Schedule 6 - Minor and consequential amendments
Employment Bill
Mr David Amess (Southend West, Conservative)
I remind the Committee that with this it will be convenient to take the following: Government amendments Nos. 201 to 207.
Government new clause 2—Flexible working—
'(1) The Employment Rights Act 1996 (c.18) is amended as follows.
(2) After Part 8 there is inserted—
''Part 8A
Flexible working
80F Statutory right to request contract variation
(1) A qualifying employee may apply to his employer for a change in his terms and conditions of employment if—
(a) the change relates to—
(i) the hours he is required to work,
(ii) the times when he is required to work,
(iii) where, as between his home and a place of business of his employer, he is required to work, or
(iv) such other aspect of his terms and conditions of employment as the Secretary of State may specify by regulations, and
(b) his purpose in applying for the change is to enable him to care for someone who, at the time of application, is a child in respect of whom he satisfies such conditions as to relationship as the Secretary of State may specify by regulations.
(2) An application under this section must—
(a) state that it is such an application,
(b) specify the change applied for and the date on which it is proposed the change should become effective,
(c) explain what effect, if any, the employee thinks making the change applied for would have on his employer and how, in his opinion, any such effect might be dealt with, and
(d) explain how the employee meets, in respect of the child concerned, the conditions as to relationship mentioned in subsection (1)(b).
(3) An application under this section must be made before the fourteenth day before the day on which the child concerned reaches the age of six or, if disabled, eighteen.
(4) If an employee has made an application under this section, he may not make a further application under this section to the same employer before the end of the period of twelve months beginning with the date on which the previous application was made.
(5) The Secretary of State may by regulations make provision about—
(a) the form of applications under this section, and
(b) when such an application is to be taken as made.
(6) The Secretary of State may by order substitute a different age for the first of the ages specified in subsection (3).
(7) In subsection (3), the reference to a disabled child is to a child who is entitled to a disability living allowance within the meaning of section 71 of the Social Security Contributions and Benefits Act 1992 (c.4).
(8) For the purposes of this section, an employee is—
(a) a qualifying employee if he—
(i) satisfies such conditions as to duration of employment as the Secretary of State may specify by regulations, and
(ii) is not an agency worker;
(b) an agency worker if he is supplied by a person (''the agent'') to do work for another (''the principal'') under a contract or other arrangement made between the agent and the principal.
80G Employer's duties in relation to application under section 80F
(1) An employer to whom an application under section 80F is made—
(a) shall deal with the application in accordance with regulations made by the Secretary of State, and
(b) shall only refuse the application because he considers that one or more of the following grounds applies—
(i) the burden of additional costs,
(ii) detrimental effect on ability to meet customer demand,
(iii) inability to re-organise work among existing staff,
(iv) inability to recruit additional staff,
(v) detrimental impact on quality,
(vi) detrimental impact on performance,
(vii) insufficiency of work during the periods the employee proposes to work,
(viii) planned structural changes, and
(ix) such other grounds as the Secretary of State may specify by regulations.
(2) Regulations under subsection (1)(a) shall include—
(a) provision for the holding of a meeting between the employer and the employee to discuss an application under section 80G within twenty eight days after the date the application is made;
(b) provision for the giving by the employer to the employee of notice of his decision on the application within fourteen days after the date of the meeting under paragraph (a);
(c) provision for notice under paragraph (b) of a decision to refuse the application to state the grounds for the decision;
(d) provision for the employee to have a right, if he is dissatisfied with the employer's decision, to appeal against it within fourteen days after the date on which notice under paragraph (b) is given;
(e) provision about the procedure for exercising the right of appeal under paragraph (d), including provision requiring the employee to set out the grounds of appeal;
(f) provision for notice under paragraph (b) to include such information as the regulations may specify relating to the right of appeal under paragraph (d);
(g) provision for the holding, within fourteen days after the date on which notice of appeal is given by the employee, of a meeting between the employer and the employee to discuss the appeal;
(h) provision for the employer to give the employee notice of his decision on any appeal within fourteen days after the date of the meeting under paragraph (g);
(i) provision for notice under paragraph (h) of a decision to dismiss an appeal to state the grounds for the decision;
(j) provision for a statement under paragraph (c) or (i) to contain a sufficient explanation of the grounds for the decision;
(k) provision for the employee to have a right to be accompanied at meetings under paragraph (a) or (g) by a person of such description as the regulations may specify;
(l) provision for postponement in relation to any meeting under paragraph (a) or (g) which a companion under paragraph (k) is not available to attend;
(m) provision in relation to companions under paragraph (k) corresponding to section 10(6) and (7) of the Employment Relations Act 1999 (c.26) (right to paid time off to act as companion, etc.);
(n) provision, in relation to the rights under paragraphs (k) and (l), for the application (with or without modification) of sections 11 to 13 of the Employment Relations Act 1999 (c.26) (provisions ancillary to right to be accompanied under section 10 of that Act).
(3) Regulations under subsection (1)(a) may include—
(a) provision for any requirement of the regulations not to apply where an application is disposed of by agreement or withdrawn;
(b) provision for extension of a time limit where the employer and employee agree, or in such other circumstances as the regulations may specify;
(c) provision for applications to be treated as withdrawn in specified circumstances;
and may make different provision for different cases.
(4) The Secretary of State may by order amend subsection (2).
80H Complaints to employment tribunals
(1) An employee who makes an application under section 80F may present a complaint to an employment tribunal—
(a) that his employer has failed in relation to the application to comply with section 80G(1), or
(b) that a decision by his employer to reject the application was based on incorrect facts.
(2) No complaint under this section may be made in respect of an application which has been disposed of by agreement or withdrawn.
(3) In the case of an application which has not been disposed of by agreement or withdrawn, no complaint under this section may be made until the employer—
(a) notifies the employee of a decision to reject the application on appeal, or
(b) commits a breach of regulations under section 80G(1)(a) of such description as the Secretary of State may specify by regulations.
(4) No complaint under this section may be made in respect of failure to comply with provision included in regulations under subsection (1)(a) of section 80G because of subsection (2)(k), (l) or (m) of that section.
(5) An employment tribunal shall not consider a complaint under this section unless it is presented—
(a) before the end of the period of three months beginning with the relevant date, or
(b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months.
(6) In subsection (5)(a), the reference to the relevant date is—
(a) in the case of a complaint permitted by subsection (3)(a), the date on which the employee is notified of the decision on the appeal, and
(b) in the case of a complaint permitted by subsection (3)(b), the date on which the breach concerned was committed.
80I Remedies
(1) Where an employment tribunal finds a complaint under section 80H well-founded it shall make a declaration to that effect and may—
(a) make an order for reconsideration of the application, and
(b) make an award of compensation to be paid by the employer to the employee.
(2) The amount of compensation shall be such amount, not exceeding the permitted maximum, as the tribunal considers just and equitable in all the circumstances.
(3) For the purposes of subsection (2), the permitted maximum is such number of weeks' pay as the Secretary of State may specify by regulations.
(4) Where an employment tribunal makes an order under subsection (1)(a), section 80G, and the regulations under that section, shall apply as if the application had been made on the date of the order.''
(3) After section 47C there is inserted—
''47D Flexible working
(1) An employee has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the employee—
(a) made (or proposed to make) an application under section 80F,
(b) exercised (or proposed to exercise) a right conferred on him under section 80G,
(c) brought proceedings against the employer under section 80H, or
(d) alleged the existence of any circumstance which would constitute a ground for bringing such proceedings.
(2) This section does not apply where the detriment in question amounts to dismissal within the meaning of Part 10.''
(4) After section 104B there is inserted—
''104C Flexible working
An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee—
(a) made (or proposed to make) an application under section 80F,
(b) exercised (or proposed to exercise) a right conferred on him under section 80G,
(c) brought proceedings against the employer under section 80H, or
(d) alleged the existence of any circumstance which would constitute a ground for bringing such proceedings.''.'.
Amendment (a), in proposed new section 80F(1), after 'apply', insert 'in writing'.
Amendment (l), in proposed new section 80F(1)(a), leave out sub-paragraph (iii).
Amendment (m), in proposed new section 80F(1)(a), leave out sub-paragraph (iv).
Amendment (n), in proposed new section 80F(2), after 'must', insert 'be in writing and'.
Amendment (bb), in proposed new section 80F(2)(b), at end insert—
'(bb) specify the reason the employee requires the change in his terms and conditions for the purpose of the care of a child.'.
Amendment (b), in proposed new section 80F(2), leave out paragraph (c).
Amendment (c), in proposed new section 80F(3), leave out first 'day' and insert 'week'.
Amendment (z), in proposed new section 80F(4), at end insert—
'and any application made under this section shall be taken to be an application permanently to change the employee's terms and conditions of employment.'.
Amendment (o), in proposed new section 80F(8)(a), leave out sub-paragraph (i) and insert—
'(i) has been continuously employed by his employer for a period of 26 weeks'.
