Mr Jonathan Djanogly (Huntingdon, Conservative)

We are debating a situation where a ballot has not yet taken place and the unions wish to send missives to workers. The purpose of the amendment is to ensure that if information sent out by unions, employers or non-unionised workers is subsequently proved to be inaccurate or to contain misrepresentations, the Central Arbitration Committee should declare the result invalid and any resulting union recognition should be quashed.

I concede that the drafting of the amendment is not of the high quality that we would expect from civil servants, but the principle is sound. Let me give a few examples. What if a union that is desperate for recognition makes misrepresentations about the company or other unions that could be competing with it for recognition, or about non-unionised workers in relation to statements or the positioning of non-unionised workers within that company? The basis of the ballot might be morally invalidated by those misrepresentations. The Bill does not deal with such an instance. As has been said, the Bill sits on top of many other Acts and I may have overlooked the legislation that deals with this issue. It is something that we should address.

Mr Jon Cruddas (Dagenham, Labour)

Conversely, does the hon. Gentleman accept that if an employer spread false information during the three-month period before the ballot, there might be a procedure to grant automatic recognition? It could be an even-handed process of perceived misinformation that is transmuted through the process.

Mr Jonathan Djanogly (Huntingdon, Conservative)

As the hon. Gentleman will note from the amendment, I have provided for employers and non-unionised workers to be included. Whether that should lead to automatic recognition is a leap; the one

does not equal the other. The situation should be addressed. The company has a legal relationship with the workers.

Mr Bill Tynan (Hamilton South, Labour)

Does the hon. Gentleman accept that the proposal could enable an employer or a non-union member to deliberately mislead and have the ballot quashed, thus preventing natural justice?

Mr Jonathan Djanogly (Huntingdon, Conservative)

No. If a misrepresentation is made, it should be addressed. The important point to make here is that the CAC has the duty to send out the information. That creates a complicated legal situation. What if the information that the CAC sends out is wrong? The CAC receives the information from the union, but what if it is wrong? Who is responsible? I am not sure and the Minister should address that. The union has no locus at that time.

Mr Bill Tynan (Hamilton South, Labour)

Does the hon. Gentleman accept that an employer could deliberately provide misinformation for the CAC to send out, knowing that the ballot would then be disqualified?

Mr Jonathan Djanogly (Huntingdon, Conservative)

The Minister may wish to clarify that issue. The employer does not have to send out information through the CAC. The employer has an existing legal relationship with his employees and can send them information at any time. If such information contains misrepresentations, the employee has a right of breach of contract. That is not the situation here; there is a fundamental difference.

At the pre-ballot stage that we are discussing, the union would not even have had a ballot. There is no legal contractual relationship between the union and the CAC, or between the union and those employees who might become subject to recognition in due course. It is a different legal relationship.

Mr Jon Cruddas (Dagenham, Labour)

Does the hon. Gentleman accept that an employer could intimidate his work force prior to the implementation of the statutory recognition procedure for the ballot? What is his proposed remedy where there is intimidation of the work force in anticipation of statutory recognition of the ballot?

Mr Jonathan Djanogly (Huntingdon, Conservative)

If there were serious intimidation of the work force, an employee could claim either constructive dismissal or unfair dismissal. There are existing remedies for an employee who is subject to intimidation, but there are no such remedies in the converse case; if a union were to put out misrepresentations about an employer. The issue of discrimination was included in an amendment that was not selected and will have to be inserted as a new clause later on.

Mr Hywel Williams (Spokesperson (Disability; Health; Social Security; Work and Pensions); Caernarfon, Plaid Cymru)

Does the hon. Gentleman accept that the amendment is flawed? Whoever is at fault, it is always the union that suffers. The amendment states that the

''resulting union recognition shall be quashed''

whoever is at fault.

Mr Jonathan Djanogly (Huntingdon, Conservative)

That ties in with the previous question. The contractual relationship is separate. There is a contractual relationship between the employee and the company that provides remedies if, for example, there is misrepresentation or intimidation.

There is no such contractual relationship between the union and the people who are going to be balloted at that time. Can the Minister tell us who is answerable in such a case? Would the CAC be held responsible if it sent out information received from a union that was a misrepresentation or caused damage in some way? What other legislation answers that question?

No one carries the buck for misrepresentation in the Bill. The unions do not. All they have to do is pass on information—whatever it may be—to the CAC. The CAC does not have any responsibility either. In real life, I imagine that the CAC would look at representations that come to it from the union and, if any part of those were misrepresentations or could be damaging in any way, the CAC would probably have a word in the union's ear. But that is not included in the Bill in any way, shape or form. It is an omission. The amendment is aimed at bridging that gap.

