Clause 42 - Equal pay: questionnaires
Employment Bill
9:30 am

Mr Philip Hammond (Runnymede and Weybridge, Conservative)

Good morning, Mr. Amess. I beg to move amendment No. 217, in page 44, line 8, at end insert—

'(3A) Information received by a complainant in response to a form served on a respondent as prescribed in subsection (2) above shall be treated as confidential by the complainant and shall be used by the complainant only in relation to proceedings before an employment tribunal or an employment appeals tribunal.'.

We move on to part 4 of the Bill, which is misleadingly entitled, ''Miscellaneous and general''. That suggests that it contains odds and ends that do not require serious attention, but it actually contains some of the most contentious issues with which the Committee must deal. I am glad to say, however, that clause 42 is not such a headline issue.

Amendment No. 217, which seeks to insert an obligation of confidentiality on the recipient of information obtained under the questionnaire procedure into new section 7B, is intended to probe the Government on how they intend to deal with that issue, which, although it is not a matter of philosophical difference, is important.

Clause 42 proposes that an employee who considers that she may have a claim under the relevant section would be able to demand information from her employer, the respondent, who would be obliged to reply. Interestingly, the clause specifies ''she'', so there may be a presumption that it would be a female employee who would think that there might be a claim under the sex discrimination section. If the respondent failed to reply, a tribunal would be able to draw an inference from that failure, which would clearly be an unfavourable one.

The principal substantive concern expressed by employers about the principle behind the clause is that it might be used for what are known as ''fishing expeditions''. There is no limit on a complainant's ability to serve such questionnaires, and there is no limit on the questions that could be asked. That will be a method for uncovering information, although it may be that the information is demanded for the legitimate and wholly genuine purpose of dealing with a perceived case of unlawful discrimination.

The Minister would agree that this is not the place to get into a debate about the rights and wrongs of the current state of discrimination legislation. The point is that we have a body of discrimination legislation, and the clause addresses a practical point about how to pursue a case under it. It is possible that the legislation would be used properly, but it is also possible, and this does not take a great stretch of the imagination, that it would be used maliciously, improperly or abusively, and, most relevantly to the amendment, it could be used to uncover information that would normally be regarded as confidential.

It would be possible to find out how much another person in the workplace was being paid, and under what conditions they were employed. That information is usually regarded as confidential, and it is certainly sensitive. Of course, it may be germane to whether a person is being unlawfully discriminated against, but the Minister will concede that people in a given workplace are in many cases paid differently with no suggestion of unlawful discrimination. I admit that the point is less likely to apply in a traditional industry, where people stand next to each other on a production line, but it certainly applies in many office environments and high-tech industries, where, in effect, pay and conditions are negotiated in a manner that reflects individual skills and talents.

The problem is that the information obtained through the questionnaire will, in many cases, be highly sensitive. The amendment cannot achieve the whole of my objective—to prevent disclosure of that information, except in a specific case of sexual discrimination—but it would impose a duty of confidentiality on the recipient of the information. I expect that the Minister intends to impose just such a duty in regulations, but as the matter is of great importance, relating as it does to a person's fundamental right to privacy in their affairs, it must be dealt with not merely through regulations but in the Bill.

The Minister may also wish to address a broader problem. Even if his regulations impose a duty of confidentiality on the recipient of the information, damage will still have been done. As another person in the workplace, the recipient will have become privy to information normally considered confidential. I accept that the point does not apply to those who work in an industry where one's pay, conditions and terms of employment are publicly known, and one has a recognised, publicly acknowledged grade. I invite the Committee to consider, however, that for the person whose pay and conditions are negotiated individually, such information is as private and personal to him as are his medical records. Including in legislation a provision that gives a colleague whom he perhaps does not know, or who has a personal vendetta against him—it could even be a spouse who works in the same workplace—the statutory right to find out such confidential details could be dangerous and damaging.

I hope that the Minister will take on board the specific proposal in the amendment, but can he also say how he intends to protect the privacy of employees against the wider damage that I have just outlined?

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

The hon. Gentleman said that he does not consider this matter an important one of principle. However, when the former Department for Education and Employment consulted on it in December 2000, 90 per cent. of respondents, including many businesses, accepted the need to establish the same facilities for equal pay questionnaires as exist in other areas relating to discrimination.

