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

I beg to move, That the clause be read a Second time.

Mr Eric Forth (Bromley & Chislehurst, Conservative)

With this it will be convenient to discuss the following:

Government new clause 9—Applications no longer to be made to Employment Appeal Tribunal.

Government amendments Nos. 59 to 65.

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

On Second Reading, the Secretary of State promised to table amendments to ensure that unions could deal with political activists who pursue a racist or xenophobic political agenda. Our aim is to ensure that unions can deal effectively with far-right political activists who infiltrate their ranks and sow the seeds of hatred and intolerance. I believe that there is widespread support throughout the Committee for tackling this issue. A great deal of detailed scrutiny has gone into the preparation of the amendments. In particular, we carefully considered the human rights implications of changing the law, and new clauses 8 and 9 and amendments Nos. 59 to 65 all relate to the changes that we are introducing.

The main changes that we propose are contained in new clause 8. The new clause is quite complex, so it will take some time to describe how it works. The current law defines unlawful exclusion and expulsion from trade unions in section 174 of the Trade Union and Labour Relations (Consolidation) Act 1992 as amended, which sets various limitations on the freedom of unions to exclude and expel. Subsection (2)(d) to which the new clause refers is especially relevant to our deliberations today. It provides that unions are permitted to exclude or expel where such actions by the union are entirely attributable to the conduct of the person involved. Subsection (4) defines what conduct means. Importantly, subsection (4)(a)(iii) states that being, ceasing to be, having been or having ceased to be a member of a political party does not count as conduct.

The provisions have caused difficulties for unions when tackling the problem of political activists infiltrating their ranks. Let me describe two of them. First, it has not been clear what membership of a political party entails. In particular, unions and their advisers have been unsure whether any political activities that it might be possible to view as intrinsic to membership are covered by the expression ''membership of a political party''. That means that

it is unclear whether it is lawful to take measures against members who have been active in promulgating racist political policies. Case law is developing in this area, so it is fair to conclude that the current definition probably does not embrace many, if any, political activities. However, case law has not yet settled down, so some uncertainty remains.

Secondly, difficulties have arisen because cases involving conduct are frequently complex. There may be several reasons why a union chooses to act against an individual, and some reasons may be much more important than others. Some reasons may be given by an official or a committee, while other reasons are given elsewhere in a union's decision-making machinery. However, as the law is currently constructed, the union has acted unlawfully even if membership of a political party was a relatively minor reason for expelling or excluding someone. Therefore, if the union wanted to expel a leading activist of a political party who was prominent in the workplace and outside it, it might easily fall foul of the law if any of the officials involved in the decision to expel an individual had unwisely indicated that that individual should be expelled wholly or partly because they were a member of a political party. In other words, there is plenty of scope in the existing legal formulation for unions to make slight errors that result in an exclusion or expulsion being unlawful.

The new clause deals with those difficulties. Our objective is to provide unions with greater latitude when dealing with political activists. We also want to make the law clearer. To achieve those ends, the new clause creates two new categories of conduct for the purposes of section 174. First, it establishes the category of ''excluded conduct'', which is defined in subsection (4) of the new clause. The category includes all the types of conduct other than membership of a political party that are expressly mentioned in existing section 174 as falling outside the definition of conduct. Such matters include the behaviours for which it is unlawful for unions to discipline their members under sections 64 and 65 of the 1992 Act.

The second category is ''protected conduct'', which is defined at subsection (4A) of the new clause as

''being or ceasing to be, or having been or ceased to be, a member of a political party.''

Importantly, new subsection (4B) qualifies the definition by making it clear that political activities of any kind do not fall in the definition of protected conduct. In other words, such political activities constitute just conduct. The various elements are brought together at subsection (2) of the new clause, which sets out the tests for determining whether unions have the freedom to exclude or expel on grounds of conduct. It has various effects and I will mention some of those.

First, the provision ensures that any exclusion or expulsion attributable in any way, even to a small extent, to an ''excluded conduct'' is unlawful. That is the current situation. So, we wish to retain the existing

protections for the behaviours listed as excluded conduct. That also ensures that there is complete consistency between sections 65 and 174 of the 1992 Act.

Secondly, the provision ensures that, if protected conduct is the sole or main reason for an exclusion or expulsion, the union has acted unlawfully. We are therefore retaining the protections for passive membership of political parties. The right simply to belong to a political party is protected.

Thirdly, an exclusion or expulsion is lawful where it is entirely attributable to conduct that is neither excluded nor protected, because any form of political activity falls outside those two categories. It follows that a union is free to exclude an individual for his or her political activities, assuming of course that it complies with its own rules when it does so.

