Determination of Fairness of Dismissal

Orders of the Day — Employment Bill – in the House of Commons at 4:40 pm on 23rd April 1980.

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Photo of Mr Harold Walker Mr Harold Walker , Doncaster 4:40 pm, 23rd April 1980

I beg to move amendment No. 43, in page 7 leave out lines 5 to 13.

We are grateful for the fact that Mr. Speaker has allowed us to have a debate on what is an important clause, albeit a small one, not least because it is one of those clauses which have been widely ignored as a consequence of the style and manner of the Government's presentation of their legislation and the way in which he media have responded to that. The impression has been built up that the Bill deals with some of the alleged abuses of picketing, some of the aspects of the closed shop, that it provides Government assistance for ballots, and that that is about it.

As I said on Second Reading, that ignores the way in which, needlessly and provocatively, the Bill attacks a whole range of hard-won workers' rights which have been provided by statute in recent years.

For example, there are women's rights such as maternity leave, the right to have time off, and so on; and there are questions relating to compensation for unfair dismissal, guaranteed payments and a whole range of matters. Not least, the Bill is an attack on workers' protections against unfair dismissal.

In looking at the technicalities of the legislation we may overlook the human realities which it may bear upon. I make no apology for quoting, as I did in Committee, a relevant passage from the Donovan report, which, in regard to the need for statutory provision to safeguard workers against unfair dismissal, said: In reality people build much of their lives around their jobs. Their incomes and prospects for the future are inevitably founded in the expectation that their jobs will continue. For workers in many situations dismissal is a disaster. For some workers it may make inevitable the breaking up of a community and the uprooting of homes and families. Others, and particularly older workers, may be faced with the greatest difficulty in getting work at all. No one gave a warmer welcome than I did to the statutory provisions, when they were first introduced in 1971. Those statutory provisions have enjoyed the support of all parties in the House and have been widely regarded not only as having made a significant contribution to the necessary protections for workers but as having contributed to a much-needed improvement in the climate of industrial relations. Therefore, it is beyond comprehension that the Government should in this way deliberately seek to weaken those protections and at the same time add yet a further drop of acid into an already polluted industrial relations climate.

The Government are doing two things in the clause. First, they are returning to the form of words that was employed in the 1971 Act about the onus of proof in relation to an alleged unfair dismissal. Those words have been recognised as being unjust to the applicant and inappropriate to the necessities of industrial relations. The Government are making the position significantly worse by including a requirement on the tribunal which deals with unfair dismissal cases to take account of the size and administrative resources of the employer's undertaking.

As I understand it, that is argued to be a concession to small firms, which in recent years have understandably and properly conducted a vigorous lobby on their behalf through a number of organisations. It is right that we should take account of the special problems of small firms, but, as I said in Committee, the new words apply not merely to small firms but to a whole range of employers. They apply equally to the small employer in a back street—the building contractor with a boy, cart and ladder—and to the multi-million pound multi-national corporation which perhaps employs 100,000 people or more, as well as to the whole range in between.

That means that instead of dispensing justice with regard to the impact of unfair dismissal on the individual, the tribunal will have to grade it according to the size and administrative resources of the employer's undertaking. In other words, there will be variations in what might otherwise have been equitable treatment, and what ought to be equitable treatment.

I should like, for a few minutes, to deal with the argument that these words were introduced in response to complaints from small firms about the burden of employment protection legislation and the Government's declared response to those complaints. I remind the House yet again that these complaints are not new. The previous Labour Government sought to ascertain the facts and to discover how well-founded those complaints were. Two independent surveys were commissioned from highly reputable bodies outside the Department of Employment. It was obviously necessary to seek the services of an outside agency to free the Government from the allegation of bias. For the same reason, it was equally important that reputable bodies be employed.

I doubt whether many hon. Members would challenge the bona fides of the Opinion Research centre, which was commissioned by the Department to investigate complaints about the effects of employment legislation on small firms which employ fewer than 50 people. As I have said before, only 2 per cent. of those employers interviewed said that employment legislation was the main difficulty in running the business. ORC asked What would you say have been the main difficulties you have faced in the past year in running your business? I accept that that was in 1978, nearly two years ago. However, 20 per cent. of the respondents said " Lack of money ". They did not say " Unfair dismissal " or " Employment protection legislation ". Another 7 per cent. gave VAT as the reason. Of course, at that time VAT was about 8½ per cent. It is now 15 per cent.

Photo of Mr John Grant Mr John Grant , Islington Central

The Government were not going to double it!

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

My hon. Friend reminds me that little did employers know that VAT would be doubled and that it would go up to 15 per cent. Had they known that, I wonder how many would have complained then. Lack of money was the first reason, at a time when the interest rate was 7 per cent. The primary cause of concern for small employers was their inability to borrow money, but the interest rate then was significantly lower than it is now.

These employers then went on to cite high running costs. In 1978 they complained of electricity costs and such items as the rent burden. I wonder what they are saying today? It would be interesting, if we could persuade the Secretary of State to have a re-run of the ORC survey, to see what those employers are saying now.

Inflation was a prime source of complaint among small firms in 1978, when the inflation rate was less than half the present rate. Way down the list of complaints from employers in those small businesses covered by the survey—below lack of money, electricity and rent burdens, inflation, VAT and the cost of borrowing money—employment legislation was cited by only 2 per cent. of respondents as a problem.

The respondents to the survey were then invited to list the main difficulties that they faced. They mentioned 597 problems, and yet employment legislation was mentioned by only 6 per cent. of respondents. It ranked equal twelfth in the list. Financial difficulties were mentioned by 44 per cent. of respondents, and 35 per cent. of them referred to labour problems. Of the small firms, only 4 per cent., as compared with 9 per cent. of large firms, cited employment legislation as a problem.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Tower Hamlets Bethnal Green and Bow

My right hon. Friend is quoting telling and valuable information from the survey. I wonder whether he noticed in the business section of The Observer of 30 March this year a long interview with Mr. Sean Mayo, the chairman of the Union of Independent Companies—the small businesses organisation. In that interview Mr. Mayo said that the two big problems facing small businesses this year were the unwillingness of banks to involve themselves in small businesses and high interest rates. In a long interview, Mr. Mayo made no mention of employment legislation.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

My hon. Friend's intervention confirms and reinforces my argument, and I have a suspicion that my hon. Friend may later contribute even more telling arguments to the debate.

I was saying that employment legislation as a problem came way down the list in the survey that I have quoted. At the top of the list were complaints about lack of money, and 16 per cent. of respondents complained about VAT. Lack of orders was cited by 21 per cent., inflation as a problem was cited by 9 per cent. of the respondents and employment legislation was a non-runner.

The survey asked specifically whether Government measures had helped or caused difficulties to small firms. In this context, the most frequently referred to problems were VAT, regulations concerning drivers' log books and EEC regulations Other taxation problems were referred to by 9 per cent. of respondents, and 7 per cent. of them spoke of national insurance contributions. Unfair dismissal as a problem was way down the list, being cited by only 4 per cent. of the respondents.

Evidence from the ORC survey does not stand alone. The industrial relations research unit at Warwick university carried out an investigation, and in a survey dealing specifically with unfair dismissal—among employers who had been involved in actions for unfair dismissal—it found that 25 per cent. of employers questioned said that the system was biased against them. However, only 5 per cent. of employers spoke of the onus of proof—the concept that an employer is " guilty until proven innocent "—as an unfavourable feature of the tribunal system. If there is a widespread feeling about the system among employers, it must exist among those who have experienced that system at first hand. Perhaps that is an indication of the need for education rather than for legislative change.

I return to the survey undertaken by the unit from the University of Warwick and to the other aspect of the clause which gives strong grounds for anxiety. The reason for that anxiety is the proposed change in the onus of proof. The proposals concerning proof, as I understand them, are a response to allegations by employers that, contrary to the principles of natural justice, when they go before a tribunal they feel that they, as respondents, are regarded as guilty persons who must prove their innocence. The supposition of the law, they say, is that a person is innocent until proven guilty.

What is too often overlooked is that, proceedings having reached the tribunal stage, it is the employee who has already suffered as the victim of an arbitrary action by his employer. Often the employee has had no chance to defend himself. He is the person who—often without the chance to say anything in his defence—has been declared " guilty " by his employer.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster

An employee appears before a tribunal to protest against an arbitrary act which, as I have said, may have far-reaching consequences for his life and career. In Committee I gave a specific example of a person in my constituency who had been a victim of such an arbitrary act. I shall resist the temptation to go over that case again, save to say that, unhappily, that individual—who was grossly and unfairly treated by his employer—has not received justice.