Amendment (d), in proposed new section 80F, at end insert—
'(9) For the purposes of this section an employer shall have the right to request that an employee reverts back to the original terms and conditions of employment, once the child reaches the age limits prescribed in subsection 3.'.
Amendment (t), in proposed new section 80G(1)(b), leave out from 'he' to 'applies' and insert—
'reasonably considers that to comply with the request in the application would result in him facing one or more of'.
Amendment (p), in proposed new section 80G(1)(b)(i), leave out 'the burden of additional costs' and insert—
'material additional cost'.
Amendment (q), in proposed new section 80G(1)(b)(iii), leave out 'staff' and insert 'employees'.
Amendment (r), in proposed new section 80G(1)(b)(iv), leave out 'staff' and insert—
'employees of similar capability on similar terms and conditions'.
Amendment (s), in proposed new section 80G(1)(b)(viii), at beginning insert 'Incompatibility with'.
Amendment (u), in proposed new section 80G(1)(b), leave out sub-paragraph (ix) and insert—
'or because he reasonably considers that he is entitled to refuse the application on such other grounds as the Secretary of State may specify in regulations'.
Amendment (e), in proposed new section 80G(2)(a), leave out '80G' and insert '80F'.
Amendment (f), in proposed new section 80G(2)(b), after first 'of', insert 'written'.
Amendment (g), in proposed new section 80G(2)(d), after 'appeal', insert 'to the employer'.
Amendment (h), in proposed new section 80G(2)(e), at end insert 'in writing'.
Amendment (i), in proposed new section 80G(2)(g), leave out 'discuss' and insert 'hear'.
Amendment (j), in proposed new section 80G(2)(h), after 'employee', insert 'written'.
Amendment (v), in proposed new section 80G(2)(k), leave out from second 'a' to end and insert—
'fellow employee or a representative of a recognised Trade Union'.
Amendment (k), in proposed new section 80G(2)(k), leave out 'the regulations may specify' and insert—
'referred to in section 10 of the Employment Relations Act 1999'.
Amendment (aa), in proposed new section 80G(2)(k), at end insert—
'(kk) provision for the employer to be accompanied by an official or representative of an organisation of which he is a member, where the employee has exercised his right under (k) above.'.
Amendment (y), in proposed new section 80G(4), at end insert—
'80GG
(1) An employer who accepts an application made in accordance with section 80F above shall be entitled to reduce pro-rata in respect of any reduction in working hours by the employee, any benefits paid to the employee.
(2) Where the nature of a benefit renders impossible pro-rata reduction in accordance with subsection (1) above, the employer may instead withdraw the benefit and make a pro-rata cash payment in lieu of the benefit to the employee, based on the value of the benefit payable prior to the application being made.'.
Amendment (w), in proposed new section 80H(1)(b), after 'on', insert 'materially'.
Amendment (x), in proposed new section 80I(2), at end insert—
'having regard to the loss sustained by the complainant as a consequence of his employer's refusal of the application'.
Government amendment No. 208.
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
I am grateful to the Minister for outlining the purpose of the new clause. Notwithstanding our more acrimonious exchanges during the previous sitting of the Committee, I hope that we can consider how the new clause will work. At the Minister's suggestion, I shall make a couple of general remarks, and go through our detailed amendments, but not the ones that the hon. Members for North Norfolk (Norman Lamb) and for Weston-super-Mare (Brian Cotter) have tabled. I shall then make a few concluding remarks about the new clause, so that the Minister can respond to the issues raised by the amendments.
I would like to place on the record my support for flexible working. It helps all of us with what I prefer to call the work-family balance, rather than the work-life balance. It also recognises that life has become increasingly complex, and that patterns of work are less rigid. Fewer people work in jobs in which it is necessary for them to be regimented in the way they work. One hopes and expects that as the economy moves up the value-added curve, more people are involved in jobs that have a flexible pattern of work. I urge the Government to recognise the need for diversity in patterns of work.
What are rather pejoratively called unconventional work patterns will become the norm in the near future. That reflects current labour force dynamics. Most businesses in this country say that their biggest problem is not lack of demand, capital or finance but a lack of qualified, skilled staff. In those circumstances, it makes sense to structure work patterns to accommodate as many of the population as possible who want to, and are able to, work.
I will take some shaking from my belief that the Government's role should be to focus on the macroeconomic management of the economy to ensure buoyancy that creates tight labour market conditions and compels workers and management to move higher up the value-added curve, and attain better-paid, better value-added employment. That is in everyone's interest. Ultimately, although it may be a disappointing thought to Ministers and civil servants who toil over such matters, no amount of Government exhortation will create well-paid, secure and flexible employment. Only a vibrant, buoyant economy with intrinsic strength can do that.
I encourage the Government to focus on that aspect of their role, and to be a little humble about the extent to which they can influence the long-term structure of the labour market through legislation.
At the risk of boring the Committee, my views are coloured by what I saw when I worked in Germany in the 1980s. Everyone appeared to be wearing a nice pair of blinkers. They could see the wonderful package that was available and the marvellous in-work benefits that they received from their employers, but were oblivious to the fact that jobs were being exported. I will not say that they were being exported east, north, south and west because it was mainly east and south, but jobs were being exported at a phenomenal rate of knots. The consequences are evident in Germany now. That is just a word of warning to the Government.
I was disappointed by the drafting of the new clause. Following the pattern of the Bill to date, it should have been three new clauses. A new clause has been used each time that a different new section has been inserted into different pieces of legislation. New clause 2 has a curious architecture. The first subsection reads:
''The Employment Rights Act 1996 (c.18) is amended as follows.''
The next subsection simply states:
''After Part 8 there is inserted—''
That is completely out of line with the rest of the Bill. It should say something like ''After part 8 of the Employment Rights Act 1996 the following is inserted''. Some of the language in the new clause is very odd. On closer examination, it is clear that it has been taken verbatim from the Bain taskforce report, particularly new section 80G.
I accept that the Government are sensitive to the issue of balance and have sought to put into primary legislation the exact prescription of the taskforce, fearful, no doubt, that to change a single word or comma would lead to one side or the other saying that the compromise had been upset. The result is some unparliamentary language and certain things that appear to be frankly wrong.
I should like to draw the Minister on another issue. The flexible working measure introduces new statutory rights for workers with small children. They do not apply to those with a caring responsibility for a disabled relative over the age of 18 or those who are looking after an elderly parent rather than throwing that parent to the mercy of the local social services. The Committee must recognise what is happening. We are singling out one group, perhaps a very deserving group, for special treatment, and that will be at a cost to other groups.
Many employers operate flexible approaches to requests for variations to working conditions by employees. Some of them do so voluntarily because they think that it is good practice, others do so because they know that good staff are like gold dust and if they do not accede to the request, the employee will find another job that is more suited to their needs. There is a danger that employers who have juggled flexible arrangements for different employees, on the basis of employees' individual needs, and have perhaps prioritised in their own minds those who are the most deserving and in need of the flexible approach,
will now have no flexibility. That flexible approach will need to be available, if the business has the capacity to make it so, to all employed parents with small children. This may mean making it unavailable to some people to whom it would have been available otherwise. By virtue of this legislation, parents of small children will be privileged.
We also have to recognise that, as we move into this world of accommodating people's family requirements in the workplace, there will be winners and there will be losers. There have been some well-publicised cases over the past few months. For example, there a policewoman established that she did not have to work certain shifts because it interfered with her family life. Workers on the London underground have the same issue, not having to work unsocial hours because of interference with their family life. That is all fine.
That may, however, create is a very new and interesting form of indirect sex discrimination. Typically—it will not happen in every case, and I am sure that the Minister can quote examples—women will argue that, because they have small children or caring responsibilities, they cannot work night shifts or flexible shift patterns and need to work standard daily patterns or shortened daily hours.
One can fully sympathise with that, but the Bill does not come cost free. For every policewoman—and our police force increasingly comprises women; they are an ever-growing minority group of the total force—who does not work her routine rota of night shifts, a policeman will have to work additional night shifts. For every London underground worker who can work only during the day, another will have to do more than his or her fair share of the night shifts.
I invite the Committee to consider carefully the fact that when we grant privileges in the work place to one group, other groups will suffer as a consequence—women without children, men and older people who no longer have direct family responsibilities. The provision is not a cost-free option: it does not cost employers, but it will cost other employees in the workplace. We must be careful when we impose privileges by statute for certain people that we do not inadvertently cause undue distress and harm to other people.
Mr Norman Lamb (North Norfolk, Liberal Democrat)
The hon. Gentleman makes a good point about carers of older people, usually older relatives. Their situation is not helped in any way by these measures.
On his point about men and women, because of the developments that the hon. Gentleman referred to in indirect sex discrimination, the reality is that women effectively have good protection. In reality, any company faced with a woman asking for a change of working arrangements, will recognise that as a potential claim for indirect sex discrimination. Changes are happening the whole time because of that threat hanging over employers.
