wording of the schedule suggests that we are talking about dismissals for a whole range of reasons. All the appropriate steps must be followed, whether an employer contemplates dismissal on the grounds of redundancy, performance, sickness absence or incapability. The Minister is nodding, which is helpful, but I would be grateful if he could confirm the position in his response.

I am concerned about how the schedule's procedural requirements compare with, for example, case law guidance on consultation with an employee over redundancy. The schedule says nothing about consultation, although it talks about a meeting and an appeal. We need much greater clarity about how the schedule compares with existing case law guidance on consultation on redundancy, and the Minister's response would be a good place to start.

The purpose of the ACAS code is primarily to deal with misconduct, and it talks about disciplinary proceedings. As I suggested, however, dismissal under the Bill could be for a range of reasons. The Employment Rights Act 1996 sets out five potentially fair reasons, including redundancy and incapability, either through poor performance or ill health. I need to understand better how the standard procedure in the Bill compares with existing case law guidance on dealing with dismissals other than those envisaged in the ACAS code, which deals with misconduct. As I said, the procedure applies to many different reasons for dismissal.

To return to the amendment, the basic statutory minimum procedure for dismissal and disciplinary matters has been widely welcomed. The schedule forms the basis for an improved approach. I accept what the Minister says about all those workplaces that have no procedures in place. The schedule would impose basic procedures on contracts of employment. The Confederation of British Industry commented that the new procedures would be of great benefit to small businesses, many of which have no procedures in place. The existence of the new minimum resolution procedures should help to encourage the resolution of disputes in the workplace and, hopefully, reduce litigation.

Although the TUC generally welcomes the introduction of the new procedures, it has spoken of its fears that the new minimum procedures may supplant the ACAS code of practice, as has the National Association of Citizens Advice Bureaux. Their concern is that, with the reversal of the Polkey principle, employers may be likely to run through the minimum statutory procedures with little or no reference to existing additional procedures or little adherence to basic principles of natural justice. That is why incorporating a requirement for investigation is important. The NACAB states:

''In our view, any move away from the present widespread use of the ACAS Code and Handbook as a 'benchmark of what the employer should have done' would be a retrograde step.''

Yet from an employer's point of view, the fact that an employee will not win an unfair dismissal claim simply because of a procedural failing beyond the basic requirements of the standard procedure is a welcome step and has the advantage of making clearer to employers what they should do.

In a recent survey conducted by the Forum of Private Business, one small business owner commented on the reversal of Polkey:

''Small businesses now live in fear of inadvertently falling foul of employment law through the lapse of procedure rather than by bending the rules or purposely flouting them. Any amendment to reduce time wasters will be welcome.''

Another said

''Most small employers do not have the resources to deal with unreasonable employees. The growing burden of employment legislation is as frightening to a well meaning employer as a minefield.''

Our dilemma is how to reconcile the rights and needs of both employer and employee. Amendment No. 30 is designed to reconcile those interests by imposing a requirement on employers to investigate fully the circumstances surrounding an employee's dismissal before preparing a written statement, as required in schedule 2, outlining the employee's alleged misconduct, behaviour, poor performance or sickness absence.

I am not especially proud of the wording of the amendment, but it is a probing amendment to urge the Government to consider further what provisions the standard procedure should contain as the bottom line. The requirement to investigate will remind employers about the need for basic fairness and the need to comply with natural justice. The fact that they will no longer be in fear of litigation as a result of a failure to adhere to a technical detail of their more extensive procedures is welcome, but the requirement in the standard procedure for an investigation must be enhanced, other than in circumstances of redundancy where investigation is inappropriate.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Perhaps the hon. Gentleman will forgive my ignorance as a non-specialist, but it is not immediately apparent to me why investigation would be inappropriate in cases of redundancy but appropriate in every other case. Presumably, on the hon. Gentleman's logic, it would be necessary to establish that the redundancy was genuine.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

What we are driving at is that in any dismissals that involve the conduct of an employee, whether it is the extent of their sickness absence, poor performance or misconduct, the employee's actions need to be investigated. That is already a principle of law, and it should be enshrined in the Bill.

With regard to redundancy, the employee's conduct is not an issue. It is more a question of looking to see whether the business has a reduced need for employees. Therefore, the concept of investigation is not appropriate in cases of redundancy, although it is appropriate in other circumstances.

Mr Tony Lloyd (Manchester Central, Labour)

I support the inquiring nature of the comments made by the hon. Member for North Norfolk (Norman Lamb). He raises an important issue, which I suspect has not been thought through by many hon. Members. Although this aspect of the provisions was probably regarded as applying mainly to disciplinary procedures, it can apply to redundancy. It is important that the procedures relating to redundancy, like those relating to all other forms of action, are fair, although redundancy contains no disciplinary element. Therefore, I hope that the Minister will respond to the hon. Gentleman's comments.

I want to concentrate on the need properly to investigate. The wording of the amendment is clumsy, which the hon. Gentleman conceded. I appreciate that some of us have our doubts about whether the ACAS code is all that it should be, but its wording is helpful. It states:

''The employer must establish the facts promptly.''

Opposition Members raised the issue of the one-employee business. In the case of sexual harassment, where the employer harasses the employee, it is beyond doubt that the grievance procedure would apply. However, if the employee harasses the employer, disciplinary procedures would apply. It would not be an unreasonable defence for the employer to say that, as the victim of harassment, he or she was aware of the facts. That would be a copper-bottomed defence before a tribunal.

Employers must know that they have a responsibility properly to establish the facts. It would be astonishing if an employer were entitled to take disciplinary action without knowing the facts. That relates to the Minister's statement in a previous debate that, although the requirement to investigate is not included in schedule 2, tribunals would most certainly consider whether the employer had properly investigated. That is a paraphrase, but I am sure that the Minister will tell me if I am grossly misquoting him. However, if that is the case, there is genuine merit in employers knowing that there is such a requirement.

I accept that we should not overload small businesses or give them any unthought-through surprises in the legislation. Frankly, I think that most reasonable employers would assume that they had a responsibility to establish the facts before acting. That is simply common sense, and I hope that we can all agree on that.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The hon. Gentleman uses the term ''establish the facts'' rather than ''investigate fully''. I am far more tempted by the idea that any reasonable person would want to establish the facts before they committed anything to writing.

I want to probe the hon. Gentleman on the matter, because he may have some knowledge of it. There is nothing obvious to suggest that the piece of writing in which the employer described the employee's misconduct would be privileged. Therefore, the employer would be prudent to establish the facts, because he might be sued for libel if he accused the employee in writing of doing something that he had not done.

Mr Tony Lloyd (Manchester Central, Labour)

As ever, I seek to be well briefed. I think that I heard the word ''privilege''.

Mr Rob Marris (Wolverhampton South West, Labour)

Perhaps I can describe a hypothetical scenario. If I were on a one on one with the hon. Member for Runnymede and Weybridge—just the two of us were in the room—and I told him that he was the biggest thief that I had ever come across, he could not sue for defamation because the situation would be one on one. I would not be lowering the esteem in which he was held in the minds of right-thinking people. Therefore, a letter from an employer to an employee that said that his conduct was dishonest could not give rise to defamation.