We are now discussing the serious consequences of dismissal for a worker. Dismissal deprives a man of his livelihood. It also deprives his family of their livelihood. Dismissal deprives a man of his self-respect and can have a totally destructive effect on his career. It can be demoralising and leave a scar for life. This is a serious issue, to which an employer should be required to give equally serious consideration. Part of that consideration must be the likelihood that he will be required to explain his actions before an industrial tribunal.

As I said in Committee, it is curious that the very thing that has been criticised in relation to statutory provisions for protection against unfair dismissal—which the Government now seek to change—has been present as an integral part of the Redundancy Payments Act 1965. There was an obligation on the employer under the provisions of that Act to prove redundancy. That concept has never been challenged, and I am glad that the Government are not seeking to challenge it now. Were they minded to do so we would fiercely resist such a change; just as we resist these provisions.

The Government's approach is inconsistent. They are not only inconsistent, but they demonstrate an inability to recognise the seriousness of dismissal for any employee. The attempt by the Government to weaken these provisions is not only contrary to the need for consideration to be given to workers in those circumstances, but is part of their needless attack on the fundamental rights of workers. That attack is contributing to a worsening and a souring of the industrial relations climate in this country, and the Opposition will continue to resist the Government's attempt to make this change.

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Photo of Mr Arthur Davidson Mr Arthur Davidson , Accrington

The clause, together with other clauses, reduces the protection that employees have against unfair dismissal. Running through each of the clauses there is a regrettable attack upon those who work for small firms. It is an attack that is couched in terms of protection for the small employer.

Clause 5 will make it much more difficult for an employee to claim damages for unfair dismissal against his employer. As my right hon. Friend the Member for Doncaster (Mr. Walker) has said, the burden of proof has been altered. It will no longer be necessary for the employer to establish that he acted reasonably. Instead, the tribunal will be obliged to act in what might benevolently be called a neutral manner. None the less, it will be more difficult for the employee to claim damages for unfair dismissal—in other words, to establish his case.

As my right hon. Friend has said, the employee has a great deal at stake. He has lost his job and he has lost his livelihood. The claim that he is trying to establish before the tribunal is important for him not only in financial terms; it is a matter of pride especially in a small community where there is a stigma attached to losing one's job.

Photo of Mr John Evans Mr John Evans , Newton

Is my hon. and learned Friend aware that there is an additional problem? In many areas there is a great deal of unemployment. If an individual loses his job through unfair dismissal in an area in which there is heavy unemployment, he will be in grave difficulty when he attempts to get another job in the same area. The prospective employer will obviously ask " Why did you leave your last job? " The individual will have to reply " I was dismissed." No doubt he will protest that it was unfair dismissal. Nevertheless, the chances of the employer taking him on in those circumstances are remote.

Photo of Mr Arthur Davidson Mr Arthur Davidson , Accrington

My hon. Friend is right. He has a great deal of experience in these matters. In communities where there is high unemployment, which is true of the area that I represent and true of the area represented by my hon. Friend the Member for Newton (Mr. Evans), there is great difficulty in finding a job when the individual has been dismissed by another firm. The difficulties that the employer faces in establishing that his actions were reasonable are not as great or as onerous as those faced by the employee in establishing his rights. That is because they appear before the tribunal in different circumstances. There is not as much at stake for the employer as there is for the employee. I do not think that even the Under-Secretary of State, the hon. and learned Member for Tunbridge Wells (Mr. Mayhew), who can crush many propositions with a great deal of charm, can dismiss my proposition by claiming it to be outrageous.

Secondly, the clause makes it more difficult for the employee because the tribunal is charged with taking account, before it comes to its decision, of the size and administrative resources of the firm in question. That has the effect of setting apart different employees. It provides that the legal rights of an employee who works for a small firm will be less in terms of unfair dismissal than the rights of those who work for a larger undertaking. That is creating two different sets of employee. That is bound to cause resentment, especially in a small community, between those who work for small firms and those who work for larger firms.

If I worked for a small firm and I felt that it was more difficult for me to obtain damages to compensate for unfair dismissal—not because I worked less hard, not because the nature of my work was different, but purely because I worked for a firm with fewer employees than my neighbour—obviously I should be resentful and disgruntled. I should feel that the law was treating me less favourably than my neighbour in a larger firm. That cannot be right.

What evidence have the Government produced that it is right to establish two different sets of principles for two different sets of employee? There is no evidence that the tribunals act unfairly. All that the Government are saying is that some employees are not fully aware of the fairness of the tribunals and that they will ensure that they are made aware of it by introducing this legislation. Surely that is an argument for making the employer more aware of his legal rights and his legal obligations. If the tribunals are acting fairly, as they are at present, why should the system be altered to the detriment of the employee? The Minister evinced no evidence in Committee that the employee will benefit from the Bill. The evidence from the Low Pay Unit and from those who have engaged in research is that the clause and the Bill will harm him, hurt him and make it more difficult for him to claim his legal rights. That is why I fully support the amendments.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

I have attended a couple of unfair dismissal hearings before tribunals. The score is two-nil for me. I am especially interested in the clause and the amendments because I am left wondering whether the decisions would have gone against me rather than for me if the provisions contained in clause 5 had been operable at the time.

One case that I remember vividly involved a waiter who worked in a small restaurant who was sacked unfairly. It did not take the tribunal long to decide that he had been sacked unfairly. It gave him a reasonable sum in compensation. However, given the inclusion of the words to which my hon. and learned Friend the Member for Accrington (Mr. Davidson) referred— the size and administrative resources of the employer's undertaking) "— I do not think that a capable legal representative of an employer would have had much difficulty in arguing that a small restaurant came within that notion and, therefore, should be protected against having to pay compensation.

My hon. and learned Friend was right when he said that the Government are deliberately inserting double standards into the Bill. The trade union movement should take serious note of these insertions if the Bill becomes part of the new employment legislation. It will have to begin to advise its members not to take up employment in small firms if they are to be placed in a situation less favourable than that enjoyed by employees in other firms because of the size and administrative resources of the firm involved.

It may be argued that clause 5 is at least consistent with the philosophy of the Government. The Government are anxious to assist small firms and that anxiety stretches to the right to exploit workers in more favourable circumstances. They believe that the provision will assist firms to pursue their activities without the fear that they may be guilty of unfair dismissal. Within our society firms such as Imperial Chemical Industries and Unilever are just as likely to be guilty of unfair dismissal as smaller firms. However, small firms will have the knowledge that this measure will protect them against the possibility of the employee seeking access to the courts and obtaining a favourable judgment.

The provision illustrates clearly that when Conservative Members talk about freedom they are talking about a complete myth. Such employees do not have freedom of choice. The workers at Grun-wick did not have that choice. No doubt the hon. Member who assisted Grun-wick's owner would have considered this provision a tremendous advantage. The size of that undertaking would probably fit into this clause.

I hope that some of the legal experts among the Opposition will come to my aid, because I do not understand how the individual giving judgment will interpret the words " size and administrative resources ". No example has been given. Are we talking about firms that employ one to 100 employees, or those that employ 501 to 600 employees? I can think of several small firms that appear to have inadequate administrative resources, but when we investigate them more closely we find that they are subsidiaries of other firms that have considerable resources. The Government should spell out the meaning of that phrase.

Photo of Mr John Grant Mr John Grant , Islington Central

I hope that my hon. Friend appreciates that the Government have said that they have incorporated that phrase into the Bill for the sake of clarity. Perhaps the Under-Secretary can help us. However, when questioned, he has said that we can leave the interpretation of that phrase to the good sense of the tribunal.

Photo of Mr Stanley Thorne Mr Stanley Thorne , Preston South

Many trade unions will be worried about that. They may find their future and their rights determined by a court. That reminds me of a decision about which Parliament has argued for eight or nine years. As a trade unionist I would never expect—in this type of society—to obtain justice in a court of law. Laws are made to buttress the system, and in this society the law is more favourable to the employer than the employee. It is usually class legislation, and this provision is another illustration of it.

I am not under any illusion about what the Minister may say in reply. He will defend the legislation according to his preferences. He will find little difficulty in doing so. I have heard him speak in Committee on other issues, and he can argue an effective legal case. However, he is generally in support of the status quo and of maintaining the balance of power in favour of the employing class. Clause 5 pursues that aim and is against the interests of the majority of trade unionists. It is therefore unacceptable to the Labour Party.