The new measures seem to redress the balance. If we put indirect sex discrimination aside for a moment, the measures contain equality in the way that men and women are treated. Does the Minister accept that?
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
There may be equality on the face of the Bill, but I do not think anybody will be in any doubt that the measure will impact more on women than on men in practical terms. I would be surprised if any of the Minister's surveys or investigations suggested that more men than women will take advantage of the new clause. Time will tell, and it will be interesting to come back and see what happens.
I expect women disproportionately to take advantage of the provision. The hon. Gentleman mentioned that the indirect sex discrimination legislation, which has essentially been established by case law, will not be wiped out by the Bill. There will be an uncomfortable fit between the case law and these measures.
It will be difficult to measure the effect of the Bill. Employers and employees regularly talk to each other and discuss how to accommodate the needs of the business one week, and the needs of the employee the next week. An employee may be asked to work a bit longer and come in earlier on Thursday, or little Freddie may be sick on Tuesday, the employee needs the day off and offers to make up the hours on Wednesday and Thursday evenings. That happens day in and day out, and in most cases, it will not be documented or recorded as an application for flexible work that is agreed by the employer. The only circumstance that will be documented and recorded is where the employer says that he cannot give the employee any time off, and the employee submits his formal application to have a request considered for a change in conditions. Almost by definition, flexible hours will be documented only in a circumstance where the employer will be minded to refuse, because the circumstance that the employer is happy to agree will never be documented and recorded.
I do not suggest that the Minister would be minded to bet, but if he wanted to, I am prepared to bet with him that he could commission a study 18 months or two years down the line that would show that a large percentage of applications under the measure had been refused by employers. If he commissioned wider research to see how many employees had changed their terms and conditions of employment to make them more flexible, he might get a different answer. I offer a word of caution, as I do not want any wrong conclusions to be drawn from superficial analysis of what will happen under the new clause.
By common consensus, the meat of new clause 2 is section 80G. Section 80F introduces a right to apply for variation of contract terms, and section 80G deals with the right of the employer to respond in different ways. At the beginning of the debate, the starting point of the union side could broadly be categorised as wanting objective justification of any refusal to agree flexible working terms. The starting point for the employers was a desire for a purely procedural approach to dealing with any request. As a result, we have an awkward compromise that is reflected in the Government's obvious reluctance to move away from the precise wording of the report, even where the wording does not fit comfortably into primary legislation.
The amendments seek to address various concerns about the substance of the new clause rather than the overarching principles. Amendment (l) seeks to leave out sub-paragraph (iii) and probes the Minister's views on how the provision will work in relation to the employer's duties in responding to applications. Those few people in the country who are even remotely interested in the proposed measure have been talking about this as a right to part-time work, and some people will want that. I suspect, and the Minister for Employment and the Regions alluded to this in his remarks, that an even more common request will be for minor variations of the working day.
Indeed, I can report best practice in the shadow Department of Trade and Industry team, as meetings have been shifted by 10 minutes to accommodate the school run of one member. The Minister will be pleased to learn that the Opposition Front Bench team is an enlightened employer and ahead of its time. There will be many such requests, but a more fundamental set of circumstances concern a request by an employee to work from home. I suggest to the Minister that that is a somewhat different class of request, and perhaps he will explain why it was necessary to include it in the provisions.
Amendment (m) would strike out sub-paragraph (iv) of proposed new section 80F(1)(a), which details the sweeping power of the Secretary of State to prescribe by regulations
''such other aspects of his terms and conditions of employment''
as the Secretary of State chooses. That concerns changes to the contract that do not relate to the hours, times and place that someone is required to work. Including that blanket provision may be bureaucratic belt and braces, but it drives a coach and horses through the stated intentions. We, and most of the employer organisations I have spoken to, have not been able to think of analogous contract changes that an employee may seek under the provision. There is a lurking fear that the Government have another medium-term agenda, which will be dealt with through sub-paragraph (iv). I would like to see the sub-paragraph removed, to make it explicit which contract changes may be dealt with in the Bill. If the Minister has good examples of why sub-paragraph (iv) might be needed, he should explain them to the Committee and reassure us that there is no hidden agenda.
Amendment (n) mirrors amendment (a), which was tabled by the Liberal Democrats. It would ensure that an application under the relevant section must be in writing. I am not one for introducing unnecessary bureaucracy, but it is clear that if there is a procedure, the failure to comply with which can give rise to a remedy, there must be some documentation of the procedure having been carried out. It is all too easy to envisage that if the procedure is not formalised, there will be endless disputes about whether someone made an application. That would be the case particularly in a small firm. If someone says to the boss over a cup of tea, ''I wouldn't mind coming in half an hour later in the morning'', does that constitute an application under proposed new section 80F(1) of the Employment Rights Act 1996?
Endless dispute is possible. The hon. Member for North Norfolk will no doubt have his own points to raise on the subject, but almost everyone to whom I have spoken believes that it must be a simple but documented procedure. I recognise that that will give rise to the problem that I identified in my opening remarks, but only those cases that are likely to be refused will be recorded as formal applications. I do not see any way of avoiding the change if we do not want employment tribunals to be clogged up with endless debate about whether a verbal application was properly made and received.
Amendment (bb) would insert a new sub-paragraph. The proposed new section is explicit, and the right to ask for flexible working is available only for a specific purpose. The employer, in refusing such an application, is required to state his specific reasoning. In the interests of balance and focusing employees' minds on the specific nature of the right, we propose that the employee making his application in writing should clarify the reason for needing the change in contract.
For example, the letter may say, ''I wish to request a change in my working hours so that I can start at 9.30 each morning so that I can drop my child at school before coming to work.'' That is simple and straightforward—there is no debate about it. Once put in writing, the facts would be on the record. If it subsequently turned out that the child started school at 8.30, or that the child was 36 years old, there would be some basis for analysing the application and referring to the facts. That is a reasonable proposal, which puts some symmetry into the arrangements.
The purpose of amendment (z) is to specify that once an employer has acceded to an application, the change will be regarded as permanent. The employee will have the right to apply, after a year has elapsed, for a change back or a change to a different set of terms and conditions. The employer would have certain rights under existing legislation to seek to change the situation back in due course. The Liberal Democrat amendment—(d)—to which the hon. Member for North Norfolk will no doubt speak in due course, takes a diametrically opposite approach, seeking to make any such change temporary at the employer's option.
I can understand why the Liberal Democrats attempted to go down that route, but we believe that it would be more straightforward to make it clear that any change to terms and conditions of employment is permanent and that a change back would require the employee to go through the same procedure again after a year had elapsed. That is probably what the Government intend, but we seek to make it explicit in the Bill.
Mr Norman Lamb (North Norfolk, Liberal Democrat)
Does the hon. Gentleman agree that one route that may well suit both parties and be within the terms of the legislation, although the impossible would make it impossible, would be for the Department to reach an agreement that a change of working hours—the half-hour later arrival time because a parent wants to drop a child off at
school—could apply for the next year or until the child was old enough. Then the parties could agree that that would apply for a specific time before reverting back. Does that seem possible?
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
Yes it does, and I do not think it is incompatible with the amendment. The amendment says that any application made
''shall be taken to be an application permanently to change the employee's terms and conditions of employment''.
In other words, the document that comprises the terms and conditions of employment will be changed. It can be changed to say that the hours of work until 31 December 2002 shall be 9.30 to 5.30 and from 1 January 2003 shall be 8.30 to 4.30. There is nothing incompatible with the amendment. I am seeking to avoid employers having to keep track of myriad temporary arrangements that are not documented in concrete but are short-period wavers of the established terms and conditions of employment rather than a change to them. My reading of the Bill is that the Government intend that to be an opportunity for an employee to change their terms and conditions of employment, not to have the employer agree a temporary derogation from or variation of them.
I am interested to hear what the Minister has to say. We have offered an amendment, but I accept that the matter could be properly dealt with in regulations rather than in the Bill and perhaps he will say that.
Mr Mark Prisk (Hertford and Stortford, Conservative)
Does my hon. Friend agree with me and the Confederation of British Industry that, given this complexity, it is important that the Government give small enterprises guidance? Does he also agree that it would be helpful for the Minister to tell the Committee later that that is the Government's intention?
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
I hope that the Minister has heard my hon. Friend's remarks. He is nodding, so he clearly thinks that it would be useful for him to give the Committee that assurance, and we look forward to it.
Amendment (o) would ensure that the Bill specified the continuous period of employment requirement. It is not satisfactory for the Secretary of State to regulate who shall and shall not be eligible by virtue of their continuous period of employment. The notes make it clear that 26 weeks is the intended period, but the Bill gives us rather mixed signals about whether the continuous employment period should be in the Bill or in regulations. Thinking back to statutory paternity leave provisions, I seem to remember that leave was dealt with in the Bill and pay was to be dealt with in regulations, or perhaps it was the other way round. The amendment suggests that the employment period needs to be specified in the Bill to make it crystal clear.