Mr Tony Lloyd (Manchester Central, Labour)

Of course, the intervention was directed to me, although the allegation of lying was directed at Opposition Members.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

I can add to the explanation just given. When something is written down as part of a disciplinary procedure, qualified privilege applies. That means that unless it has been written down from malice, no claim can be made against the employer who has written it down. Therefore, there is no great threat to an employer who writes something that turns out not to be true.

In addition, few employees have the wherewithal or financial clout to pursue defamation actions, which tend to cost tens of thousands of pounds. There is simply no sufficient control on the employer to prevent him from writing down things that turn out not to be true.

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

Order. Before the hon. Gentleman responds, I remind the Committee that, although we can debate broadly in Committee, if hon. Members intervene they must direct their remarks to the hon. Member who has the Floor. If that is not done, I will be disciplined by the Speaker.

Mr Tony Lloyd (Manchester Central, Labour)

That was a dynamic demonstration of the flexibility of our procedures. The hon. Member for Runnymede and Weybridge posed a question and my two legal advisers took it up on my behalf. The words were mine, but they came from other mouths. However, we can make some progress if we examine the intention here. The hon. Gentleman said that he was more tempted by one interpretation than the other—I do not know how tempted he is. Perhaps he will tell us.

We have established the simple point that any reasonable person would assume that an employer or employee would take steps to establish the facts if it were necessary, or would at any rate be privy to the facts. In terms of the hypothetical and real cases that we have discussed when the employer was the victim, one would assume that he would be well aware of the facts. The alternative would be that the employer could act without knowing the facts, which would be unreasonable, and, one hopes, would be judged unreasonable by the tribunal.

If it is obvious that if the situation is universal and all employers find themselves bound in the same way, we are no longer discussing an area about which a tribunal may come to a judgment. If that is the case, in fairness to all parties, there would be genuine merit in having the duty on employers in the schedule. That would not merely be a device—there would be genuine merit in the amendment. After all, it is an easy and a common-sense duty, but having it there would remind them that if they failed to subscribe to it, they would find themselves judged by the tribunal, which would find against them. I urge my hon. Friend the Minister to consider not the form of words—it is defective in that ''establishment of facts'' is better than the wording of the amendment—but the spirit of the amendment, which should command support across the Committee.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

Our debates have become much more exciting under your chairmanship, Mr. Conway. We have had a debate full of sex and violence. My pulse is racing and I shall try to calm down. All amendments are well meaning. Some, as George Orwell might have said, are more well meaning than others. Amendment No. 29 is particularly well meaning. Our common aim is to ensure that schedule 2 is clear and unambiguous, and the hon. Member for North Norfolk thinks that paragraph 1 of the schedule gives scope for confusion. The paragraph refers to the written communication that the employer must send the employee under the standard statutory dismissal and disciplinary procedure. That communication is described as a statement in paragraph 1(2) but that term is not used in paragraph 1(1), where the employer is required to set out the issue in writing. The amendment therefore seeks to introduce a further link between the two sub-paragraphs, so it is well meaning.

I do not agree that a problem exists; the statement mentioned in paragraph 1(2) can have only one meaning in the context. No one could infer that two documents would be involved. The wording is clear. It will not cause any confusion to employers, employees or tribunals. It is unnecessary to include the additional wording. I hope that the hon. Gentleman will accept that and will withdraw his amendment.

The excitement concerned amendment No. 30, which also deals with schedule 2. That sets out the statutory dispute resolution procedure. Once again, I stress that we are talking about minimums. We know that the ACAS code also assigns a role to investigation and most existing procedures are more detailed than the proposed statutory minimums. The amendment seeks to introduce a compulsory investigatory stage into the standard dismissal and disciplinary procedure. I understand the points made by the hon. Member for North Norfolk and by my hon. Friend the Member for Manchester, Central.

Sitting suspended for a Division in the House.

On resuming—

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I can understand why the amendment has been tabled. Investigations, the discovery of facts and the taking of evidence are all important and we do not argue with that. However, I am not convinced that they have a place in the statutory procedure and I will explain why.

The standard procedure currently requires the employer to set out the problem in writing, then there is a requirement to meet and discuss the issue, after which the employer must inform the employee of his decision. The next step involves an appeal, after which the employer must reach his final decision and inform the employee accordingly. Those are clearly defined actions given that they are statutory minimum procedures that will affect how far the employment tribunal system can be entered into. They will also determine whether a case is automatically unfair. Later, we will explain that procedures have to be met or dismissal will automatically be unfair.

If those steps have been taken and applied to individual cases, that should be relatively easy to verify. That is integral to the operation of clauses 31 to 34. We want to avoid having the tribunal system bogged down by the consideration of endless complex disputes about the application of statutory procedures. We want clarity for employers and for employees. Wherever possible, we have avoided introducing general and unspecific statutory obligations and the amendment would frustrate that aim.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

I accept that there is a case for keeping things simple, but does the Minister acknowledge that without a requirement for investigation, there are bound to be endless cases in tribunals where no investigation has taken place and the employers will argue that that had made no difference. They will say that they would have dismissed the employee anyway, and that might make the outcome a case of fair dismissal. It will be difficult for tribunals to reach a proper view on whether the additional procedural requirement, which is not set out in the standard procedure, would have made a difference. Many cases will therefore end up with the finding of fair dismissal without an investigation having taken place because the employer has managed to persuade the tribunal that an investigation would not have made a difference.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I do not accept that. We are talking about the statutory minimum and about what is necessary, not about what might be sufficient when the case comes before the tribunal. We have avoided introducing general unspecific obligations, and the amendment makes unclear the precise actions that employers would need to undertake fully to investigate a case. How should evidence be assembled and does investigation always require the taking of witness statements? Should fellow employees, as well as line managers be interviewed? Should a third party—say, customers—be involved? Should the accused individual be interviewed, and if he is, how would that square with the step 2 meeting?

I accept that the hon. Member for North Norfolk said that the amendment is not perfect, but it still implies that investigations should be full and that suggests that they would occur solely at the start of the process and before the employer writes to the employee. In practice, that would be undesirable. Often further investigations are required later in the process as other issues are raised by the employee in his or her defence. I am sure that the hon. Gentleman would not want to limit investigations in that way, but that would be the effect of the amendment. That illustrates how difficult it is to draft a clear, yet flexible set of investigative duties for the employer.

Of course, we do not want to discourage parties from fully investigating complaints or to dissuade employers from using more elaborate and customised procedures. We expect many parties, especially but not exclusively large organisations, to go beyond the minimum. That will be largely a matter for them to determine, drawing on the ACAS code.

I am afraid that I cannot accept the amendment. The schedule should be seen as establishing the core elements of procedures that should be applicable in a wide range of circumstances. We do not object to investigations or to fact-finding in themselves, but to the inadvisability of explicitly placing them within the statutory procedure. I hope that in the light of that explanation the hon. Gentleman will feel able to withdraw the amendment.

Mr Rob Marris (Wolverhampton South West, Labour)

I want to explore further what the Minister said in response to the hon. Member for North Norfolk. I am concerned that an employer who does not investigate and ends up before a tribunal could say, ''Well, I complied with the schedule 2 statutory minimum, so I didn't have to investigate. If Parliament had intended that an investigation should take place, it should be stated in the schedule.'' The applicant may then say, ''Ah, but you should have investigated under the ACAS code,'' because, as the Minister said, if the investigation is not carried out under schedule 2 the matter will be considered by the employment tribunal. The employer could respond, ''But under clause 34 it would have made no difference anyway, so I am off the hook on that one as well.''