Photo of Mr David Mellor Mr David Mellor , Wandsworth Putney 5:15 pm, 23rd April 1980

I am sorry that, because of other parliamentary business, I was not present when the amendment was moved. I have had considerable professional experience of working in industrial tribunals and of dealing with the burden of proof, which lies at the heart of this provision. I therefore feel that it is right for me to raise a few points.

I cannot agree with the hon. Member for Preston, South (Mr. Thorne) about the ability of tribunals to determine matters, in the light of this provision. Nor do I agree with some of his observations about class-based legislation. My experience stretches over several years. I have acted for applicants and for respondent companies, and I feel that industrial tribunals do their job extremely well. One of the most useful and interesting aspects of their work is that the legally qualified chairmen work well with their two lay associates, one of whom is a trade unionist and one of whom is an employer. Perhaps it is cruel to bring reality into the hon. Gentleman's observations. However, I do not understand how on earth he can talk about class-based justice when a member of the panel has been nominated by the TUC. Perhaps we should not expect logic when discussing such topics in the light of the observations of certain Opposition Members.

The nub of the issue is on whom should the burden of proof lie in establishing a case of unfair dismissal? Clearly it is wrong that the burden should be placed—as at present—on the employer. That sets on one side the rule governing the whole of civil law, namely, that the plaintiff must come to court with a grievance and prove his case. If a worker is knocked down on his way to the factory and wishes to maintain a claim for negligence against the driver, he must establish that, on the balance of probabilities, the driver had been negligent. If he is in dispute with someone who has supplied him with a television set or a motor car, he must go to court and satisfy the court that, on the balance of probabilities, a breach of contract has occurred. It was wrong to reverse that situation in the first place.

There might have been a case for arguing that the burden of proof should be placed on the applicant. Indeed, to judge from the strictures on the Government, one might have thought that that was being proposed. However, that is not so. It is being said that the burden should be neutral and that tribunals, as industrial juries and commonsense people, should be left to decide the case according to the circumstances.

Photo of Douglas Hogg Douglas Hogg , Grantham

Does my hon. Friend agree that, despite the amendment contemplated by my right hon. Friend, the burden still rests on the employer to show the reason for the dismissal and that the dismissal falls within one of the designated classes? Does he further agree that if the employer is unable to discharge that burden, the dismissal will be deemed unfair?

Photo of Mr David Mellor Mr David Mellor , Wandsworth Putney

I agree with my hon. Friend. The Government do not seek to change dramatically the way in which tribunals operate. The measure is a piece of fine tuning and is not the dramatic change that has been suggested. The hon. Member for Preston, South referred to the phrase: including the size and administrative resources of the employer's undertaking If he had done more than two tribunals, he might have understood them better. I cannot understand why he should think that the provision will cause problems for industrial tribunals.

Courts up and down the land—no matter what they deal with—must always look at the decision that they make in the light of certain factors that have been set down by the court.

Photo of Mr John Grant Mr John Grant , Islington Central

If the hon. Members' point is valid, why should the Government put in this provision? In Committee the Minister said that the tribunal would take these matters into account anyway. Therefore, it is difficult to see the reason for this provision.

Photo of Mr David Mellor Mr David Mellor , Wandsworth Putney

As I understand it, the Government must respond to the pressure that they are under—quite rightly—from small firms with particular problems. The hon. Member for Islington, Central (Mr. Grant) should not look so smug, because it is usual in any form of legislation to put in certain points that the courts are asked to bear in mind. For example, in the Matrimonial Causes Act dealing with the break-up of a marriage and the distribution of property, there is a long list of factors, such as the duration of the marriage and the standard of living that the parties enjoyed, that courts must look at specifically. That does not mean that if these provisions were not included a sensible tribunal would not look at them, but as a matter of common sense it is necessary for Parliament in its wisdom properly to direct the courts to the points that it feels they should bear in mind. Aggrieved parties can look with rather more strength to the Court of Appeal if they think that these crucial social factors have not been borne in mind.

It is quite wrong that this clause should be deleted, it is a sensible clause, a piece of necessary fine tuning, and it will make a system that is working well work even better.

Photo of Mr Giles Radice Mr Giles Radice , Chester-le-Street

I wish to take up one or two points made by the hon. Member for Putney (Mr. Mellor). Legal protection from unfair dismissal is one of the essential rights of a civilised industrial society. This Bill attacks that protection at two key points: first, on the test of circumstance—and taking this clause together with clause 7 we find that employees in small firms will be far worse off than they were before—and secondly, on the change in the burden of proof. My hon. Friend the Member for Islington, Central (Mr. Grant) has just made the point that the tests of circumstances are already taken into account by industrial tribunals. Therefore, it is not necessary to change the law in this way.

Let us look at the Government's case that this is a deterrent to small firms taking on labour. I believe that this is a very crude case, and there is very little evidence to support it. In fact, there is so little evidence that the Minister, who conducted himself extremely skilfully in Committee, found himself having to fudge the evidence on this matter. I have the Committee record with me and I have just referred to it. We tested him sharply and he revealed that there was very little evidence for the Government's case.

What is really important to small firms is the high interest rates. Small business men are concerned about whether banks will lend them money. They are concerned about the state of the industrial markets which, as everyone knows, are extremely bad at present. In many areas small firms are facing catastrophe. They are faced with redundancies, particularly in the North and other areas of high unemployment. The Government should not be tinkering around with the fine tuning. They should be doing something about bringing down interest rates and making finance more readily available to small firms.

If the Government are interested in doing something about the Employment Protection Act, they should tell small firms what the Act actually involves. If the Minister would tell the House that he would withdraw the clause and ensure that small firms really know the implications of the Employment Protection Act. we would go along with him. The evidence that we have indicates that small firms do not understand the Act. If the Department of Employment would at least tell them what the Act is all about we might get somewhere.

I wish to make a few comments on the change in onus of proof. We regard this as a retrograde step because in a dismissal case this factor is extremely important for employees and not so important for employers. When an employee is dismissed he is at his weakest and the employer is at his strongest. That is why the Employment Protection Act singled out dismissal cases as those where the onus of proof should be placed on the employer.

In Committee the Minister said that this was only a small but useful change because there were other protections as well. There were four other tests which an industrial tribunal must take account of. In any case the court would be looking at the question in accordance with equity and the substantial merits of the case. If it is such a small change, why bother with it? Why bother to upset the trade unions and make employees feel less secure?

I know what the Minister will say because I have just refreshed my memory and looked at his speech in Committee. He will say that this is important psychologically. Small firms will rush around taking on labour because they will not be worried about the onus of proof. I agree that it is important psychologically, but in a different way. The psychological problem that will now arise is that employees will feel far less secure than they were before.

I do not think that anyone would suggest that employees are not facing difficulties. It has been forecast that there will be 2 million unemployed and unemployment is rising all the time. If the hon. and learned Gentleman came with me to the North I could show him that redundancies are being announced almost every day. The situation is very difficult for employees, but they at least have the comfort of the Employment Protection Act. They know that they have the security provided by that Act. But suddenly they will find that their security is weakened by this clause and by clause 7, and as a result there will be two classes of employees. If employees now feel more insecure, the Government have only themselves to blame.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

This is a very short clause but it is nevertheless important. We are talking about people losing their jobs. We are talking about people being dismissed—not only dismissed but specifically unfairly dismissed.

Last night the Conservative Benches were full of hawks and others who were worried about the possibility, in certain circumstances, of people losing their jobs as a result of the closed shop. They regarded it as an infringement of personal liberty. Today the Conservative Benches are empty. The Tories are not in the least worried about people being dismissed unfairly by their employers. That is very instructive to me.

The purpose of this short clause is to alter the law. At the moment the determination of fairness depends on whether the employer can satisfy the tribunal that he has acted reasonably. Instead, it is proposed to amend the 1978 Act to read in the circumstances (including the size and administrative resources of the employer's undertaking) 5.30 pm

A small firm gets a let-out. It has been suggested that tribunals already take this factor into account. Why is it therefore to be included in the Bill? In the words of the Under-Secretary of State, often heard in Committee, it is to give a steer to the tribunals. It means, in relation to small firms, that the provisions will be weakened and rendered nugatory. There will be a form of legal apartheid with two classes of citizens, those with one set of rights and others with lesser rights. It will be a sliding scale of justice.