Interestingly, the hon. Gentleman mentioned that the provision uses ''she''. That is indeed a small step forward for progressives. For years, legislation has been framed using male gender when it applied to both sexes. I confirm that the clause applies to both sexes, but ''she'' is used to mean both, as it is in sex discrimination legislation. The clause is one small step forward for womankind.

The amendment requires that all information provided in response to the questionnaire would be treated as confidential and could be used by the complainant only to take a case to tribunal. The hon. Gentleman said that his was a probing amendment, which is just as well, because it is technically deficient. If an individual wanted to take the case to a higher court—for instance, the European Court of Justice—he or she should not be prevented from relying on that information in such a court.

We know that the absence of transparency on pay information contributes to and perpetuates the gender pay gap. The purpose of introducing a questionnaire procedure is to formalise the drive to transparency by providing a route to obtaining information about relevant issues, such as details of pay schemes and job grading systems, and about the way in which skills and experience are reflected in the company's pay system.

We understand that there may be concerns about disclosing details of an individual's pay. The questionnaire will not alter any duty of confidence that all employers owe to their employees. The questionnaire may be simply a vexatious fishing expedition. At present such fishing expeditions take place in a full-blown employment tribunal. We want to head off employment tribunal cases by giving better and more transparent information at an early stage.

Mr Philip Hammond (Runnymede and Weybridge, Conservative)

Is the Minister saying that where an employer is asked questions about an individual employee, thus being invited to breach his duty of confidentiality to that employee, his failure to respond could not give rise to a negative inference by the tribunal, as the Bill suggests would happen when an employer fails properly to reply to a questionnaire?

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

It is highly likely that a tribunal would look at that in such a way. Employees can say to the employer, ''I don't want details of my pay to be given to anybody else.'' We will not cater for that situation in the way that the hon. Gentleman suggests, but will point out in the regulations that the public interest test means that confidential information will not be disclosed unless it is germane to sex discrimination, because that is inherent in the common law of duty of confidentiality.

If an individual asked the employer not to give such information, the employer would take that seriously.

Nevertheless, where he believes it is a public interest case, the employer could still disclose the information. It is a matter for his judgment. If an employee asked about the pay of someone in a different grade doing different work who could not possibly be compared to him—making a fishing expedition just to find out how much the colleague earned, in other words—the employer could confidently say that no public interest was involved and refuse to provide the information.

Mr Philip Hammond (Runnymede and Weybridge, Conservative)

Let me be clear. The Minister is saying that that is a matter for the employer's judgment, but that puts the employer in an invidious position. The Minister apparently envisages that if the employer calls that judgment wrongly, the tribunal could draw a negative inference in a hearing. That places on the employer a heavy burden that he should not have to face when juggling statutory obligations and a duty of confidentiality to employees.

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

That is the procedure in sex discrimination law. The problem is that at present people have to use the sex discrimination regulations to address a problem of equal pay. These issues have been tested previously. The tribunal might be asked to consider whether any inferences should be drawn from the employer's failure to answer the question. The failure would probably not be unreasonable, provided that he or she had at least approached the colleague and asked whether he could disclose the information. A duty is being placed on employers, who must make a judgment, but it will be the same judgment that is made in sex discrimination cases. The issues are the same; we are merely trying to sort them out earlier, rather than through a full-blown employment tribunal.

Mr Philip Hammond (Runnymede and Weybridge, Conservative)

The Minister has just second-guessed what a tribunal might consider reasonable or unreasonable. Will that be laid down in regulations or guidance, or is it just the feeling his officials have given him off the top of their heads? Is there any substance to the guidance that he has just given the Committee, and can he reassure us that tribunals will behave like that?

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

The common law duty of confidentiality guides all discrimination cases—sex and race cases under Labour legislation and disability cases under Conservative legislation. There is a fair amount of experience in other areas. Of course, a tribunal can order disclosure of information if the case proceeds formally. That is exactly the same as the position in existing discrimination law questionnaires in the three areas that I have mentioned.

In each of those cases, the employer might be asked to provide information subject to a common law duty of confidentiality. He or she must consider whether it is appropriate to disclose that information. If the employer is not prepared to disclose it, the tribunal can, and does, decide whether it is in the interests of justice for it to be disclosed. I reassure the Committee that that system works well in other fields of discrimination.