I urge the Minister to reconsider investigation. When one tries to establish a simple and straightforward procedure in an Act, there is a danger of making it too simple, leaving oneself open to the attack at an industrial tribunal that, ''If Parliament had intended that, it would have stated it.''

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am interested that the hon. Gentleman has adopted the language that the hon. Member for North Norfolk used in the amendment—that is, investigating—rather than the Minister's term, establishing the facts. Is that a conscious decision on his part and, if so, can he explain why?

Mr Rob Marris (Wolverhampton South West, Labour)

The exact words used are not important. I used the word ''investigate'' because that is the word in the amendment. If there were some other formulation encompassing a spirit of inquiry, I would be happy to use it.

The ACAS code says that the employer must establish the facts promptly and, where appropriate, have taken statements from available witnesses. That brings us back to the establishing of facts that my hon. Friend the Member for Manchester, Central mentioned. I would be pleased to see such a formulation included in the schedule. I am worried that an employer may be able get round schedule 2 and clause 34 and avoid an investigation by saying that it would have made no difference anyway. That goes against the whole spirit of what the Government are trying to do as a statutory minimum.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

It would be a foolish employer who would take that view. Let us be clear about this. We are talking about what is necessary, not what may be sufficient. Every element of the system is discernible because it is so important. Clause 34 provides for the no difference test and other clauses deal with admissibility. The whole ethos and thrust of our proposals is that these are internal procedures and they should be used. Mitigation is involved if one has not used them and cannot establish that one has done so.

This is a simple three-step procedure that can be verified at each stage. Was the letter sent? Did they have the meeting to discuss the issues and convey the decision to the employee? Did they have the appeal? To bring in the question of whether there was an investigation clouds the whole issue at an important point in the procedure. Are they to be given a three-month extension to enable them to complete the proceedings? The employer would be foolish in those circumstances because the facts of the case would come out at the tribunal. The ACAS code is clear, and there is no doubt that the tribunal would insist that the size of the company should be taken into account in all cases. It is unlikely that the code would not apply in terms of establishing the facts.

If the need to investigate were part of the statutory procedures, one would run the risk of employers thinking that they are protected because they have gone through the motions. It would be possible to argue that one has investigated a particular case by considering it for two hours on a Thursday afternoon, but once the case was explored in more detail at tribunal it would become apparent that the investigation was a perfunctory exercise in going through the motions. The duty to investigate and establish the facts is in section 98(4) of the Employment Rights Act 1996, and it ensures that a dismissal will be unfair if an employer has not taken adequate steps to find out the facts. It is not the ACAS code that is at issue, although it may be relevant. There is no need to add an element of uncertainty to the statutory procedures.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The Minister has described a perfunctory investigation as going through the motions, which introduces an interesting concept. Is he saying that in order to comply with the standard procedure the tribunal would want to look behind the mere fact that the meeting took place, and inquire into the state of mind in which individuals approached that meeting? Would he describe a meeting as perfunctory if the employer did not approach it in a genuine spirit of trying to resolve the matter? I am curious as to whether the concern about perfunctoriness that he has raised pervades the whole of the procedure.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

No. The three-step procedure must be complied with otherwise the dismissal is automatically unfair and one does not get past first base. Whether the employer conducted the meeting in the way suggested by the hon. Gentleman would come out at the hearing stage as the case progresses through the employment tribunal. There is no argument between us on the principle, but there is a point about how we should frame the statutory procedures. The wording of the amendment is deficient because it suggests that one must have a full investigation. In many cases, the investigation would take place at other stages in the process. The amendment is unnecessary in terms of the concerns expressed by my hon. Friends because of section 98(4) of the 1996 Act. The hon. Member for North Norfolk should withdraw the amendment, and if he does not do so the Committee should oppose it.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

I am happy to withdraw the amendment. Amendment No. 30 was a probing amendment. In the case of the tidying-up amendment, I agree with the Minister that it is sufficient to refer to the statement in schedule 2(1)(2). However, I would like him to consider the issue further and take account of the concerns expressed by both Government and Opposition Members.

The Minister states that everything in the standard procedure is discernable. In the sense that a meeting is a meeting that is true, but a meeting that ended in three minutes would allow an employer to say, ''I have complied with the standard procedure.'' However, in all other senses, and certainly under the ACAS code, it would not amount to a fair dismissal because of the deficiency of that meeting. Something that is ''set out in writing'' could establish in detail allegations against, or concerns about, an employee, or it could be very perfunctory. The standard procedure appears discernible, but there is considerable latitude, so it would seem sensible to set out a basic requirement of investigation. I concede that the hon. Member for Manchester, Central has thought of a much better way of establishing the facts, and the wording in the ACAS code would indeed meet our concerns adequately.

I urge the Minister to consider establishing a basic requirement to ascertain the facts. He has mentioned measures that go beyond the standard procedure, but in our view—many on the Government Benches seem to agree—part of the bottom line should be a basic requirement to establish the facts. As I have said, employers will be able to argue endlessly at tribunal that, because they followed the standard procedure, the dismissal was fair and the failure to establish the facts properly made no difference.

My amendment draws a distinction between dismissal on the ground of redundancy and other types of dismissal. I should like the Minister to explain further how the new standard procedure overlays existing case law guidance on procedures that must be followed in a proposed redundancy case. Neither the explanatory notes nor anything that has been said today has made that clear. It is terribly important that employers and employees understand the requirements for future redundancy cases, and if such clarification were given I would be prepared to withdraw the amendment.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I am sorry that I did not answer the hon. Gentleman's point—I meant to. The provision will apply in all circumstances, including individual redundancies. It will not apply to collective redundancies or to other collective procedures.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

Why would it not apply in cases involving more than one redundancy? I recognise that other statutory requirements apply in collective redundancy cases, but for the individual being made redundant, it makes no difference whether 10 people or 100 people are being made redundant at the same time. Under schedule 2 as drafted, it will make no difference whether it is a single or a collective redundancy; the requirement presumably applies to the individual.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

It will not apply to collective redundancies that are dealt with collectively by a trade union or other body.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

Where does the schedule say that?

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I do not know, but I know a man who does—[Laughter.] I shall post him a letter in a minute.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I beg to move amendment No. 69, in page 57, line 17, after 'employee', insert 'in writing'.

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

With this we may discuss the following amendments: No. 70, in page 57, line 21, at end insert 'in writing'.

No. 71, in page 57, line 27, after 'employee', insert 'in writing'.

No. 72, in page 58, line 2, at end insert 'in writing'.

No. 73, in page 58, line 6, after 'employee', insert 'in writing'.

No. 74, in page 58, line 19, after 'employee', insert 'in writing'.

No. 75, in page 58, line 23, at end insert 'in writing'.

No. 76, in page 58, line 27, after 'employee', insert 'in writing'.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I shall attempt to brief, and I shall not mind in the least if the Minister seeks in his reply to answer the last question raised by the hon. Member for North Norfolk. It was an interesting one and I, too, would be pleased to hear an answer to it.

