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My Lords, this amendment takes us back to the statutory dispute procedures where the Secretary of State is given a considerable amount of flexibility to change, alter, add, take away and reduce the procedures. He can modify them. He can amend them in the light of experience, in the light of caseload and indeed in the light of anything else. The amendment proposes that as a result of the power which the Secretary of State, has the statutory procedures should not become worse. It suggests that the modifications should not be less favourable to employees.
When this issue and clause were debated in Committee, I was unwise enough to say that the provisions in the statutory procedures were so bad that they could not be any worse. I have thought about that and that was clearly wrong. They could certainly be better. There could be something in the statutory procedures to say that one had to have an effective investigation before the employer took any decision. We would not be against that. There could be something in the statutory procedures—we hope that in time the Government might see that this is a good idea—about the suspension alternative. There could be something in the statutory procedures about taking into account the reasonableness of the decision. Indeed, we would not mind—in fact we would welcome it—if the Government decided to abolish the modified procedures which have never been fully explained.
Nevertheless, it could be worse. It could be much worse. I do not say that the Government intend to make the situation much worse. I do not say that the Government intend to make it worse. I say that the power in the regulations would enable them to do certain things. For example, the exemptions which we hope to see might be taken away. There might be no exemptions. The modified procedures could be extended to cover other issues that we presume that they would not cover now. The 28 days delay could rise to 35 days. More steps could be added to restrict the access to the tribunals.
When we raised these questions in Committee my noble friend Lord McIntosh began by reassuring us, but he said that our amendment at that time created several practical difficulties. He said that our amendment,
"raises issues about what constitutes treatment that is more or less favourable to the employee. Different views could reasonably be taken in many circumstances and the tests would be difficult to apply in practice. We might be"— and this is the critical part I think—
"under certain circumstances, inviting judicial review . . . Amendment No. 162 . . . seeks to prevent us [the Government] from changing the admissibility criteria in any way that is less favourable to the employee".
Well, yes, of course; that is what we are trying to do. He continued:
"it could have uncertain results and invite applications for judicial review. The policy underlying the amendment is too restrictive. It is biased against employer interests".
It is an attempt to maintain a balance. Presumably, the Government have maintained the balance, and we are saying that they should not intervene to make the situation worse. My noble friend continued:
"If we are to create a fair and accepted system, it must meet the needs of both employers and employees".—[Official Report, 25/3/02; col. CWH 363.]
What he did not deny, as far as I can tell—I am asking whoever answers for the Government to deny it today—was that the Government may move in the direction that we seek to deny them and make the procedures worse.
Of course, I should like the Government to accept our amendment, but if they will not I should like them to say that they have no intention of moving in the direction that our amendment would preclude. I beg to move.
My Lords, the statutory procedures represent a significant innovation. We have consulted on them. They have been scrutinised in detail both here and in another place and the procedures have been amended as a result. We are as confident as we can be that they will work in practice. However, experience, unforeseen events or changing circumstances may throw into question the use of particular words—or possibly whole sections of the procedures. It is therefore eminently sensible to build some flexibility into the Bill allowing us to change the procedures in the light of developments.
Clause 29(2)(a) contains an important order-making power enabling the Secretary of State to change the statutory procedures in Schedule 2. Before using those powers, the Secretary of State must consult the Advisory, Conciliation and Arbitration Service. Orders must be introduced following the affirmative resolution procedure. The Select Committee on Delegated Powers and Regulatory Reform considers the power to be "appropriate". The amendment tabled by my noble friend would limit the use of the power to ensure that the procedures were not changed in a way which made them less favourable to the employee.
We have two problems with the amendment. First, it would seriously imbalance the power. As I stated, the power is there to deal with unforeseen circumstances—to correct any practical problems or difficulties in interpretation. If a problem emerged that mainly affected the employer, it might be difficult to use the power to make the necessary adjustments to the procedures because employees might incur some loss—however minor—as a result. That is simply inequitable and would ensure that known deficiencies in the procedure would remain in place much longer than necessary.
Secondly—this point was made by my noble friend Lord McIntosh in the passage cited by my noble friend Lord McCarthy—it is by no means easy in all circumstances to determine what is or is not "favourable" to the employee. For example, it is far from clear whether employees would be advantaged or disadvantaged if the requirement to set out grievances in writing were replaced by an obligation to make the complaint orally. Some might benefit if they could not express themselves well in writing, whereas others might lose if they found it difficult to explain themselves clearly and unambiguously in the spoken word.
So I fear that we are not prepared to agree to the amendment and I hope that, in the light of my explanation, my noble friend will feel able to withdraw it.
My Lords, before my noble and learned friend sits down, I have two questions for him. First, is he not aware that the formula of what is not less favourable to employees appears frequently in other areas of statute law and has never caused a difficulty of the kind that he describes?
Secondly, my noble and learned friend suggests that the power to change things in a way that may be less favourable to employees is to deal with unforeseen events. This happens again and again in the Bill: the Government take powers and then say, "Oh, we cannot tell you to what they may apply; it is all unforeseen". Cannot he produce one example in which it would be reasonable to make a less favourable provision for employees? None of the examples that he gave was in fact of that kind. It is extraordinary that the Government want to take powers for events that are totally unforeseeable.
My Lords, on the first point, yes, I am aware that there are provisions in employment law describing procedures no less favourable to a particular group. I am also aware, as is my noble friend, that almost all of those provisions have accreted a huge amount of case law around them as to what they mean.
On the second point, the starting point for the provision is that we think that we have the statutory procedures right. It follows that we do not at present identify changes that will be required. By their nature, the changes are unforeseeable at present. But, in the course of my remarks, I gave an example; namely, evidence to be given in writing as opposed to orally. I do not envisage that that change will be required, but it identifies the problem. I hope that I have adequately answered my noble friend's two questions.
My Lords, I fear that I do not agree. There are several points to be made. Of course, we do not deny, and the amendment does not preclude, that the Government will from time to time want to make changes in the light of various developments. But on the question of what is less favourable to the employee, I thought that the Government had made a great deal in this House, in another place and in Routes to Resolution of the fact that this is a minimum procedure. It is not everything, for God's sake.
It is certainly not what is in the ACAS code. We have frequently said, "Why not include a little of what is in the ACAS code?" "No, no, no", the Government say, "It is a minimum. The employer—especially those poor employers who have never before had a procedure—could not possibly embrace more than what is in the minimum procedure". OK, I accept that, it is pretty minimum, but in fact it could get worse. In the example that my noble and learned friend gave, it is impossible to say whether the situation is worse or better. With respect, that is frivolous. My examples of ways in which the situation could be made significantly worse are substantive and they were not challenged by my noble and learned friend.
Finally, I am not at this point saying that I expect the Government to accept the amendment. We have for a long time been used to tabling amendments that are not accepted. But we would be making some progress if only Ministers would say that some of the concerns that underlie the amendment are unjustified and unfair and that they do not intend to act in that way. They could say that they do not intend to make the minimum procedure worse. That is what I ask them to do, but they will not do it and I beg leave to withdraw the amendment.
moved Amendment No. 35:
Page 35, line 33, at end insert—
"(4) Minor and inconsequential breach by an employer or employee of the requirements of Schedule 2 shall not result in his suffering any detriment in any proceedings before an employment tribunal and the employer shall not be deemed thereby to have wrongly dismissed the employee."
My Lords, Clause 29 introduces Schedule 2, which sets out the statutory dispute resolution procedure. Unlike other procedural clauses in the Bill—for example, Clauses 23 to 28—the schedule relates solely to claims under the Bill and does not alter employment tribunal procedure generally. The whole tenor of the Bill's procedure is one of informality, recognising that applicants may not have easy access to legal advice or support from a trade union and that employers will more often than not be small businesses—very small businesses, in many cases—the proprietor of which has neither the time nor, in many cases, the money to secure professional assistance.
Schedule 2 sets out the procedure in two-and-a-half pages containing three separate parts comprising a total of five chapters. It goes into minute detail, much of which is rightly designed to resolve the differences between the parties by agreement or discussion without recourse to the tribunal. When introducing the Bill, the Minister made it clear that it was a great attempt to make things much more informal and to try where possible to avoid employers and employees having to end up at tribunals.
Of course, we have absolutely no objection to that procedure. We think that it is fine. However, with no disrespect to employees or employers, who may be acting for themselves in person and without skilled advice, it will be all too easy for one of the many procedural steps to be taken out of time, carried out incorrectly, or even missed altogether.
About 300 years ago English courts began to erode the rules of "strict pleading" under which the courts of common law sometimes dismissed cases, not on their merits, but because of some defect in the form of the documents presented to the court. There is a legal maxim de minimis non curat lex—the law does not concern itself with trifles—which has its origin back in Roman times where it was expressed as de minimis non curat praetor—a praetor does not occupy himself with petty matters. There is no reason why employment tribunals should be exempt from this long and persuasive line of precedent.
The Minister, in his reply to me at Committee stage, said that,
"as presently drafted, the procedures are clear and uncluttered".
I agree with that. He then said:
"Each action within them is simple to understand and apply".
I agree with that, too. He also said:
"There are no convoluted twists and turns".
I agree with that. He went on to say:
"I feel there is only limited scope for 'minor and inconsequential' breaches to occur".—[Official Report, 18/3/02; CWH.189.]
I profoundly disagree with that. I do not believe that the Minister thinks that that is a serious argument. We know that millions of pounds of social security entitlement is unclaimed because those entitled do not know how to get their entitlement. There are many things that the average person does not know what to do with when filling in forms, and so on. Every government department can tell tales of forms—even those as simple as passports and driving licence applications—being rejected because they were incorrectly filled in.
If the Minister has attended as many counts as I have on election night, he would know how many voters do not seem to understand the simple process of putting a cross in a box next to the candidate's name. Those voters would not claim that—and I repeat my earlier quotation:
"There is only limited scope for minor and inconsequential breaches to occur".
I want to be careful not to be disrespectful to anyone or to over-generalise. However, it is a fact that many of the litigants before the tribunals, in person and without professional assistance, can often be employees with limited academic qualifications or, in many cases, with limited English. It is equally true that in the case of employers, many of them acting in haste may also not have the most excellent command of English. Surely there is no harm in protecting employers or employees from the consequences of what would only be a minor procedural error—and I emphasise the word "procedural"—which might otherwise wreck a perfectly valid case.
It is not a scope for cunning parties to avoid what the Minister called the "clear and uncluttered" procedures laid down in the second schedule. The tribunal itself will decide whether an omission is minor and inconsequential, entirely within its own discretion, depending on the individual circumstances of each case.
The civil courts, which according to the Government the tribunals are supposed to mirror as far as possible, have what they call a "slip rule" which allows minor errors to be corrected or ignored. It is no assault on the "clear and uncluttered" provisions of the second schedule to allow the same leniency to unqualified parties to proceedings before the tribunal in cases under this Bill.
Perhaps I may say to the noble and learned Lord who is to answer that, given that the aim is to try to take matters out of tribunals or make matters simpler, it can do no harm at all to the law and can only make it easier. I beg to move.
My Lords, we debated an identical amendment in Grand Committee. The noble Baroness made her point forcefully and well there and has done so again today. She will forgive me if I rely on similar arguments to those which I relied on at that time.
The amendment is based on the premise that the procedures are complicated and contain obscure and minor requirements which parties of a whole range of types, which she has indicated, could easily fail to follow in full. That is simply not the case. The procedures are spare, simple and easy to understand. They represent the minimum core elements of any procedure. Some have referred to the procedures as "skeletal" or even "sub-minimal". Therefore, I believe that there is little scope for parties to misunderstand what they should do at each stage, even after a fairly swift reading. Minor slips should not occur.
Later, we shall be debating amendments regarding the sending of written communications. Those will permit parties to send either a copy or the original of any written communication which is required under the procedures. Those amendments will reduce further the possibility of minor slips arising.
The procedures are mainly drafted as a series of concrete steps. That is important because concrete steps are easy to verify if they have been undertaken. As far as possible, we have avoided references to any qualitative requirements in the procedures, which are intrinsically much more difficult to pin down. We have thereby reduced the scope for argument to arise about what the procedures require and what they entail.
It may help the noble Baroness if I say that minor and inconsequential breaches of the statutory procedures by employers would not entitle the employees to resign and claim, either in the ordinary courts or before tribunals, that they had been dismissed.
We are also concerned that the amendment would upset the simplicity of the procedures. As the noble Baroness explicitly says, it would encourage parties to debate and dispute whether failures to follow the procedures were "minor and inconsequential" or "more significant". That would in turn generate more discussion about compliance with the procedures than the substantive issues at stake. That cannot be the right way forward to encourage legal debate about those issues.
With the greatest of respect to the noble Baroness, this amendment deals with a phantom problem. It would create rancour and confusion at the workplace and it would encourage disputes before the industrial tribunal, which I know the noble Baroness does not want to occur. Therefore, with the greatest of respect to the noble Baroness, I invite her to withdraw her amendment.
My Lords, it is most polite of the Minister to preface everything he says with "the greatest of respect" and to point out that I moved the same amendment actively and forcefully in Grand Committee. However, I would say to no effect, because the Minister has repeated exactly what he said then. I did not accept it then; had I done so I would not have tabled the amendment now.
I do not believe that the Minister was listening carefully to what I said. I did not suggest that the rules were not clear; I agreed that they were not convoluted; I agreed that most people could understand them. However, I pointed out to the Minister that, nevertheless, in filling in forms, as far as procedural error is concerned, sometimes people make errors because they do not understand. There would not be huge debate as to whether something was a minor infringement because, as I made quite clear, the tribunal would say whether it was. That would be the end of the discussion.
The Minister is nodding—I do beg the Minister's pardon, but I thought he was nodding as if to say, yes, he agreed. Now he is shaking his head in the other direction, so he clearly does not agree. However, I say to the Minister that if someone tables an amendment in the same tones, it does not mean that he or she did not listen to the answer: it means that the answer was not accepted. In my view, the Minister did not listen appropriately to the arguments.
The Minister may be 100 per cent correct, but perhaps he would like to clarify the point I made about minor and inconsequential matters. I did not understand or accept what he said. In my opinion, the matter should not be decided against one party because either party had made a minor or inconsequential error. I believe that in his last few words the Minister said that the matter would not be serious. Perhaps he would repeat what he said. Otherwise, I must say to the Minister that I do not accept his answer and we would move to a different conclusion.