Mr Philip Hammond (Runnymede and Weybridge, Conservative)

I understand that, and the provision is beginning to make some sense, but I am concerned about the tribunal's power to draw any inference that it thinks fit from the employer's refusal to answer a questionnaire. If I have understood the Minister correctly, the questionnaire will be served and the employer may or may not respond to it. If he does not, the next stage is that the tribunal decides whether the information ought to be disclosed, and if it requires it to be disclosed, it will be.

That seems to render redundant the provision that the tribunal may draw what inference it wishes. The Minister appears to be saying that, whether or not the employer responds to the questionnaire, the matter will ultimately and properly be dealt with by the tribunal. No inference is therefore required.

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

I was not saying that. At the moment, that happens at an employment tribunal. Under the new system, the employer will be able to provide that information to reassure an employee and avoid a case going to a full-blown employment tribunal. That is exactly the same as the position for other areas of discrimination legislation. The amendment, as the hon. Gentleman rightly said, would not prevent information being passed on. The amendment deals with the confidentiality of the employee who receives that information.

The employer must judge whether an individual is on a fishing expedition. It is entirely within the employer's remit to decide whether to give the information. He or she will have to decide whether the employee is still disgruntled and believes that there is a case of discrimination on equal pay grounds. In that case, he or she could end up in front of a tribunal. The tribunal will make the decision, and I cannot second-guess tribunals' decisions, which will depend on all the complex issues in the case.

The tribunal can order the information to be disclosed if it thinks it necessary. If the individual is not prepared to disclose it, the tribunal can, and does, decide whether it is in the interests of justice for it to be disclosed. The system works well in other fields of discrimination. In any event, if confidential information is provided as a result, for example, of a questionnaire and when an employer has decided that that is in the public interest, a common law duty of confidentiality may arise. That is to say, the woman would receive the information in circumstances that would impose a duty of confidence on her. She would be able to use it only for the purposes for which it was given to her.

Much information provided will not be confidential—the hon. Gentleman made a good point about sectors—and in the majority of cases it will be such things as details of pay schemes, job grading systems and how skills and experience are reflected in the employer's pay system. The amendment would impose a duty of confidentiality on all information disclosed, which is unnecessary and undesirable. It could not be shared with organisations such as the Equal Opportunities Commission, citizens advice bureaux or trade unions when there may be good reason to do so.

I hope that the hon. Gentleman will not press the amendment to a vote because I fear that it would encourage people to go to tribunals, which have the power to order disclosure of information without an automatic duty of confidence. That is the opposite of our aim of settling disputes in the workplace. I hope that that explanation will encourage the hon. Gentleman to withdraw his amendment.

Mr Philip Hammond (Runnymede and Weybridge, Conservative)

This is not the most pressing issue before us, but I am not entirely satisfied with the Minister's reply. I am surprised to hear a Minister who is invited to include specific provisions in a Bill, or in regulations, say that good old common law may do the job instead. That is not, in my experience, the usual approach taken by Ministers. They usually want the law to be codified in secondary rather than primary legislation.

I freely acknowledge the Minister's criticism of the drafting of the amendment. I included employment appeals tribunals, but erroneously did not include higher courts. The Minister drew attention to the fact that information disclosed in response to a questionnaire will contain much that is not confidential, so I must also confess to having failed to include a public domain exclusion from the scope of the confidentiality that I seek. An effective amendment would allow its use throughout the judicial process and would exclude information already in the public domain other than by the recipient's breach of confidentiality.

I do not accept entirely the Minister's assurances. I am sure that he is right that in the vast majority of cases and most of those in which sex discrimination matters are likely to arise, the information will concern grading and disclosed semi-public information that is generic rather than specific. I am, however, worried about the sort of workplace that I described in which contracts are genuinely negotiated individually, which is probably the norm rather than the exception in small, white-collar businesses.

I accept that the amendment is defective and would not achieve what I seek. I give notice that I shall table a more effective amendment on Report, perhaps tailored more specifically to the sort of cases that I have in mind, because I want to press the Minister further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 42 ordered to stand part of the Bill.