The amendments probe the Minister on the question of whether all the steps in the procedure have to be dealt with in writing. The initial statement by the employer in the case of a dismissal or discipline procedure, and the initial statement by the employee in the case of a grievance procedure, clearly has to be in writing. It says so in the schedule. But it does not say that each of the subsequent steps must be in writing. After the appeal meeting, when, according to the schedule, the employer must inform the employee of his final decision, it seems self-evident that that must be in writing.

Without wishing to be over-bureaucratic, I would be horrified by the idea that a procedure that starts in writing can end up with the employer saying at the end of the appeal meeting, ''Right, that's it Fred, I have made my decision, you are still fired,'' with nothing appearing in writing. I hope that the Minister will tell me that this is unnecessary and that I have missed something, and that each of the steps will be in writing. I look forward to hearing that from him.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

No, I am not going to tell the hon. Member that. What I am going to explain is that we have to be clear and avoid being over-prescriptive. This is a concern that has been raised by my hon. Friends, and one in particular.

We have considered the matter carefully previously. The philosophy behind this is that we should give scope to the parties to choose whichever method of communication, written or verbal, suits them best, for some of the reasons that the hon. Member for Tatton mentioned in a previous debate. We have to remember that these procedures will apply to 960,000 micro-businesses employing between one and four people. Many of those businesses will not use written communication to any great extent. Indeed, some may have limited clerical facilities. The employer or the employee may also have poor literacy skills. Therefore, we have limited the written part of the standard procedure to step one, the definition of the issue—what is the issue, in terms of a grievance by the employee, or a discipline case by the employer against the employee? That is such a basic aspect of the entire process that it must be put in writing. Both parties will then share, as far as possible, a common understanding of the complaint.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

I entirely understand and accept what the Minister says about the importance of starting off with something in writing, but is it not equally important that there is clarity of understanding between the two sides as to the outcome of the investigation? If it is any step short of dismissal, not to have the next stages in writing, seems to be a recipe for a total lack of clarity and something that should be avoided. The Minister refers to the fact that small businesses may have limited clerical facilities, but if they can write one letter at the start, surely they can write a confirmation later.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I will go through that, because it is crucial to the issue. We have agreed that the basic point, in principle, has to be in writing, and then there is a common understanding of the issue. The modified grievance procedure is shorter, but it actually has more obligations to communicate in writing. We envisage that the modified grievance procedure would apply to a situation where an ex-employee wants to raise a grievance with a former employer, probably in terms of a constructive dismissal case. The practicalities of this special situation make it difficult to envisage that face-to-face communication would have much of a role. We make no provision for meetings to occur in the modified two-step procedure on a grievance. In this context it makes sense to require communication to be in writing. So, in the modified grievance procedure, it is in writing at both of those steps, because the employee has left the company and there is no face-to-face communication.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am surprised by what the Minister is saying. Does it not strike him that since it will be necessary to establish that standard procedure has been followed, that task will be made infinitely more difficult if there is no written evidence of the outcome of each step? The Minister spoke about people with limited literacy; there will also be those with limited language understanding capabilities. Does the Minister not think that having a written decision is the ultimate safeguard against misunderstanding? If nothing is in writing, is he not creating a situation in which there will almost inevitably be more dispute and misunderstanding? Even someone with a poor command of English can be given something in writing and have the opportunity to go away and have it explained to them. If they receive something only aurally, there will be every future opportunity for misunderstanding and dispute.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

It is a judgment. That would be going too far given that we are applying the legislation to all businesses, particularly very small ones in which there is an informal relationship between an employer and one or two employees. At the beginning of the process, information would have to be in writing because there is a reason to get to the core of the argument, the grievance or the discipline. I fully acknowledge the point made by the hon. Member for Runnymede and Weybridge that written communication has obvious advantages. It may help to avoid uncertainty, which could help employment tribunals if unresolved disputes are eventually referred to them.

The point about the dispute procedure is not how we roll the wicket for an employment tribunal case, but how to resolve disputes in the workplace. We want to help those who employ one or two employees to resolve issues before they reach tribunal. We must not lose sight of that.

Mr George Osborne (Tatton, Conservative)

How is a tribunal supposed to establish what took place in the in-work disciplinary procedures if no written evidence of it exists beyond the original piece of writing? My worries about the burdens on small business would be neatly dealt with if the Government accepted the amendment to clause 36, which will be moved later, dealing with removing small companies from the procedures.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

That would not be welcomed by small business. However, we will discuss clause 36 after we have dealt with clause 35. The hon. Gentleman raises the point that we must consider the situation at an employment tribunal. May I drag us back a little and emphasise that the three-step procedure is to help the employer and employee avoid getting to a tribunal in the first place? We are not always talking about cases of discipline and dismissal; all kinds of things come before an employment tribunal.

If I was an employer and the hon. Member for Runnymede and Weybridge was my one employee—[Interruption.] It may happen one day, although it would be unfortunate. A point is put in writing and I, as the employer, consider it. In my two-manned garage workshop in which we are repairing a car every day, it should be enough for me to say, ''You are quite right. Problem settled.'' To say to an employer that because we have a certain procedure he must find a word processor—I understand that that is something that is still used, although it is very 20th century—or a typewriter or pen and paper and be forced to complete every stage of the procedure, would be unnecessary and over-burdensome. Our proposals will not stop people from going through those steps, or from following the ACAS code that advises written communication.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

To continue the analogy, would not the Minister's employee be left entirely confused, since, under standard procedures, his misconduct would require the service of a written warning? Established disciplinary procedures, with guidance from the ACAS code of practice, clearly require employers to go through a process of verbal warning, written warning and so on. The confusion for both the employee and the employer will be that that imposes no requirement to put anything in writing, yet ordinary, established procedures clearly indicate that a written warning is appropriate. Where does the employer stand?

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

If a written warning is appropriate, a written warning is appropriate. We are talking about the three steps in the procedure: whether one would need to convey one's decision, having looked at the case, and having had the interview with the employee; whether one would need to write to say either that everything was fine or that the case was to be taken forward; and whether, having had an appeal hearing, one would need to inform the employee—again in writing—of the outcome of that hearing. ACAS would say that that was best practice; so would I, and so would everyone in the Room.

However, do we want more than 900,000 micro-businesses to have to put everything in writing on every occasion? Including that in the Bill would be onerous. We recognise that the balance between written and oral communication is a matter of judgment. We have opted for an approach that limits burdens on business, especially on small businesses, and provides reasonable flexibility. Employers have broadly welcomed that approach.

I should like to take advantage of the invitation to return to something that we discussed earlier. Although it is not in the Bill, we intend to ensure in the regulations that dismissal and disciplinary procedures will be used unless 20 or more redundancies are occurring and the law on collective redundancies applies. That is in the law already, as the hon. Member for Runnymede and Weybridge well knows. We also intend that in cases where fewer redundancies arise and the matter has been dealt with as a collective issue between the employer and the union. I hope that that clarification helps and that the hon. Gentleman will withdraw the amendments. If he does not, I hope that the Committee will resist them.