My Lords, I speak with great diffidence because of the ruthless attack that the noble Baroness made on my previous speech. However, perhaps I may help. My point about minor and inconsequential was that in tabling the amendment the noble Baroness was urging us to let industrial tribunals decide the issues. That would inevitably generate doubt and discussion about compliance and it would encourage disputes in the tribunal. That was unjustified by what I described as a "phantom" problem.
My Lords, perhaps I may clarify one point with the Minister. He was so polite to me at the beginning and spoke with respect and so forth, but he then suggested that I attacked him. Most definitely I did not. However, the amendment, which deals with minor and inconsequential breaches, should not result in suffering any detriment. That was all it was about. The Minister then gave his explanation but I did not catch what he said. I ask for clarification.
My Lords, I said that minor and inconsequential breaches of the statutory procedures would not entitle the employees to resign and to claim either in the ordinary courts or before tribunals that they had been dismissed.
My Lords, the aim of the amendment is to make clear that Schedule 2 is not intended to undermine the right to a written statement of reasons for dismissal, as specified in Section 92 of the Employment Rights Act 1996. We are asking the Government for the same kind of reassurance that we sought on the previous amendment. No doubt the Government will say that they do not intend to undermine Section 92 of the 1996 Act. Nevertheless, they could accept the amendment and make that clear. If they do not accept the amendment, they can say so.
Section 92 states that an employee,
"is entitled to . . . particulars of the reasons for . . . the dismissal", in a form,
"admissible in evidence in any proceedings".
The terms of the statutory procedure do not clear that hurdle. The terms do not entitle the worker to be told the principal reason or reasons for dismissal—whether they are fair or unfair. They do not say that the employee is entitled to very much. All the employer has to give is his final decision—not the reasons.
The schedule states that the employer must set out in writing the employee's alleged conduct or characteristics or other circumstances that lead him to contemplate dismissal or disciplinary action against the employee. That relates to the view that the employer takes, to set the procedure in motion. At this point, the employer has not heard the worker's case. The employer must send a copy of the statement to the employee and invite him or her to attend a meeting to discuss the matter.
Under the normal statutory procedure, there follows a meeting or hearing—after which the employer must inform the employee of the decision. The employer does not necessarily have to provide the reasons or explain his reaction to the employee's case. The employer can simply say, "I have decided that you are going" and notify the employee of his or her right to appeal. There is nothing about grounds or reasons—and not much to make it clear that the statement could be used in a court of law.
If I had time, I would explain why the modified procedure is even worse. It seems to be assumed that the employer can merely say, "I am dismissing you. That's it". The modified procedure does not even embody a proper appeal. Under the statutory procedure, contemplation is all. The employer contemplates unfair dismissal: "I contemplate dismissing you for the following reasons". What if the worker says, "It wasn't me. It was someone else. I was never warned that this might happen. I have been working for the company 10 years and have never received a formal correction. I was provoked. I am entitled to know what you think about the excuses and justification that I advanced"? Nothing in the statutory procedures states that the employee should have an answer.
The Government can deal with the matter in a number of ways. We would like them to accept the amendment—or they could say, "We can't do it today but we will ensure that the regulations will make clear that employees will have the kind or rights already available to them under Section 92 of the 1996 Act". I beg to move.
My Lords, although Amendment No. 36 was not tabled in Grand Committee, my noble friend Lord Wedderburn sought and received assurance that the right to a written statement for dismissal—the Section 92 right, to which my noble friend Lord McCarthy has referred—was not adversely affected by the Bill and the statutory procedures. I repeat that assurance again today. Under Section 92 of the Employment Rights Act 1996, an employer must supply, at the request of the employee, a written statement setting out the reasons for a dismissal. That right to a written statement applies to employees who have been employed for a year or more, although that condition is waived in certain special circumstances surrounding pregnancy and maternity arrangements.
That section of the 1996 Act is not changed by the Bill. If a qualifying employee requests a written statement, she or he must be provided with one as now. The existence of a pre-existing Step 1 letter from the employer in which the reasons for a proposed dismissal are set out does not change the position. When the employee requests the written statement, the employer must write again setting out the reasons. Even if the reasons are as set out in the Step 1 letter, the employer must still write again, although on such occasions the employer may choose to shorten the reply by enclosing a copy of the original Step 1 letter. Therefore, we agree with the proposition stated in the amendment—Section 92 is unaffected by the statutory procedures.
However, the amendment is unnecessary. Generally, as my noble friend Lord McCarthy will recognise, it is bad practice to itemise aspects of pre-existing legislation in a Bill which are left unaffected by the Bill. We would depart from that principle only where there was good reason to doubt that the pre-existing law was unaffected. We do not believe that there is room for any confusion or doubt of that kind here. Indeed, I am unaware that any organisation picked up this issue as a problem during consultations. In short, I do not believe that there is a need to introduce this amendment. In the light of those assurances, I hope that my noble friend Lord McCarthy will feel able to withdraw his amendment.
My Lords, I have no alternative, but I am not satisfied. I agree that the Government have said that what they are putting in the regulations will not adversely affect workers' rights under Section 92, but I do not see why the regulations cannot say that. I do not understand why that matter cannot be on the face of the Bill. I shall have to consider the issue again at Third Reading. I beg leave to withdraw the amendment.
My Lords, I shall speak briefly. Since Committee stage, Ministers have, as they said they would, revisited this territory. Since we tabled this amendment, the Government have tabled Amendments Nos. 41 and 47 on the disciplinary side and Amendments Nos. 54 and 58 on the grievance side.
I am trying to anticipate what the Minister may say. The Government are saying that they will now pinpoint the basis for including in the statement the grounds given in it. Clearly, that goes some way to ensure that the whole of the relevant circumstances of the case are put on the table. It would be helpful if the Minister could say whether that form of words will be introduced shortly, along with the words of giving an employee,
"a reasonable opportunity to consider his response to that information".
That means that the facts of the case will be fully on the table. Other noble Lords may want to probe this matter. If the answer is that we have made progress we shall consider that in the light of the Minister's comments. I beg to move.
My Lords, I want to draw attention to the word "promptly". I have read Amendment No. 41, but it does not include the word "promptly". The reason I feel strongly about this matter is that in a previous life I dealt with cases in which an employer threatened disciplinary proceedings against an employee, but the facts of the case were not gathered promptly. There is nothing worse than continuing in an employment when it is believed that one has done something wrong. If the facts are not gathered quickly enough, an employee can have such a matter hanging over his or her head to the knowledge of other employees. Perhaps the Minister can tell the House how such a matter will be dealt with.
My Lords, I want to speak to Amendments Nos. 38 and 50. The amendments tabled by the Minister respond in some measure to the debate in Committee. Essentially the issue is whether or not a proper investigation has been conducted prior to the decision to dismiss. The purpose of adding the words,
"and detail the evidence upon which he relies", is simply to ensure that that proper investigation has taken place prior to the decision. It is not only a matter of the protection of the employee—although that is important—but also of ensuring that the employer, who is given an additional hurdle in both the modified and the standard disciplinary procedures, is protected. Although the employer who complies with the additional procedures insures himself against a finding that the dismissal was automatically unfair, he is not protected against a finding that the dismissal was unfair for any other reason. It is important that the Government should go further and add more detail to their amendment to ensure that both the employee and the employer are protected by proper, full and detailed investigations prior to the decision to dismiss.
My Lords, I support the amendment in the name of my noble friend Lord Lea. The amendments grouped with Amendment No. 37 mean that the Government—my noble and learned friend will correct me if I am wrong—will speak to Amendments Nos. 41, 47, 54 and 58 that raise entirely new matters. My noble and learned friend nods. Therefore, we have a quite inconvenient grouping which requires a debate within a debate. I want to speak to Amendments Nos. 41, 47, 54 and 58 and I want to know what they mean. The new matter introduced by the Government in those amendments does not answer the case put by my noble friend and by the noble Lord, Lord Sharman, but introduces a problem of an extremely delicate and serious nature. These amendments are what I may call the "basis" amendments.
I believe I understand what is meant in regard to the disciplinary procedure. The procedure must not continue unless,
"the employer has informed the employee what the basis was for including in the statement . . . the ground or grounds given in it".
I can see what that means. The statement may say, "You have broken your duty in some way and I now give you the basis of that allegation". But Amendments Nos. 54 and 58 on the grievance statement relate to quite a different position. Amendment No. 54 requires the same thing and appears to be parallel to the disciplinary procedure. In my submission it is not. Amendment No. 54 states that the employee must inform the employer of the basis for the grievance. Amendment No. 58 states:
"The employee must—
(a) set out in writing—
(i) the grievance, and
(ii) the basis for it".
If we apply that provision to real life, we do not obtain the sort of answer that we received regarding discipline. What does the employee say? He sets out in his written statement, of which he sends a copy to the employer, "You treated me unfairly last Tuesday. You deprived me of my right to contractual overtime". Or he may say, "You have been threatening to treat me wrongly or dismiss me for exercising my rights to trade union activity". That is the grievance. What is the basis for the grievance? What else does he have to say? He has to say something else, because the new amendments require something more of the employee.
This is exactly the sort of problem Judge Prophet was worried about in the procedures being introduced. What can the employee say when he has already said, "My grievance is that you have stopped me exercising my trade union rights", or, "You have deprived me of my contractual overtime"? Does he have to set out the contract or put in a pleading? Does he have to ask, "What are the basis of my trade union rights"? Does he have to refer to Section 46 of the Trade Union and Labour Relations (Consolidation) Act 1992?
If he does not have to do that—I apprehend that my noble and learned friend will be aghast at the thought that he has to quote some legal basis; he nods, so I am right—what other basis will he make for his allegation that his trade union rights have been infringed? He has already said, "Last Tuesday you stopped me exercising my rights"; in the first case, a contractual right; in the second, a statutory right. What is the basis for that grievance? What do the Government mean by that requirement?
Let it not be said that this is something meaningless or trivial, because a tribunal or, particularly, the Employment Appeal Tribunal or the Court of Appeal, will have to give it some meaning. It will have to say, "You, the employee, have set out your grievance in writing, which you are required to, and sent it to the employer, but you have not set out its basis"—whatever that means. Will my noble and learned friend give me a precise and exact illustration of what the basis of a grievance would be for someone who has set out his grievance properly and fully, as one would hope, if it is not a reference to its legal origin; a right that he alleges has been contravened?
I appreciate why the Government introduced the amendment on grievance procedures. If I may say so with respect to those who authored the amendment, it is a slipshod attempt to look even-handed; they have put in "basis" on disciplinary procedures, so they have put it in on grievance procedures. With great respect, they have not thought it through. What does basis mean in the grievance procedure once you have set out your grievance?
That question needs answering rapidly, because if Amendments Nos. 54 and 58 slip through in a group of amendments that is about something else entirely, the courts will be faced with the deplorable situation of trying to find a basis where the basis has already been stated in the written document the employee is legally obliged to present. I hope that separate accounts will be given of Amendments Nos. 54 and 58 when my noble and learned friend replies. It is not like Committee stage; after his reply we cannot intervene. That is why I set out the problem at this stage.
My Lords, I rise to support the amendment tabled by my noble friends Lord Lea of Crondall and Lady Gibson, but I have another reason for intervening. Government Amendment No. 47 raises the issue of misconduct. If accepted, it would pre-empt the amendments on misconduct which follow immediately in my name and the names of my noble friends.
It cannot be too heavily emphasised how serious it is for an employee to be dismissed on grounds of misconduct. It will not only affect his chances of obtaining comparable—perhaps any—employment, but it may also involve loss of benefit. I was for a number of years a member of a tribunal dealing with social security matters. We sometimes had to deal with appeals from dismissed ex-employees who had lost benefit. We used to rule that it was up to those who made the allegation of misconduct to establish it; the onus of proof was on them. If that obligation was not discharged to our satisfaction, the claimant succeeded. Nevertheless, it was a serious matter for the appellant.
Since the charge is so serious, every effort must be made to ensure that it is properly investigated. I am not at all certain that government Amendment No. 47 provides for such investigation. It can be difficult; there may have been disputes between employees; harassment and provocation; perhaps even allegations of sexual harassment. In certain circumstances it would clearly be unwise to take allegations at face value without investigation. It may not even be possible to come to a clear decision as to culpability, in which event a strong warning might be appropriate. In any event, suspension pending investigation would appear to be the wisest course.
Although the government amendment is an improvement on what was there before, it does not go far enough. I hope that when the Minister speaks to it he will set at rest some of my concerns and those of my noble friends. Amendment No. 47 does not provide for investigation and the possibility of warning and suspension. I hope that the Government will consider that point, at least before Third Reading. I shall not be able to move the amendments later on, which is why I am participating in the debate now.
My Lords, before I begin to discuss this group of amendments, I should confirm that government Amendment No. 54 contains a drafting error. It deals only with the standard grievance procedure. Sub-paragraph (a) makes reference to "paragraph 4" of the modified dismissal and disciplinary procedure. In fact, the correct cross reference is to "paragraph 6"—I know that noble Lords spotted the error for themselves—which describes Step 1 of the standard grievance procedure. The error is self-evident. I would therefore ask for the reference to paragraph 4 to be treated as referring to paragraph 6.
The amendments arise from the many debates on investigations that have taken place during the Bill's passage. In Grand Committee on 18th March, I indicated that the Government would explore whether we could devise amendments on the topic that met the concerns expressed but avoided the known pitfalls.
It is worth recalling some of the main problems with introducing into the statutory procedures a reference to investigations. The procedures are written as a series of concrete and verifiable actions. It is intrinsically difficult to define the investigatory process in similar terms and in a way which would generally apply to many different cases and circumstances. There is thus a difficulty in referring to the term "investigations" within the statutory procedures because it is unclear what it precisely entails in any particular case. None of the four government amendments uses the word "investigations". It is also worth noting that none of the other amendments in the group uses the term either. I take that to mean that there is at least a measure of common ground across these Benches on the nature of the problems.
Perhaps I may deal first with government Amendments Nos. 41, 47, 54 and 58. We believe that we have successfully navigated these difficult waters. We have therefore brought forward these four government amendments. We consider that we have tackled the issue in a broad enough way that it can be applied to each of the four statutory procedures. Amendments Nos. 41 and 47 relate respectively to the standard and modified dismissal and disciplinary procedures; and Amendments Nos. 54 and 58 deal with the standard and modified grievance procedures.
