Mr Philip Hammond (Runnymede & Weybridge, Conservative)

I beg to move amendment No. 58, in page 37, line 16, leave out paragraph (c).

This is a probing amendment. It seeks to leave out clause 31(2)(c), which allows regulations to

''make provision treating proceedings begun out of time as begun within time.''

I have pondered on that for a while but I cannot see what the Minister is driving at. When will it be right and proper to treat proceedings begun out of time as being timely?

It may be fine to adjust time limits to reflect statutory procedures. That does not seem the same, however, as taking the power to decree that proceedings that are out of time are within time. Can the Minister clarify the exact circumstances in which that power will be appropriately deployed? I hope that it is precisely definable, because otherwise it is a rather sweeping power that could have serious consequences. If it is definable, why can it not be defined in the Bill, rather than being reserved as a regulation-making power?

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

The short answer is best given in an example, such as a case in which an employee is seriously ill and would have to have started the procedure within the three-month limit. We are making provision through regulation for treating proceedings begun out of time as begun within time. I am sorry: we are talking about beginning proceedings out of time. That would apply when the employee concerned-in, say, a dismissal case-is seriously ill and unable to attend the hearings or respond to the employer's inquiries.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Can the Minister be precise about what he means by ''begun''? It seems to me that proceedings would have been begun, even were the employee subsequently, for a prolonged period, unable to attend meetings or respond to the employer's inquiries. My understanding is that the Minister proposes to take a power to allow a proceeding to be begun after a long period, when no steps have previously been taken.

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

In exceptional circumstances, that will be the case. Most jurisdictions have a three-month time limit. Let us remember that we are looking to get disputes resolved in the workplace and to end the culture in which the IT1 and IT3 forms are flying about the system and there has not even been an attempt fully to resolve the issue in the workplace.

Mr George Osborne (Tatton, Conservative)

Is there not a paradox here? Schedule 2, which we debated previously, involved no time limits and the Government did not accept the amendments that my hon. Friend tabled to it. Here, however, we are talking about extending time limits for employment tribunal actions. What is to stop an employer or an employee spinning out the procedures to delay going to an employment tribunal?

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

The hon. Gentleman makes a good point, but there is a difference between this debate and those that we had on the basic three-step procedure, when we talked about ''reasonable'' time. If I remember rightly, that debate was about setting a period of a month. It is for the employer and employee to decide that matter.

The precise point that the hon. Gentleman made about the possibility of an employer spinning out the procedures will be discussed when we reach clause 33 on admissibility.

At the moment, most jurisdictions in schedule 3 have a three-month time limit for presenting a claim and the tribunal has the power to extend that time limit, generally where it believes that it was not reasonably practicable to have presented the claim within the time limit. We propose that complaints should not be regarded as out of time if a statutory procedure was begun within the normal period for complaining, but the application is made later, during an extended period of a further three months. Those extra three months would run from the expiry of the original three-month period. In some cases, a statutory procedure may not be commenced until after the expiry of the time limit, which would normally be when the claim itself was also out of time. We want to consider whether there should be any provision for extending the time limit if it was not reasonably practicable to have started the procedure within the time limit-for example, if the employee concerned was seriously ill.

In most jurisdictions, there will be three months to submit the claim, an extension of three months to allow internal procedures to be completed in exceptional circumstances, and a further two months if both parties agree that they have made sufficient progress to be able to resolve the case internally. That moves away from a procedure in which people focus on the employment tribunal almost as soon as the award has been made.

We are trying to deal with exceptional cases, of which the example of serious illness comes to mind and was raised during consultation. Given those assurances, I hope that the hon. Gentleman will be willing to withdraw the amendment.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Not entirely. I understand and agree with much of what the Minister said, but I still have reservations. Subsection (2)(b) gives him the power to

''make provision about the exercise of a discretion to extend the time for beginning proceedings''.

So in the case of a potential applicant who was seriously ill, the tribunal could extend the time for beginning proceedings. Unless I have misunderstood, subsection (2)(c) will be a retrospective power. Consequently, an employer who believed that he had no outstanding claims, and no potential for outstanding claims because the period for bringing claims had passed, could suddenly find himself subject to claims that were, on the face of it, way out of time. Subsection (2)(c) refers to making provision for

''treating proceedings begun out of time as begun within time''.

The Minister will respond that he would not make such regulations without imposing some backstop time limit-at least, I hope that he will. Nevertheless, if that backstop time limit was, say, five years, is it reasonable that somebody who is expecting a claim to be brought within the normal period of six months could suddenly find, two or three years later, that a claim is popping up from nowhere? I am sure that the Minister would not want to encourage that.