I reiterate what I said about the drafting of proposed new section 80G. The wording is little short of bizarre, if I dare use that word. It simply does not look like a statute. It looks like what it is—the verbatim text of the report. It states:
''An employer to whom an application under section 80F is made—
(a) shall deal with the application in accordance with regulations made by the Secretary of State—''
that is not a problem—
''and
(b) shall only refuse the application because he considers that one or more of the following grounds applies''
That should not be a problem either, but the way in which the grounds have been drafted simply does not make sense; it is not English. The first ground is
''the burden of additional costs'',
but that cannot be a ground that applies.
Amendment (p) is designed to change the wording, which would improve the situation but would not solve the problem completely. I am interested to hear the Minister's overall view of the provision's drafting. The amendment would replace the words
''the burden of additional costs''
with ''material additional costs'', so that that was the ground.
I am getting ahead of myself because I have missed out amendment (t), which would help the whole provision to make sense. It would make subsection (1) read, ''An employer . . . shall only refuse the application because he reasonably considers that to comply with the request in the application would result in him facing one or more of'' the items in the list. The first would be ''material additional costs''. That is the plain English way of specifying that, and it tells us what we want to know. My interpretation of the English language is that ''the burden of additional costs'' is not an appropriate phrase to use in the structure of this rather long subsection.
Whether the phrase is ''the burden of additional costs'' or ''material additional costs'' depends on how serious that burden must be. Presumably, the Minister would say that something that cost the employer an extra four pence a week would not be a ground for refusing an application, and I would agree with him. However, the issue is rather subjective, and I seek to address that by using the term ''material''. The ground for refusal would therefore be that ''material additional costs'' would be incurred as a result of accepting the application. ''Material'' is not a precise word, but it is well known to the law, the courts and, I suspect, the employment tribunal. I would hazard that the term ''material additional costs'' is more susceptible to proper interpretation than ''the burden of additional costs'', which does not specify how much burden.
Amendment (q) would amend the wording of sub-paragraph (iii), which is curious. The sub-paragraph states:
''inability to re-organise work among existing staff''.
We have had many arguments about the use of the word ''worker'' or ''employee'', but I do not recall a debate about the use of the word ''staff''. I do not claim to be an expert on every last word of the drafting of the Employment Rights Act 1996, but as far as I am aware, the word ''staff'' does not occur in the legislation. It certainly does not fit comfortably in this context. The sub-paragraph should say ''inability to re-organise work among existing employees''.
Perhaps the Minister wants to get on to the territory of ''existing workers'', but ''existing staff'' does not make any sense. The word ''staff'' appears to be here simply because it was used in the task force report and has been copied without careful consideration and without reconciling it to the language of the statute.
Amendment (r) would also remove the word ''staff'' from sub-paragraph (iv), which reads:
''inability to recruit additional staff''
and make it ''inability to recruit additional employees''.
The amendment goes further by inserting ''employees of similar capability on similar terms and conditions''. The issue is not the inability to recruit additional staff, but the ability of an employer to accommodate a request from an employee to start working part time. The question is whether the employer can find another suitable person with the same skills at the same rates of pay and the same conditions of employment to do the other half of the job if it is a continuous-cover job such as in a shop or a bank—not that there are many banks left that have people sitting at counters. The amendment would allow the employer to cite as a ground for refusal his inability to recruit appropriate staff to fill any gap left by the request for flexible working.
Amendment (s) addresses the wording of sub-paragraph (viii). Paragraph (b) states that the employer
''shall only refuse the application because he considers that one or more of the following grounds applies—
(viii) planned structural changes''.
The employer refuses the application because the ground ''planned structural changes'' applies. That is not English and does not make sense. It is not meant to say that any employer who plans a structural change can refuse an application. I do not suggest that the wording of the amendment is perfect, but the sub-paragraph is meant to say that the application is incompatible with planned structural changes in the workplace. We inserted the words ''incompatibility with'' in the hope that the Minister would acknowledge that there is a problem.
My preferred solution is to deal with all those problems in amendments (p), (q), (r), (s), (t) and (u). Amendment (u) strikes out the ubiquitous provision
''such other grounds as the Secretary of State may specify by regulations''.
Again we need to know what we are legislating for. We cannot give the Secretary of State the power to say that the employer can refuse an application on the ground that he got out of bed on the wrong side or had a bad breakfast that morning. This is supposed to be objective consideration of the way in which the application would affect the business. The ground in sub-paragraph (ix) is far too broad and needs to be removed and replaced by something more specific. We propose the wording
''or because he reasonably considers that he is entitled to refuse the application on such other grounds as the Secretary of State may specify in regulations''.
We could have sought to delete sub-paragraph (ix) but the Minister would doubtless feel naked without a blanket provision—I do not want to get back to the Calvin Klein's. We need to get the language right and to introduce the concept of the employer's reasonable interpretation of those additional grounds. We have attempted to change the language without changing the overall architecture of subsection (1). I do not suggest that the Minister should open up the can of worms of rebalancing the grounds for refusal that the report indicated, but the language of the subsection needs a wholesale clean-up. To be honest, when I first saw the new clause, I half expected that the Minister would table a replacement subsection to tidy up the language.
I do not propose to comment on all the Liberal Democrat amendments, but I congratulate the hon. Member for North Norfolk on amendment (e). He has spotted a genuine error in the Bill. We will see if the Minister says different. That is the Liberal Democrat brownie point for the day. It is always good to see someone on the Liberal Democrat Benches in this Committee. It is especially good to see two people, although rare. My hon. Friend the Member for Wealden (Mr. Hendry) says that they are practising flexible working and job sharing. I should be interested to know whether they draw only half the salary.
Amendment (v) to subsection (2)(k) deals with an employee's right to be accompanied at a meeting with the employer under the provision. We are curious as to why paragraphs (n) and (m) refer to section 10 of the Employment Relations Act 1999, which deals with the right to be accompanied and variations to times of meetings and hearings because of the unavailability of the person accompanying. That reference makes it clear that the person accompanying can be a fellow employee, or a trade union official or representative. That is fine, but it is not what we are considering. Paragraphs (a) and (d) provide for the employee to have a right to be accompanied in meetings by a person of such description as the regulations may specify.
The explanatory notes show clearly that the Government do not intend to replicate section 10 of the 1996 Act. They state that employees may be accompanied by a friend. ''Friend'' is a broad term, and I am advised that it may effectively be anyone including—
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
The hon. Gentleman has it in one. If the Government are proposing that an employee undergoing the procedure is entitled to be accompanied by a lawyer, that would be a radical departure from practice hitherto. The language should mirror section 10 of the 1996 Act. There is no good reason to deviate from that. The wording that amendment (v) would insert is more specific. It would remove the discretion of the Secretary of State, and makes it clear that the person allowed to accompany is a fellow employee or a representative of
a recognised trade union. I would be equally happy with an assurance from the Minister that he will move an amendment to provide that the right to be accompanied extends to the same categories of people as specified in section 10 of the Employment Rights Act 1996.
Amendment (k), tabled by the hon. Member for North Norfolk, deals with a similar matter by referring to section 10, rather than defining the class of person entitled to accompany in the Bill. I hope that the Minister is not creating more work for lawyers. Nothing he has said pre-disposes me to think that he is the great friend of the toiling mass of my learned friends. I hope that he will not disabuse me of that notion by creating more fee-earning opportunities for that group of much-respected members of society.
Amendment (aa) would insert paragraph (kk) after paragraph (k). It can be a complicated because of the way the clause has to be handled, which is beyond the discretion of any of us. The amendment would provide that when an employee exercises his right to be accompanied, the employer has a reciprocal right. At first glance, that might sound strange.
Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West and Hessle, Labour)
It does.
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
Well, let us consider the idea. The manager of a large concern—the human resources director of a big company—should not need someone to sit next to him in most cases. If the Minister tells us that the ''friend'' that the notes refer to could be a lawyer representing the employee, I withdraw that remark. Even the HR director of Big Co. plc might need his lawyer sitting next to him, and of course not all employers are the HR director of Big Co. plc. We may be talking about the owner and operator of the local corner shop, who may have less access to support and information about his rights and the law than his employees who belong to a trade union. I could suggest many scenarios and cite many examples of employees who read the stuff that their union sends out and are well aware of their rights, how they go about exercising them and the procedures that they have to use.
Employers should be aware of the details of the statutory provisions that apply to them, but many small employers are not until they come up against a problem. The amendment would apply to all employers, but it is reasonable that a small employer at least should have the right to be accompanied if the employee is accompanied. That would simply ensure a level playing field and a similar level of support. It would not be unreasonable for an official of one of the small business organisations to accompany the employer to ensure that he follows the procedure correctly and does not inadvertently slip up and give the employee cause for complaint, possibly with reference to an employment tribunal.