Knowing that it is problematic to mention "investigations" per se, we have therefore chosen to approach this issue from a different angle. Investigations aim to uncover information or evidence about the circumstances of the case or a matter of concern. These then constitute the basis for initiating the complaint or other action. With those thoughts in mind, we feel that there is no need to mention the investigatory process at all. Instead, we should refer to the outcome of the investigatory process—the information or evidence which it typically uncovers.
Accordingly, the procedures should place obligations on the parties to disclose the information on which they initiated their action against the other party. The requirement to assemble and convey information of this kind would in practice be a very strong encouragement to the parties to ensure that an investigation occurs; otherwise, they would not be able to divulge any information because none would exist.
Let me now describe how we applied this approach to each procedure. Amendment No. 41 deals with the standard dismissal and disciplinary procedure. It requires employers to ensure that employees are informed of the "basis" for initiating procedural action against them. The Step 1 letter serves the purpose of identifying the issue or allegation against the employee. This amendment would ensure that the employer is then required to provide the supporting information which led him to write that letter.
The information should be disclosed before the Step 2 meeting and sufficiently in advance of that meeting to ensure that the employee can consider his response to it. By this formulation, we ensure that employees are not "bounced" with important new information that the employer knew all along at or just before the Step 2 meeting.
We have deliberately not prescribed how the employee should be informed. This is desirable because it gives a helpful flexibility to employers. We should remember that the procedures will apply to virtually every employer in the country, including the many businesses which employ only one or two employees. Some may wish to convey this information in writing. They are free to do so. Indeed, they could include the information in the Step 1 letter, which will be an attractive idea for many larger employers. Others may wish to convey the information orally by telephone or at a meeting.
Investigations are usually associated with conduct cases. However, we believe that the gathering and prior disclosure of information can help in any dismissal or disciplinary matter. It can help to inform the dialogue between an employer and an employee, not only in conduct cases but also where the employee may be declared redundant or where he or she is thought to be under-performing at work. For example, in the case of an individual redundancy it would help the employee to know what were the redundancy criteria and how he or she scored in respect of them in advance of any Step 2 meeting. Our choice of wording in this amendment has therefore been deliberately chosen to apply to both conduct and non-conduct cases.
Amendment No. 47 deals with the position of the modified dismissal and disciplinary procedure which, as noble Lords will recall, the Government intend to apply to cases of instant dismissal for gross misconduct. As noble Lords know, there is no Step 2 meeting in this procedure. This amendment therefore obliges the employer to disclose the information in the Step 1 letter that he sends to the dismissed employee.
Amendments Nos. 54 and 58 assign the corresponding obligations to employees in grievance cases. We consider that there is great merit in this. Information about a complaint which is disclosed in advance helps the employer to respond more fully and constructively to the complaint; time is used more efficiently; and it might even prompt the employer to undertake investigations of his own into the matter.
My noble friend Lord Wedderburn asked, "What does 'basis' mean here? Does it have a different meaning in relation to grievance procedures from what it has in relation to disciplinary proceedings?" He gave as an example that if the grievance was that the employee had not been able to exercise his union rights, what "basis" would have to be provided by the employee in support of the grievance? It is unwise for me to go too heavily into what the precise requirements might be in a particular case but, in the example given, what more the employer would need to know and the employee would need to convey is when the employee was prevented from exercising the rights; the circumstances—
My Lords, perhaps I may finish. My noble friend can then intervene as he feels appropriate.
The circumstances in which he was prevented—for example, not being allowed time off for union activities; confirmation that he is a union member; and what exactly happened. My noble friend said that the complaint was, "Not being able to exercise my union rights"; and then he said, "What was the 'basis'?"
My Lords, I am grateful to my noble and learned friend. If he checks, he will see that I said that any worker who is faced with that kind of obstruction from the employer will say, "Last Tuesday you prevented me from exercising my right of carrying out trade union activities in the paint shop". What other basis for that complaint has to be set out? What has to be said that is extra to "Last Tuesday you prevented me from exercising my trade union activities in the paint shop and, of course, as a union member, I object to that"? What else has he got to say?
My Lords, subject to confirming that he is a union member and identifying shortly what happened in the paint shop, nothing more would be required. There would be an adequate basis there laid for such a complaint. Nothing more would be required. I do not believe that that would cause any difficulty in relation to resolving complaints by employees. Indeed, it would be helpful for such a short description to be given.
Perhaps I may deal with the point made by my noble friend Lady Gibson. She asked why not include the word "promptly". She emphasised, quite rightly, that time is important in relation to this. Under the heading "General Requirements", paragraph 12 of Schedule 2 to the Bill deals with this point. It states:
"Each step and action under the procedure must be taken without unreasonable delay".
It does not contain the word "promptly", but it seeks to achieve broadly the same result.
We have worked up practical proposals on this topic which are consistent with the style of the statutory procedures, which provide flexibility in their application and which apply to a wide range of issues and complaints. The statutory procedures are improved by these amendments as a result.
Of course it can be said that parties could still fail to undertake any investigation or review of a case. They could meet these new requirements of the statutory procedures by simply providing no or very little information. That would be a very foolish way to proceed for either the employer, in the case of a disciplinary matter, or the employee, in the case of a grievance. It would show that they had acted with no forethought or on no basis of fact. This would immediately suggest that their case was weak. Certainly tribunals would tend to draw that inference. We therefore believe that in practice we are creating sufficient and significant pressure on the parties to assemble full information on the issue.
Let me deal with the points made by the noble Lord, Lord Sharman, in relation to Amendments Nos. 38 and 50. These amendments deal with the two types of dismissal and disciplinary procedures. They seek to ensure that the scope of the Step 1 letter is widened and must include the evidence on which the employer relies when initiating action against an employee. I do not believe that our approaches are very dissimilar, especially in respect of Amendment No. 50 dealing with the modified procedure. These amendments follow our approach in that they require the employer to disclose information of a type which will indirectly encourage the employer to investigate a case before proceeding.
I believe that our approach is to be preferred. Amendment No. 38 would always require information to be set down in writing as part of the Step 1 letter. This has the advantage of establishing a clear record of the employer's views and this might, in turn, assist the tribunal if a case is subsequently brought. However, on balance we believe that more scope should be given to the employer to convey information in different forms at different times. We believe that this particularly helps small business, a section of our economy which the noble Lord often seeks to champion. Indeed, we consulted the Small Business Council when constructing these amendments and it advised us unequivocally that we should try to create this flexibility.
We also believe that the wording of Amendment No. 38 is focused too much towards conduct cases. It is not clear to me how it would apply to the case of individual redundancy. The reference to all of the evidence is too inflexible and would lead to the possibility of technical failure. Amendment No. 50 achieves much the same effect as our Amendment No. 47. Our amendment has the advantage of using consistent wording across both the standard and modified procedures.
I deal finally with Amendment No. 37. My noble friend Lord Lea has indicated that he will not move it, subject to hearing what I have to say. He tabled a similar amendment at Grand Committee. His amendment draws on the wording used in the ACAS code. That was drafted as a means of providing guidance. I am not sure that it is sufficiently precise and unambiguous for a statute; for example, what facts should be established? Does that mean each and every one which might have some relevance or does it mean just the salient facts?
As I have stated, the Government seek to achieve a very similar aim to that of my noble friend Lord Lea. I believe that our amendments are to be preferred because they particularly apply to both conduct and non-conduct cases and also provide greater flexibility.
I hope that my remarks have dealt with the points made by my noble friend Lady Turner. I entirely agree with her that dismissal for misconduct is an extremely serious matter. Bearing that very much in mind, we have sought to ensure that there is a proper basis before the procedure is used. I apologise for a long explanation. I commend Amendments Nos. 41, 47, 54 and 58 to your Lordships and ask the movers of the other amendments in that group to consider withdrawing them.
My Lords, the past few minutes have provided some very useful clarification as to what the Government amendments mean. There has always been a degree of symmetry in this Bill between the discipline procedure on the one side and the grievance procedure on the other. Sometimes the symmetry does not really work. Nevertheless, the points made by my noble friend Lord Wedderburn and others have probed that matter. However, we are moderately satisfied with the Government's explanation. More work needs to be done before the regulations are published. In a later amendment we suggest that the realities of introducing these two historically important procedures for every firm, however small, in the country requires a great deal of detail for them to make sense in the workplace, whether large or small. With those remarks I withdraw Amendment No. 37.
moved Amendment No. 39:
Page 65, line 11, leave out "a copy of"
My Lords, we now move to a group of technical amendments which improve the drafting of the statutory procedures. In moving Amendment No. 39, I shall speak also to Amendments Nos. 40, 51, 52, 53, 59 and 60. I am very grateful to the noble Lord, Lord Wedderburn, for identifying at Grand Committee an anomaly in the statutory procedures. In the Bill as drafted, the statutory procedures require the parties to write to each other by sending a copy of the letter, but not the original. We have brought forward these amendments which ensure that the relevant party is allowed to send either the original or a copy of the written communication.
Amendments Nos. 39 and 40 achieve that effect for the standard dismissal and disciplinary procedure. Amendments Nos. 51 and 52 deal with the reference to a written communication in the standard grievance procedure. Amendments Nos. 59 and 60 deal with the second reference to a written communication in the modified grievance procedure.
For completeness I point out that Amendments Nos. 47 and 54, which we have just debated, achieve the corresponding effect for the modified dismissal and disciplinary procedure and the first reference to a written communication in the modified grievance procedure.
Amendment No. 53 removes inconsistent wording from the standard grievance procedure. Where the statutory procedures require parties to meet, they refer to the holding of "a" or "the" meeting. However, in step 2 of the standard grievance procedure the text refers to the holding of at least one meeting. This use of different wording is unintended and the amendment ensures that the meetings are described in a consistent fashion. I beg to move.
moved Amendment No. 40:
Page 65, line 11, after "statement" insert "or a copy of it"
On Question, amendment agreed to.
moved Amendment No. 41:
Page 65, line 15, at end insert—
"( ) The meeting must not take place unless—
(a) the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b) the employee has had a reasonable opportunity to consider his response to that information.
On Question, amendment agreed to.
[Amendment No. 42 not moved.]
[Amendment No. 43 had been withdrawn from the Marshalled List.]
[Amendment No. 43A not moved.]
[Amendment No. 44 not moved.]
My Lords, in moving this amendment, I shall speak also to Amendments Nos. 56 and 65. The House will remember that in Grand Committee I moved eight amendments to provide forms of ex parte mediation or arbitration to cover all four forms of the statutory procedures. We covered everything in those amendments at Grand Committee. But the Government could not accept any of them so we return with something which is more modest. We are simply asking for mediation; that is to say, for a third party to recommend that a dispute might be settled in a particular way. We argue that this is a way of not going forward to a tribunal. If one reaches the point where a worker refuses to accept what is on offer by the employer, one can go to the tribunal or add something at that point. We say that we should include not arbitration but mediation.
When dealing with those amendments in Grand Committee, the noble and learned Lord, Lord Falconer—it is a pity that he is not in his place—used a series of bewhiskered arguments against all forms of third party intervention in dispute resolution. In fact, I counted five objections; namely, that third parties complicated disputes; they reduced the incentives of the two parties to reach a settlement; third parties are often thrown over by the stronger party; there are not enough skilled people to reach third party dispute settlements; and that such settlements cost a great deal of money.
I shall be most pleased to be corrected on this, but I know of no research in industrial relations which provides one single fact to support any of these ancient, bewhiskered excuses for external dispute resolution. I would like to have it because I would give it to my students. All they read are arguments to show that it works very well on the whole. In fact, it has been going on since the Greek city states. I dare say that most of the bewhiskered arguments were used by those who were against such a procedure when settling ancient quarrels. The procedure has been used since the 16th century to settle maritime disputes. There was a growth in commercial arbitration in the 18th century. In the 19th century the pioneers of arbitration and mediation in the cotton, iron and steel industries and in the mines avoided a whole series of industrial upsets. Most recently, third party involvement has been used as a much cheaper way, particularly in the United States, of settling family disputes. There is absolutely no evidence that it does any of the things that the noble and learned Lord trotted out to me in Committee.
Indeed, it is beginning to be accepted—I hope that the noble Lord who responds will be able to keep me up to date—that in the highest possible regions of this Government a change is taking place in regard to the notion of third party dispute resolution. The Prime Minister—who, as we know, has been against all forms of third party involvement since he was the Labour Opposition spokesman—said the other day that he thought it would be a very good idea if we could have arbitration in relation to the railways. Perhaps that is a sign. Perhaps it means that the Government will at last allow a reference to the Civil Service Arbitration Tribunal. So there is a sea change.
I want to draw to the attention of the noble Lord a point that I mentioned in our previous debate, so he cannot say that he does not know about it. I refer to the report of the Better Regulation Task Force—a body set up by the Government. It is a very interesting body. It has, for example, 46 members. They include a few academics, a few consultants and an overwhelming proportion of employers and employer groups. There is one trade unionist, one general secretary, Mr. Simon Petch. This is a typical representative body.
The terms of reference of the Better Regulation Task Force are to examine the problems, particularly of small firms, in coming to terms with this legislation. The task force says nothing about the problems of workers who may or may not get their legal rights. It is concerned with employers, and particularly with small firms. After the usual rubbish about the SETA report, the task force states at page 28 of its report, under the heading "Access to mediation":
"The Task Force welcomes the proposals in the Employment Bill, but would like to see more done for employers and employees where there is no line management chain. This will often be the case in small businesses where the employee's manager may also be the most senior person in the business. When the manager is also the owner of the business there is no one higher"— as we have said many times—
"to whom the complainant can appeal. In such small firms the only way of reaching a resolution without recourse to a tribunal would be to provide an external mediator".
That is the statement of the task force, with dominant employer representation and one trade union representative. So those stakeholders who were consulted—who are, of course, employers—said that in such situations access to mediation would be welcome. The report goes on to state:
"ACAS should be brought into the dispute process before a tribunal application is made. In businesses with less than 50 employees, where there is no management chain, either party should be able"— this is ex parte arbitration, or mediation—
"to call upon mediation services ... the service should be piloted, and if successful either provided free of charge or subsidised. The mediation service should save on the tribunal service budget".
Of course it will save in that way. Recommendation 11 under the heading "Access to mediation" is as follows:
"ACAS should pilot a mediation service for businesses of less than 50 employees. If successful, the service should be either free or subsidised".