Mr Rob Marris (Wolverhampton South West, Labour)

I have some sympathy with the amendments. There seems to be a contradiction in what the Minister is suggesting. Given the procedure as a whole, at some point an employer needs to put something in writing and at some point an employee needs to put something in writing. We are expecting employees and employers either to be literate and to feel capable of communicating in the English language or, to use the Minister's words, to know a man who is. If we are thinking in terms of preventing cases from going to employment tribunals, the results of disciplinary procedures, in particular, should be put in writing.

For many of my constituents, English is not their first language—it might be one of the Asian languages or British sign language or whatever. Sometimes, both as Member of Parliament and as a solicitor before that, I have seen people in high dudgeon about an action that some authority has taken against them, and they bring a sheaf of papers when they come to see me. When one goes through the papers, one finds that the action about which they are incensed has not actually taken place; they have misunderstood. However, because they have the papers, one can explain that the problem that they thought they had is either a different problem or one that does not exist.

I could envisage, although I would not favour it, a whole procedure with nothing in writing. However, when bits are required in writing from both sides, that presupposes some kind of literacy and access to pen and paper or whatever at some stage on each side. In chapter 2 of part 2 of schedule 2, it is envisaged that the modified grievance procedure will come into play when the employee has been dismissed. In step 2, the decision of the employer has to be put in writing because a meeting is less likely, since the employee is no longer at the work premises. Why have that? Why not say that the employer could telephone the employee? It seems to be a contradiction and calls into doubt the clarity of schedule 2. Returning to what the Minister said earlier about giving another three months' extension to complete procedures, almost nothing in the procedures refers to any time limit at all.

Mr George Osborne (Tatton, Conservative)

I am delighted to see the hon. Gentleman take a broad approach to the role of a Government Back Bencher in a Standing Committee. Does he agree that if the case reached an employment tribunal—the Minister is right to say that we want to prevent cases from reaching that stage—it would be difficult for the tribunal to establish whether the procedures under schedule 2 had been correctly followed if there was nothing in writing?

Mr Rob Marris (Wolverhampton South West, Labour)

I agree with the general proposition that an absence of anything in writing might make it more difficult for an employment tribunal to establish that procedures had been followed. It might also take much longer at an employment tribunal to establish what had happened and what provisions had been complied with. The Government rightly seek to tackle not only the rising number of employment tribunal applications, but the time that each takes and, therefore, the waiting list for access to that procedure. Justice delayed is justice denied and costs business more. Indeed, it can cost the applicants more, as there may be more preparation time, to echo an earlier debate.

More procedure in written form might lessen the chances of the issues reaching employment tribunals at all. Cases that went to employment tribunals would be easier to decide if matters were in writing, and would probably be less time consuming. The lack of time limits is a related point. I appreciate that the Minister wants a fairly straightforward procedure, does not want to add all 24 pages of the ACAS code and has tried to strip the provisions back to their basics. I suggest that he has stripped them back too far. They need to be a little longer. The words ''in writing'' need to be added in various places, as does something to do with time limits, so that employees are certain what they should do and by when.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am interested in what the hon. Gentleman says. I imagine that he is telling the Committee that he will support my next amendment, No. 77, which deals with time limits.

Mr Ian Pearson (Assistant Whip (funded by HM Treasury); Dudley South, Labour)

I hope that my hon. Friend will not speak to it.

Mr Rob Marris (Wolverhampton South West, Labour)

As ever, I shall wait until we reach that debate and listen to it before I make up my mind.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

The debate has been interesting, and has genuinely surprised me. I did not table the amendment thinking that it would be highly controversial. I toyed for a moment with not bothering to table it, partly because there are so many points at which one would have to insert ''in writing'' that it would tedious to draft them all, and also on the assumption that the Minister would simply dismiss it and say that it was obvious that everything had to be in writing.

The Minister has made much of the idea that the amendment would impose yet another burden on small businesses, as they would have to find a piece of paper and a pen so as to write letters stating, ''Dear Mr. Bloggs, Having considered your case at our meeting last Thursday, I remain of the opinion that you are dismissed. Yours sincerely.'' The Minister seems to think that the amendment is adversarial, and that he can get to me by saying that it would impose a big burden on business. I do not agree.

The matter is one of principle, and is about rather more than placing a minor burden on one person or another. If a procedure is to be carried out, it should be seen to be carried out fairly, and everyone should be able to understand what has happened. If a degree of formality has been introduced through the original complaint from the employer having to be in writing, it seems outrageous, absurd and unthinkable that the process would not conclude in writing. Anything less is bound to lead to confusion and create the potential for genuine misunderstanding, clogging up the tribunal system with yet more cases.

It seems to me self evident that a process that begins in writing and involves communication between the parties must end with a written confirmation of the final decision. To have that communicated verbally at the end of the hearing is surely inadequate. Apart from anything else, it suggests to me a lack of consideration. I would expect the employer to confirm his position in writing following the appeal meeting, much as in the legal system a court hearing takes place and a judgment is delivered later.

I am not at all satisfied with what the Minister has said. It is a lay notion of a basic principle of justice that people should have the ultimate finding against them recorded in writing so that they can refer to it. The hon. Member for Wolverhampton, South-West made a good point about people whose first language is not English having a definitive document to which they can refer. If the decisions at each step of the process are conveyed in writing, there is no scope for misunderstanding, misinterpretation or the rewriting of history, which so often occurs when procedures are conducted orally.

There is no question in my mind that the procedure ought to be conducted in writing and that the additional burden that it will impose on someone who has already had to make a statement in writing at the beginning of the process is modest and worth bearing in the interest of ensuring that the process is fair and seen to be fair. The outcome must be incontrovertible, so that there is no scope for disputes to arise about what someone did or did not say during a process that was begun in writing but continued orally.

Therefore, I will urge my hon. Friends to support the amendment, which I will press to a Division. I urge Labour Members to consider carefully where they stand. The issue is not party political, it is simply a question of whether the Minister has struck the correct balance between convenience and justice. I would say that it is essential that the entire procedure be carried out in writing, in order to ensure that justice is done and seen to be done.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

As a new Member, I had very little idea of what to expect when attending my first Standing Committee. I had assumed, in my naivety, that the Government would accept an amendment that clarified the Bill and was generally perceived to be a common-sense measure. That was, perhaps, a naivety too far.

The process starts admirably and, as the Minister said, with clarity. It is disappointing that there is every chance of it descending into chaos and confusion, because it ends with no one quite knowing what has been said in the workplace, or with different parties interpreting it differently. Remarks could have been made in a few rushed moments, perhaps to someone who does not completely understand English, or whatever language the employer is using. The amendments would provide clarity for both the employer and the employee, and I support them.

Mr Tony Lloyd (Manchester Central, Labour)

I hope that my hon. Friend the Minister is able to say that he recognises the thrust of the argument, even if he is not happy with the amendments as drafted. A reasonable case has been made. The Minister would help Labour Members if he were to tell us, even in rejecting the amendments at this stage—and I support him in that, if he thinks it right—that he will, nevertheless, accept the spirit of what is proposed? Will he think hard about what is, on the face of it, a reasonable argument from both sides of the Committee?