Mr Rob Marris (Wolverhampton South West, Labour)
Has the hon. Gentleman undergone a Damascene conversion? Does he now recommend that all employees join trade unions and have access to the wonderful range of facilities that such unions offer their members?
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
Anyone who embarks on the impenetrable process of trying to exercise his rights under any legislation is wise to seek advice, and trade unions are one source of advice. It is equally possible that a non-unionised employee would trot along to his local citizens advice bureau or, worse, to his Member of Parliament's constituency surgery to seek advice. Indeed, he could even request that the MP accompany him and be the friend in that process. Such a request is not unknown to many of us, but I suspect that most Members would be wise to resist it.
Mr Norman Lamb (North Norfolk, Liberal Democrat)
Does anything in the Employment Rights Act prevent that?
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
The hon. Gentleman may be right. I do not profess to be an expert on the detail of the way in which the Employment Rights Act works. If the situation is as he suggested, the Minister will say so and the matter will be dealt with. I do not know the answer, but fairness would normally suggest an equal number of people in the room on each side in such a discussion.
If there is any danger of the discussion becoming adversarial, having six or seven people lined up on one side of the table, but only one or two on the other does not in my experience usually lead to a fair and balanced discussion. Of course, it depends on who the one is and who the six or seven are. Opposition Members are more than usually aware that quantity is often outweighed by quality. [Interruption.] It is probably best that I move on, for fear of spoiling the consensual atmosphere.
Amendment (y) would insert new section 80GG after new section 80G to deal with benefits enjoyed by employees who, by virtue of their rights under the provision, achieve a reduction in their working hours. In order not to create a disproportionate increase in costs, or an increase in costs per hour or unit of time for the employer, it will be necessary, when an employee reduces his hours in relation to part-time work, to allow the employer to reduce pro rata any benefits that he receives. Otherwise, there will be an effective per hour increase in employment costs, which would not be right, and which would be burdensome.
However, if a person is employed full-time, and his contract says that he is entitled to a car or BUPA—we know that many trade union members like to take advantage of private health insurance schemes offered by their employers—it is not immediately obvious that when he applies for, and is granted, a right to work half-time, he loses those benefits. I stand to be corrected on that by the employment lawyers in the Committee. Clearly, it is not easy to lose half a car, or even half a private health care insurance subscription—[Interruption.] It may be that Johnson motors in Hull deals in what I believe are called ringers, as the Minister seems to know quite a lot about half-cars. Let us hope that that is not the case. I am sure that it is a thoroughly reputable business.
The issue is ensuring that employers are not put in a situation in which they have to agree to part-time working. They might willingly agree to part-time work but find that, because there is an existing contract, and because of the way in which the legislation works, they
will still have to provide the part-time worker with a full-time car and a full-time BUPA subscription. I am not seeking to advertise BUPA—there are many fine providers of health insurance packages.
Subsection (2) of our proposed new section deals with the situation in which it is impossible to divide a benefit: a car would be a good example. It proposes monetisation of the benefit, so that the employer can say, ''It costs me £300 a month to provide you with this car. You are now working half-time, so we are withdrawing the car, but you will have £150 a month in lieu of provision of the benefit.'' That may not be a perfect solution, and there may be alternatives—they may already exist, buried deep in the mire of impenetrable legalese. If so, will the Minister explain how that issue can be addressed in practice?
Amendment (w) inserts into proposed section 80H(1)(b) the concept of materiality in relation to incorrect facts. That mirrors the discussions that we had in relation to tribunal procedures. The Government have accepted—and the Employment Rights Act 1996 has been amended accordingly in the course of our consideration of the Bill—that mere procedural errors, when they do not have a real bearing on outcome, should not be a ground for unravelling the whole process. The amendment would make it clear that there would be a ground of challenge when an employer has rejected an application for reasons that include, or are based on, incorrect facts, but only when those facts are materially incorrect, and the conclusion could not have been properly drawn.
For example, if the employer's grounds of refusal were that he had advertised for a part-time worker for six months, had had no applicants, and could not therefore recruit appropriate labour to cover for the employee in question, and it turned out that the advertisement had been displayed for only five and half months, that would not be a materially incorrect fact. However, if it turned out that the advertisement had been displayed for only five and half minutes, that would be a materially incorrect fact, which ought to be taken into account. I hope that the Minister will accept that that is common sense. If we failed to put it in, we would risk entrapping employers involved in tribunal proceedings in tiny procedural or factual errors that have no material bearing on the case—something from which changes to the Employment Rights Act sought to save employers.
Amendment (x) addresses an important issue with regard to remedies. It is necessary because of the way in which the proposed legislation will interact with the sex discrimination legislation, and with the body of case law that has developed as a consequence of that. Under sex discrimination law, there is no limit to the amount that can be awarded. An award can be made for matters such as injured feelings and hurt pride, as well as for economic loss. I assume that the Minister wants the legislation to be treated seriously, and that he wants employees who are seeking a flexible working pattern to use it.
We have not been fully informed about the Government's proposals with regard to
compensation, but it will be limited to employees' earnings—a certain number of weeks or days has been mooted. Because it will be limited, the proposed legislation will offer a less attractive route than the sex discrimination legislation—in a claim for indirect sex discrimination, compensation could be unlimited.
The Minister should carefully consider how he will address that problem. If he wishes the legislation to be properly used, he should ensure that there is no double jeopardy. The legislation specifically deals with requests for flexible working, but there is another piece of legislation, with a bigger pot of gold, for people who suffer a wrongful refusal of a request, and there is a clear incentive for those people to go down that route, rather than that which is set out in the Bill.
The amendment refers to the loss sustained by the complainant, and it focuses on economic loss, rather than on what is in the Bill, which is the compensation that a tribunal considers to be just and equitable in the light of all the circumstances. That needs to be replaced by a reflection of economic loss, and it needs to be limited.
I believe that the Minister's intention is to limit and, if that is the case, he will inform us about that. Someone might say, ''I would like to come into work 20 minutes later, so that I can take my child to school. The alternative is that I have to drop my child at the child minder's at half-past eight; they take my child to school at 9 o'clock, and I have to pay them £20 per week.'' In such a case, economic loss is demonstrated and quantifiable. That is the route that a tribunal should follow, in looking at cases where an employer has wrongfully refused an application under this section of the legislation.
Proposed new section 80G is the core of the clause as, in it, the Government have at their disposal the mechanism for gold-plating the legislation if they want to. The Minister will recognise that there is a delicate balance. It is a procedural test at the moment, and the burden of proof lies with the employee, having made his application, to show that it was wrongfully refused. The provisions for regulations under new section 80G would allow the Government to gold-plate the legislation by moving the goal posts, shifting the burden of proof and moving towards an objective justification for an employer's decision. The comprehensive view from business, both large and small, is that that would be a line in the sand beyond which business would not be prepared to go in trying to meet the Government constructively.
The proposals outlined in the Bill are just about acceptable across the piece, but the Government must make a commitment that there will not be any creep on the legislation. Professor Bain has a reputation for being a skilled craftsman of measures that are capable of being as innocuous or deep-biting as Ministers want. That probably accounts for his popularity in Whitehall and Downing street, and we will want to be assured that the measure has not been designed to soothe at the outset but then be ratcheted up in the medium-term.
We are concerned to ensure that we do not move into territory in which tribunals start to probe the basis of business decisions beyond establishing that the facts on which they have been made are not correct. It has been put to me that, whatever the Minister's good intentions at this stage, there is a danger of them being undermined by case law. Tribunals and courts may evolve a view that allows the employer's response to be probed more deeply than the Minister intends. There is a danger, too, that the legislation will have a negative impact on the good informal arrangements that operate in many workplaces, and we must be alert about that. The legislation will be used mostly in difficult cases, and the good practice in many workplaces, with flexible working patterns agreed on a daily basis, will in some cases be threatened. The Minister must tell us how he sees the legislation fitting in with the existing body of case law in relation to indirect sex discrimination and whether he is alert to the dangers that are presented by the different remedies available under the measure and existing sex discrimination provisions.
Mr Norman Lamb (North Norfolk, Liberal Democrat)
We support wholeheartedly the approach taken towards developing flexible working, and it seems to me that, by and large, the Bill has a light touch and gives a gentle legislative push to encourage the employer and employee to talk and achieve agreement about working arrangements that suit both sides. I mentioned that in interventions during the previous couple of sittings, and existing legislation and case law development has changed the reality for many women as regards indirect discrimination. It concerns mostly women who have responsibilities for child care, but can include those who care for an elderly relative. Statistically, such carers are predominantly women, so there may even be a case for a woman who is looking after an elderly family member to pursue a case of indirect discrimination. As far as childcare responsibilities are concerned, a woman can now, under indirect discrimination legislation, go to an employer and request a change in terms and conditions, including suggesting the possibility of working from home. That is already on the agenda. If employers reject the proposal put forward by the woman, they face a potentially costly claim for indirect sex discrimination.