Fourthly, we have ensured that any exclusion or expulsion is lawful where a minor reason for it concerns protected conduct, but the main reason concerns other conduct outside the definition of excluded conduct. That means that a union will have acted lawfully if it expels a political activist principally on the grounds of their political activities where a subsidiary factor was the person's political party membership.

New clause 8 also changes the remedies for unlawful exclusion or expulsion. They are set out in section 176 of the 1992 Act. Under those provisions, an individual who an employment tribunal holds to have been unlawfully excluded or expelled may apply later for compensation. A minimum award applies where, at the time that the application is made, the union has not admitted or readmitted the individual. That minimum award is currently £5,900.

In cases where the union has failed to admit or to readmit the individual, the application for compensation is at present made to the Employment Appeal Tribunal. I will return to the division of responsibilities between the EAT and the employment tribunal when I discuss new clause 9. We believe that the minimum award of £5,900 is simply too high to apply to all cases. It is quite a substantial sum of money for the deserving and less deserving alike. We therefore think that the tribunal should be given greater discretion to decide the amount of the award. That is achieved in subsection (4) of new clause 8, which inserts a number of subsections into section 176 of the 1992 Act. In combination, the new subsections remove the £5,900 minimum in cases where the exclusion was unlawful because it was mainly attributable to protected conduct—namely, to membership of a political party—and the other reasons for the union's decision, wholly or mainly concerning conduct, were contrary to the union's rules.

That sounds complicated, so let me give an example. The union has expelled an individual on the grounds of both his political party membership and his party activities. The main reason was the person's membership. However, a contributory factor concerned the individual's engagement in political activities that were contrary to the union's rules. So,

the political activity was an important contributory factor but not the dominant one. Under new clause 8, the expulsion was unlawful, but the minimum award would not apply. If the union failed to readmit the individual, the tribunal would make an award that it thought ''just and equitable'', subject to the contributory fault attached to the individual.

New clause 9 changes an unusual feature of the law. At present, an application for compensation must be made to an employment tribunal.

Mr Jonathan Djanogly (Huntingdon, Conservative)

In that example, what if the individual concerned was a member of a political party and also conducted himself in a way that was adequate for his expulsion, but he argued that he was wrongly expelled because the union used his membership of a political party as the excuse? In such a situation, could he not be expelled for a conduct point?

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

No, he could not.

Mr Jonathan Djanogly (Huntingdon, Conservative)

If that is the situation, then if someone is a member of a political party, how can he be expelled in any circumstances?

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

I accept that the issue is very complicated. It relates to whether a person's activities are related to the activities of the union. If his political activities were in contradiction to the aims, objectives and rules of the union, he could be excluded. The hon. Gentleman may want to consider that and return to the matter as part of a wider debate. It is a particularly controversial area.

Mr Jon Cruddas (Dagenham, Labour)

I know that this is very complicated, but what about when the anti-racist position of the union is contained not in its rules but in its general preamble and statement of objectives? In that instance, the activities would not break the rules of the union. Does the union have any recourse if it wants to exclude a person in that case?

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

I am grateful for my hon. Friend's contribution. That is something that we may need to consider. We have been very careful, for the reasons that I outlined—the legal advice that we have taken and the spirit that we have tried to achieve, which was evident on the Floor of the House on Second Reading—to try to resolve the issue. We are talking about the rules at present, but I am prepared to consider strengthening that further. Hon. Members on both sides who feel that amendments could be made should note that we can consider the matter again on Report. We considered the matter in great detail with the support of independent legal minds, and then looked to parliamentary counsel for advice on how to draft the provisions. We are trying to achieve a perfectly reasonable step.

It is the far right political party that is trying to infiltrate unions that announced that, should the new clause become part of the Bill, it would launch a national recruitment campaign. I say to that party, ''Go on and do that,'' because it should be out in the open attracting the attention of trade unions if that is at all possible. What it should not be doing is infiltrating organisations, whether they be political parties or trade unions.

On new clause 9, at present, an application for compensation must be made to an employment tribunal when the individual wrongly excluded or expelled from a union has been admitted or re-admitted to the union when he applies for compensation. However, as I have explained, the application must be made to the Employment Appeal Tribunal when he has not been admitted or re-admitted. A similar arrangement also applies to the law on unjustifiable discipline.

We think that that arrangement is unnecessarily complex. It is confusing for the parties who have to go to different tribunals at different stages of a case. It involves unnecessary cost in so far as the Employment Appeal Tribunal needs to acquaint itself from the beginning with the facts of a case that has already been considered by the employment tribunal. There is no other jurisdiction when the Employment Appeal Tribunal is involved in assessing compensation in this way.