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I appreciate that a reasonable argument has been put forward. When the hon. Member for North Norfolk has served on Standing Committees for a while, he will appreciate that what we do here is not for the sake of our health. I engaged in debate with my hon. Friend the Member for Wolverhampton, South-West on this matter. Whether to accept amendments is a matter of judgment. I assure the Committee that I shall consider the matter further and dwell on the points that have been made.

Opposition Members should be wary. We have been very concerned about what bureaucratic burdens we place on micro-businesses in particular, given that we want disputes to be resolved in the workplace. That was our starting point, and we consulted widely on the three-step procedure. The response was not that more of it should be in writing. The Small Business Council responded:

''I am very pleased that our ongoing pressure on this issue has led to these very clear measures, which are fair both to small businesses and their employees.''

The Confederation of British Industry stated:

''We are encouraged by the draft procedures laid down in the consultation document which are very straightforward in their approach and would urge the Government not to go beyond them.''

The Chartered Institute of Personnel and Development welcomed the proposals, and the Federation of Small Businesses said that they were clear.

I urge Opposition Members not to upset the fine balance of the three-step procedure. That will be a major concern for hon. Members on both sides, but the Opposition regularly raise such considerations. My hon. Friend the Member for Wolverhampton, South-West said that he preferred nothing in writing to a mish-mash. It is crucial that the first stage should be dealt with in writing. I am repeating myself, but this has been a long debate and the issue is important.

The first step must be dealt with in writing because an employer needs to know the grievance; alternatively, the employee needs to know the accusation. Should every stage after that be in writing? That would apply to employees as well. The employee who might struggle to put a case in writing would have to struggle again to put the decision to appeal in writing. The hon. Member for Runnymede and Weybridge says that only two lines would be needed. It should be remembered that when people are trying to resolve a dispute in the workplace, every time someone must sit down and write out the grievances, it spurs matters on—[Interruption.] These are important points that came up in consultation.

It is crucial to establish the first point in writing. Whether that approach is used in further stages of the procedure is a question of judgment.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am sorry to interrupt the Minister. He suggested that the requirement to inform the employer in writing of a wish to appeal would require the employee to restate the grievance. That is nonsense. If the process is already under way, all that the employee would have to do would be to write a letter stating, ''I have received your letter of the 10th; I wish to appeal.''

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I did not say it was required. I was commenting on the nature of the sort of events that we are considering and what would happen if, while an attempt was being made to solve a dispute in a workplace with one or two employees, the person concerned said, ''I am still unhappy with your decision'', before the appeal. After the first formal stage, that person would once again have to put something in writing.

We are considering what would be statutory requirements. Not adhering to them could, under the Bill, result in one's case being mitigated by 10 to 50 per cent. It is a matter of judgment whether it would be necessary to proceed in writing at later stages. ACAS advises that people should put such matters in writing, but as we have said before, there is a difference between what is necessary and what is sufficient.

We are trying to set down what is necessary and to frame the measure in such a way as to encourage the resolution of disputes in the workplace. I do not want hon. Members to think that I am being perverse. I would be delighted to accept some amendments—it would give me an easy life—but we have a duty, having consulted, to point out why it is important not simply to have a quick debate and move on. Having given that assurance, I shall reflect further. I hope that the Committee will reject the amendment.

Mr Charles Hendry (Wealden, Conservative)

I speak for the first time in this Committee. I believe that the Minister misunderstands the interests of small business. I record my interest as an employer, albeit on a scale rather smaller than Johnson Motors of Hull. The Minister said that he seeks to help small business, but the people most protected by this measure will be small businesses.

I have worked for companies large and small, and I have had my own small business. I do not know whether the Minister has ever worked for a small business—although, the way it is going, the Post Office will soon become one. However, the Minister will understand that the facilities available in different sorts of organisation can vary enormously. Such an issue in a large company would be handled by the personnel department, and everything would undoubtedly be committed to paper. Such a professional organisation would be capable of handling that, but small companies do not necessarily have such facilities.

One would hope that such disputes happen only once in an employer's career—it will not happen year after year—and both sides will certainly find it distinctly traumatic. The most traumatic part of all will be the first letter—for instance, to the person in Hull who services the Deputy Prime Minister's Jaguar—that says, ''Something has gone wrong, and you're not doing what we expected you to do. I am sorry to say it, but this is the end of our relationship. It is a matter for dismissal.'' That would fundamentally change the relationship between two people working in a small business.

Thereafter, the trauma will drive friendships apart, and it will sometimes be impossible for two such people to work together again. It is in the interests of both parties that everything thereafter that is crucial should be put in writing. Human nature dictates that if we have something deeply painful to say, we try not to say it face to face. It could be that the end of such a meeting, the employer may say, ''Let me think about this a bit more, and I'll see if we can find a way through it.'' A little while later, he may telephone his employee at home and say, ''I am sorry; I have thought about it more and the answer is no, we cannot resolve this.'' Or, worse, he may leave a message with that person's partner or on the answer phone, which the employee may say he never received, or he may leave a message with someone who works at the employee's home who does not have a good command of English. We are not told how the employee should be informed, but it is not adequate to leave it like that. The only way to protect both sides when a key decision is made is to commit it to paper.

The Minister says that he seeks to protect small businesses, but he is wrong. The people who stand to be most damaged are small business people; they may go through this only once but, if it goes to a tribunal, they will want to be able to show that they have done everything properly and that they have taken every possible precaution. Even at this late stage, I urge the Minister to think again.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

My hon. Friend has made his case admirably. What the Minister proposes will leave uncertainty. There is good reason for doing things in writing, especially if proceedings are likely to be controversial or if anything needs to be referred to again. That practice is well established, and the Minister has not made a case for departing from it.

The hon. Member for Manchester, Central suggested that he would be satisfied if the Minister indicated a willingness to reject the amendment but to return to the principle later. That is a common device, which I accept, for dealing with amendments on a complex subject or amendments that are poorly drafted that need to be abandoned and dealt with by the parliamentary draftsman. In the present case, the amendments would insert the words ''in writing'' into each provision. There is no scope for the parliamentary draftsman to improve the wording. It would be disingenuous of the Minister to say that he was sympathetic to the idea but not the phrasing of the amendments—[Interruption.] I accept that he has not said that.

In this case, I would withdraw the amendment only if I were persuaded that it required redrafting. I have not been persuaded, so I must press the amendment to a Division.

Mr Kevin Hughes (Doncaster North, Labour)

I urge the Minister to consider throwing a life belt to my hon. Friend the Member for Wolverhampton, South-West. He is a new Member who has given a gift to the Opposition. As soon as he agreed with the amendment, the Conservative Whip, the hon. Member for Wealden (Mr. Hendry), scurried to Members of other parties to stack up enough for a Division. That put my hon. Friend in a bit of a predicament.

My hon. Friend the Member for Manchester, Central counselled the Minister well: the Minister should consider the amendment seriously before Report. If he does not, my hon. Friend the Member for Wolverhampton, South-West will be in a dilemma, because Opposition Members have set a trap for him. Will the Minister consider the amendment seriously? That would allow us to discover whether the Opposition are serious about it.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

As always, I am grateful for my hon. Friend's advice, which I intend to take. If the hon. Member for Runnymede and Weybridge presses the amendment to a Division, we should reject it. I have made an important point, which we should pursue. The Committee is a good one; it should not be divided.