There is no evidence that small businesses are worried about this legislation. My right hon. Friend the Member for Doncaster (Mr. Walker) quoted evidence of a couple of years ago. I am sorry that the hon. Member for Putney (Mr. Mellor) came in late, made a speech and left early. I hope that he will soon return. We are fond of him and appreciate his presence. Like other Members, including myself, the hon. Member for Putney will have received a communication from the Greater London Council that is temporarily controlled by the Conservative Party. The document is headed " Small Businesses ". It is sent to hon. Members for their information. An accompanying letter states: Early last year the Council produced a consultation document entitled ' Small Business ', which was distributed to London MPs, borough councils and relevant organisations for comments. You may be interested in the enclosed copy of a report summarising the outcome of the consultation process which was considered by the Council on 11 March 1980. The council wrote to me on 11 April. No document could be more up to date or relevant. It lists six points relating to comments that have been received. The document reads: A wide range of valuable points emerged in responses to the discussion paper. Those that seemed to be particularly worthy of note are summarised in the following paragraphs: I shall not bore the Minister by quoting all of them; I shall merely give the heading. The first was Taxation—The majority of respondents considered that the tax system worked against the healthy development of small businesses. The second issue about which respondents were worried was Finance—The problems of and limited possibilities for raising finance generated considerable comment. I am not in the least surprised when there is a minimum lending rate of 17 per cent. What sort of profit do they need to earn with a minimum lending rate—some of them probably pay more—of that order? I am not surprised that it raised considerable comment.

The third point about which the small businesses were concerned was Information—Information, advice and training for entrepreneurs. I suppose that they should be directed to the Secretary of State for Industry, who has a special interest in entrepreneurs.

The fourth issue was Premises—A major difficulty identified was a lack of suitable premises the right size and at the right price and lack of information about what was available. The fifth concern was Planning—Major simplifications of planning procedures were advocated. The sixth and last concern was Bureaucracy and other issues—A number of suggestions were made regarding the removal of onerous form-filling. and other issues, including shortages of skilled labour, traffic and transport problems and high rates. Virtually nowhere is found the onerous obligations of employment protection legislation. There is no evidence that it is necessary, in the interests of small businesses and in order to stimulate small businesses in London, to take away the rights of people to protection against unfair dismissal. No evidence was produced in Standing Committee. The GLC, after consulting small business men, finds that the business men are not concerned about employment protection legislation. They are concerned about high interest rates and other burdens that the Government have placed upon them.

Photo of Mr Edward Fletcher Mr Edward Fletcher , Darlington

The speech of my hon. Friend the Member for Newham, North-East (Mr. Leighton) and that of my right hon. Friend the Member for Doncaster (Mr. Walker) illustrate that there is no demand from small businesses for this clause. I hope, therefore, that the House can devote some attention to other aspects of the problem.

I wish to deal with a matter that has not been discussed, namely, the reaction of trade unions to discrimination between one trade unionist and another. The Government often rush into legislation without any regard for the likely reaction of the trade union movement. The unions will obviously not allow discrimination between their members. They will endeavour to steer workers away from small industries where their members are not properly protected against unfair dismissal. My hon. Friend the Member for Newham, North-East read from a list provided by the GLC, setting out some of the problems facing small businesses. One problem is that small businesses cannot recruit skilled labour. That problem will become even more difficult if the Bill is allowed to go through unamended.

Many trade unions keep lists in their district offices of firms that they advise their members not to join. It is a black list of firms which, in many cases, pay much below trade union rates and where conditions are not up to union standards. The unions advise their members not to seek employment with those firms. Now, further firms will be added to the list. The unions will advise their members that they will not be protected against unfair dismissal if they seek employment with small firms, in contrast to colleagues working for larger firms who are fully protected by the Act.

I do not know what is meant by the words the size and administrative resources of the employer's undertaking ". There will be great debates at the tribunal; debates concerned not with the merits of whether a man has been unfairly dismissed, but with whether the administrative resources of the firm entitle it to special consideration.

Photo of Mr Edward Fletcher Mr Edward Fletcher , Darlington

I shall develop this argument before giving way to the hon. Gentleman. He referred to his experience in appearing on behalf of applicants and employers before industrial tribunals. Now he has another task. His job will be to plead poverty and to say that the firm that he represents does not possess the resources to meet its full obligations. There may be problems with exports to Iran, over the fact that high rate of the pound is interfering with exports, or over high interest rates and increased charges for gas and electricity. The firm will plead that it has to be considered a special case. There is no doubt that such pleadings will be made. The tribunal will not ask for audited accounts to discover a company's financial position or whether it has the resources to meet the costs or awards made by the tribunal.

Photo of Mr David Mellor Mr David Mellor , Wandsworth Putney

The hon. Gentleman has got the wrong end of the stick. The argument has nothing to do with the financial resources of a company. The reality of all the cases is that the question whether an employer is reasonable or unreasonable often depends on the size of the undertaking, how big its personnel department is, and whether the management knows the individual worker. A tribunal must take those aspects into account when deciding whether a dismissal is reasonable. It has nothing to do with whether a company can pay the costs.

Photo of Mr Edward Fletcher Mr Edward Fletcher , Darlington

That is debatable. No cases have been heard under the new legislation. There could be a debate about what resources are. Are they financial re- sources, or personnel resources? Many small firms do not have a personnel department. It is easy to estimate the size of a company, but it is more difficult to estimate its resources.

The clause will make it more difficult for firms to recruit labour, because it discriminates. When employers realise—as they already have in London—that they need to recruit skilled labour and that that will be more difficult because trade unions are steering their members away from secondclass firms which do not have the same facilities regarding unfair dismissal as large firms, they will ponder whether the Conservative Government are doing them a good turn by the legislation.

We condemn the clause. There is no demand for it, as research sponsored by the Department of Employment shows. Only 2 per cent. of small firms are anxious about this matter. It is ironic that more small firms than ever are becoming bankrupt every day because of the Government's policies. The number of bankruptcies has doubled since the Conservatives came to power, and yet they pay lip-service to small businesses and say that they will help them. If small businesses have friends in the Conservative Party, they do not need any enemies.

The Government intend to make it more difficult to recruit labour. They are introducing legislation that will make it more difficult for small firms to operate, in addition to high interest charges and other factors, and these firms are adamant that they do not want this legislation. That is reflected in the statistics given by my right hon. Friend the Member for Don-caster.

I hope that small businessmen will recognise where their true friends are. They are on the Opposition side of the Chamber. We are trying to protect them against irresponsible legislation. We are trying to encourage them in their desire to build up their businesses and to employ the labour that they need. We want to protect trade unionists against the discrimination between first-class citizens, entitled to all the rights of the legislation, and second-class citizens who, because they happen to work for a small firm, are deprived of protection against unfair dismissal. I hope that the amendment will be carried. I hope, too, that the Government will ponder what has been said here and in Committee, and have second thoughts.

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells 5:45 pm, 23rd April 1980

Much has been said with which all sensible people will agree. For example, the hon. Member for Chester-le-Street (Mr. Radice) said that an employee is at his most vulnerable when he is dismissed. The right hon. Member for Doncaster (Mr. Walker) said that to be dismissed was to suffer a great disruption in one's life. He said that if dismissal takes place in unfair circumstances that can lead to a scar for life. I agree with those sentiments, as will most sensible people.

It is right for the concept of some property in one's job to be introduced into our law in addition to the protection that the common law has always given. It is not enough for an employer to say " I have sacked you. I gave you the notice that I contracted to give you and therefore you have no complaints against me ". The employment protection legislation provides that, if someone is not sacked for one of the four justifiable reasons and an employer has not acted reasonably overall, the employer must pay compensation. We support that. It is a welcome addition to our industrial law.

However, we part company with the Opposition in their allegation that the provision in some ways weakens the rights and protection conferred upon employees. The whole purpose of the changes that we are seeking to make to the employment legislation in this modest Bill is to strengthen the employment prospects of people who work in small businesses especially, but in businesses generally.

It is not sensible to say that the Government are embarking on a direct attack upon working people, as the hon. and learned Member for Accrington (Mr. Davidson) said uncharacteristically. I accept that it would be beyond comprehension, as the right hon. Member for Doncaster said, if the Government were seeking to weaken significantly the rights of employees.

The purpose of the legislation is to encourage people to employ more staff. It rests upon the Government's assessment that there is a belief that the present legislation is unfairly biased against employers. It was right for the right hon. Member for Doncaster to begin his speech by saying that human realities must always be taken into account and must never be lost sight of. That is what it is all about.