I ask the Government: what about it? I take it that the Minister has read the detail of the report. I take it that is has been read all over Downing Street. This a body set up by the Government. It looks after the interests of employers and has consulted with employers. The employers, particularly the small employers, say: "We do not want to go to tribunals, but we are sensible enough to realise that if we do not want workers to go to tribunals, they must have some alternative"—some alternative to the last word of management.
Finally, I understand that the Better Regulation Task Force has to have an answer by Christmas. So why do we not have the first indications of the answer now? I beg to move.
My Lords, there are some issues of different jurisprudences on which I should have commented in speaking to Amendment No. 44 but which can be addressed equally in relation to Amendment No. 45.
A number of different procedures may now be arising. We have ACAS and the role of the ACAS code. We have the interesting and relevant proposition of my noble friend Lord McCarthy in relation to this amendment. We have the question as to how procedures under the 1996 Act dealing with unfair dismissal work. There will no doubt also be procedures dealing with legal challenges to the grievance and discipline procedures within the Bill.
It might be convenient if the Minister could clarify one matter in his response to the amendment; namely, how we are going to make sure that there is some reasonable dovetailing between the procedures. We understand that before regulation there will need to be talks between ACAS and the DTI about the relationship between the ACAS code and the DTI. This question is more generally relevant in the light of the amendment moved by my noble friend Lord McCarthy in terms of making sure that there is a reasonable interface between the three or four sets of procedures which can be taken into account by an individual or by an employer. It would be useful to hear some comment on the matter at this stage. I believe that the House will be consulted at a later stage when regulations are introduced, but the question will arise of major points of the ACAS code being taken into account if someone wants to appeal in relation to either the grievance or the displinary procedure. That is a relevant problem on which it would be useful to hear some clarification today.
We were told in Committee in another place by my honourable friend Alan Johnson, the Minister of State, that the ACAS code would need to be rewritten once the Bill reaches the statute book. Therefore, it would be extremely useful, in the context of what my noble friend has just said, if the Minister could give us, either now or at some later stage, a conspectus of the changes which the Government's legislation will require in the ACAS code—not least in respect of the matter of mediation in the amendment moved by my noble friend.
I repeat what my noble friend said. This amendment is being debated with Amendments Nos. 56 and 65. The machinery that is proposed for mediation not only provides some step further than the employer's first and last word, which is what the Government leaves workers with; at the root of the unfairness of Schedule 2 is the fact that workers will be left with the employer's first and last word, especially in the modified procedures to which we shall come. My noble friend's amendments do not suggest some arbitrary or unilateral mediator. If one looks at Amendment No. 65, which deals with the machinery for the mediation, one finds that it suggests that employers should be encouraged to reach agreement with,
"a recognised trade union of which the employee was a member . . . [or] an agreement made between the employer and such a recognised trade union [generally] . . . [or] in the absence of such a person", to abide by the suggestions of the "Advisory, Conciliation and Arbitration Service"; in other words, the proposal is mediation by a machinery, or by a "person" who is agreed, or by someone who is put forward under an ACAS scheme.
It seems to me that my noble friend is proposing mediation as an added extra to the employer's "last word" on a most reasonable basis; namely, of agreement, or ACAS. Therefore, both points that I have made—the ACAS code and the place of ACAS in mediation—need to be made clear in respect of this group of amendments.
My Lords, we spent time in Grand Committee debating whether the statutory procedures should be amended to give the employee unilateral access to third party involvement in the shape of mediation and arbitration. In this set of amendments, my noble friend is confining himself to the involvement of just the mediator.
As well as being an academic with unrivalled knowledge of this subject, which, as he says, goes back to the Greek city states, my noble friend is also an expert mediator and arbitrator. I do not want anything that I say to undermine or undervalue either his skills or those of other mediators and arbitrators. We simply maintain the belief that mediation should remain a voluntary activity. It should be entered into only where both parties agree. That is the position adopted by the ACAS Code, which invites parties to consider the scope for third party intervention where problems seem intractable or involve very senior management within organisations.
The amendments now before the House would compel the employer to accept mediation. I remind my noble friend, as he reminded us, that the amendment he moved in Grand Committee (Amendment No. 102), was about an arbitrator rather than a mediator. In that sense, it goes well beyond the existing guidance of the ACAS Code, which stresses that both parties should agree to third party intervention.
My noble friend describes his amendments as representing the only real alternative to the tribunals for resolving disputes. However, I doubt whether it would work that way. Compulsion would make the mediator's job much more difficult. It is possible that the employer would not collaborate with the mediator in his examination of the issue. It would certainly mean that employers would feel under very little moral obligation to accept the mediator's recommendations. I suspect that issues would remain unresolved because the mediator's advice would not be readily accepted in those circumstances. Many cases would still go to the tribunal, and the mediator's intervention would be wasted. Indeed, the reputation of mediators might suffer as a result.
Moreover, as I mentioned at Grand Committee, unilateral access to a mediator may create perverse incentives in the system. For example, it might dissuade the parties from bilaterally resolving their differences. My noble friend made some play of the comments of the Better Regulation Task Force. We place considerable reliance on the task force. Indeed, we take its recommendations most seriously. It has made recommendations for increased access to mediation. We accept the value of mediation, but nothing in the report of the task force supports the proposal for compulsory mediation, as proposed in the amendment. It would not only be compulsory, it would also be unilateral.
Before I conclude, I should like to return to the point properly raised by my noble friend Lord Lea of Crondall in Amendment No. 44, which we passed by rather rapidly. My noble friend's amendment would place a duty on employers to take the ACAS Code into account when arranging meetings under the statutory procedures, and when disciplining employees. Under Section 207 of the Trade Union and Labour Relations (Consolidation) Act 1992, employers are not placed under any direct requirement to observe the code. However, the section does require employment tribunals to take the code into account if it is relevant to any question before them.
It follows that employers who disregard the code in circumstances where it is applicable may well damage their prospects of success in defending tribunal proceedings. It is because of this that employers, and others, turn to the codes for guidance; they will do so whether or not there is a cross-reference in the schedule. For that reason, the cross-reference introduced by the amendment is unlikely to achieve anything that Section 207 does not already achieve.
My noble friend Lord Wedderburn pointed out that a Minister in another place had said that changes in ACAS may be needed as a result of this Bill. I do not deny that possibility. However, I believe that my noble friend asked me to give a "conspectus" of what changes would be required. It would be impertinent for me to do so. It is for ACAS to consider its code; it is not for the Government to suggest what changes might be made. No doubt ACAS will address that situation when it sees the Bill on the statute book.
The fundamental point is that the amendments would significantly change the approach adopted in these statutory procedures, which are being introduced into legislation for the first time. They are being made available to 6 million people who might not have access to them at present. They are meant to contain the basic core features of a dispute resolution system. These amendments would make the procedures much more prescriptive. We do not believe that we should move in that direction. The roles of mediation and arbitration should stay as they are.
My Lords, before my noble friend the Minister sits down, perhaps I may ask him to read again the recommendation of the task force that is to be found on page 28 of its report:
"In businesses with less than 50 employees, where there is no management chain, either party"— that is, ex parte mediation—
"should be able to call upon mediation services".
That is exactly what I am asking for—ex parte mediation—and that is what the task force has recommended.
My Lords, that deals with the unilateral issue. The Better Regulation Task Force is entitled to its view in that respect. However, to me, it does not imply that it is compulsory.
My Lords, I am sorry that the Government take this view. It is no good inventing herds of bogus arguments against third party intervention, as my noble friend seemed to do. Mediators do not mind wasting their time; indeed, that is their job. They do not suffer from doing their business—they prosper, as do the parties involved. You cannot keep inventing possible situations. You must have facts. I repeat, there is no research known to me that supports any of this nonsense.
Despite the recommendations of the task force, the Government may say that they are still stuck in the bunker. I remind them that they will have to answer the people who are asking them to come out of the bunker, and that they must do so by the end of the year. I hope that they come forward with something better than my noble friend's response. The fundamental point behind the amendment is something that is behind many of our amendments: we are not against statutory procedures, nor are we against trying to get people out of the tribunal habit and into the dispute settlement habit. We want that to happen—not because we want to get rid of 30,000 cases, but because we can see coming across the skyline an almost endless series of regulations from the EU, which, unless something is done to make dispute settlement outside the tribunals a real option for the worker, will place intolerable burdens upon tribunals.
There must be a real option for the worker, and it must be beneficial. As my noble friend Lord Wedderburn said, workers must know that they can get something other than the first and last word of the employer. The statutory procedures do not provide for anything but the employer's first and last word, which is why they will not work. That is why, sooner or later, the Government must think again. Meanwhile, I beg leave to withdraw the amendment.
My Lords, in moving the amendment I shall also speak to Amendment No. 57 which is parallel to it.
The effect of these amendments would be to take out of Schedule 2 the "modified procedures". That does not mean that we are wholly satisfied with the standard procedures, and other amendments explain why we are not wholly satisfied. However, these modified procedures are unfair in their effect. They encourage not the best but the worst of practices. To cap it all, they are highly uncertain whereas the Government's primary claim for their statutory, obligatory procedures is that they must be certain. They are uncertain beyond redemption in any regulations. Moreover, the uncertainties and problems we have raised before are not cured by the government amendments elsewhere on the Marshalled List. Nor do the government amendments relieve the modified procedures of their unfairness—unfairness possibly as between different groups of employees, as I shall outline later.
I acknowledge that removal of the modified procedures might require some amendments to the standard procedures. The Government could easily do that on Third Reading. It would be a substantial change. However, it is worth noting the archaeology of the modified procedures. In the first government proposals, Routes to Resolution, the modified procedures were absent; we had only the standard procedures. They were suggested by someone in the consultation, but we have never been told who it was and we have never been told why it was. They appeared for the first time on page 14 of the Government's document Response to Consultation without any real explanation or justification. They were described there as modified standards in cases of gross misconduct justifying summary dismissal.
Nothing substantial was said about the innovation in the House of Commons. Indeed, with the greatest respect to another place, partly because they were not provided with the details of the research on which the Government said they relied, very little was said about these procedures in another place. Since then, there has been no justification of any substance. Very little has ever been said about the modified grievance procedure; but then there is very little in it. It is the crudest, most elementary procedure of all. The employee must write setting out a grievance and, as we are now told, the basis for it, whatever that means. Subsequently the employer has only to send a response. That is it. There is no meeting, discussion or appeal. The employer's last and first word is the end of the matter. When and how this supplants the statutory procedure—with a meeting and an appeal—is not made clear anywhere.
The modified disciplinary procedure is in some ways even worse, and it remains so despite forthcoming government amendments. On behalf of the Government, my noble and learned friend Lord Falconer of Thoroton said of it:
"The modified procedure is necessary. It deals with special cases where it may not be appropriate to follow the full procedure, requiring former employees to attend hearings".—[Official Report, 20/03/02; CWH col. 225.]
The employees in question are employees who have been thrown out of their jobs. What is appropriate when one has been thrown out on one's ear depends on the angle from which one looks at the situation.
One might have thought that one would be careful when preparing to impose in Schedule 2 such crude and unfair procedures as the implied terms of every contract of employment in the land. I pause to say that they may be implied terms in even more contracts. In Clause 29, the Government have power to extend these provisions to those who are not technically employees. It would be interesting to know whether they intend to use that power soon after the Bill becomes an Act. Regardless, no such care was taken to avoid what is unfairness and uncertainty. The line has never been drawn in a meaningful way between standard and modified procedures.
In Committee, my noble and learned friend Lord Falconer stated:
"The modified procedures will by regulations be applied in respect of cases where the dismissal has already occurred and therefore it is instant or near instant".
He went on to say:
"by the time one gets to the modified procedure, the employee has already been instantly, or near instantly, dismissed".—[Official Report, 20/03/02; CWH cols. 239-40.]
At one point in the debate, he was concerned about preserving the right of summary dismissal and "instant" or "near-instant" dismissal.
The suggestion that paragraph 4 of the modified procedure applies only to cases of "instant" or "near-instant" dismissal, just because it arises from gross misconduct, may be thought to suffer from the logical defect of a defectively distributed middle in the argument. The modified procedure speaks of,
"alleged misconduct which has led to the dismissal", of the worker. We do not know what is meant by "misconduct". As we shall hear later, in Committee, the Minister explained that the regulations are not going to define misconduct. However, on the Pelion of an uncertain "misconduct" is piled the Ossa of "near-instant dismissal"—which is even less meaningful legally.
Dismissal from employment is defined and described in Sections 95 to 97 of the Employment Rights Act 1996. Dismissal includes any case—I summarise the three cases—where the employee is given notice of dismissal by the employer; or works out a fixed-term contract; or is summarily dismissed. So the words of paragraph 4 on modified disciplinary procedures on their face apply to cases of dismissal with notice, or to a case of non-renewal of a fixed-term employment, just as much as to instant or near-instant dismissal. When the employer says, "You've broken the works rules and that is misconduct. I am giving you three weeks' notice, to which you are perhaps entitled", what will apply—the modified procedure? On the face of it, it does apply. We should be told whether the regulations will make it clear whether it applies. So far, no one has told us whether it applies. One might think that, in introducing a whole new section of procedures, someone would have thought about when it will apply.
Moreover, three weeks' notice is not a near-instant dismissal. I ask my noble friend the Minister to answer the following example. Suppose that an employer dismisses for misconduct three employees. One he dismisses summarily, or instantly. To the second he gives one week's notice, which is less than the worker is entitled to. However, to the third he gives six weeks' notice, saying, "That's longer than you're entitled to but I like you. So you can have garden leave of absence for the period of the six weeks' notice". To which of these three examples does the standard procedure apply and the modified procedure apply? No one knows. And yet we shall be introducing this implied term into every contract of employment in the land.
The matter gets worse. Where the dismissal associates misconduct to another ground, life is not as simple as the authors of the Bill suggest. Suppose an employer says to a fourth employee, "You can get out now. You've been guilty of misconduct and you're also being made redundant. You can 'respond'"—the word in the Bill—"as much as you like, but you're out. Get off the premises". On Second Reading, my noble friend Lord McIntosh gave an example from his experience as an employer, when he had to say to an employee:
"'Clear your desk and be out in half an hour'".—[Official Report, 26/02/02; col. 1407.]
If the employer in my example had not consulted properly about the individual redundancy, it would be an unfair dismissal. However, even if he has consulted in advance, the employee with two years' service is entitled to his redundancy payment. Why should he have to go through some further procedure if that payment is refused? Which procedure applies to him when he is told that he is redundant as well as otiose? Is it the modified procedure? When he complains of a lack of warning, is it a grievance, or is it in the disciplinary procedure? Paragraph 48 of the ACAS code makes it abundantly clear that, in the middle of a disciplinary procedure, a grievance can arise.