I have witnessed interesting shifts among many employers who often start off with the knee-jerk reaction of saying, ''No, we cannot possibly agree to a change. This is the contract of employment, this is what we employ people to do. The suggestion of part-time or job-share arrangements is unacceptable.'' But when one points out to employers that the law actually requires them to look at the issue and explore the options with the employee, many of them then realise that the arrangement proposed is workable. It often means that they retain a potentially valuable employee and it makes them look at their own processes and explore ways in which they may be able to work more efficiently. Sometimes they realise that they can employ someone part time instead of full time, and therefore make a cost saving. I have seen with my own eyes, the way in which indirect discrimination legislation has encouraged the development of a new
environment, which has by and large worked to the benefit of both employers and employees.
In that sense, I take issue with the position taken by the hon. Member for Runnymede and Weybridge, in which he indicates that by and large the conservative approach is to leave it to the parties to sort out arrangements between themselves and allow the demand for labour to push and cajole employees in the right direction. Here is a case in point where legislation has actually had a beneficial effect for employees, and for employers.
The indirect sex discrimination route can be complex and confusing. There is a massive degree of understandable ignorance, on both the employer's and the employee's side, about how the law works. To provide a simpler route, seems to me to be very sensible.
The hon. Member for Runnymede and Weybridge alluded to the serious possibility of the new provisions being laid on top of the provisions for indirect discrimination. It is inevitable that any lawyer will advise an employee to pursue two claims—one under the Bill, and one for indirect sex discrimination. It is quite possible that a claim under the Bill will fail, because the employer has factually stated a ground of refusal, but what has happened may still amount to a case of indirect sex discrimination.
It seems to me that one legislative framework would ultimately be better. If we can move towards simplicity by having one code that deals with employees' rights to ask for flexible work, that will be better. We are still left with the confusions that surround indirect discrimination and the uncertainty of a tribunal's conclusion. Therefore, it would be wise for the Government to move towards a simpler framework.
The hon. Member for Runnymede and Weybridge alluded to what he saw as a movement towards uneven rights between employers and employees in requesting changes to terms and conditions. I do not see that as a concern. I think that the employer actually has significant rights. If, for sound business reasons, an employer wants to change terms and conditions in any way and wants, for example, a change of place of work or a change of hours, he or she has the ultimate sanction, as an employee can fairly be dismissed under existing legislation for refusing to agree.
There is a reasonable balance between employer and employee, and the provision would improve it. Often, employers do not realise the strength of their position under the law. The frustrating thing for employers is that they often have to pay for expensive legal advice to find out their rights.
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
Do I interpret that to mean that the hon. Gentleman supports accompaniment for employers? He has suggested that they already have an unlimited right, but does he agree with the principle that is being pushed?
Mr Norman Lamb (North Norfolk, Liberal Democrat)
I have accompanied employers to discussions of all kinds with employees, and I think that there is nothing wrong with doing that. If the employees are represented, it seems reasonable for
employers—especially small employers—to have someone with them. In a reasonable sized company, the human resources department would normally send someone, and there would probably be two people from the employer's side. However, it would be eminently reasonable for the employer in a small company—a shopkeeper, for example—to be able to have someone with them to help them when the employee has representation.
The hon. Member for Runnymede and Weybridge made a fair point about the carers of elderly relatives. I fully accept that one deals with an issue at a time, and I have not tried to amend the clause by adding new groups of people. However, we are all trying to make things easier for carers, and there is a case for arguing that someone who cares for a disabled or elderly relative should have the same right to request a change in working arrangements from an employer. He or she might, for example, want to come in half an hour late because he or she needs to bathe a relative. The Government should consider that.
Many of the amendments, including amendments (a), (f), (h) and (j), deal with the question of using writing in the procedure. For the sake of clarity and certainty, it would make eminent sense to base the process in writing rather than on a conversation that might take place just as someone is leaving the workplace, and that can later be claimed to amount to an application under the Bill. All the problems that the hon. Member for Runnymede and Weybridge described could occur if the process were based on verbal requests.
The framework is quite prescriptive and many things must be put into the application. It seems daft to base it on a mere verbal request. I would like to shift the balance slightly, and that would be the effect of amendment (b), which would leave out paragraph (c) of proposed section 80F(2), which states that an employee must
''explain what effect, if any, the employee thinks making the change applied for would have on his employer and how, in his opinion, any such effect might be dealt with''.
It seems over-prescriptive to place that rather complex requirement on employees, and if it were a verbal requirement, it would be more difficult for an employee to lodge a basic application. Clearly, it is the sort of thing that should be discussed between the parties, but I would prefer a simpler written application that does not go into that detail. I entirely agree with the hon. Member for Runnymede and Weybridge that it would make sense for written applications to include the reason why he or she needs to make it to look after the child. I prefer a simpler, written application to a more complex, verbal one.
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
I disagree with the hon. Gentleman about removing paragraph (c), as that is an important pointer to asking the employee to focus not only on his or her needs, but on the impact that they will have on the employer. In many cases where there are good relations, merely being forced to focus on that issue will lead the employee to think about how to modify the request to make it more acceptable to the employer and more compatible with the business.
Mr Norman Lamb (North Norfolk, Liberal Democrat)
I agree with the sentiment behind what the hon. Gentleman said. I hope that the process of discussion encourages employees to see the employer's problems as well as the other way round. The paragraph is over-prescriptive and makes it too difficult for some people to make what should be a simple application to start the process.
Amendment (c) would change 14 days to 14 weeks. I speak to the amendment on behalf of the Federation of Small Businesses, who wanted the issue aired, to give it the opportunity to have its case made. This is a difficult issue about the limitation on the group of parents who can take advantage of this, and the amendment would shift it further back to 14 weeks before the sixth birthday. I know as a parent of a teenage boy that demands on parents of teenagers can be just as difficult as those on parents of very small children. The hon. Member for Runnymede and Weybridge mentioned carers of disabled or other relatives. The situation of parents of teenaged children must also be recognised, with all its difficulties and demands these days.
Amendment (d) relates to the right of the employer to request that the provisions revert to the terms and conditions of employment before the change. I speak to it to air another concern of the Federation of Small Businesses. I accept that the amendment's wording is not ideal. It adds little to the existing legislative framework, but is simply saying that the employer may request a change. As has already been said, if there are sound business reasons for that request, the sanction of dismissal encourages the employee to agree. I want to use that as an opportunity to make the point that employers and employees can agree a temporary change under these provisions. It is down to the parties to work out the change that suits both sides.
I hope that the Minister will respond to that point and endorse the fact that the employee may accept a temporary change as a legitimate change that may be reviewed in two years when another request is considered. It would be possible for something to be written up to confirm the agreement that for the next two years the employee was allowed to come in half an hour later than usual.
Amendment (e) would leave out section 80G and insert 80F. This is my proud moment, and my first opportunity to have an impact on legislation.
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 did well before.
Mr Norman Lamb (North Norfolk, Liberal Democrat)
That amendment was tabled by my hon. Friend the Member for Weston-super-Mare (Brian Cotter). This one is mine, and I am enormously proud of it. I will be able to tell my grandchildren that I changed one letter in legislation, if that is all I ever do. The Liberal Democrats have been used to limited aspirations, but that will all change.
Amendment (g) makes it clear that the appeal is an appeal to the employer. Legislation frequently talks about different types of appeal: it may be an internal appeal or an appeal to the employment tribunal. The
amendment makes it clear for both sides that we are talking about an internal appeal to the employer.
Amendment (i) deals with clarity. The reference to ''discussion'' of an appeal could be taken to mean a preliminary discussion as to whether an appeal will be heard later. The accepted phraseology is to ''hear'' an appeal; the employer hears the appeal from the employee.
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
As the hon. Member is a lawyer, would he like to comment on the drafting of new section 80G? Does he find it, as I do, somewhat jarring in tone and not sitting comfortably with the general style of the legislation?
Mr Norman Lamb (North Norfolk, Liberal Democrat)
Some aspects of the proposed section do indeed jar. The hon. Gentleman referred to the use of the word ''staff''. I may be wrong, but I cannot remember seeing that before. The traditional way in which legislation is drafted tends to make its phraseology over-complex and inaccessible to people who are not lawyers. Anything that can be done to make legislation accessible and clearer to ordinary individuals who do not have the burden of being solicitors is a good initiative. I agree that proposed section 80G is not clear. Given its late introduction, I urge the Government to reconsider whether the overall framework could be improved. I am sure that it could.