We consulted widely with small businesses. None of those that examined the simple three-step procedure asked for the procedures to be in writing. The hon. Member for Wealden (Mr. Hendry) made an eloquent speech, although I was slightly offended by references to the Post Office, Jaguars and Hull. The detail of his speech did not reflect our experience of consulting organisations. Although the hon. Gentleman may not be persuaded by the argument, and he is joined in that by a few Government Members, he should accept that we shall return to the issue after touching base with the small businesses that returned submissions in good faith.

I am also informed that an extra hour for each case would cost business £3 million. I know that hon. Members will take that into consideration; I work very quickly in my mental calculation on such matters. I assure the hon. Member for Runnymede and Weybridge that we will consider the amendment, but we will do so on the basis of our initial principle of light-touch regulation that does not add to bureaucracy. Some eloquent arguments have been made, but certainty is in the interests of small businesses. Whether the amendment is defeated or withdrawn, I will give it further informed consideration.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 12.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I beg to move amendment No. 77, in page 59, line 10, after 'taken', insert

'within one month of the previous step or action and in any case'.

Opposition Members are used to winning the argument but losing the vote. However, we are not used to winning the argument so convincingly but still losing the vote, so I am disappointed with that result.

I hope that this amendment will appeal to the hon. Member for Wolverhampton, South-West, because it would do precisely what he suggested was needed. It would beef up the reference in paragraph 12 of the schedule that steps in the procedure

''must be taken without unreasonable delay.''

In framing the amendment, I sought not to undermine the principle that no unreasonable delay should be the primary requirement. However, I seek to underpin that slightly nebulous concept with a fixed maximum period of one month between steps in the process. The amendment would ensure that each step and action was taken within one month of the previous one and in any case without unreasonable delay—in simple language, whichever period was the shorter.

I hope that the Minister might be persuaded that the amendment is a good idea. I am not persuaded that the phrase ''without unreasonable delay'' should be deleted and replaced with a fixed time, because in different cases, different periods will be reasonable or unreasonable. Ultimately, the individual circumstances of a case must be considered, but underpinning that with a fixed period would be the right way to make a statement about the speed of the process and the longest acceptable period.

I hope that the Minister will either accept the amendment or tell the Committee what he understands by the phrase ''without unreasonable delay''. He might want to put a shorter or longer period around that concept, and I look forward to hearing what he has to say.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

We have no wish to impose set time limits within the process, because that would create inflexibility. The hon. Gentleman says that the provision's wording is needed but insufficient. As the amendment recognises, in some cases, a month may be longer than a party needs to undertake a simple action. Indeed, taking a month might constitute an unreasonable delay. For example, why should an employee have to wait as long as a month after lodging an appeal before the employer arranges an appeal meeting?

However, just as importantly, the amendment fails to recognise that there may be cases in which it is reasonable to allow more than a month between actions in the process: for example, after their initial meeting, the parties in complex cases might agree that some form of detailed investigation should be undertaken, which might involve a third party or the establishment of a joint union-employer working group. Such steps outside the statutory procedure might be sensible in some circumstances.

We do not want to close off opportunities for parties to agree. Our ambition is that the procedure will resolve problems in the workplace, so we do not want to be overly prescriptive. The wording of paragraph 12 achieves the objective in a way that provides the necessary flexibility. I hope that the hon. Gentleman will withdraw the amendment.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Will the Minister issue guidance indicating how speedy the process should be in normal cases, allowing for the point that he just made?

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

No, but ACAS undoubtedly will. Timing is an important element of its code, and it will now have to take into account the new circumstances. ACAS is the best source of such guidance.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am somewhat persuaded by what the Minister says. Obviously, even in framing the amendment, I was acutely conscious that there could be cases in which a much longer period would be reasonable: for example, if one of the parties was seriously ill, it might be necessary to postpone a step.

The purpose of tabling my probing amendment was to ask the Minister for a definition of reasonable delay and how he intends to enforce the measure. Employers' groups have raised concerns about the vagueness of the term ''without unreasonable delay.'' ACAS guidance on best practice would be helpful. In the interest of—dare I say it?—speeding up the debate so that we can move to a more interesting part of the Bill, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

I beg to move amendment No. 31, in page 59, line 13, at beginning insert 'Notice,'.

Mr Derek Conway (Old Bexley & Sidcup, Conservative)

With this, it will be convenient to take amendment No. 47, in page 59, line 19, at end add—

'(4) The right referred to in section 10 of the Employment Relations Act 1999 to be accompanied by a single companion applies to meetings under this section.'.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

Part 3 of schedule 2 states the general requirements that apply to meetings. Paragraph 13(1) states that

''Timing and location of meetings must be reasonable.''

Inevitably, there is a certain amount of latitude in interpreting ''reasonable''. None the less, the requirement is imposed on the employer. As well, the conduct of such a meeting must allow both parties to explain their case. That, too, is reasonable.

However, a requirement to give an employee sufficient notice of such a meeting should also be included in the Bill. It must be recognised that the employee, like the employer, will probably need time to prepare his or her case so that the complaint can be dealt with fairly. Such a requirement is particularly relevant because the employee has the right under other legislation to be accompanied at such meetings by a chosen representative, who also would need time to prepare for the meeting. Given that the Bill already refers to the requirement that the timing and location of meetings must be reasonable, it seems sensible for it also to say that notice must be reasonable. I refer again to my earlier argument. This is a perfectly sensible amendment, and I urge the Minister to respond constructively.

Amendment No. 47 would detail the right to be accompanied in the Bill. Although the right to be accompanied to a formal hearing is contained in section 10 of the Employment Relations Act 1999, there is a clear concern that if the right to be accompanied in meetings under the new procedures is not set out as a basic requirement, employees will be unaware of their rights and employers left in doubt about the requirements on them.

The amendments are intended to provoke the Minister into considering the requirements. The requirement of notice is clear and straightforward. The concept of detailing in the Bill that employees have the right to be accompanied should add clarity. I urge the Committee to accept the amendments.

Mr Rob Marris (Wolverhampton South West, Labour)

Amendment No. 47 is perhaps a question of interpretation. My reading of section 10 of the 1999 Act is that when Parliament—of which I was not then privileged to be a Member—passed the Act, the word ''hearing'' was used. To most people, both lay and professional, ''hearing'' imports something different from ''meeting''. I am not sure about the amendment's wording for the reasons that I will lay out, but I am speaking to its spirit.

Will the Minister clarify whether the word ''hearing'' might be better used for step three, which is the appeal? I appreciate that, early in the procedure, there might be a meeting between two people over the bonnet of a Jaguar for example. However, for an appeal scenario, ''hearing'' would be better used and would import with it the right to be accompanied, which is not evident as the Bill stands. As I said in an earlier debate, if this were to become the subject of a legal dispute of tribunal proceedings, whichever party it suited is likely to say that, had Parliament intended this to be a hearing with the attendant right to be accompanied, it would have used ''hearing'' not ''meeting''. If ''hearing'' were used at certain points in the schedule, that would remove the need for amendment No. 47.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

The amendment would ensure that employers had to give reasonable advance notice of meetings held under the statutory procedures. I sympathise with the aim, and I would not encourage employers to hold at short notice meetings for which the employee and accompanying person had no time to prepare. However, that point is covered by the existing wording. Paragraph 13(1) requires that the timing of meetings should be reasonable, which should mean that meetings could not be arranged at times that are seriously inconvenient for employees or their accompanying colleagues. Notice would be of the timing of the meeting, and if it arrived only a short time before the meeting, it would not be reasonable. Similarly, it would be unreasonable to arrange meetings at times that would seriously disadvantage the employee because there was inadequate time to prepare. The amendment is unnecessary. The point is already covered sufficiently in the wording of the schedule.