I quoted paragraph 48 in Grand Committee. I shall not do so again. But, as I understood it, Ministers agreed that a grievance can arise in the middle of a disciplinary procedure. I can see that one might argue for the standard procedures, but some procedure of that kind should apply. However, I find it very difficult to imagine that the modified grievance procedure should be made to apply when the employer is trying to exercise and use the modified disciplinary procedure.
The lack of clarity is compounded by the fact that the procedures are inadequate. As the Law Society pointed out in its briefing sent to your Lordships:
"Where a sanction with the severity of summary dismissal is being contemplated, the highest standards of procedural fairness should be required".
That is not true under the modified procedure.
It gets worse. The Government Response to the consultation document stated three times that the modified procedure applied only to former employees. We asked them to use the words "former employees" in regard to the modified disciplinary procedure. However, they said, "Oh, no. We could not possibly do that". Yet, that is what was said in the response document. Does the procedure apply only to former employees? That question is important in relation to a point to which I shall come.
"We are trying to set down what is necessary and to frame the measure in such a way as to encourage the resolution of disputes in the workplace".—[Official Report, Commons Standing Committee F, 13/12/01; col. 167.]
How on earth does the modified procedure encourage resolution of disputes at the workplace? As my noble friend Lord McCarthy said, although misrepresented on this point several times, including in the Secretary of State's latest letter to the Joint Committee on Human Rights, we have never objected to the idea of settling disputes in the workplace. However, we do say that the modified procedure will not help to do so.
The case against forcing an employee, on pain of limited access to a tribunal or on pain of reducing compensation even if he eventually wins a case, into the modified procedure is that it will not contribute to that goal and will work against it. The employer is able to say, "This is my answer. That is my first and last word. You can't have mediation because the Government have now said that they will not agree to it", despite the report to which my noble friend referred. Both the TUC and the National Association of Citizens Advice Bureaux were very concerned about such a move away from the ACAS code in statutorily imposed procedures. The modified procedure moves furthest from the ACAS code.
There is a proper place in regulations for making clear what is unclear in statute so long as the statute sets out the broad framework of the principles. But there are no principles in the Bill to say when the modified or standard procedures will apply. It is the legislation of a madhouse run by janitors who are either lazy or obsessive in pursuit of objectives to which they insist their procedures will contribute when they will not.
It gets worse. The proposition that a summary dismissal or near-instant dismissal always terminates the contract of employment—it seems that that is what is involved in the Government's position—assumes an answer to a problem which, as the law stands, is currently of great complexity. The moment of termination of the employment contract has been affected by two competing principles. The old master-and-servant principle of automatic dismissal says that whenever the employer dismisses, the contract of employment comes to an end.
A different principle from the law of contract, often dubbed the "elective" principle of termination, holds that termination of employment arises when the employee accepts, or elects within a reasonable time to accept, the repudiation of the employer or, in a sense, to resign. Recently, on 28th May, the Court of Appeal said:
"The right of an employee to resign when faced with repudiation of his contract by the employer", is important. Lord Justice Sedley pointed out in the case of Cerberus Software v. Rowley in 2001 that the issue had not yet been finally resolved as to exactly when each principle applied to termination of employment contracts. It was what Lord Justice Ward called "murky waters".
For the Government to settle that the automatic principle applies, which, it seems, is what is meant by the modified procedure, in the schedule to the Bill, which does not face up, and has never done so, to the problems which exist in the law as it stands, is an extraordinary method of promoting sensible law reform, whichever of the principles applies. And there are other, equally difficult issues. I make no excuse for saying to your Lordships that they have to be faced today. If they are not faced today, they will never be faced. They were not faced in Grand Committee by the Government.
I shall take just one example, although I could quote many; that is, the problem of group dismissals. After the decision in Parr v. Whitbread & Co in 1990, where an employer dismisses a group of employees in circumstances in which all the employees could have committed the misconduct in question, and where each member of the group was capable of having committed the misconduct and the employer cannot identify the individual perpetrator, as the law stands, the employer is entitled, if he has solid grounds for his belief, to dismiss each and every member of the group. That will not be an unfair dismissal.
The principle is not limited to summary dismissals, but it arises most often where the employer has made investigations but despairs of ever finding the culprit and decides to get all of them off the premises. Does the modified procedure apply to group dismissals?
That is the last of my questions, which I shall summarise in this form. Does the modified procedure apply to group dismissals? Will the Government tell us whether the modified procedure applies only to summary dismissals or, as the noble and learned Lord, Lord Falconer, said more than twice, to near-instant dismissals? If it applies to near-instant dismissals, what length of notice makes it "near instant" and what length of notice places it in another category so that the standard procedure applies? It is no good to tell me that we shall find out when we read the regulations. The Government will have to tell us when they give notice of the regulations and they must have some idea now. If they do not, they should take the provision out of the Bill.
In addition, are the Government deciding the difference between the elective and automatic principles of termination of employment contracts? Will they tell us why, in all cases where an employer decides to use the modified procedure, it is necessary to allow him to use that privilege in a manoeuvre by saying that this is a dismissal for misconduct, which is more than likely to unbalance industrial relations at the workplace between different groups of work people, especially if he gives different notice to different groups where he alleges misconduct?
Why is that procedure, in which the employee has no right of appeal, no right to a meeting and no right to discussion but must accept the first and last word of the employer, appropriate? Whatever the employer's ultimate right to effect a summary dismissal, there is no need to encourage it in the way that the modified procedure does.
It would serve the Government's aims much better to swallow pride on this matter, whoever first thought of the modified procedure in the middle of the formulation of their Bill—it came in late—and to recognise that these unfair modified procedures are likely to cause more disruption and bad feeling at the place of work than almost anything else in the Bill, let alone causing many preliminary reviews in the tribunals. There will be argument as to whether the employer was entitled to apply the modified procedure. Do the Government believe that that will save tribunal hearings?
The need to investigate by the employer, which my noble friends have pressed, is totally lacking in the modified procedure. The best move that the Government could make to restore confidence in their approach to workers' rights and to save them from the charge that there is inherent in Schedule 2 an inroad upon the enforcement of employment rights in an unfair modified procedure would be to drop those procedures from the Bill. I beg the Government to reconsider this matter between now and Third Reading and to consider seriously dispensing with this unnecessary provision—one which did not arise during their first thoughts on the Bill. I beg to move.
My Lords, I shall speak briefly in support of Amendment No. 46. The issue which concerns us most on these Benches is dismissal for gross misconduct. We accept that in a limited number of cases of dismissal an employee's behaviour may be both flagrant and unambiguous. But even in such apparently obvious cases, in our view there will remain an argument for proceeding with caution in taking the decision to dismiss. In any event, such considerations will not apply in the overwhelming majority of cases of gross misconduct. In most cases the opposite will be true.
As the noble Lord, Lord Wedderburn, said, the severity of the sanction of summary dismissal requires that higher, not lower, standards of procedural fairness should be adopted before such procedures are followed and such action is taken.
My Lords, this amendment deletes the modified dismissal and disciplinary procedure in its entirety. Amendment No. 57 would do the same for grievance procedures. Indeed, the noble Lord, Lord Razzall, moved an identical amendment in Grand Committee.
The noble Lord, Lord Wedderburn, started by discussing what he described as "the archaeology" of this measure. He started by saying that the issue was not raised in Routes to Resolution. I have an in-built objection to referring to the archaeology because I want us to consider what is in the Bill, not the consultation procedure beforehand. However, since the noble Lord, Lord Wedderburn, made the point, perhaps I may say that paragraph 3.15 on page 18 of Routes to Resolution states:
"There will be cases, for example gross misconduct or harassment of an employee by a manager, where it would be unreasonable to expect all these actions", that is, the actions in a standard procedure,
"to be completed. Tribunals would therefore be given some discretion when assessing whether the failure to follow these actions was reasonable in the circumstances or should lead to some enhancement or mitigation of the award".
Those are matters which we shall come to. However, it is not the case that the issue has arisen for the first time.
My Lords, I am grateful to my noble friend for giving way. I hope that I said that there was no right of appeal in a grievance procedure. My noble friend said, correctly, that Routes to Resolution states that the tribunal would have a discretion to set aside some parts of the standard procedure. What I said—if the noble Lord looks at page 17 he will see that it is correct—is that no modified procedure, which is separate from the standard procedure, was proposed in Routes to Resolution, and that is true.
My Lords, the modified procedure arises from an issue which was raised for debate in Routes to Resolution and referred to in the response to consultation.
I do not know why the noble Lord, Lord Wedderburn, keeps stating that the line is not clear. We have made clear from the beginning that the modified procedure deals with instant or near instant dismissal. Without anticipating in detail what the regulations will say, the difference between instant dismissal and near instant dismissal is fairly clear. Instant dismissal takes place when the person who is capable of taking the dismissal decision, the employer, or whoever it may be, is present when the incident takes place and says, in the words of the noble Lord, Lord Wedderburn, "Get out". Near instant dismissal is when the employer is not immediately available. He has to be called from another part of the premises or from off the premises, but as soon as he returns he says, "Get out". There is nothing particularly significant about the difference there.
Clearly, those dismissals exist in real life. Neither the noble Lord, Lord Wedderburn, nor the noble Lord, Lord Sharman, suggested that there are no cases in which instant dismissal might not be justified. They both think that the number of cases should be limited as far as possible—of course they should—but neither of them say that they should not exist. They arise from cases of gross misconduct. Some are unfair—as few as possible should be unfair—but others are not. Tribunals consider the individual cases on their merits, but there is no blanket prohibition against instant dismissal.
So, under the existing law, it may be completely lawful for an employer to dismiss instantly in extreme situations without first suspending the employee or imposing some other disciplinary measure. It is our intention to leave the underlying law on unfair dismissal unchanged. When the noble Lord, Lord Wedderburn, says that that is an inroad into the enforcement of employment rights, I have to say that I believe he is wrong. I believe that the introduction of modified procedures as opposed to no procedures, which is the present situation, cannot fairly be described as an inroad into employment rights. The noble Lord says that they are unfair and crude. At present, an employer who summarily dismisses is not required to follow any minimum procedures.
The noble Lord, Lord Wedderburn, asked specific questions about cases which he described. He mentioned the three individuals who are given different periods of notice. He added to that a fourth individual who is made redundant at the same time. Perhaps I may say to the noble Lord—I know that he does not like me saying it—that those matters will be determined by regulations, and we shall consult fully on the regulations. But we have stated our intentions—I am sure that this is what he wanted me to say—to apply the modified procedure to instant dismissals or near instant dismissals. I cannot be drawn on the specific examples given except to say that we consider that the standard procedures should apply to all other cases except instant dismissal.
Some noble Lords believe that the modified procedure will undermine the sound guidance provided by the ACAS code. As we know, the ACAS code advises that most cases of gross misconduct should not result in instant dismissal but should first be subject to an internal procedure before a decision is taken. I see no reason to believe that ACAS will or should change that advice. Employers should still take it into account when assessing what to do in individual circumstances.
The schedule does not change the obligation on the employer to act fairly when dismissing. As now, the ACAS code should be taken into account by the tribunals when assessing whether the employer has acted reasonably and fairly. That is the point of the quotation I gave from Routes to Resolution. If it is currently unfair to dismiss an employee instantly for certain types of gross misconduct or in particular circumstances, that will remain the case in the future.
The modified procedure sets a new procedural standard below which employers should not fall in any circumstances. But it does not absolve employers from the need to follow more elaborate procedures where necessary. That may well involve employers suspending employees while investigations take place. It may well involve meetings with the employee before a decision is taken. Despite what has been said, the modified procedure is necessary. It deals with the special case where it is not appropriate to demand the following of the full procedure because that would involve requiring ex-employees to attend hearings. However, it does not reduce the standard against which tribunals will judge the fairness of employer actions in cases of instant dismissal. We recognise that such dismissals may or may not be fair. I hope that the noble Lord will withdraw his amendment.
My Lords, before the Minister sits down, if he reads Hansard tomorrow he may agree that he seemed to be saying at one stage—and I should like to know whether he wants to be left on the record as saying this—that whether or not the modified procedure is available to the employer depends on where he happens to be. If he happens to be there and sees this act there can be an instant dismissal. If he is half a mile away he does not have much chance. If he is 50 yards away, perhaps he would come back. It is bizarre to think that putting a provision on the statute will encourage those who have never had procedures in their lives to look at the Bill and say, "Oh, yes, I see". Why must we have to have this big procedure at the top? Let us have this little procedure at the bottom where, in the case of grievances, there are no appeals.
The Minister seemed to be saying that the only aspect that will decide a court or tribunal is where the employer happens to be at the time. He cannot mean that.
My Lords, the reverse is the case. I was trying to be helpful by explaining the difference between instant and near-instant dismissals, as those were the words used by my noble and learned friend Lord Falconer. I tried as always to be helpful, but I made it clear that the chance of whether the employer happens to be on the spot, 50 yards or half-an-hour away, is not the significant factor between the standard and the modified procedure. That is why we have used the words "instant" or "near-instant" dismissal. The implication is the opposite to that which my noble friend Lord McCarthy seeks to draw.
My Lords, I should like to say that I am grateful to my noble friend when he clarifies issues, but I wrote down what I thought he said in what was the first definition we have ever had of a "near-instant" dismissal. As I understood him, he said that the instant dismissal is when the employer is present and says, "Get out". That is a summary dismissal in law, but if the Government want to call it an instant one, I do not mind.
The noble Lord then said that the near instant dismissal is when the employer is not there but comes back. I wrote down, "When the employer comes back". If I have written that down wrongly, I apologise, but if he looks at his text I think he will find that that is what he said. The employer comes back and says, "Get out".
I imagine myself in the Court of Appeal where an unhappy employee who has been told to get out says, "I was wrongfully dismissed at common law". Someone says, "Well, you should not have been allowed to go to a tribunal because that was a near-instant dismissal". The employee says that the employer was nowhere around. He came back the next day and said, "Get out". Is that a near-instant dismissal? With the greatest respect to those who thought up this curious paradigm, that definition is absurd.
However, the Minister said something that was very important. He said that the modified procedure would apply to ex-employees. I notice that he did not say a word about the law on termination of contract. So he is adopting the automatic theory on termination. Is that what the Bill says? So the courts had better look at this deep area of what Lord Justice Ward called "murky waters" and realise that the Government are by a side wind legislating on that.