I can explain that by summarising the effect of the amendment. It is to delete clause 5. The amendment returns the onus of proof as to the reasonableness of a dismissal to the employer. It removes the requirement that tribunals should take into account the size and administrative resources of a firm in determining whether the employer acted reasonably.

The right hon. Gentleman was right to say that human realities must never be left out of account, and among the human realities to be taken into account in this context is what we believe to be the widespread feeling—it may be challenged; certainly, the basis for it can be challenged without much difficulty—that under this jurisdiction on unfair dismissal an employer is assumed to be guilty until he has proved himself to be innocent. It is widely felt that this is an unfair jurisdiction and that the results of these cases are unfairly biased against employers.

I say at once that the tribunals have no difficulty in rebutting the charge that they are unfair in their operations. Not only is there the point already forcefully made by my hon. Friend the Member for Putney (Mr. Mellor), that the tripartite basis of the tribunals, with an independent chairman presiding over a TUC nominee and a CBI nominee, ensures their impartiality, but one has knowledge if one is in the know, if I may so put it, having to look at the outcome of these cases, that about 70 per cent. of claims for unfair dismissal are decided against the claimant. For those who are in the know, that disposes of the suggestion that the tribunals are biased against employers.

The trouble is that so many of those who today fulfil the extremely important function of employing people in this country are not and cannot be in the know. It is therefore important, if one can do so without significantly or seriously diminishing the proper protection which the 1978 Act gives to the interests of workers, to do what one can to mitigate that which is seen, perhaps inaccurately, as being a source of unfairness. That is exactly what is proposed in the clause.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

Let me be sure that I understand the hon. and learned Gentleman. He says that the tribunals work on the basis of common sense, having no bias one way or the other, and we have had corroboration on that score from the Government Benches. Second, he says that the majority of claims fail.

If, therefore, there is nothing for the employer, and especially the small employer, to worry about, the Minister's purpose ought to be to get the message across to the small employer that he will receive justice. Is there not a better way of doing that than by altering the legislation? Is it not better to do it by information instead of by changing the law, which seems to give a steer against the employee? Is not what the hon. and learned Gentleman says a rather disingenuous rationalisation for what he is doing?

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

It is a question of doing everything one can. I should not dream of saying that the changes which we propose in the Bill are enough, any more than I should dream of saying that we ought not to do all we can to bring interest rates down, for example, to bring taxation rates down and to do all the other things which the right hon. Gentleman and various of his hon. Friends have dwelt upon as serious matters for anxiety on the part of small businesses.

We must do everything we can, and we must do our best to educate business men about what the Employment Protection Act does. We recognise this need, and we are in the Department currently preparing a guide for employers which should more or less coincide with the enactment of the Bill. This guide will pay particular attention to the position of smaller employers.

If I now turn to what the clause proposes and then examine what the consequences of the amendment would be, that will, I think, establish the point which I am making and which I tried to make in Committee.

In the first place, it is not right to say that the clause reverses the burden of proof. It does not. As has already been pointed out by my hon. Friend the Mem- ber for Putney, the burden of proof is fairly and squarely upon the employer to show that a dismissal was for one of what we called in Committee the OK reasons—one of the four justifiable reasons. That is put fairly and squarely on him, and it marks our recognition of the special position of an employee who has been dismissed.

I do not quarrel with the point made by the hon. Member for Bethnal Green and Bow (Mr. Mikardo) that the employee has already been sentenced and tried by his employer. It is a vivid way of putting it, but I do not quarrel with it, and we reflect that situation by putting the burden on the employer to show, first, that it was a justifiable reason which led to the dismissal.

The trouble is that section 58 then goes on to say that the employer must show that he acted reasonably in treating that justifiable reason as a ground for dismissal, and it is this which has given rise to the belief, which reaches out very strongly, that one is guilty all the way down the line until one has proved oneself innocent.

I say at once that there are precious few cases decided in the industrial tribunals where the formal burden of proof determines the issue. There are jolly few cases in the civil courts where the burden of proof actually decides the issue. But what we are doing by the clause—if I may put it in a rather loose way—is taking off the shoulders of the employer the burden of proving that he acted reasonably in treating the OK reason as ground for dismissal. We are certainly not putting the burden on to the employee and making him show that the employer acted unreasonably. We leave it for the tribunal to decide whether the employer acted reasonably. That is putting it into the middle, and it takes away what can be seen in the terms of the existing section to be an unfair bias in the shape of the legislation. That is all that the clause does.

The second effect of the clause—we have already been reminded of this—is that it tells the tribunal in express terms that it must take into account the size and administrative resources of the firm when assessing the reasonableness of the employer's actions.

Perhaps I may risk wearying the House by reminding it that under section 57 of the 1978 Act the tribunal is already obliged to take the circumstances into account, and that means all the circumstances. Subsection (3) lays down that the question whether the dismissal was fair or unfair shall depend upon whether the employer can satisfy the tribunal that in the circumstances (having regard to equity and the substantial merits of the case) he acted reasonably We are therefore not saying to the tribunal that it must take into account something which it would hitherto have been entitled to disregard. What we are doing is giving special prominence to one of the circumstances by spelling it out, and that is a perfectly proper thing to do.

I do not altogether quarrel with the suggestion that this is a cosmetic change. No one has quite put it like that today, but it does not amount to very much more. There are very few circumstances in which one knows that the tribunal has not taken this into account, but the purpose of putting it in is that the layman reading the legislation will see that the tribunal must take into account among the circumstances the size and administrative resources of the firm.

Photo of Mr Giles Radice Mr Giles Radice , Chester-le-Street

If it is such a small change, why bother to make it?

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

That was a small intervention but it prevented me from coming to that very point. As I have already tried to explain, the purpose is that those who have to look at these matters as lay people, as business people, or perhaps as those in business associations giving advice, shall at least see that under this part of the legislation which deals with unfair dismissal the tribunals are enjoined to have regard to sensible every-day considerations, for example, the size and administrative resources of the undertaking.

I was rather hoping that the hon. Member for Chester-le-Street, having asked the question, would be interested in the answer, but, as he knows very well, we went round this buoy at some length in Committee. I tried to deal with the matter then.

This clause does not empower tribunals to do something that most do not do at present. It may be asked why we are going to the trouble of including this provision in the Bill. I shall provide an answer. Although the industrial tribunals are empowered to take all the circumstances into account in the way I have explained, they are not all seen to do so. Nor is it apparent to many people, who are not lawyers or substantial business men, that they are empowered to do so. It is because it is not widely or generally understood, particularly among smaller business, that this power exists that the Government believe that it should be spelt out.

6 pm

A practical example of why this may be important can be found in the guidance given by ACAS in its code of practice. The code sets out guidance on the kind of disciplinary procedures which should be followed. In paragraph 12 recommendations are given about the warnings. First, there is an oral warning, then, for a second offence, there is a written warning. A structure is built up which, in the case of a very small business, may seem to be unrealistic. We feel that it is right to make this change in order to draw attention to the fact that tribunals are not expected to apply to small businesses the kind of structure for warnings that would apply to large businesses.

We are making it clear that smaller firms are not necessarily acting unreasonably if they adopt procedures that are appropriate to their resources. I believe that this will result in a positive response from small businesses which may feel that the present code of practice is aimed only at large firms. I recognise the need to educate. I wish to make that clear, and I repeat that the Department is in the process of producing a guide which we hope will be published at the same time that the Bill is enacted.

Photo of Mr Ron Leighton Mr Ron Leighton , Newham North East

The Minister wants to reassure small business men, but is this the most effective way of doing so? Does he believe that small business men are waiting with bated breath for this legislation to be placed on the statute book, and that they will all rush to the Stationery Office to buy a copy and read it? I do not think that they will read it, or that the press will report it. Would it not be more efficacious to distribute a leaflet explaining these matters rather than to change the statute?

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

No, I do not suppose that they are waiting with bated breath. I recognise that we must do all we can to publicise the changes that we are making, and we shall try to do so. However, we are not in a position, as a responsible Government, to turn down any proposal that we reasonably believe will have the desired effect of encouraging companies to employ more people. In view of the high unemployment—which is expected to get worse—we must not turn aside any reasonable proposal that may result in stimulating employment. I agree that the surveys show plainly that these matters are not at the forefront of small business men's anxieties. But they are there, and we must not neglect them. However, we cannot take a survey of people who have not started a business.