The legitimate situation that he describes, in which a person is seriously ill, would be better dealt with under subsection (2)(b). Subsection (2)(c), which is a retrospective power, appears to be unnecessary. Moreover, it could create a highly unsatisfactory situation for an employer who has had to dismiss several members of staff. He will know, when he does so, that it is possible that a claim will be brought. He will metaphorically hold his breath until the period for the making of a claim has passed, then regard himself as being free of potentially having to answer an application in the employment tribunal.

Can the Minister be more explicit about why he needs the power in subsection (2)(c) and confirm that it would operate retrospectively, unlike subsection (2)(b), whereby a discretion would be exercised before the deadline for extending the time limit? I assume that, under subsection (2)(c), discretion would operate retrospectively, so that an application that was brought after a year would be deemed to have been brought within six months. That would not be a good way to proceed, and I should be grateful for the Minister's clarification.

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

We can deal with the detail in the regulations. We want to ensure that a procedure started within the three-month period can be completed through an extension. However, my example concerned a discipline case. In a grievance case, the first time that most employers hear about the grievance is in the employment tribunal. In a grievance case in which the person who has made the complaint has been seriously ill, that person might not be in a position even to start the procedure until after the three-month period has elapsed. We are not talking about six years. We do not envisage that the regulations will stretch it even beyond a year. I hesitate to say what will be in the regulations, other than that it will be the subject of wide consultation.

We have to cater for this eventuality so that we are able to say to the person concerned, ''It's clear that you didn't have the opportunity to commence your claim within the three-month period.''

The hon. Gentleman asked about the backstop. That is a legitimate point, but it can be dealt with in the regulations. I am asking the Committee to accept the principle that we need to cater for people who could not even begin the process within three months.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

Will subsection (2)(c) operate rigidly? In other words, will the Minister specify circumstances in which proceedings begun out of time would always be treated as having been begun within time, or will he give the tribunal a discretionary power?

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

I would hope that we can be as tight as possible in terms of giving examples of where it could happen. However, I do not want to remove the tribunal's discretion. We cannot envisage in this Room all the circumstances that could arise whereby someone with a perfectly legitimate case to take to an employment tribunal has been debarred because of a lack of flexibility.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

With respect to the Minister, if he wants to give the tribunal the power to deem that an application made out of time is treated as having been made within time, the wording of subsection (2)(c) is faulty. It allows regulations to make provision treating proceedings begun out of time as having been begun within time, but does not allow them to make provision to allow a tribunal to treat proceedings begun out time as having been begun within time. The draftsman seems to have in mind a set of circumstances in which proceedings begun out of time would in certain circumstances be deemed to have begun within time.

I am encouraged by the Minister's recognition that there needs to be a backstop date. I shall give him a simple, practical, everyday example of where the provision might be onerous for the owner of a business. When selling a business, it is customary to be required to make a series of warranties about the state of the business, one of which will typically be that there are no outstanding claims by employees and no claims that are capable of being made by employees-in other words, that any event that could give rise to a claim is already out of time. The prudent vendor would have to disclose a circumstance that had occurred at a time that meant that any claim was by then out of time but still potentially within the remit of subsection (2)(c).

It would be helpful if the Minister could throw light on what the draftsman precisely intended in 2(c). The purpose of the amendment has largely been served by focusing the debate on what the period of time, or backstop date, should be. We could have the debate when the regulations are published, but I suspect that they will be chunky and that many similar issues, which are not exactly earth-shattering but are none the less important, will be raised. During a 90-minute debate, not everything will be dealt with, so either on Report or in the other place, the matter should be further probed.

Understandably, the Minister did not want to commit himself to a year, but I sense that he was tempted by the idea that a year might be the right backstop. If, later in the Bill's passage, he were able to give a clearer indication of a backstop so that an employer could know that he was definitely clear of liability for a claim, that would also be helpful.

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

In the case of warranties, an employment tribunal has the discretion to extend the time limit-there is no time limit, in effect-where it is not reasonably practicable for the individual to submit the case. That discretion exists and I hesitate to interfere with it; we want to supplement it with defined circumstances and a time limit in the regulations, but we do not want to detract from the tribunal's discretion, which is rarely used at the moment. That will not make the employers' position any worse, as the hon. Gentleman said, and it will make it a great deal better in the circumstances to be defined in the regulations.

Mr Philip Hammond (Runnymede & Weybridge, Conservative)

That is helpful and has thrown light on the issue. I will reflect on it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 ordered to stand part of the Bill.