New clause 9, read with subsection (4) of new clause 8, therefore has the effect of amending section 176 of the 1992 Act to ensure that the employment tribunal, and not the Employment Appeal Tribunal, sets awards when an unlawfully excluded or expelled individual has not been admitted, or re-admitted to the union when he makes his application. It also makes corresponding changes to section 67 of the 1992 Act concerning the remedies for unjustifiable discipline. The Employment Appeal Tribunal will of course retain its standard appellate function in regard to both jurisdictions.

Finally, I will deal with Amendments Nos. 59 to 65 inclusive. Those amendments are consequential to new clause 9. Various provisions in employment law cross-refer directly or indirectly to the role of the Employment Appeal Tribunal in making awards of compensation under sections 67 and 176 of the 1992 Act. They also need to be deleted or amended to allow for the proposed removal of the Employment Appeal Tribunal's jurisdiction to set compensation.

The Secretary of State for Trade and Industry set out the Government's purpose in bringing forward these amendments at the Labour party conference last September. She said:

''It is wrong that racists should be allowed to hide behind their political party membership to prevent unions from excluding or expelling them for their offensive conduct''.

New clause 8 removes that possibility. It helpfully clarifies the law, yet it retains the essential freedom to belong to a political party. Our other amendments tidy up the division of legal responsibility between the Employment Appeal Tribunal and employment tribunals and give greater scope to tribunals to use their judgment when awarding compensation. I urge the Committee to join me in commending the new clauses and consequential amendments for inclusion in the Bill.

Mr Jonathan Djanogly (Huntingdon, Conservative)

The new clause amends section 174 of the 1992 Act relating to the right to exclude or expel from a trade union. I read it on Friday when it first came in. I read it on Sunday. I read it yesterday, and I read it again this morning. Having read it several

times, I find the drafting unintelligible and the purpose vague to the point of obscurity.

Under the 1992 Act, the exclusion or expulsion of an individual from a trade union is permitted if, among other things, exclusion or expulsion is entirely attributable to his conduct. As the Minister suggested, the Government are proposing to substitute ''his conduct'' in section 174(2)(d) with the massively cumbersome phrase,

''conduct of his (other than excluded conduct) and the conduct to which it is wholly or mainly attributable is not protected conduct'',

which makes anyone's eyes water. As I said earlier, the new clause will be looked at by a lot of people between now and Report, so it is not the be all and end all but the start of the process.

Excluded conduct is conduct that may not lead to exclusion from a trade union. It includes being a member of another trade union, being employed by a particular employer, failing to support industrial action and so forth. Protected conduct, which is conduct that may not in itself lead to exclusion from a trade union, consists in the individuals being or ceasing to be, or having been or ceased to be, a member of a political party.

The new part of the Government's proposal lies in the introduction of new subsection (4B), which states:

''Conduct which consists of activities undertaken by an individual as a member of a political party''

is not protected conduct. That means that, for instance, a member of the British National party cannot be excluded from a trade union just for being a member of the BNP. However, he could be excluded for activities or conduct taken as a member of that party.

Let us start putting it another way, because the new clause does not deal with the BNP. Let us say that the anti-racist cause goes badly, the BNP starts winning more seats in Burnley, it consolidates a power base, consolidates a power base in unions, and unions suddenly realise that BNP members whom they had considered to be entryists and troublemakers are beginning to enter the mainstream and to establish power bases.

In more likely circumstances, let us say that the BNP's influence grows and there is a big bust-up in the union, the BNP people are expelled and they set up their own union. In the new union or one that they have taken control of, a member of the Communist, Labour or Conservative parties could not be excluded from the union just for being a member of one of those parties, but they could be excluded for activities undertaken as a member of the party. That could presumably mean being involved in events designed to enhance race relations, as long as exclusion was not done in a racist way, in which case the union would be prosecuted under other statutes, such as the Race Relations Act 1976.

Under those circumstances, are there not dangers in allowing unions to decide what is or is not acceptable

conduct? Would it technically be possible, for instance, for a public sector union to throw out a Labour or Conservative party member for sending their children to a private school or for a using private health care? That clearly goes against the ethos of the public sector union concerned. Would it be possible to throw someone out for going fox hunting?

There are significant problems with the drafting of the new clause, partly because it does not talk about racism or the BNP at all. Therefore, it has become very wide. It might be helpful if the Minister could explain which activities he has in mind. What activities would that BNP member have to undertake? Let us take a narrow version. What would they have to do to be subject to expulsion? The new clause does not deal at all with someone who is not a member of a political party but who is a racist and who could be a lot more racist than someone who is a member of a racist political party. [Interruption.] Well, yes, but why not just rely on other legislation?