Photo of Mr Arthur Davidson Mr Arthur Davidson , Accrington

Of the many circumstances that the tribunal has to take into account, why has the Minister pinpointed only two? Is there not a danger that the employee, seeing these provisions in legislation, will feel that the tribunal will give excessive weight to those circumstances over and above the others?

Photo of Sir Patrick Mayhew Sir Patrick Mayhew , Royal Tunbridge Wells

There is less chance for employees to scrutinise the legislation than for employers to do so. Since the number of circumstances which are relevant and which should be taken into account are legion, we can hardly pinpoint all of them. Therefore, a judgment has to be formed as to what needs to be emphasised. For the reasons, I have given, we believe that these circumstances are properly emphasised.

This is not an attack on anyone. It is an attempt to make the expression of the law relating to unfair dismissal in the employment protection legislation more reassuring to those to whom we look to provide employment today. The hon. Member for Preston, South (Mr. Thorne), who manages to bring what he perceives as a class war into every topic that he discusses, said that this was another round in the class war and that this legislation favoured the employer class. I point out to him that, by definition, unless there is an employer class there cannot be an employee class. It is because we wish to stimulate and enlarge the number of employees that we believe that this clause is proper, and that the amendment should be rejected.

Photo of Mr John Grant Mr John Grant , Islington Central

My right hon. and hon. Friends have made it clear that the policies of the Government are putting more and more businesses—particularly small firms—into difficulty. High value added tax, the minimum lending rate, charges and rates generally, the construction of order books—not least because of the public sector squeeze—combine to make life extremely difficult for small businesses. The steeply rising unemployment figures do not simply reflect a harsh regime for workers, but for many employers also. Yet the best that the Government can do in the face of that is to bring forward these lamentable measures which undermine the Employment Protection Act, which, they claim will reduce the burden on the small firm. It is all part of a pattern which is contained within the Bill. We saw part of the pattern last night when schedule 11 was replaced. That pattern will be followed when we reach the clauses on the restriction of maternity benefits, and it is being followed on this clause now.

Despite what the hon. and learned Gentleman says, this is an attempt to offer a sop to employers whom the Government are hurting in other ways. If it does not weaken employees' rights, why is every employees' organisation opposed to this change? The case on unfair dismissal is ill-founded. Unlike his efforts in Committee, at least the hon. and learned Gentleman is not now seeking to justify the changes by relying on evidence. He knows that he is totally unable to produce relevant evidence, and even if he could produce evidence that employers were seeking this change, I would still argue that this is a further disgraceful attack on individual workers' rights.

The Government are flying in the face of their consultative document. I am sure that the hon. and learned Gentleman read that consultative document. It said that it was generally undesirable to give special treatment to small firms because that would create a second tier of employees with reduced protection. But that is what the Government are doing. This is an extraordinary and rapid rebuttal of their views. Perhaps a funny thing happened to the Secretary of State on his way to the Cabinet, or, as is more likely, a funny thing happened to him when he arrived. It is a very quick change of view.

Workers in small firms most need protection. If that is not so, why are there wages councils to look after the minimum wages and conditions of about 3 million workers?

That need has been recognised by successive Governments. Even though we know of the difficulties which are experienced—under-payment and so on—one matter which is again causing concern is the apparent intention to run down the size of the Wages Inspectorate. If that happens, protection for low-paid workers will again be reduced. It is right to point out that in that area there is a lack of trade union organisation. Low-paid workers just do not have protection.

My right hon. Friend the Member for Doncaster (Mr. Walker), referred to the various surveys that have been carried out—in particular, the ORC survey. I do not intend to dwell on that. He also referred to the Warwick university industrial relations research unit's study. My hon. Friend the Member for Newham, North-East (Mr. Leighton) quoted the GLC document, which I too, have received. There is ample evidence to show that these are not matters of paramount importance to employers. They are very much down the list.

There has been a great deal of criticism of the Government's proposals, particularly that the tribunals have to take into acount size and administrative resources. The Association of County Councils—a Tory-dominated body if ever there was one—is opposed to the Government's proposals. The Royal College of Nursing, the Migrants Action Group and the Equal Opportunities Commission are concerned because many women work in small firms. All these organisations have made written protests about these proposals.

We know that the Under-Secretary of State wrote to some of the small firms' pressure groups, as it were, to whip up support for the proposals. The National Federation of the Self-Employed, for instance, said that the Employment Protection Act had damaged 50 per cent. of its members. Of course, 98 per cent. of the membership did not reply to the questionnaire. Therefore, not a very meaningful result was produced. We had other similar unrepresentative examples, with which I shall not weary the House, but they were trotted out in Committee.

My hon. and learned Friend the Member for Accrington (Mr. Davidson) asked the valid question: what encouragement are these changes to people to work for small firms where they know that their rights are to be lessened? My hon. Friend the Member for Preston, South (Mr. Thorne) made a similar point. My hon. Friend the Member for Darlington (Mr. Fletcher) pointed out that there will be a tendency for trade unions to steer their members away from this area of employment.

There is also the matter of the onus of proof. It is a fact—again, my right hon. Friend the Member for Doncaster touched on this matter in his opening remarks—that only the employer is likely to know the full reason for dismissal. That is why it has always been for the employer to satisfy the tribunal that it was fair dismissal. It is the worker who gets the chop. That is the situation when it reaches the tribunal. The action has been taken by the employer, not the employee.

We have no real evidence that the system has been working unsatisfactorily. I do not recall the Under-Secretary at any stage telling us about any advice that he had received from the members or the chairmen of tribunals on this matter. I should have thought that would have been the first place to look for advice on the satisfactory nature of the working of this feature of the legislation.

We cannot take these proposals in isolation. They must be seen in conjunction with clause 7, to which we shall come later, which takes away the right of complaint of unfair dismissal from all new recruits to firms with 20 or fewer workers until they have worked continuously for the firm for two years. They must also be taken in conjunction with the changes introduced by the Government last July extending the qualifying period of service from six months to 12 months for all employees.

This is a package. It is not fine tuning, as the hon. Member for Putney (Mr. Mellor) put it. It is far from fine tuning. It is a very nasty package.

6.15 pm

The Under-Secretary said that these latest changes were being made for psychological reasons. I think that he probably did not use the word " psychological " this afternoon—perhaps he was careful not to use it—but he used it in Committee. The implication of his remarks was that it would not have much effect in law. The hon. and learned Gentleman did not put it quite like that, but the idea was that it would make employers feel that the Government had in some way given them another boost. That is, in effect, what he said. But I wonder whether he seriously believes, as my hon. Friend the Member for Newham, North-East pointed out, that employers are waiting to seize on this measure and that it will influence them. If the Government think that, I can only suggest that they do not know how small firms work. I do not know of any small employers—there are many in my constituency—who are interested in the fine tuning of the legislation.

I welcome the news that the Department is to issue a new guide—I am sure that it must do so as a consequence of the Bill—but I cannot help feeling that the guide should be a guide to where to find a lawyer. At any rate, I welcome the fact that the Department is making this additional educative effort. However, I do not think that employers will be unduly concerned about it in the sense that the Under-Secretary has put it.

We can only assume that the Government hope that these unfair dismissal procedures will act as a sweetener for traditional Tory voters in the small firms sector—traditional voters who must be turning away in droves at the moment as a result of this and other Government policies. It is almost as crude as that.

I want to refer to some figures that I have taken from the Employment Gazette, because they prove the case for the legislation as it is being maintained. Indeed, I think that it is fair to suggest that, if these changes are made,

they are likely to result in increased industrial action.

The statistics for the years 1973 to 1979 show that stoppages arising from dismissal and disciplinary matters have steadily fallen from 383 in 1973—that accounted for 7·3 per cent. of all workers directly involved in total stoppages for that year—to 197 stoppages in 1979—or 2·9per cent. of all workers directly involved in stoppages last year. That shows that the unfair dismissal procedures have been working increasingly satisfactorily. It is also a fact that just under two-thirds of unfair dismissal applicants can be regarded as low paid. The majority are certainly from the low paying industries. Once again, in tampering with this legislation, we are talking about the most vulnerable workers.

In the end we come back to two basic points. First, dismissal is either fair or unfair. It is as simple as that. No diversionary discriminatory legislation about size and administrative resources should cut across that position. Justice should not be measured on the basis of some arbitrarily chosen yardstick to suit the convenience of either the Government or employers. As my right hon. Friend the Member for Doncaster said, we are talking about the sack—people's livelihood

Finally, the Government are clearly seeking to play footsie with the employers' organisations which, as I said, are daily becoming more disenchanted with the Government in other ways and will soon start to say that openly. The Government are hoping that, by making life more difficult for working people by restricting their rights, they will, as it were, redress the balance a little. We are talking about dirty work by the Government. Therefore, we shall certainly divide the House on the amendment.