Then the Minister says that these are the cases to which the modified procedure will apply. So in all cases where notice is given the modified procedure will not apply. Therefore, an employee would be very sensible when an employer says, "Get out", to ask, "Are you giving me notice?" If the employer says, "Well, all right, you can have a week's notice, but I want you off the premises anyway", that is not a near-instant dismissal.
I touched on a further point which the Minister did not seem to notice. The modified procedure applies to all summary dismissals whether or not they are justified at common law. So it applies even where the employer instantly or summarily dismisses wrongly. In other words, the modified procedure application is at the choice of the employer. Whether or not he is right in law, if he says "Get out", the modified procedure applies—especially if he is present because then we know it does. Just how far he has to be away to come back we are not sure.
So can he be sued in an employment tribunal? Every time he says, "Get out" the employee has to start his grievance procedure. He has to send that letter before he can get to a tribunal. That is the point where the Minister, with the greatest of respect to him, was most in error.
The Minister says that it is wrong to call this an inroad into employment rights enforcement. But if the employee has not done what Schedule 2 says that he must do, he is not allowed to go to a tribunal. Even if he has complied with it he has to wait 28 days. We shall come to that matter.
Therefore, the modified procedures encourage the worst practice. They encourage summary dismissal. Where it is a matter of a grievance they encourage the employer to give his first and last word and know that that is the end of it because there is no meeting and no appeal.
What possible contribution to what the research documents rightly call "the need for further dialogue at the workplace" can such crude and silly procedures possibly have? I hope that the Government will think again. If they cannot withdraw the modified procedures, at least at Third Reading they should come back with provisions that working people can recognise as having elementary fairness. At the moment there is no fairness. The worker is left vulnerable. I say that especially in view of the policies advanced by parties other than the Government. Those who are vulnerable need protection. The modified procedures deprive them of it. But at the moment there is nothing that we can do except to leave the Government wallowing in what is a terrible mess and which is opposed to their professed aims, and beg leave to withdraw the amendment.
moved Amendment No. 47:
Page 65, line 32, leave out paragraph 4 and insert—
"4 The employer must—
(a) set out in writing—
(i) the employee's alleged misconduct which has led to the dismissal,
(ii) what the basis was for thinking at the time of the dismissal that the employee was guilty of the alleged misconduct, and
(iii) the employee's right to appeal against dismissal, and
(b) send the statement, or a copy of it, to the employee."
My Lords, Amendment No. 47 was spoken to with Amendment No. 37, or strictly with Amendment No. 41. I beg to move.
moved Amendment Nos. 51 to 53:
Page 66, line 13, after "send" insert "the statement or"
Page 66, line 13, after "copy" insert "of it"
Page 66, line 16, leave out "at least one" and insert "attend a"
On Question, amendments agreed to.
moved Amendment No. 54:
Page 66, line 17, at end insert—
"( ) The meeting must not take place unless—
(a) the employee has informed the employer what the basis for the grievance was when he made the statement under paragraph 4, and
(b) the employer has had a reasonable opportunity to consider his response to that information."
On Question, amendment agreed to. [Amendment No.55 had been withdrawn from the Marshalled List.]
My Lords, Amendment No. 55A refers to the grievance procedure. It is designed to be helpful. It is a simple but necessary amendment. Bullying arises on occasions and possibly will increasingly arise in the grievance procedures.
A fortnight ago I organised a meeting on bullying in this House. I had only 10 working days to advertise it. Over 90 people turned up at the meeting. They told horrendous tales about bullying from the point of view of employees, employers and middle management.
The Peers who were interested in coming to the meeting were not able to get into the meeting room because it was too small. Although it was very squashed and very hot, I appreciate the support of those who came.
Since then I have received numerous telephone calls and letters in which I have been inundated with examples of bullying. Obviously, with this meeting I touched the tip of an iceberg, one which certainly will not dissolve and most probably will grow. All of those who attended believed that, as the law stands, there is no adequate legislation to challenge bullying at work. I know that the Government do not take that view, but I merely say to them, "Try being a trade union representative and using the law as it stands and you will know how difficult it is".
We cannot ignore the fact that bullying exists in thousands of workplaces and that in many it is endemic: it has happened for years; it is the norm. At the meeting, instances were cited from the health service, teaching, the voluntary sector, engineering and, indeed, from the Post Office—perhaps I should speak to my honourable friend the Minister in another place about that because I am sure that he would be interested in those bullying cases.
All types of offices, including government offices, were involved and several Ministries were mentioned. I shall not embarrass any of my noble friends by naming them, but I urge all Ministers to look over their shoulder because bullying is occurring. Of course, it also takes place in many kinds of factories, in workplaces large and small and in all parts of the United Kingdom. People attended the meeting from Scotland, Wales, Northern Ireland and all parts of England.
The Dignity at Work Bill recently passed through the House, for which I thank your Lordships. It is now scheduled for the other place but unfortunately, as I said, the Government are not backing it. Perhaps they will think again. It is an extremely popular piece of legislation with working people and good employers who were also present at the meeting stressed that good employers need not fear the Dignity at Work Bill. As they pointed out to me during the meeting and afterwards, when they remained behind to speak to me about it, they have had to face bullying at work and agreed that a specific law on bullying would have helped them.
We are now considering the Employment Bill, which sets out to be good legislation. The Government are rightly proud of having introduced it, but we need to encompass as much as possible in the Bill. Because it is a forward-thinking piece of legislation and one that should last for a good while, the amendment would add significantly to it. The amendment is a simple but sincere attempt. It covers employers, employees and managers because in many aspects of grievance procedures all three, or two out of those three, may be involved in bullying. My noble friend Lord Lea will speak a little more about that in a moment, but I ask the Government seriously to consider the amendment. It is intended to be helpful and could improve the Bill. I beg to move.
My Lords, I rise briefly to support my noble friend. We are seeking to make an important clarification as regards a possible difference between bullying and other matters that may come under disciplinary or grievance procedures. The key issue, to which my noble friend just alluded, is that there are often three sides to such disputes, not two. The key point is that an appeal will in practice often relate to the manager's position in the line of command in relation to the ultimate employer. The manager in question will therefore not be taking the hearing, as he would in the case of an ordinary grievance. So the manager could either be the person being said to have done the bullying, which would constitute a grievance, or the person in a disciplinary hearing who was saying that the employee was doing the bullying. Would it then be right for the manager to be the person to take the case, as it were, instead of a third party?
I wonder whether Ministers in the Department of Trade and Industry and the DTI corporately have yet shown sufficient ingenuity in addressing what I may call the variable geometry. We do not have to be Picasso to work out that the picture is different from a two-dimensional one. The manager is often the pig in the middle between the other two parties.
I thank my noble friend Lady Gibson for her work and refer briefly to the interesting meeting upstairs last week. As a trade union official of some years' experience, I can normally tell quite quickly whether there is a big head of steam behind an issue. There is a big head of steam worked up behind this one, which should be released without adding to the frustration by saying that it does not really come under this Bill or that perhaps it should come under my noble friend's Dignity at Work Bill. We do not know what will happen to that Bill. Something must be done.
We have narrowed down what is the proper connection between the broader ideas on bullying, which have been the basis of the campaign, and the unique, narrow opportunity presented by this Bill. We have made a modest suggestion that I hope will be accepted as useful: that the employee could be deemed to be a third party if the employer takes action under the disciplinary procedure.
The amendment may not represent the optimum formulation, but as we are nearly at the last stage of the Bill, our real request is to move forward, put some cards on the table and not just go round in circles arguing about what bullying is, because we have been doing that for as long as I can remember. We want some evidence that the right degree of intellectual agility is being shown to try to address the proposition for which my noble friend has been campaigning. We have started to crack the issue and I hope that my noble friend the Minister can say something positive about it today.
My Lords, let me acknowledge from the outset that this is an important issue. To her great credit, my noble friend Lady Gibson has brought it to the House's attention more than once. She has certainly proved to my satisfaction that there is what my noble friend Lord Lea calls a head of steam behind it. It is clearly something that deserves the Government's attention.
We do not normally oppose or support Private Member's Bills, but on Second Reading of my noble friend Lady Gibson's Dignity at Work Bill, I identified certain problems with the Bill, the definition of bullying and the extension of new types of protection that the Bill would entail. But that does not mean that we do not have to take the issue seriously.
Bullying is typically handled under internal procedures in two ways. Employees can raise allegations of bullying under grievance procedures, which is covered by Amendment No. 55A, and employers can use their disciplinary procedures against employees who are accused of bullying, with which Amendment No. 43, over which we passed somewhat rapidly, is concerned. The amendments seek to allow the employer or the manager to initiate an appeal against a Step 2 decision under the standard statutory procedures for both dismissal and discipline and grievances in cases involving bullying. The procedures currently permit only the employee to request the appeal.
I must say that there is something odd about the amendments, because they concern the appeal, which is an appeal against the employer's initial decision after the Step 2 meeting. It is odd to let the employer appeal against his or her own decision. I am not aware of any voluntary procedures that involve such an unusual arrangement.
My Lords, I am coming to that matter. The amendment provides that the employer, the manager or the employee has the right to institute an appeal. I assure my noble friends that I have given the matter a great deal of consideration during the past few days because it is puzzling. It is a very difficult matter to define, a very difficult matter to legislate for, and it deserves proper consideration.
The amendment refers to the ability of a manager to initiate an appeal. I suspect that my noble friends are concerned about the position of a middle manager who is pronounced guilty of bullying by the employer when considering a grievance by a bullied employee. However, having listened to my noble friend Lady Gibson I believe that she raised a point which does deserve consideration; namely, where the appeal would go through a manager who is himself accused of bullying. That is certainly a consideration which I had not thought about before.
When my noble friend Lord Lea refers to the manager being the pig in the middle, I can see the argument that the middle manager should be entitled to appeal. Of course, a manager is simply another employee for the purpose of the statutory procedures. Managers are entitled to use the statutory procedures, just as other employees are. Therefore, aggrieved managers are entitled to raise a separate grievance with the employer about the way that they have been treated by the employer's consideration of the other employee's complaint. I believe that that is a more sensible and logical way to deal with the issue because it avoids introducing unusual steps into the grievance procedure.
In practice, it may be unnecessary for the manager to lodge a grievance in those circumstances. Often, the employer will initiate separate disciplinary action against a bullying manager. This process will give ample scope to accused managers to put their side.
I have already referred to the difficulties in defining bullying. That is a problem that has dogged discussions of this difficult and sensitive issue over a number of years. There is no precise, accepted definition of bullying that could be used for legal purposes. That is why there is no legislation against bullying. I do not believe that introducing it without any attempt at definition, which the amendments would do, would avoid the problem of creating great practical difficulties of interpretation.
I have identified what I believe are real problems with the amendments, but I acknowledge the importance of the issue to a very large number of noble Lords, and the head of steam beside it. I believe that we should meet to discuss the matter between now and Third Reading and I invite my noble friends to do just that.
My Lords, I thank my noble friend for his speech. Having spoken to him informally, I know that he does recognise that bullying is increasingly becoming an issue in employment terms. I should like to offer a quick aside on the definition. When, over 25 years ago we were talking about racial harassment, sexual harassment and victimisation we were always told that they were difficult to define. Somehow we managed to get over that. Perhaps if we meet, which is an extremely helpful suggestion on the part of the Minister for which I thank him, we can deal with this. I beg leave to withdraw the amendment.
moved Amendments Nos. 58 to 60:
Page 66, line 32, leave out paragraph 9 and insert—
"9 The employee must—
(a) set out in writing—
(i) the grievance, and
(ii) the basis for it, and
(b) send the statement, or a copy of it, to the employer."
Page 67, line 2, after "send" insert "the statement or"
Page 67, line 2, after "copy" insert "of it"
On Question, amendments agreed to.
moved Amendment No. 61:
Page 67, line 11, at end insert—
:TITLE3:"Procedure: consideration by employees
At the time of the introduction of the procedure, the employer should—
(a) issue to all employees in draft form the actual procedure which is to apply to the establishment,
(b) provide the opportunity for comments to be made by employees within one month, and
(c) issue the substantive version of the procedure after consideration has been given to the points submitted."
My Lords, the purpose of Amendment No. 61 is to pinpoint some of the problems that we shall be facing as the relevant regulations are tabled. This is an opportune moment—we had one brief bite at it upstairs—because soon there will be intensive consideration of what is going to be a revolutionary impact on all companies in the country. We know that those companies will range between multi-plant companies, groups, public limited companies, and so on, down to very small companies. Within that spectrum there will be a whole variety of companies in terms of geography, size, employment hours and people.
As regards communicating important new procedures, we have been told that in industrial relations the communication would typically relate to the appropriate size of bargaining unit, or people with a particular logic, as to why they are the group being consulted.
I do not believe that it is too late to shed light on this matter because I suspect that it cannot be transposed into practice just by the best brains in the country sitting in a room. The matter needs to be carefully considered in order to ensure that we have a meaningful account of who has to do what in a particular environment.
It ties up with the fact that a useful cross-reference arises in government Amendment No. 64 on the right to be accompanied. I believe that that is relevant because it is important that firms and workers' representatives understand that there is a new chapter opening up here as to who is to be involved, and how, in various procedures. The ideal solution will be an explanatory note—not just a unilateral notice board signed Department of Trade and Industry—on how Mr Struthers in King's Lynn will deal with issues concerning the night shift in the transport depot . That is the degree of detail required of the domestic procedures which the Government wish to have credibility. That is why many issues will not need to go to industrial tribunals, as my noble friends Lord McCarthy, Lord Wedderburn and Lady Turner have stated on many occasions. All of that is true. However, it is also true that we have an opportunity to ensure that robust procedures are in place to ensure that the domestic environment is improved so that not only are such matters settled through procedures but the climate is improved so that the issues do not even arise. In my view new procedures will be required in almost every workplace as a result of this Bill.
On the opposite side of the argument, I know that there is a concern about too much regulation. The better that this matter is addressed in the initial stages—and we are talking about a procedure at the time of introduction—the longer it is likely to be before an issue will arise. Additionally, there would be worries about people's motives and about misrepresenting where people are coming from. If this can be got right from the start, however it is expressed, there will be a degree of joint ownership of the procedure. That is what we are aiming for. I do not necessarily intend a connection with trade unions, although I am a trade unionist and that is what I should like to see. However, I believe that there must be some degree of joint ownership of those procedures. That must be put in at the start.