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

Mr. Forth, I welcome you to the Chair.

As my hon. Friends the Members for Dagenham (Jon Cruddas) and for Hamilton, South and the hon. Member for Caernarfon (Hywel Williams) indicated—and the hon. Member for Huntingdon (Mr. Djanogly) accepted—the technical aspects of the amendment do not follow through. It is technically inept. On all occasions, the guilty party would be the trade union. It would not matter whether it was the employer's fault, or anyone else's; the union would be left with the problem of the recognition procedure being stopped.

We are trying to establish the principle that there should be a code of practice for recognition ballots that makes it clear that parties should not use defamatory or provocative material, or undertake negative campaigning. The Government are concerned that there have been examples of employers using union-busting tactics by employing companies, mainly from the US and elsewhere, to intimidate workers into not participating in recognition—[Interruption.]

The Chairman: Order. Will hon. Gentlemen either not conduct conversations or conduct them outside? They certainly should not conduct them in between the Minister and the hon. Gentleman whose question he is answering.

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

Thank you, Mr. Forth.

We will consider the issue that I have mentioned in debates on other amendments. The sanction in amendment No. 24 is very harsh. There would be only one guilty party—the union—even if the inaccurate information came from elsewhere. Once there was a mistake, even a minor one, that would be it. We must be careful to recognise what we are trying to achieve and the backdrop to that. The Government are trying

to make the situation easier and fairer on all sides. I hope that no side—union or management—would deliberately mislead a work force or make libellous statements about another party.

Mr Jon Cruddas (Dagenham, Labour)

Does my hon. Friend the Minister anticipate a code of practice that is binding on both sides in the process to ensure a set of protocols that should not be breached? That would ensure that there were no intimidatory tactics by the union or the employer, and that employees were safeguarded from such activities during the totality of the recognition procedure.

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

I am considering that with regard to the evidence that is coming to us from a variety of organisations. In relation to intimidation on either side, there is currently a code of practice, which will have to be updated after the Bill receives Royal Assent.

The measure is about a spirit of partnership and our objective in relation to information being balanced for both sides. The employer has the opportunity to give his or her employees as much information as possible. The non-union person has the right to speak to the work force, as we have said, but the union would be at a disadvantage under the amendment. We have accepted the principle that was set out and we would not want either side to involve itself in intimidation. There are sufficient safeguards with the existing code of practice. There could be recourse to the law on libel and other things could happen if either party went down that route. I think that there are sufficient safeguards to offset the concerns expressed by the hon. Member for North-West Norfolk (Mr. Bellingham). Also, the amendment is flawed, and I ask him to withdraw it.

Mr Jonathan Djanogly (Huntingdon, Conservative)

The Minister has made some concessions, in so far as he sees that there is a problem, for which I thank him. However, I should like to pursue the point slightly, because I am still not entirely sure who takes responsibility for misleading information. The information goes from the union to the CAC and then on to the employees. Does that mean that the CAC takes responsibility if information is misleading, negligent or will create harm? That needs to be addressed.

My other point is that we keep hearing from Labour Members that this measure is about management and unions, but that is not necessarily the case. Unions often compete against one another in pre-ballot situations. I do not want to say that it is a case of them against us, because that is not how it is in real life. There are often conflicting parties, whether they are the unions, people who do not want to be unionised or the companies.

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

The responsibility for the literature lies with the people who provide it. If that were the union, it would be the union's responsibility. If the literature were found to be libellous, the CAC would take a view and deal with the situation during the procedure. The union involved would have to watch out; if the CAC said that the process had been faulty, the union would be prevented for three years from

trying to apply for recognition again. It will need to be careful all the way through not to jeopardise the procedure.

As we discussed earlier, the CAC is a strong body in terms of how it safeguards its information and its responsibilities, as is the qualified independent person. If information flows that the employer sees as libellous, of course, they would have the right of reply. Few employers would not take up the opportunity to reply quickly to what they saw and to use it as a mechanism against the union in their dealings with the work force.

If a union does not go through the process properly, it will be prevented from applying again for three years. That is a strong sanction. I think that we have covered the issue and I ask the hon. Member for North-West Norfolk to withdraw the amendment.

Mr Henry Bellingham (North West Norfolk, Conservative)

Mr Forth, I apologise for my slight misdemeanour a moment ago. I can see that you are going to put the stamp of firm authority on this Committee early on, and I will not transgress again.

The Minister has obviously made a number of interesting suggestions, and has given us some grounds for comfort. In the light of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr Henry Bellingham (North West Norfolk, Conservative)

I have one particular concern. I should like to refer the Minister to proposed new paragraph 19C(5) to schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992, which says:

''The initial period is the period starting with the day on which the CAC informs the parties under sub-paragraph (7)(b) and ending with the first day on which any of the following occurs''.