Question put, That the amendment be made:

The House divided: Ayes 232, Noes 312.

Division No. 262]AYES[6.20 pm
Abse, LeoBagier, Gordon A. T.Bray, Dr Jeremy
Adams, AllenBarnett, Guy (Greenwich)Brown, Hugh D. (Provan)
Allaun, FrankBarnett, Rt Hon Joel (Heywood)Brown, Robert C. (Newcastle W)
Anderson, DonaldBenn, Rt Hon Anthony WedgwoodBrown, Ron (Edinburgh, Leith)
Archer, Rt Hon peterBennett, Andrew (Stockport N)Buchan, Norman
Armstrong, Rt Hon ErnestBooth, Rt Hon AlbertCallaghan, Rt Hon J. (Cardiff SE)
Ashley, Rt Hon JackBoothroyd, Miss BettyCallaghan, Jim (Middleton & P)
Ashton, JoeBottomley, Rt Hon Arthur (M'brough)Campbell, Ian
Atkinson, Norman (H'gey, Tott'ham)Bradley, TomCampbell-Savours, Dale
Canavan, DennisHolland, Stuart (L'beth, Vauxhall)Parry, Robert
Cant, R. B.Home Robertson, JohnPendry, Tom
Carmichael, NeilHomewood, WilliamPowell, Raymond (Ogmore)
Carter-Jones, LewisHoram, JohnPrescott, John
Cartwright, JohnHowell, Rt Hon Denis (B'ham, Sm H)Price, Christopher (Lewisham West)
Clark, Dr David (South Shields)Huckfield, LesRace, Reg
Cocks, Rt Hon Michael (Bristol S)Hudson Davies, Gwilym EdnyfedRadice, Giles
Cohen, StanleyHughes, Mark (Durham)Rees, Rt Hon Merlyn (Leeds South)
Coleman, DonaldHughes, Robert (Aberdeen North)Richardson, Jo
Concannon, Rt Hon J. D.Hughes, Roy (Newport)Roberts, Albert (Normanton)
Conlan, BernardJanner, Hon GrevilleRoberts, Allan (Bootle)
Cook, Robin F.Jay, Rt Hon DouglasRoberts, Ernest (Hackney North)
Cowans, HarryJones, Rt Hon Alec (Rhondda)Roberts, Gwilym (Cannock)
Craigen, J. M. (Glasgow, Maryhill)Jones, Barry (East Flint)Robertson, George
Crowther, J. S.Jones, Dan (Burnley)Rodgers, Rt Hon William
Cryer, BobKaufman, Rt Hon GeraldRooker, J. W.
Cunliffe, LawrenceKerr, RussellRoper, John
Cunningham, George (Islington S)Kilroy-Silk, RobertRoss, Ernest (Dundee West)
Dalyell, TamKinnock, NeilRowlands, Ted
Davidson, ArthurLamborn, HarrySever, John
Davies, Ifor (Gower)Lamond, JamesSheerman, Barry
Davis, Clinton (Hackney Central)Leighton, RonaldSheldon, Rt Hon Robert (A'ton-u-L)
Davis, Terry (B'rm'ham, Stechford)Lestor, Miss Joan (Eton & Slough)Shore Rt Hon Peter (Step and Pop)
Deakins, EricLewis, Arthur (Newham North West)Short, Mrs Renée
Dempsey, JamesLewis, Ron (Carlisle)Silkin, Rt Hon S. C. (Dulwich)
Dewar, DonaldLitherland, RobertSilverman, Julius
Dixon, DonaldLofthouse, GeoffreySkinner, Dennis
Dobson, FrankLyon, Alexander (York)Smith, Rt Hon J. (North Lanarkshire)
Dormand, JackLyons, Edward (Bradford West)Snape, Peter
Douglas, DickMabon, Rt Hon Dr J DicksonSoley, Clive
Douglas-Mann, BruceMcCartney, HughSpearing, Nigel
Dubs, AlfredMcDonald, Dr OonaghSpriggs, Leslie
Dunn, James A. (Liverpool, Kirkdale)McElhone, FrankStallard, A. W.
Dunnett, JackMcKay, Allen (Penistone)Stoddart, David
Dunwoody, Mrs GwynethMcKelvey, WilliamStott, Roger
Eadie, AlexMacKenzie, Rt Hon GregorStrang, Gavin
Eastham, KenMaclennan, RobertStraw, Jack
Ellis, Raymond (NE Derbyshire)McMahon, AndrewSummerskill, Hon Dr Shirley
English, MichaelMcNally, ThomasTaylor, Mrs Ann (Bolton West)
Evans, loan (Aberdare)McNamara, KevinThomas, Jeffrey (Abertillery)
Evans, John (Newton)McWilliam, JohnThomas, Mike (Newcastle East)
Ewing, HarryMarks, KennethThomas, Dr Roger (Carmarthen)
Faulds, AndrewMarshall, David (Gl'sgow, Shettles'n)Thorne, Stan (Preston South)
Field, FrankMarshall, Dr Edmund (Goole)Tilley, John
Fitt, GerardMarshall, Jim (Leicester South)Tinn, James
Fletcher, Ted (Darlington)Martin, Michael (Gl'gow, Springb'rn)Torney, Tom
Foot, Rt Hon MichaelMason, Rt Hon RoyVarley, Rt Hon Eric G.
Ford, BenMaxton, JohnWainwright, Edwin (Dearne Valley)
Forrester, JohnMaynard, Miss JoanWalker, Rt Hon Harold (Doncaster)
Foster, DerekMeacher, MichaelWatkins, David
Fraser, John (Lambeth, Norwood)Mellish, Rt Hon RobertWellbeloved, James
Freeson, Rt Hon ReginaldMikardo, IanWelsh, Michael
Garrett, John (Norwich S)Millan, Rt Hon BruceWhite, Frank R. (Bury & Radcliffe)
George, BruceMitchell, Austin (Grimsby)White, James (Glasgow, Pollok)
Gilbert, Rt Hon Dr JohnMitchell, R. C. (Soton, Itchen)Whitehead, Phillip
Ginsburg, DavidMorris, Rt Hon Alfred (Wythenshawe)Whitlock, William
Golding, JohnMorris, Rt Hon Charles (Openshaw)Wigley, Dafydd
Gourlay, HarryMorris, Rt Hon John (Aberavon)Williams, Rt Hon Alan (Swansea W)
Graham, TedMoyle, Rt Hon RolandWilson, Rt Hon Sir Harold (Huyton)
Grant, George (Morpeth)Newens, StanleyWilson, William (Coventry SE)
Grant, John (Islington C)Oakes, Rt Hon GordonWinnick, David
Hamilton, James (Bothwell)Ogden, EricWoodall, Alec
Hamilton, W. W. (Central Fife)O'Halloran, MichaelWrigglesworth. Ian
Harrison, Rt Hon WalterO'Neill, MartinWright, Sheila
Hart, Rt Hon Dame JudithOrme, Rt Hon StanleyYoung, David (Bolton East)
Hattersley, Rt Hon RoyOwen, Rt Hon Dr David
Haynes, FrankPalmer, ArthurTELLERS FOR THE AYES:
Healey, Rt Hon DenisPark, GeorgeMr. Joseph Dean and
Hotter, Eric S.Parker, JohnMr. George Morton.
Hogg, Norman (E Dunbartonshire)
NOES
Adley, RobertBell, Sir RonaldBoyson, Dr Rhodes
Aitken, JonathanBendall, VivianBradford, Rev R.
Alexander, RichardBenyon, Thomas (Abingdon)Braine, Sir Bernard
Alison, MichaelBenyon, W. (Buckingham)Bright, Graham
Amery, Rt Hon JulianBest, KeithBrinton, Tim
Ancram, MichaelBiffen, Rt Hon JohnBrittan, Leon
Arnold, TomBiggs-Davison, JohnBrocklebank-Fowler, Christopher
Aspinwall, JackBlackburn, JohnBrooke, Hon Peter
Atkins, Rt Hon H. (Spelthorne)Blaker, PeterBrotherton, Michael
Atkins, Robert (Preston North)Bonsor, Sir NicholasBrown, Michael (Brigg & Sc'thorpe)
Baker, Kenneth (St. Marylebone)Boscawen, Hon RobertBrowne, John (Winchester)