Amendment (k) deals with who can accompany the employee. Our amendment has been framed in a different way from that of the Conservatives, but it is driving at the same issue. It seems sensible from everyone's point of view to have the same right of accompaniment as in other legislation. Let us not have a different right here to that elsewhere; that seems daft. We should drive at simplicity all the time. That is in the same vein as my earlier comments about the use of the terms ''employee'' and ''worker''. The faster we can move toward simpler provisions the better. If the term ''friend'' was used to allow a lawyer into a workplace, that would be a retrograde step. I always advise clients never allow a lawyer into the workplace. It is disastrous, and it is not the place for them. These matters are to be discussed between lay people who do not have legal backing. If an employer is faced with a lawyer across the table, that will increase the anxiety and potential for conflict, which would be a bad thing. I urge the Government to use the same framework that they have used elsewhere for the past three years and make provision for a work colleague or a trade union official.
I have dealt with all the Conservative amendments to which I wanted to speak, with one exception. The hon. Member for Runnymede and Weybridge wants a qualifying period of 26 weeks inserted in the Bill. I agree with that: it is better to include it rather than leaving it to regulations. I urge the Government to accept it.
The hon. Gentleman tabled an amendment on pro rata regulations that would allow the employer to reduce the package of the employee with a commensurate reduction in working hours, or to take away a benefit and compensate them partially in another way. That should be possible under the terms
of the provisions. It is a matter of getting the employer and employee to sit down and work something out. Under indirect sex discrimination, if a woman says that she wants to work part time, 20 hours a week, the employer should respond to that, and agree to pay her for those hours with commensurate reductions in benefits. That could be agreed and the contract of employment amended accordingly. Will the Minister confirm his view of those provisions? It seems appropriate that both sides agree a commensurate reduction in terms and conditions to accompany the reduction in hours, or any other change.
Mr Mark Prisk (Hertford and Stortford, Conservative)
The Minister can be assured that we are waiting with bated breath to hear his comments, so I shall be brief. I welcome the principle of flexible working and I will not go into endless detail about it except to say that it offers economic benefits and benefits to workers, employees and, apparently, staff.
I support the comments of my hon. Friend the Member for Runnymede and Weybridge and the hon. Member for North Norfolk, which highlighted the errors in this rushed set of Government amendments. That highlights one of the key dangers. It is a complex issue, but we are in danger of making bad law.
Although the provisions constitute a right to request flexible working, my concern, and that of many small employers in my constituency, is that it will become a right to flexible working. I would welcome a guarantee from the Minister that that is not his intention, at least for the duration of this Parliament, and hopefully beyond. The belated receipt of the revised regulatory impact assessment shows that the rest of the Bill represents additional burdens to business of £272 million per annum net of benefits. Those costs are considerable, so I was concerned to read that the amendment related to flexible working represents an additional net benefits cost of £173 million per annum. That is a 60 per cent. increase in the total cost of the Bill to business. Does the Minister have any intention of alleviating some of those costs, particularly to small businesses?
In proposed section 80F(6), the Secretary of State is granted the power to substitute a different age for the first of the ages specified in subsection (3). It seems that that could be nine years old, or 12 or 18. That sheds a different light on what the clause could do, and I would welcome any clarification that the Minister could provide of his intentions. I have waxed lyrical—I hope—and certainly at length on the issue of small businesses. I am grateful for the Committee's patience. Flexible working is an important principle. Most small businesses operate it and do so by their very nature. But there are burdens here. The CBI, the Federation of Small Businesses and other organisations have raised this. I reiterate the point that I raised through my hon. Friend: can the Minister give the Committee some assurance that small businesses will be given clear guidance? Proposed section 80G(2) contains almost a page of details that every employer will have to comply with. That is a burden and I look forward to hearing the Minister's comments.
Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West and Hessle, Labour)
I hope that hon. Members will understand that with 20 minutes to reply to 28
amendments, I may not be as generous with interventions as I would normally be. Hon. Members have been assiduous in tabling amendments at very short notice. I will try to cover them all as well as address the points of principle.
The hon. Member for Runnymede and Weybridge talked about how this would benefit one group only. He did not, to his credit, advance the backlash argument that other employees in the workplace would be seething because parents of small children had flexible working arrangements. We found no evidence of that. However, and the hon. Gentleman is quite right, we found that people with other responsibilities such as aged parents or those who simply want to pursue their hobbies as football referees or whatever it may be want some flexibility at the workplace too.
We are concentrating on the parents of small children because we all have a stake in raising children properly. There are some stark statistics on involvement in the workplace: 87 per cent. of fathers who are in a couple are in work as against only 64 per cent. of single fathers. The figures for mothers are much more stark: 67 per cent. of mothers who are part of a couple are in the workplace compared with only 45 per cent. of single mothers. That is only half of the average rate throughout the rest of Europe. We must address the problems that women have in juggling their domestic commitments with their working life.
There are two other points here. The hon. Gentleman said that women would be keener than men to take up these arrangements. That is not what the labour force survey found. Indeed, according to a table in the taskforce's report showing the latent demand for flexible working, 24 per cent. of males and 18 per cent. of females want to work annualised hours and 40 per cent. of males and 30 per cent. of females want to compress the working week and do the same hours over four days rather than five. There is no evidence that requests for flexible working will come mostly from women. Much of it will come from men.
That brings me to one other point, which is the culture of the workplace. Many men said that they believed that it would damage their employment and promotion prospects if they tried to do anything that would be regarded as sissy and soft like asking for more time off to spend with their children. August bodies such as the Small Business Council and the better regulation taskforce said that a key barrier is parents' fear of being discriminated against if they make a request for flexible working.
Mr Philip Hammond (Runnymede and Weybridge, Conservative)
Are those survey figures specifically related to a desire to work flexibly in order to meet the requirements of the legislation to care for a child?
Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West and Hessle, Labour)
They relate to the desire to work flexibly and were taken in 2000. My point is about women being keener on flexible working than men, which the hon. Gentleman mentioned.
We are taking the legislative route on work and parents, and using a light touch, rather than demanding flexible working, the right to work flexibly or the right to request a duty to consider. We are taking a non-legislative route on the work-life
balance campaign. The Employers for Work-Life Balance group is set up separately. Peter Elwood of Lloyds TSB chairs that. The work-life challenge fund is giving consultancy grants to companies that want to change the way in which they work for all their employees. There is a lot going on for people who are not the parents of small children, but want to work flexibly.
Mr Norman Lamb (North Norfolk, Liberal Democrat)
I made a point of principle about trying to get simpler legislation and the interplay between indirect sex discrimination and the new provisions. Does the Minister agree that it would be better, ultimately, if we had only one framework rather than two together? Will he examine that further?
Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West and Hessle, Labour)
It would be very difficult. I remind the hon. Gentleman that we are consulting on the article 13 stuff on discrimination on the grounds of sexual orientation, age, disability and religion. That may provide an opportunity to address the matter. I was musing about the point while the hon. Gentleman was speaking, and his suggestion would be difficult to achieve.
May I discuss the amendments in the order of the Bill, rather than dealing with the Conservative amendments followed by those of the Liberal Democrats? If I can manage that, it will allow a better narrative.
Amendment (a) would insert the phrase ''in writing'' in proposed section 80F(1). Similar amendments have been tabled throughout new clause 2, and my argument is the same for them all. We intend all of the steps to be in writing. The taskforce recommended that and we will put that in regulations. There was an argument—kindly, nobody mentioned it—about whether the basic three-step and two-step procedure under discipline should be in writing. I undertook to consider and consult on that, and it will be done for Report. Both sides of industry on the taskforce said that things should be in writing for the good reasons that have been mentioned previously.
The hon. Member for Runnymede and Weybridge discussed amendment (l), which relates to a person who works between his home and place of business. As part of the flexible arrangements, a person may ask to work from home or in a different way at work. A person cannot ask to work at another workplace, such as another branch of a bank. That is not covered by the provision. We did that because the types of flexible working that the taskforce recognised covered compressed hours, flexi-time, job sharing, tele-working, term-time working, shift working, staggered hours, annualised hours and home working, which is a way of flexible working that is spreading throughout businesses large and small through best practice. We want to cover those ways of working, and home working is an important part of that.
When he spoke to amendment (m), the hon. Gentleman asked why we needed sub-paragraph (iv). He said that he could not think of a single example of something that might come under that provision. I can: tele-cottaging. That is a terrible term; it sounds
faintly like an act that a person should not commit. It is a system through which people can work from a place that is kitted out with information technology facilities. We want to cover the probability that new methods of flexible working will arise that are not covered by the subsection, which is purpose of sub-paragraph (iv).
Amendment (n) would require an application to be made in writing, and I hope that my response to amendment (a) covers that.
The taskforce discussed the substance of amendment (bb) in detail, and rejected it unanimously. It would insert a provision to require the specification of a reason why an employee requires a change of terms and conditions in order to care for a child. It was discussed and rejected. Why was it rejected? The matter is similar to paternity leave when employers want no part in having to check whether the employee was the genuine father of a particular child. They did not want to get involved. Under the clause, employees may seek flexible working because their partners had left them and they might not want to explain that to the employer. They may have had a problem with their carer, who may have left under acrimonious circumstances. The employees would not want to go into detail. When such matters were discussed by the taskforce, such a proposal was rejected unanimously, and that is why the amendment should be rejected.