Why is the new clause drafted so widely? I assume that that was on the basis of human rights advice that the Minister received. I should be grateful if he could expand on that. The width of the new clause means that, if the circumstances were right and the wrong people took control of the union, the legislation could be used for a purpose almost exactly opposite to that which the Government intend and certainly in a counter-productive way. Could legal and democratic activities, such as taking part in demonstrations and exercising freedom of speech, be banned under the new clause? Clearly, human rights advice has destroyed the original purpose of the new clause, but it harbours dangers that could attack the freedoms that we take for granted. I have raised quite a few issues there. I look forward to hearing what the Minister has to say.

Mr Jim Sheridan (West Renfrewshire, Labour)

May I say at the outset that the aims and objectives of most, if not all, trade unions are made perfectly clear in the union's rulebook? Any applicant wishing to join a trade union is made aware of its aims and objectives. Indeed, most rulebooks are made up from the thoughts and contributions of the membership. Sometimes we get locked into talking about trade unions as if they were abstract organisations. In my experience trade unions operate for and with their members and, indeed, exclusively for them. As a result, expulsions or exclusions are extremely rare in trade unions.

Trade unions have the ability to look forward. Even when expulsions or exclusions take place, the decision is taken not by one member but by the lay members themselves. When a member is expelled from a trade union, they have a lengthy and transparent appeal structure where lay members would ask pertinent questions and they could put forward their case.

I am concerned that far right racist parties are using the trade union movement as a vehicle to spread their racist poison. Any right-minded person who cannot see that gives me cause for concern. It is only right that this Bill should seek to stop that kind of racist intimidation. If trade unions exist for anything, it is to stop discrimination against anyone at the workplace, and I would like to think that that work will continue.

The hon. Member for Huntingdon poses the question about far right organisations becoming power bases in trade unions. That may well be the case. However, the first thing that they will have to do in order to gain the power base is to convince the membership of that trade union of the rights of their case. I find that highly unlikely. Therefore, I do not see that far right organisations such as the BNP would have the ability to convince people and form a power base within the organisations.

It is certainly my experience, and perhaps my hon. Friends would agree, that trade unions are by far the most democratic organisations in this country. Should people wish to join and to participate in the aims and objectives of a trade union, they do have that right. However, they cannot do so surreptitiously, in order to further their own causes, and that is the problem I have with far right organisations.

In terms of intimidation at the workplace, there is plenty of anecdotal evidence that organisations such as the BNP are using intimidatory practices to put forward their own particular view. Membership of a trade union, as I have said from the outset, aims to stop discrimination and racism, and the trade unions have a proud record of supporting that. This Bill goes a long way to protecting those who do not wish to be taken over by such organisations as the BNP.

Mr Jon Cruddas (Dagenham, Labour)

I, too, welcome the new clause, but in contrast to the hon. Member for Huntingdon, who deems it to be drawn too wide, I have one slight concern about it being too restrictive. As we know, trade unions are increasingly a target for infiltration by the BNP, specifically in the railway industry at the moment, although we can assume that it will go further. I do not see why trade unions should have the freedom to decide for themselves who their members are, but I appreciate, given the history of labour law over the past 20 years, why we are in the position that we now occupy.

I mentioned my concern in an intervention earlier, and I would now like to flesh that out slightly. I think that new subsection (1B) overcomes the concerns that the hon. Member for Huntingdon raised about expulsions on the basis of being opposed to fox hunting or of sending a sibling to a private school, because it specifically says:

''that the other conduct to which the exclusion or expulsion was attributable consisted wholly or mainly of acting in a way which was contrary to the rules of the union''.

Mr Jonathan Djanogly (Huntingdon, Conservative)

My whole point in that example was that it was a public sector union, and therefore the concept of private schooling or of private health care would run totally contrary to the ethos and purpose for which the union was established.

Mr Jon Cruddas (Dagenham, Labour)

My point is precisely about the ethos of the union, rather than about its rules. It seems to me quite possible that none of the issues raised earlier by the hon. Gentleman would be covered by the Bill as it is currently drafted, because of its specific reference to the rules of the union. The new clauses as they stand seek to deal with BNP infiltration, but they might not deal with issues of BNP activity that are against the ethos of the union, but that do not fall foul of the rules

themselves. Again, to repeat myself, I acknowledge the point made by my hon. Friend the Minister earlier when he said that we will be looking at this more closely. There might be a case for broadening the definition in new subsection (1B) from

''contrary to the rules of the union''

to one involving the activity being inconsistent with the rules and objectives of the union.