Proposed new paragraph 19C(5)(d) says:

''the CAC informs the union (or unions) under paragraph 25(9) of the name of the person appointed to conduct the ballot.''

The union's right of communication continues throughout the period of the ballot by virtue of existing provisions in the schedule, so is not proposed new paragraph 19C(5)(d) superfluous? In the interests of trying to tighten up and sharpen up legislation, which I am sure, Mr Forth, is something that you would sympathise with and condone, surely we should take out anything that is not strictly necessary. Will the Minister please comment on that?

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

The hon. Member may be right as regards the proposed new paragraph. There may be some truth in what he is saying. I will take it away and look at it.

Mr Henry Bellingham (North West Norfolk, Conservative)

I am grateful.

Mr Jonathan Djanogly (Huntingdon, Conservative)

I thought that it was important to speak in this stand part debate because, unlike most of the other clauses, which build on existing legislation, clause 5 is new. There is a new right for unions to

communicate with workers after acceptance by the CAC of an application, but before the ballot process. My initial reaction on reading the clause was, ''Why is it needed? Let us table an amendment to strike it out.'' The Minister will notice that we did not table such an amendment, but we have not yet covered why the clause is necessary. It would be helpful if the Minister explained some of the background to that and said which representations led him to think that it should be included.

Mr Jon Cruddas (Dagenham, Labour)

I just want to flesh out a couple of points that the Minister has made and raise a couple of points on which I seek a bit of clarity. The balloting period is relatively short but the recognition procedure can be quite protracted. That is the product of the agreements that were reached during work on the ''Fairness At Work'' White Paper, which were consolidated in the Bill.

The current code of access concerns the statutory 20-day period of the recognition procedure. However, the Minister talked about the possibility of a code of practice for the recognition procedure, addressing intimidation on the part of the union or the employer, covering access in excess of the 20-day period of the statutory recognition ballot.

As I understand it, the clause proposes access for the union only in terms of direct communication with the union members; it does not cover issues of access beyond that formal direct communication. Can the Minister clarify what he anticipates in terms of a new code of practice—covering, one would hope, the whole recognition procedure rather than the 20 days in the current code—and what that would mean in respect of addressing intimidation short of dismissal?

The hon. Member for Huntingdon mentioned remedies that were available in terms of unfair dismissal, but this covers issues of which the Department is aware, thanks to the submissions that were made to it during the review of the legislation, such as action that is short of a dismissal but which intimidates prospective union members as well as current union members, who might support a vote for the union in a recognition ballot. That covers a range of activities short of dismissal—visits to the homes of employees, activities outside the gate and the like; there is a range of possible intimidatory tactics. Does the Minister anticipate that the revised code, or discussions around it, will cover a period that exceeds the 20-day period of the formal statutory recognition ballot?

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

I am considering the situation on the basis of the evidence—not only the 20 days, but the whole process. It is difficult to find the right solution. We are considering the matter and will come back to the Committee at an appropriate time. My hon. Friend is right to differentiate between the balloting period and the period of recognition.

The reason behind the clause is to create a balance. The basis of the debates has been that the statutory recognition procedure should work well. We have had evidence of that from the extensive consultation that has taken place with a variety of organisations. We

listened to the union argument that the employer had the right to speak to his or her employees at will, and that those within the work force who did not want to join the union had their opportunity. There was a need for the union to be involved at an earlier stage, and for that to be done independently through the CAC and qualified independent people.

Mr Jonathan Djanogly (Huntingdon, Conservative)

There is a fundamental difference. The employee has contracted to work and provide services for the company, and might join the union. However, the employees who have not joined the union have no relationship with it. How can we, therefore, give the company and the union parity in terms of approach?

Mr Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations, Competition and Consumers), Department of Trade and Industry; Bradford South, Labour)

The union will have had to recruit members and must be in a position to explain to the CAC that it has reached the cut-off point for the number of members recruited. It will have tried the voluntary route, and that will not have worked. It will then have gone on to the statutory procedure. Surely it is important, in a democracy, that people should get the maximum amount of information that is available from all parties concerned, so that they can make a balanced judgment about what they want.

We took cognisance of the force of the arguments put to us by unions, and the clause provides the arrangements for access. This is about modern industrial relations. The system is working well and we do not want to see intimidation on either side. There is no extra cost to the employer because the union covers the cost of the communications that go to the CAC through the independent person. It is right and fair that we strike a balance. I know that Opposition Members do not accept that for reasons that have been explained in the debate. I believe that this is the right way forward.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.