In Grand Committee, my noble friend indicated that some important matters need to be examined but not necessarily put on the face of the Bill. It would be useful if he would indicate how the Government visualise these matters being taken forward. There must be an acceptance that procedures are not being parachuted in from Whitehall but that they make sense in the workplace. We believe that over time they will make a great deal of sense in the workplace and we want to get them correct from the outset. I beg to move.
My Lords, I rise briefly to support my noble friend Lord Lea. The Minister in another place rightly spoke of the measure in terms not only of reducing the number of cases which go to employment tribunals but of introducing organisation, discipline, opportunities and rights to about 6 million workers. That is an innovative and exciting prospect and we do not want it buried. We need to have a clear explanation of how the Government intend to handle the matter.
They cannot handle it themselves, except by drawing attention to it. However, I believe that it is the responsibility of employers' organisations, trade unions and other bodies to ensure that when the Bill becomes law everyone knows of it and their rights. We know that the Government will not accept the amendment and we hope that provision will be contained in regulations. However, when will discussions take place on when these 6 million people will be told of their rights and who will be consulted?
My Lords, I agree with a great deal of what has been said and the thinking behind it. When we provide statutory procedures for the first time we want to ensure that they will work. I have a great deal of sympathy with much that has been said about the amendment because—and I have bored the House with this previously—as an employer of about 35 people in the only unionised market research company in the country, I did exactly what the amendment proposes. I produced a draft—or rather it was produced by the union because it was much better qualified to do so. We provided the opportunity for comments and we finally provided a substantive version.
However, when I consider the implications of writing such procedures into the Bill in the form suggested, I start to shudder. I was going to say that I could write a whole Bill on the subject, but I could not. I could give instructions to the departmental lawyers to give instructions to parliamentary counsel to write a Bill on the subject. It is enormously complicated and it requires a great deal more than what is provided in the amendment. Let us consider, for example, the issue of nominated individuals to whom complaints should be made. There is a wide variety of places of employment and of multi-plant organisations. I find it difficult to see how without injustice to a considerable number of employees one could produce a formula which could work for all of them.
However, we have the ACAS code. It provides guidance to employers about consulting their workforce before introducing their own procedures. That is what makes sense to me. I have no problem with that as guidance and we would encourage the parties to follow it voluntarily, as does ACAS. However, it is quite another matter to impose a new legislative requirement to consult. It would go beyond the effect of the ACAS code and it would take the Bill into different and controversial territory.
We have problems with the notion that employers of all sizes should be legally obliged to consult their workforce on their procedures. What would the cost be in terms of additional burdens on millions of employers, the majority of whom are in daily personal contact with their employees and do not need to go through statutory procedures for this purpose?
We are concerned with positioning the amendment within the statutory procedures. Schedule 2 specifies the statutory minima; it does not deal with the detailed application within voluntary procedures. The amendment takes the schedule into areas which it was not designed to cover.
The schedule does not provide an entitlement to employers to vary the procedures themselves. Yet the amendment seems to encourage employers to vary the procedures after consulting their employees—and quite right, too. It would even entitle employers to introduce procedures which were inferior to the minimum specified by the schedule, if their employees agreed. We had some difficulty with that when we considered Clause 39 in Grand Committee. Surely we do not want to open up that possibility.
We know that many employers already operate good procedures. We hope that many more will adopt their own procedures following the Bill's implementation and the introduction of statutory procedures. In many cases, employers will consult their workforce before introducing or changing the procedures. But we believe that such consultations are best taken on a voluntary basis without imposing any legal requirement to do so. We certainly do not want to cut across, for example, existing consultative arrangements with recognised unions, which might be the effect of these amendments.
I am sympathetic to a great deal of what was said but I cannot accept the amendment.
My Lords, these issues will not go away; we have not heard the last word on the subject. Indeed, although my noble friend said that he shuddered at the implications of my amendment, perhaps he was shuddering at some of the issues which must be examined before the Bill is enacted.
When speaking to the amendment he used the expression "one size fits all". We are not talking about a single currency or a single interest rate and I shall not say that the penny has dropped because I shall mix my metaphors. Clearly, "one size fits all" is the nature of the Bill. As regards certain procedures, one size does fit all and I could say the same about any aspect of the Bill. The fact is that large firms, small firms, geographically dispersed firms, electronically based firms and so forth must introduce a procedure.
I welcomed the Minister's reference to the ACAS code and for one moment thought that my noble friend was saying that it would be a generally agreed point of reference. It is inevitable that people will have a good look at the code, but in order to avoid disputes about how a procedure is introduced we cannot deny that this is a procedure. It is a procedure, and they appear in the Bill, so let us not use words as though they have no meaning. We are discussing the unique occasion on which they will be introduced.
This has been a useful opportunity to highlight these issues for discussion. When the brainstorming is up and running between the DTI and everyone else, I hope that something will have come out of our discussion today. Meanwhile, I beg leave to withdraw the amendment.
moved Amendment No. 62:
Page 67, line 19, at end insert "and should as far as reasonably practicable further seek to agree with the employee, or with a recognised trade union, a mechanism for the conduct of appeals taking into account the recommendations of any relevant code issued by the Advisory, Conciliation and Arbitration Service.
My Lords, this is a modest and minor amendment. We are dealing with the general requirements which apply to Schedule 2, the statutory dispute resolution procedures, and we are trying to add to what it proposes should be done in respect of appeal.
Part 3(13)(3) states:
"In the case of appeal meetings which are not the first meeting, the employer should, as far as is reasonably practicable, be represented by a more senior manager than attended the first meeting (unless the most senior manager attended that meeting)".
An element of an appeal mechanism is that the person taking the appeal was not involved in the first instance case. One must try to introduce an element of perceived independence or to bring a fresh mind to the issue. Part 3 is better than nothing but it is not enough—particularly for the millions of people who will never reach a tribunal.
The Government want to discourage people going to tribunals but say, "It will be all right. Tribunals will have the full rigour of the ACAS code". That is all very well but the overwhelming majority of employees do not get to a tribunal. The employer might know the law and be aware that he only has to observe what is said in the Bill. We want to insert in Part 3:
"and should as far as reasonably practicable further seek to agree with the employee, or with a recognised trade union, a mechanism for the conduct of appeals taking into account the recommendations of any relevant code issued by the Advisory, Conciliation and Arbitration Service".
The amendment specifies "any relevant code" because we are not certain what the Government will do about the present code, which they will have to change to take into account the Bill's provisions. The code that we know and can reasonably ask the Government to consider is paragraphs 27 to 31 of the ACAS code on discipline and grievances, which generally deal with appeals.
One would not necessarily have to take into account all those provisions but parts of the code are of particular importance. There is provision for time limits in the Bill but not for a hearing by a manager not previously involved. The Government may say that many small firms only have one manager but in most cases they could find someone within the organisation who was not previously involved—even if it is a member of the board. That will add to the feeling of equity.
If one does not want employees to go to tribunals, one must find an alternative to the employer's last word. The trouble is that the employer took the decision and was present. With an appeals procedure, one wants somebody who was not present and—says the ACAS code—someone who was not previously involved. If that proves impossible, the code says that one should seek an alternative form of perceived impartiality—which is recognised by the Better Regulation Task Force. The code states also that if new evidence emerges as a result of the appeal process, time should be allowed for investigation and comment. That might result in a slightly different decision.
I do not see why some, part or all of that should not be embodied in the Bill or regulations. I ask the Government to give me a friendly reply. I do not want them to say that we are trying to return to external dispute resolutions. We are not. We have given that up. We are saying that the employer should be asked to consider the possibility of bringing to the appeal process someone who was not previously involved because it would look better for the employer—who should investigate also getting agreement between the parties that the worker himself might accept. That would be in the spirit of the ACAS code but there would be no compulsion. The amendment is an attempt to focus the Government's attention on the need to engineer a shift, so that there will be an alternative to the employer's last word. I beg to move.
My Lords, my noble friend describes this as a modest amendment. I suppose he means that it is heavily qualified, with its reference to "reasonably practicable", "seek to agree" and "taking into account". I certainly would not accuse it of going over the top.
"the employer should, as far as is reasonable practicable, be represented by a more senior manager than attended the first meeting".
I got the impression that my noble friend was not recognising that point.
The amendment proposes that the parties should seek to agree a mechanism for the conduct of appeals. I do not understand what is meant by "a mechanism". Is the intention to establish a joint system, whereby decisions about the conduct of appeals could be made—or about the rules of conduct themselves?
I find it difficult to understand the amendment and suspect that it is necessary. Part 3(13)(2) states that appeal meetings must be conducted in a manner that enables both the employer and employee to explain their cases. Is that not the amendment's objective?
I and my noble and learned friend Lord Falconer have said several times this afternoon that use of the ACAS code should be encouraged even more than now. We agree with the Better Regulation Task Force in that regard but we have always resisted bringing the code into statute. The parties can draw on whatever guidance the ACAS code provides—the amendment does not add anything of substance.
We have tried to keep the statutory procedures as short and simple as possible. We resist all embellishments, unless there is an extremely good case for them. The amendment would complicate the procedures. Part 3(13) covers most of the points made by the amendment and many people, including me, would be confused about its meaning.
My Lords, I cannot resist responding to the Minister. I said that the amendment is modest and that it does not ask for much. It is just a little broader. I pointed out the fact that "a more senior manager" was on the statute book and on the face of the Bill. But to echo the Minister, he could have been there; he was not far enough away. He could have been the person who told the inferior person to sack the worker. ACAS wants someone who is not directly involved. It is better if it is a senior person because it will be easier for such a person to reverse the decision. It will be no good using someone with no authority. You cannot bring out the man who looks after the cars; you need someone with authority to reverse a decision of managers. It should be someone who is not involved in the dispute, and that is not on the face of the Bill.
The Minister says that he does not know what is meant by "mechanism for conduct". Those are three words and I can explain them in one: procedure. All noble Lords know what a procedure is and we are talking about a mechanism for the conduct of an appeal. That is a procedure.
To reject this amendment will not do. The Government can continue to reject amendments, but I return to the point that there will be no reduction in tribunal hearings. This amendment is modest and it may induce a few people not to demand their day in court. If the Government will not accede to that, there will be no reduction in the number of tribunal hearings. When the results of the latest directives come in one will see that the figures will have risen and the Government will get around to introducing such a measure in the end. In the mean time, I beg leave to withdraw the amendment.
moved Amendment No. 64:
Page 67, line 19, at end insert—
:TITLE3:Status of meetings
A meeting held for the purposes of this Schedule is a hearing for the purposes of section 13(4) and (5) of the Employment Relations Act 1999 (c. 26) (definition of "disciplinary hearing" and "grievance hearing" in relation to the right to be accompanied under section 10 of that Act)."
My Lords, in Grand Committee we discussed the case for including a reference to the right to be accompanied in the statutory procedures. That right was brought into being by the Employment Relations Act 1999. The noble and learned Lord, Lord Falconer, indicated that the Government were giving further consideration to the issue. We have done so and have come forward with this amendment.
Its effect is to make it explicit that the right to be accompanied will apply to meetings held under the statutory procedures in the same way as the right applies now to hearings held under voluntary disciplinary and grievance procedures. In other words, it will remain the case that the right will apply where a meeting under the statutory dismissal and disciplinary procedures could result in the administration of a formal warning or some other formal action against the employee or the confirmation of such actions at an appeal. It will remain the case that the right will apply to meetings held under the statutory grievance procedures where the grievance concerns the performance of a duty by the employer in relation to the employee.
In our judgment, it is highly likely that the right to be accompanied would apply in this way even without the amendment. But we have listened to the debates on this issue and we recognise that some individuals, including eminent employment lawyers, have raised questions about these matters. We have therefore decided to place the matter beyond doubt by tabling this amendment. We are indebted to the noble Lord, Lord Wedderburn, and to other noble Lords for giving their opinions on the issue in Grand Committee. Their contribution has helped to clarify our thinking. I beg to move.
My Lords, I cannot let this welcome government amendment pass without saying how glad we are that the obdurate opposition to putting this matter on the face of the Bill in another place and the keenness to deal with it in procedures and regulations in this place have been supplanted by the excellent principle of putting fundamental matters on the face of the Bill. We congratulate the Government on doing so and hope that they will follow their own precedent on other occasions.
I hope that the Minister will not mind if I raise one matter. By importing, as this amendment does, the welcome definition of meetings as hearings under Section 10 of the Employment Relations Act, which is specifically mentioned as part of Schedule 2 procedures, does it mean that the definition of "grievance hearing" in the Employment Relations Act applies to the meaning of "grievance"? I ask that especially in relation to "grievance"; otherwise there is no definition of "grievance" in the Bill. It is important to know what is a grievance or it will be when the matter is argued in a procedure. One will need to know whether an employee should use the first step in the grievance procedure. If he does not use the first step he will not be able to go to a tribunal, and if he does he cannot go to a tribunal for 28 days.
This amendment, in a most welcome manner, rightly applies the meaning of "grievance hearing" in Sections 10, 12 and 13 of the Employment Relations Act 1999 for the purposes of what is a meeting in this Bill. Of course, in doing so the question arises whether, for the first time, the Government are defining "grievance". If they are defining "grievance" in precisely the same way as it is defined in Sections 10, 12 and 13 of the 1999 Act, that has important consequences, not only for understanding generally, but also in relation to the amendments that they have moved today about what an employee has to do in regard to the grievance procedure. I believe that we are entitled to know how far this amendment imports the other parts of those sections that go with Section 10 in the 1999 Act.
My Lords, I have two immediate reactions to that. First, the word "grievance" is used widely in Schedule 2 and, secondly, as I understand it the amendment is tightly drawn. I believe the wisest course would be for me to write to my noble friend Lord Wedderburn on this matter in good time before Third Reading.
moved Amendment No. 64A:
Page 67, line 19, at end insert—
:TITLE3:"Scope of grievance procedures
(1) The procedures set out in Part 2 are only applicable to matters raised by an employee with his employer as a grievance.
(2) Accordingly, those procedures are only applicable to the kind of disclosure dealt with in Part 4A of the Employment Rights Act 1996 (protected disclosures of information) if information is disclosed by an employee to his employer in circumstances where—
(a) the information relates to a matter which the employee could raise as a grievance with his employer, and
(b) it is the intention of the employee that the disclosure should constitute the raising of the matter with his employer as a grievance."