I turn now to amendment (b), which was tabled by the Liberal Democrats, and which would leave out subsection (2)(c) of proposed section 80F. I agree with the hon. Member for Runnymede and Weybridge that it is wrong to remove an essential part of what was agreed by the taskforce. We are sticking to its recommendations. It carried out a superb job and I want to say, in passing, that Sir George Bain did excellent work, as he has done on the Low Pay Commission. He is highly regarded, and I commend him for his work.
It is proper that the employee should consider the circumstances of what such a request would mean and what impact it would have on the business. He should think it through, not simply say, ''I want Fridays off.'' That is an important requirement, which is why the Government oppose amendment (b).
The position is similar with amendment (c). The hon. Member for North Norfolk said that the Federation of Small Businesses was keen to push it. It is wrong, however. The taskforce came up with 14 days before a child's sixth birthday to provide a mechanism that would remind people. Many of us fathers know that, when we are two weeks away from a child's birthday, we usually start thinking about it because of the effect that it will have on our bank balance. The period of 14 weeks before the child's sixth birthday would be totally arbitrary. More seriously, after the start of the fourteenth week, the child carer could leave and the arrangements would fall apart. Someone might want flexible working in the remaining 13 weeks and be denied that by the law, under which they would have such a right up to a
child's sixth birthday. The taskforce was right to say that there should be a certain period, but a period of 14 weeks would be wrong.
I shall take amendments (z) and (d) together. The hon. Member for Runnymede and Weybridge wants the arrangement to be permanent, but the hon. Member for North Norfolk takes the opposite view. The taskforce have the matter absolutely right. If, as part of the arrangement reached between the employer and the employee, it were decided that the change would be for only a specified time and then the employee would revert to the old arrangements, the amendment would complicate matters. Employees would have to go for a different contract of employment or may have their change of terms and conditions. That would be wrong. It was said that people should automatically revert back, but the taskforce was particularly vehement about that because another worker may have been recruited to cover the Friday that the employee was having off. Such arrangements may suit everyone and the taskforce said that there should be no automatic reversion. I do not agree with either amendment.
As for amendment (o), the hon. Member for Runnymede and Weybridge said that proposed section 80F(8)(a)(i) is not suitable. It is not appropriate for the Bill to refer to a period of 26 weeks. That could be written into regulations, but we want to leave ourselves some flexibility because there may be an opportunity in the future to bring different qualifying periods together, which employers are keen to do. It is not something that we have in mind at present, but there should be some flexibility because different pieces of employment legislation involve different qualifying periods.
I agree with the hon. Member for Runnymede and Weybridge about the wording of amendment (t); I was disappointed with the hon. Member for North Norfolk—I may as well hand him his Dan Dare badge now; I know whose statue should go on the spare plinth in Trafalgar Square, although he slightly spoiled his triumph by the line he took. The language we used is that used by the taskforce: business people, union people and charity people sitting down together. It is true that we tried to transpose it but I do not think that that is a problem.
The hon. Member for Runnymede and Weybridge said that the term ''material'' was well known in law; it is well known in accountancy law but not in employment law. The language we use is correct. The term ''reasonableness'' would create another barrier for the employer because instead of being able to say, ''These are the reasons why I am rejecting the measure'', he would have to have a reasonable case, as determined by a tribunal. A tribunal case would open up the prospect of second-guessing the business reasons—the very thing we are trying hard to avoid.
Several hon. Members made a point about guidance. We will accept recommendation 7 of the taskforce for much guidance. We should work hard to give guidance, particularly to small businesses, on all the relevant matters. Amendment (p) dealt with the term ''material''; I do not accept the argument on that
and believe that the wording is acceptable. On amendment (q), the term ''staff'' is used because we are talking about recognising the effects on the rest of the work force. The rest of the work force might be made up of people who would be termed employees under employment law and those who would be termed workers under employment law. The amendment would prohibit anyone who is not an employee from being considered; the provision on staffing in relation to casual workers or agency staff and so on would therefore be ignored.
Mr Alan Johnson (Minister of State (Employment and the Regions), Department of Trade and Industry; Kingston upon Hull West and Hessle, Labour)
It is defined as the rest of the staff and we will make that clear in regulations. If ''employees'' were used, a large section of the work force would be left out. I do not accept the arguments on that, just as I do not accept the arguments about amendment (r) on similar capability. There is no reason why the coverage could not be provided by someone on a different grade and on different terms and conditions; to prohibit that would restrict employers and employees. I apologise: I have departed from my intention to take the amendments in order.
Amendment (d) is the same as amendment (z) and there is no support from employers or parents for the proposed change. I apologise; I have already dealt with that—I am trying to rush through all the amendments in a short space of time. I shall give up trying to go through them in order.
Amendment (s) dealt with the issue of incompatibility with planned structural changes. The hon. Member for Runnymede and Weybridge made a point about Fowler's ''Modern English Usage'' but in terms of the grounds for refusing, if the planned structural changes involved the decision of an individual wanting to work in a shop on Monday, for example, rather than Sunday, for example, which meant that the shop would close on Sunday, that would be grounds for rejection. In terms of incompatibility, the amendment would make an unnecessary addition.
The argument on amendment (u) is the same as that for amendment (t). I have dealt with the question of reasonableness. The amendment tidied up the paragraph on the original amendment. The right to be accompanied is an important point. It is different from the provision under the Employment Relations Act 1996 that one can be accompanied by a trade union representative, regardless of whether he or she is recognised. The taskforce said that that would be wrong; it would have to be a recognised trade union representative, because it is important to have someone who understands the background. The process is not an industrial tribunal, a discipline case or a grievance case; it is about how the workplace operates. That is one important reason.
The taskforce also said that the employee could be accompanied by a friend. We will have to consult widely and draw up the regulations carefully. However, the gist of the taskforce's recommendation was that someone who might have a lot of knowledge—not lawyers; it does not expect lots of
lawyers to come into the workplace—or who might have worked in a similar industry, perhaps a friend who had seen that operate before—
It being twenty-five minutes past Eleven o'clock, The Chairman proceeded, pursuant to Sessional Order D [28 June 2001] and the Order of the Committee [6 December 2001, as amended on 22 January 2002], to put forthwith the Question already proposed from the Chair.
Amendment agreed to.
The Chairman then proceeded to put forthwith the Questions necessary to dispose of the business to be concluded at that time.
Amendments made: No. 201, in page 70, line 27, at end insert—
'In section 191(2) (provisions of the Act which have effect in relation to Crown employment), for paragraph (c) there is substituted—
''(c) Parts 6 to 8A,''.'.
No. 202, in page 70, line 27, at end insert—
'In section 192(2) (provisions of the Act which have effect in relation to service as a member of the armed forces)—
(a) in paragraph (aa), for ''section 45A'' there is substituted ''sections 45A and 47D'', and
(b) for paragraph (c) there is substituted—
''(c) Parts 7, 8 and 8A,''.'.
No. 203, in page 70, line 27, at end insert—
'In sections 194(2) and 195(2) (provisions of the Act which have effect in relation to employment as a member of the House of Lords or House of Commons staff)—
(a) in paragraph (c), for ''and 47C'' there is substituted '', 47C and 47D'', and
(b) for paragraph (e) there is substituted—
''(e) Parts 7, 8 and 8A,''.'.
No. 204, in page 70, line 27, at end insert—
'(1) Section 199 (application of the Act to mariners) is amended as follows.
(2) In subsection (2) (provisions not applying to share fishermen)—
(a) after ''47C,'' there is inserted ''47D,'', and
(b) for ''Parts VII and VIII'' there is substituted ''Parts 7, 8 and 8A''.
(3) In subsection (8) (provisions whose application is subject to the limitation in subsection (7)), for paragraph (d) there is substituted—
''(d) Parts 7, 8 and 8A,''.'.
No. 205, in page 70, line 27, at end insert—
'In section 225 (definition of calculation date for the purposes of the calculation of a week's pay in relation to cases connected with rights during employment), at the end there is inserted—
''(6) Where the calculation is for the purposes of section 80I, the calculation date is the day on which the application under section 80F was made.''.'.
No. 206, in page 70, line 31, leave out paragraph 38 and insert—
'(1) Section 227(1) (maximum amount of week's pay) is amended as follows.
(2) Before paragraph (a) there is inserted—
''(za) an award of compensation under section 80I(1)(b),''.
(3) For ''or'' at the end of paragraph (b) there is substituted—
''(ba) an award under section 112(5), or''.'.
No. 207, in page 70, line 42, after '80B,' insert '80G,'.—[Alan Johnson.]
Schedule 6, as amended, agreed to.
Clause 52 ordered to stand part of the Bill.