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

This has been a useful debate on the important issue of the infiltration of trade unions by far right organisations. I am not trying to put the hon. Member for Huntingdon on the spot, but I want to be clear that he supports the Government's aims and objectives. I should like him to confirm his party's view on Second Reading.

Mr Jonathan Djanogly (Huntingdon, Conservative)

Our party is against racism in the workplace but the new clause does not deal with that.

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

I understand and accept what the hon. Gentleman says about the new clause. The issue is complex and I do not want to put him under too much pressure. The new clause must be read in the context of tribunal case law, which is evolving as we speak.

The hon. Gentleman's concerns about the boot being on the other foot, and what will happen if things go horribly wrong are unjustified as there is a provision for unions to change their rules. I would hate to see the consequence of that, but I assume that the BNP members of a trade union would change their rules and that individuals' operations would be dealt with under the heading of conduct. As the hon. Gentleman said, unions have powers to expel people who operate outside their rules.

The new clause is specifically about political activity—the hon. Gentleman is right about the human rights requirements. We have been very careful not to be too prescriptive and, as I said to my hon. Friend the Member for Dagenham (Jon Cruddas), I will look at the issue in greater detail to try to sort out the objectives. As my hon. Friend the Member for West Renfrewshire (Jim Sheridan) pointed out, unions are democratic and their operations are open and transparent. They are an integral part of our society. More than 7 million people are members of trade unions. They are powerful organisations and it is wrong for political activists from the far right to try to infiltrate them.

We are operating in the spirit of what we are trying to achieve and I hope that the fears expressed by the hon. Member for Huntingdon will not be realised. We will consider the aims and objectives of the unions as well as their rule books. I commend the proposal to the Committee.

Mr Jonathan Djanogly (Huntingdon, Conservative)

There is an assumption that entryism will not lead to racist activity within unions becoming the mainstay, but I give the example of a textile business in the east midlands in the mid-1970s that reclassified its Asian workers as machine workers rather than cleaners. The unions rejected it on the basis of race and went on strike for months. There was clear evidence of entryism by the National Front, which organised the strike.

I have listened to the debate with great concern. I assumed that in a democratic, freedom-loving country such as ours such things do not happen, but they have happened and do happen. I disagree with people who take the view that we should just ignore racists, or put the matter under the table and not give it oxygen. That is the wrong approach. We must confront these things and deal with them. There is nothing in the new clause that will stop intimidation or racism per se. If there were, we could have a sensible conversation about it.

Mr Jim Sheridan (West Renfrewshire, Labour)

The hon. Gentleman is absolutely right that the Bill will do nothing to stop intimidation or racism, but does he agree that it gives unions a tool to deal with racism and intimidation?

Mr Jonathan Djanogly (Huntingdon, Conservative)

In fact, the Bill may give racists and BNP supporters a platform to question decisions taken by unions and may, in some ways, give such people more air time than they might have got otherwise. The Bill will not deal with the root of the problem.

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 what he has said and I understand his concerns, but I urge him to read the Bill again or, if he has read it a third time, I urge him to read it a fourth, fifth or sixth time, and perhaps he will be convinced by the strength of the arguments in the context of the cases that have arisen so far and what we are trying to achieve.

The democratic freedom is there. There is a right to be a member of a political party. We have maintained that ability. The issue is activities. As a consequence, I am told, of what the Government propose, the BNP will try to recruit trade unionists. I am prepared to have that argument—it should be out there and up front. The hon. Gentleman talks about giving racists and BNP supporters more air time than they deserve. Currently, they do things behind the scenes—behind closed doors. I want us to bring the issues and the arguments out into the open. The new clause will help trade unions to deal with the matter under their rules, but we need to have the debate in the open. Let us see what the BNP's recruiting strength would be if it did things in a proper way.

Mr Jonathan Djanogly (Huntingdon, Conservative)

While the argument was so interesting on new clause 8, I ignored new clause 9. I do not want to stop the flow of the debate, but I note that that is another new clause that was tabled late. Indeed, I do not believe that it was even mentioned in the Minister's letter of 25 February, so it really was one from out of the blue. In justifying the changes, he mentioned that the current procedure involves unnecessary costs and complications, but he did not give details. It would be helpful if he could give slightly more detail and perhaps some figures and facts according to which the new clause could be reviewed.

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

I shall write to the hon. Gentleman with those details and ensure that I hand-deliver the letter.

Question put and agreed to.

Clause read a Second time, and added to the Bill.