The right to be accompanied by a trade union official or a fellow worker is crucial and we need to be clear about this. It will apply to virtually all meetings held under the statutory procedure. The relevant provision of the Employment Relations Act 1999 will therefore apply to these meetings. Among other things, that Act sets out arrangements to ensure that meetings are not called at times when the accompanying person cannot attend. In effect the provisions also provide a further set of protections to ensure that meetings are arranged at suitable times. We will look to ACAS to revise its code of practice on disciplinary and grievance procedures. The existing code already provides some guidance on the arrangement of meetings. We will be asking ACAS to see whether that advice could be refined to give guidance on the application of part 3 of the statutory procedures. The hon. Member's point about notices could be addressed in the revised code.

Mr Tony Lloyd (Manchester Central, Labour)

The Minister makes it clear that the principle of the right to be accompanied remains the same. My hon. Friend the Member for Wolverhampton, South-West simply expressed the concern that ''hearing'' might be interpreted by the tribunal in a narrow and restrictive sense and that ''meeting'' would not cover that. Lawyers and those familiar with tribunal proceedings have expressed concern about this. It is imperative that there is certainty in the Bill and that it enshrines the right to be accompanied.

If there is any doubt, will the Minister consider the wording? Words in Parliament are cheap enough. I am sure that there are many alternative wordings. We must ensure that every worker has the right to be accompanied. That is the spirit of the Employment Relations Act 1999. We must also ensure that no employer is unaware of that right. That may be done through the ACAS code or some other means.

I accept what my hon. Friend the Minister says today and I will support him, but it is imperative that he gets it right.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

I agree with my hon. Friend. On amendment No. 31, the right to be accompanied, which once again follows ACAS guidance and is now part of the code, reinforces the point about notices. I am now coming on to the more crucial point about amendment No. 47.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I am anxious to probe the Minister on that point. Was he saying that there is a right to have the meeting arranged at a time that is convenient to the representative accompanying the person, or merely not impossible for him? If he is saying that one cannot arrange a meeting in the middle of the night in the pub down the road that is obviously perfectly sensible. But is he saying that if a person wishes to be accompanied by a specific representative, the meeting has to be arranged around the availability of that representative? If so, he is introducing additional complexity into these arrangements, which he sought to reject when we dealt with notices in writing.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

That is an interesting point, but it is a different law. I was quoting from the Employment Relations Act 1999. That Act and its accompanying guidance states that if a person is to be accompanied to a meeting, to which they will be entitled under these procedures, the employer must ensure that meetings are not called at times when the accompanying person cannot attend.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Would that apply to this?

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

It would certainly apply to this.

I turn to amendment No. 47, which would ensure that the statutory procedures carry a specific reference to the right to be accompanied. That right is set out in legislation and applies to most meetings that are held under the grievance and disciplinary procedures. The exceptions are less important meetings that deal with grievances that do not affect statutory or contractual rights, and meetings in a disciplinary context that cannot lead to disciplinary action against a worker. That is the existing law on the right to be accompanied, although the Act did not require employers to adopt procedures. The Bill changes that. As I said, from last July, workers had the right to be accompanied to a grievance or discipline hearing, but did not have the right to have such a meeting to be accompanied to.

The Bill will require employers to have procedures and will give clear incentives to employers and employees to use them. Consequently, more meetings will be held under such procedures than would otherwise be the case, so more meetings will be held to which the right to be accompanied will apply. However, we intend to leave the right unchanged by the Bill, which is why there is no explicit reference to it in the schedule. We have avoided the risk of unintentionally changing or diluting the right.

Amendment No. 47 seriously runs that risk because its precise effects are unclear. It may mean that the right to be accompanied applies to all meetings held under the statutory procedures. An employee may have a grievance that his employer does not provide a car park. Employers do not have a statutory duty to provide car parks, and it makes no material difference to the employee's terms and conditions. The 1999 Act states that an employer would not have the right to be accompanied to pursue that grievance. The amendment highlights the danger that problems may be created if one tinkers with provisions. It suggests that the right that we want to preserve would be changed. If the amendment were accepted, the right may apply to meetings about trivial grievances that could not be the subject of a tribunal complaint. That would extend the ambit of the existing right. Even if the amendment does not affect the right, I am not convinced that it should be in the Bill.

I shall deal with the point of my hon. Friend the Member for Wolverhampton, South-West, which he raised with me last week. The words ''meeting'' and ''hearing'' have the same meaning in this context. The right to be accompanied will apply to virtually all meetings under the statutory procedure. We are absolutely clear about that. There are no mistakes in the wording meaning that a person would lose the right to be accompanied. There are no legal terms to refer to the right in the statutory procedure. The right will apply to meetings held under the statutory procedures as it does now to meetings held under the voluntary procedure.

I understand that the hon. Member for North Norfolk may want to include a reference to the right for presentational reasons because he thinks that more people will learn about the right from including it in the Bill. However, he did not mention that during his remarks. The law serves to define rights and responsibilities, not to publicise such rights. We must ensure that people understand fully the interaction between the right to be accompanied and the statutory procedures.

Mr Rob Marris (Wolverhampton South West, Labour)

May I take the Minister back a little way? When he clarified the right to be accompanied, he appeared to be quoting. I do not have the Employment Relations Act 1999 in front of me. However, I recall that section 10 refers to the right to be accompanied to a hearing. It would assist me greatly if he would indicate a different part of that Act or other legislation that refers to the right to be accompanied to meetings.

Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West & Hessle, Labour)

Perhaps I can write to my hon. Friend on that matter. The point raised was whether ''hearing'' and ''meeting'' had a different legal context, and I am absolutely satisfied that they do not. In terms of the terminology that we are using, ''meeting'' would be much better than ''hearing''. That does not dilute or change the right to be accompanied. In many ways, it strengthens that right, because there are measures on IT1 and IT3 forms, which would provide a useful opportunity to make sure that people are aware of their right to be accompanied. We will undertake a major publicity campaign alerting employers and others of the existence of the statutory procedures, which will publicise the existence of related law, especially the right to be accompanied. That is the proper way to raise awareness of that important statutory right. For all those reasons, the Government cannot accept the amendments.

Mr Norman Lamb (North Norfolk, Liberal Democrat)

I am happy not to press the amendments, which were probing. It is helpful to have it on record that the Government intend that the right to be accompanied should apply to these provisions. Equally, although I would have preferred a very clear provision, it is helpful that the Minister has made it clear that the Government intend to interpret the word ''timing'' as including a requirement for the notice of the meeting to be reasonable. Given that Hansard can be used in interpreting provisions, that goes some way towards satisfying my concerns. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Further consideration adjourned.—[Mr. Pearson.]