Clause 13 - Power to make provision about effect of amalgamations etc.
Employment Relations Bill
4:00 pm
Mr Jonathan Djanogly (Huntingdon, Conservative)
I seek clarification from the Minister about the paragraph in the clause relating to the effect of the change of identity of an employer. Can the Minister give an example of how that would work in practice, because I am not sure about the mechanics of it? Would it relate only to big mergers? It seems as if the Secretary of State would have to move quickly to make an order in cases in which there was a change of identity of employer, and I am not sure that the clause provides the mechanisms that would be required.
Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)
I am grateful to the hon. Gentleman for raising that issue. I recognise his professionalism in that area, given his experience in his previous life—or perhaps I should say continuing life. As he said this morning, the world of industrial relations is dynamic. Employers and unions often adapt and change to meet new challenges, changes in economic circumstances and the evolving needs of their customers or members. Companies undergo mergers, transfers and takeovers. Unions amalgamate, join larger unions and sometimes divide.
Sometimes, the law is not so flexible. Current statutory procedure does not provide clearly for what should happen if the identity of one of the parties changes. If the CAC awards union recognition for an employer, it is not clear what will happen to that award if the business is taken over by a different employer. Likewise, there may be uncertainty about the status of an award for recognition if the original union merges with another and its legal identity changes. The law should provide greater certainty, which is why clause 12 gives the Secretary of State the power to make provisions to deal with such situations.
Our policy is that, following a change in the identity of the union or employer, responsibility for awards or outstanding applications should be reassigned to the new employer or union. It is important that, in so far as possible, there is continuity of treatment for the workers concerned. The Secretary of State will be able to make provision not only for where the CAC has
already awarded recognition but for where an application is under way. Often when a business transfer or union merger takes place, the circumstances on the ground will not change. The same managers and union reps will be in place, and the structure of the bargaining unit will not have been affected.
Applications that go the full distance take a median time of just over four and a half months. Our policy is that, if there is a change in the identity of one of the parties towards the end of the process, months of hard work and negotiation should not be wasted. As the hon. Member for Huntingdon said, there are many complexities. Only part of the bargaining unit might be transferred to a new employer. When a union divides, it may not be clear which of the new unions should have the benefit of the recognition award or be treated as pursuing an application.
The recognition schedule deals with many different situations and contains numerous references to the employer and the union. The Government do not believe that the procedure can be amended by applying a simple rule of thumb, which is why the clause contains an order-making power to provide for the detail of the policy in regulations. We will consult on such regulations in draft, and I intend that they will be introduced as soon as practicable following Royal Assent. They will be subject to the affirmative resolution procedure, so Parliament will have ample opportunity to scrutinise them.
I hope that my remarks have satisfied hon. Members that the clause should stand part of the Bill.
Mr Jonathan Djanogly (Huntingdon, Conservative)
I thank the Minister for that clarification and am pleased to hear that regulations will be introduced to dictate the issues. Will he briefly spell out whether the Secretary of State will delegate the decisions to the CAC? That would seem to make sense.
Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)
That is my understanding of what would happen, although I will let the hon. Gentleman know if I am wrong. The CAC will make the recommendations.
Question put and agreed to.
Clause 13 ordered to stand part of the Bill