Baker, Nicholas (North Dorset)Bottomley, Peter (Woolwich West)Bruce-Gardyne, John
Beaumont-Dark, AnthonyBowden, AndrewBryan, Sir Paul
Buck, AntonyHeath, Rt Hon EdwardPage, Richard (SW Hertfordshire)
Budgen, NickHeddle, JohnParkinson, Cecil
Bulmer, EsmondHenderson, BarryParris, Matthew
Burden, F. A.Heseltine, Rt Hon MichaelPatten, Christopher (Bath)
Butcher, JohnHicks, RobertPatten, John (Oxford)
Butler, Hon AdamHiggins, Rt Hon Terence L.Pattie, Geoffrey
Cadbury, JocelynHogg, Hon Douglas (Grantham)Pawsey, James
Carlisle, John (Luton West)Holland, Philip (Carlton)Penhaligon, David
Carlisle, Kenneth (Lincoln)Hooson, TomPercival, Sir Ian
Carlisle, Rt Hon Mark (Runcorn)Hordern, PeterPink, R. Bonner
Chalker, Mrs LyndaHowell, Rt Hon David (Guildford)Pollock, Alexander
Channon, PaulHowell, Ralph (North Norfolk)Porter, George
Chapman, SydneyHowells, GeraintPowell, Rt Hon J. Enoch (S Down)
Churchill, W. S.Hunt, David (Wirral)Prentice, Rt Hon Reg
Clark, Hon Alan (Plymouth, Sutton)Hunt, John (Ravensbourne)Price, David (Eastleigh)
Clark, Sir William (Croydon South)Hurd, Hon DouglasPrior, Rt Hon James
Clarke, Kenneth (Rushcliffe)Irving, Charles (Cheltenham)Proctor, K. Harvey
Clegg, Sir WalterJenkin, Rt Hon PatrickPym, Rt Hon Francis
Cockeram, EricJohnson Smith, GeoffreyRaison, Timothy
Colvin, MichaelJopling, Rt Hon MichaelRathbone, Tim
Cope, JohnJoseph, Rt Hon Sir KeithRees, Peter (Dover and Deal)
Cormack, PatrickKaberry, Sir DonaldRees-Davies, W. R.
Corrie, JohnKimball, MarcusRenton, Tim
Costain, A. P.King, Rt Hon TomRhodes James, Robert
Cranborne, ViscountKitson, Sir TimothyRhys Williams. Sir Brandon
Critchley, JulianLamont, NormanRidley, Hon Nicholas
Crouch, DavidLang, tanRidsdale, Julian
Dean, Paul (North Somerset)Langford-Holt, Sir JohnRoberts, Michael (Cardiff NW)
Dickens, GeoffreyLatham, MichaelRoberts, Wyn (Conway)
Dorrell, StephenLawrence, IvanRoss, Stephen (Isle of Wight)
Douglas-Hamilton, Lord JamesLawson, NigelRoss, Wm. (Londonderry)
Dover, DenshoreLee, JohnRossi, Hugh
du Cann, Rt Hon EdwardLennox-Boyd, Hon MarkRost, Peter
Dunlop, JohnLester, Jim (Beeston)Royle, Sir Anthony
Dunn, Robert (Dartford)Lloyd, Ian (Havant & Waterloo)Salisbury, Hon Timothy
Durant, TonyLloyd, Peter (Fareham)St. John-Stevas, Rt Hon Norman
Dykes, HughLoveridge, JohnScott, Nicholas
Eden, Rt Hon Sir JohnLuce, RichardShaw, Giles (Pudsey)
Edwards, Rt Hon N. (Pembroke)Lyell, NicholasShaw, Michael (Scarborough)
Eggar, TimothyMcCrindle, RobertShelton, William (Streatham)
Elliott, Sir WilliamMacfarlane, NeilShepherd, Colin (Hereford)
Eyre, ReginaldMacGregor, JohnShepherd, Richard (Aldridge-Br-hills)
Fairbairn, NicholasMacKay, John (Argyll)Shersby, Michael
Fairgrieve, RussellMacmillan, Rt Hon M. (Farnham)Silvester, Fred
Faith, Mrs SheilaMcNair-Wilson, Michael (Newbury)Sims, Roger
Fell, AnthonyMcNair-Wilson, Patrick (New Forest)Skeet, T. H. H.
Fenner, Mrs PeggyMcQuarrie, AlbertSmith, Cyril (Rochdale)
Finsberg, GeoffreyMadel, DavidSpeed, Keith
Fisher, Sir NigelMajor, JohnSpeller Tony
Fletcher, Alexander (Edinburgh N)Marland, PaulSpence, John
Fletcher-Cooke, CharlesMarlow, TonySpicer, Michael (S Worcestershire)
Fookes, Miss JanetMarshall, Michael (Arundel)Sproat, lain
Forman, NigelMarten, Neil (Banbury)Squire, Robin
Fowler, Rt Hon NormanMates, MichaelStanbrook, Ivor
Fraser, Rt Hon H. (Stafford & St)Mather, CarolStanley, John
Fraser, Peter (South Angus)Maude, Rt Hon AngusSteel, Rt Hon David
Freud, ClementMawby, RaySteen, Anthony
Fry, PeterMawhinney, Dr BrianStewart, Rt Hon Donald (W Isles)
Galbraith, Hon T. G. D.Maxwell-Hyslop, RobinStewart, Ian (Hitchin)
Gardiner, George (Reigate)Mayhew, PatrickStewart, John (East Renfrewshire)
Gardner, Edward (South Fylde)Mellor, DavidStokes, John
Garel-Jones, TristanMeyer, Sir AnthonyStradling Thomas, J.
Glyn, Dr AlanMiller, Hal (Bromsgrove & Redditch)Tapsell, Peter
Goodhart, PhilipMills, Iain (Meriden)Taylor, Robert (Croydon NW)
Goodlad, AlastairMills, Peter (West Devon)Taylor, Teddy (Southend East)
Gorst, JohnMiscampbell, NormanTebbit, Norman
Gow, IanMitchell, David (Basingstoke)Temple-Morris, Peter
Gower, Sir RaymondMoate, RogerThatcher, Rt Hon Mrs Margaret
Gray, HamishMolyneaux, JamesThomas, Rt Hon Peter (Hendon S)
Greenway, HarryMonro, HectorThompson, Donald
Griffiths, Eldon (Bury St Edmunds)Montgomery, FergusThorne, Nell (Ilford South)
Griffiths, Peter (Portsmouth N)Moore, JohnThornton, Malcolm
Grimond, Rt Hon J.Morris, Michael (Northampton, Sth)Townend, John (Bridlington)
Grist, IanMorrison, Hon Charles (Devizes)Townsend, Cyril D. (Bexleyheath)
Grylls, MichaelMorrison, Hon Peter (City of Chester)Trippier, David
Gummer, John SelwynMurphy, ChristopherTrotter, Neville
Hamilton, Hon Archie (Eps'm & Ew'II)Myles, Davidvan Straubenzee, W. R.
Hamilton, Michael (Salisbury)Neale, GerrardVaughan, Dr Gerard
Hampson, Dr KeithNeedham, RichardViggers, Peter
Hannam, JohnNelson, AnthonyWaddington, David
Haselhurst, AlanNeubert, MichaelWainwright, Richard (Colne Valley)
Hastings, StephenNewton, TonyWakeham, John
Havers, Rt Hon Sir MichaelNott, Rt Hon JohnWaldegrave, Hon William
Hawksley, WarrenOppenheim, Rt Hon Mrs SallyWalker, Bill (Perth & E Perthshire)
Hayhoe, BarneyPage, Rt Hon Sir R. GrahamWalker-Smith, Rt Hon Sir Derek
Waller, GaryWhitelaw, Rt Hon WilliamWolfson, Mark
Walters, DennisWhitney, RaymondYoung, Sir George (Acton)
Ward, JohnWickenden, KeithYounger, Rt Hon George
Warren, KennethWiggin, Jerry
Watson, JohnWilliams, Delwyn (Montgomery)TELLERS FOR THE NOES:
Wells, John (Maidstone)Wilson, Gordon (Dundee East)Mr. Spencer Le Marchant and
Wells, Bowen (Hert'rd & Stev'nage)Winterton, NicholasMr. Anthony Berry.
Wheeler, John

Question accordingly negatived.