My Lords, both at Second Reading and in Grand Committee, my noble friends Lord Borrie and Lord Gladwin discussed the interaction between the statutory procedures and the system for making and protecting public interest disclosures. That system was introduced by the Public Interest Disclosure Act 1998, which inserted new sections about public interest disclosures into the Employment Rights Act 1996.
My noble friends voiced concerns that the statutory grievance procedure may undermine, or be thought to cut across, the Act. It was felt in some quarters that employees may, rightly or wrongly, feel compelled to use the statutory grievance procedure when they wanted to make a public interest disclosure relating to their own personal treatment. In other words, they may feel constrained from raising their concern in a less formal way with their employer or via dedicated disclosure procedures. They may also think that they could not make the disclosure to third parties.
Ministers have stressed that we do not want the statutory procedures to undermine the Act. At Second Reading I said that the Bill and the regulations would secure that that was the case. But the doubts remained and in Grand Committee on 11th April my noble friend Lord Sainsbury announced that the Government intended to table an amendment that would remove any lingering uncertainty that the Bill would carry with it such unintended effects. He also indicated that officials would consult Public Concern at Work on the amendment.
We have therefore tabled this amendment to remove all doubt on the matter. We have consulted Public Concern at Work on drafts of the amendment. We are grateful for its helpful input and I want to place on public record our thanks for its support in this work and for the letter that Guy Dehn of Public Concern at Work sent to all noble Lords yesterday.
His letter confirms my belief that our amendment satisfies its concerns. It makes it clear that employees are free to decide how they wish to pursue a concern which could be treated either as a public interest disclosure or as a grievance. If they wish to take up an issue as a grievance, they can do so. If they wish to disclose their concern in other ways consistent with the Public Interest Disclosure Act 1998, then they are free to pursue that course of action either as an alternative to raising the matter as a grievance or, indeed, as an addition to raising it as a grievance.
I hope that the amendment will satisfy all the concerns expressed and I commend it to the House. I beg to move.
My Lords, I welcome the amendment, particularly on behalf of Public Concern at Work, of which I am a patron. As my noble friend Lord McIntosh said, the amendment fulfils the assurances given in Grand Committee by my noble friend Lord Sainsbury of Turville in response to an amendment I moved. Public Concern at Work is grateful also for the consultation that followed the Minister's response to the suggestion made in Grand Committee by my noble friend Lord Gladwin of Clee.
The amendment makes it clear that the Bill's grievance procedure does not undermine the legislative framework for whistleblowing in the public interest contained in the Public Interest Disclosure Act. The Act encourages employees to raise public interest concerns internally, but it is important for obvious reasons that there should also be an option for employees to raise matters externally; for example, with appropriate regulators.
That option is preserved through the amendment, so long as it is not the employee's intention to raise the matter as a grievance. My noble friend Lord Wedderburn of Charlton mentioned in another context the remaining deficiency that the Bill contains no definition of "grievance". I raise this point as a fact, not as an objection to the amendment, because consultations can take place before regulations are drafted to fill that deficiency and to define what is a grievance.
The view of Public Concern at Work is that the key element of a grievance procedure is that its purpose is to remedy or redress some harm or damage suffered by an employee. That differs from whistleblowing, where the purpose is to alert or to put on notice the employer or the relevant authority so that they can assess what action, if any, is needed. As the new statutory dispute regime is concerned only with grievances which may ground a tribunal claim, a definition of grievance that recognises the essential element of remedy for personal harm is appropriate. That is because the pre-eminent reason claims are brought to a tribunal is to seek a personal redress, especially, and usually, compensation for a detriment or harm the employee believes that he has suffered at the employer's hands.
We trust that Her Majesty's Government will confirm that there will now be full and open consultation on what is a grievance before regulations are introduced. We trust too that they will confirm that the key element of a grievance in the new regime will be that the employee is seeking a remedy or redress for harm or detriment.
When the Bill becomes an Act, the new statutory regime will be explained in various ways to employers and employees, who can all usefully be reminded of the nature and value of whistleblowing. If an employee is concerned about wrongdoing in his workplace, be it fraud, public danger, danger to public health or cover up of wrongdoing, he should feel able to raise that matter as a witness and be seen as such by managers and fellow employees rather than as a complainant who may have a personal interest in the outcome.
If, sadly, as we all know happens only too frequently, an employee is victimised as a result of blowing the whistle perfectly legitimately within the public interest disclosure regime and seeks a personal remedy, the grievance procedure set out in Schedule 2 will apply as it does to any other kind of grievance. I warmly welcome the amendment.
My Lords, I welcome the amendment. The comments of my noble friend Lord Borrie are right. But I have a problem, and I want to help the Government in its solution. As my noble friend Lord Borrie said, it relates to what was said about the previous amendment. He suggested—and I understand what he was saying—that a grievance concerns harm, damage or detriment to the employee. If that is to be used as the definition or near-definition of "grievance", it will be different from the definition in the Employment Relations Act 1999.
"a hearing which concerns the performance of a duty by an employer in relation to a worker".
If grievances relate only to the performance of a legal duty by the employer, that is rather narrower than the definition suggested by my noble friend Lord Borrie, where harm or detriment to the worker is the distinguishing point. It may seem a small point, but it would be critical in evaluating when whistleblowing is properly preserved by the amendment. Perhaps the Minister could indicate, if he is going to write to me, that he will write also to my noble friend Lord Borrie, and perhaps to all noble Lords concerned, telling us which of those definitions is likely to be adopted.
I suggest that the Minister should take seriously the definition in Section 13(5) of the Employment Relations Act and consider whether it should apply to both the Section 10 amendment we have just debated and the amendment under consideration.
My Lords, I am grateful to my noble friends Lord Borrie and Lord Wedderburn for their support. I confirm that when I write to my noble friend Lord Wedderburn on the issue—and my reply will be informed by his further helpful comments—I shall write also to my noble friend Lord Borrie, to the other Front Benches and all other Members of my party who have taken part in the debate; my noble friend Lord Gladwin is particularly associated with Public Concern at Work.
moved Amendment No. 66:
Page 67, line 19, at end insert—
14 Where a party states that a statement or copy of it has been sent to another party it shall be presumed that he has sent it.
15 In the interpretation of this Schedule, any relevant code of practice or statement of guidance issued by the Advisory, Conciliation and Arbitration Service shall be taken into account."
My Lords, this amendment seeks to incorporate a clause dealing with interpretation. Both in the standard and modified procedures there is a requirement to set out grievances in writing and to send a copy to the employer. That effectively starts the procedure. The amendment ensures that there is as little delay as possible in commencing procedures. Therefore, if a party states that a statement or a copy of it has been sent to another party, it shall be presumed—a word I emphasise—that it has been sent. Surely this is sensible. Is the worker expected to prove that he has sent it? Why should proceedings be delayed by arguments about whether or not it has been sent?
The legislation ought to be user-friendly. We have to remember that the workforce is becoming increasingly multi-ethnic—the noble Baroness, Lady Miller, mentioned this and I am sure that it is agreed in all parts of the House—and there may be language difficulties or cultural misunderstandings. Giving the employee the benefit of the doubt in such circumstances would appear to be eminently sensible. Employment tribunal proceedings are intended to be simple and easily accessible. Many of the people seeking to use the procedures will be relatively poor and it is the duty of politicians, as we have repeatedly said in the House, to be helpful to the vulnerable.
My noble friend Lord Wedderburn raised this issue in an earlier, differently worded, amendment in Grand Committee. Unfortunately, because my noble friends and I were not particularly happy with the response that we received from our noble and learned friend the Minister at that stage, we are bringing back the matter with slightly different wording.
The second part of the amendment provides that,
"In the interpretation of this Schedule, any relevant code of practice or statement of guidance issued by the Advisory, Conciliation and Arbitration Service shall be taken into account".
The Government have repeatedly acknowledged that ACAS is the organisation with the relevant expertise. Undoubtedly it will be called upon to provide advice and assistance in what, for many, will be an entirely new field of operation. The intention of the Bill is to get employers with no procedures to adopt at least a minimal level. But they may well need assistance, and ACAS is the right place to go for it. Interpretation may be difficult for some. The amendment makes it clear that guidance must be available and taken into account.
I hope that the Government will accept that the amendment is intended to be constructive. In Grand Committee we asked the Government to take away what we were saying and to look at the issue again. I had hoped that they had done so, but that does not so far appear to be the case. I beg to move.
My Lords, I certainly agree that the amendment is intended to be constructive. I can assure my noble friend Lady Turner that we did take away the amendment and that we did think about it again. But the result of that further thought is that we have not changed the view that we took when we debated a similar amendment in Grand Committee.
As my noble friend said, there are two issues here. The first concerns disputes between parties about the sending of written communications under the statutory procedures—Step 1 letters, for example. Of course disputes do arise in practice; letters get lost in the post and people pretend that letters have been sent when they have not been. This part of the amendment tries to cut through such disagreement by entering a presumption in the procedures that the sender is always right if he or she asserts that a communication has been sent. My noble friend is concerned about the implications of this kind of dispute for an employee's access to the tribunal system. We do not believe that these issues will cause problems for tribunals and therefore, by extension, for employees.
In our judgment, it would be extremely difficult for the employer to prove that a communication was never sent, especially if a dated copy was retained by the sender. So any disputes on these points would not detain the tribunals for long. However, there may be cases where the employer has valid evidence that a communication was not sent. For example, the employer's computer records may provide evidence about the alleged use of internal e-mail systems to send written communications. We should not discount the existence of that possibility by introducing a presumption of this kind. That would bring the procedures into disrepute.
The second point introduces a cross-reference to the guidance given by any relevant ACAS code or other statement of guidance when interpreting the schedule. We have discussed this matter on a number of occasions, both in Grand Committee and today. In particular, I responded to the amendment of my noble friend Lord Lea, Amendment No. 44, on this point.
To repeat the issue, the ACAS code of practice on disciplinary and grievance procedures would of course be relevant to the use of statutory procedures. The only question is whether a specific reference to the code is necessary here. As I said before, I am confident that it is not. When considering "any question" to which an ACAS code may be relevant, tribunals must already take the code into account under Section 207 of the Trade Union and Labour Relations Consolidation Act 1992.
The amendment also refers to other "statements of guidance" issued by ACAS. At present, statute does not require tribunals to take into account other such ACAS documents. Indeed, I am not quite sure what other ACAS documents would be covered by the term. I am therefore reluctant to introduce a novel reference of this kind into the Bill.
While confirming that the amendment is intended to be constructive, I would ask my noble friend Lady Turner not to press it.
My Lords, I thank my noble friend the Minister for his response. I am glad that he acknowledged that we intend to be constructive with these amendments. However, I am rather disappointed that the Government have not found it possible to come back more sympathetically to the submissions that we made in Grand Committee.
My noble friend said that the procedures could be brought into disrepute. That was one of the statements made on behalf of the Government in Grand Committee. We believe that if proceedings are delayed because of arguments about whether or not documents have been sent, that of itself is likely to bring the procedures into disrepute. It was to avoid that kind of incident that the amendment was drafted yet again for Report stage.
As to the reference to ACAS, as I said earlier, ACAS undoubtedly will be asked to advise on these new procedures. It seems appropriate that it should be clearly stated on the face of the Bill that if any matter of interpretation is to be discussed or investigated, then the guidance from ACAS should be looked at. Undoubtedly ACAS will issue guidance. This is a new set of procedures and I am sure that ACAS will be asked to provide, if not a code, at least some notes of guidance for people operating procedures of this kind for the first time.
There is no point in proceeding any further with this issue at this stage. That being the case, I beg leave to withdraw the amendment.
My Lords, Clause 31 deals with the non-completion of statutory procedures and specifies adjustment of awards where procedures have not been completed. Subsection (2) states that where there has been non-completion wholly or mainly due to failure by the employee, the ET must reduce any award to the employee by 10 per cent and, if it considers it just and equitable, it can reduce it by a further amount but not so as to make a total reduction of more than 50 per cent.
In subsection (3) it states that if the non-completion is wholly or mainly due to a failure by the employer, the ET must increase any award made to the employee by 10 per cent, or, if it believes it just and equitable, increase it by a further amount but not so as to make a total increase of more than 50 per cent.
However, subsection (4) allows the tribunal some flexibility. It states that in exceptional circumstances which would make a reduction or an increase unjust or inequitable, the ET may make no reduction or increase. My amendment seeks to remove the word "exceptional" from this clause. I do not understand the need for it. If it is unjust or inequitable in the view of the tribunal not to make an increase or a reduction in an award, surely that is a matter for the employment tribunal. What is meant by the word "exceptional" in this context? It can simply add to uncertainty. The ET's view of what is just and equitable should be sufficient. I beg to move.
My Lords, this may seem to be a very small amendment, but it is rather important. There are places in the legislation on these matters where special circumstances are mentioned as regards, for example, the employer's duty to consult. That has given rise to a great deal of litigation. Exceptional circumstances will do the same. Either there are circumstances where it is unjust and inequitable to make no reduction or increase in the awards, or there are not.
Exceptional circumstances pose a question which the tribunals and the courts will have to answer. As we have seen with the interpretation of special circumstances, that can be a matter of very great difficulty. I cannot understand why the Government insist on introducing these words especially as the matter was dealt with in the 12th report of the Joint Committee on Human Rights, dated 25th February, which commented on Clause 31(4). It states,
"In our view it would have been preferable had it been possible to draft clause 31(4) in a way which ensured that it would have operated proportionately without the need to resort to external aids to interpretation in the form of the Human Rights Act and a judicial decision in an unconnected area of the law. This might have been achieved, for example, by giving tribunals a single discretion in clause 31(4) to reduce or increase an amount of any enhancement or restriction of the award, allowing a tribunal to fix an amount of between zero and 50 per cent 'if it considers it just and equitable in all the circumstances to do so'. This would have reduced the complexity of clause 31, improved its transparency, and reduced the risk of tribunals behaving in a way which might be disproportionate. We draw this to the attention of each House".
Like some other passages in the 12th report, no one has drawn that passage to the attention of this House or any other House.
The comments on Clause 31(4) almost led us to move a much longer amendment to try to incorporate the precise proposal of the Joint Committee, but we did not do so because we thought that the removal of the word "exceptional" would go a long way in the direction of that proposal. I put it to the Minister that paragraph 16, which I have partially read, of the 12th report of the Joint Committee supports the simplification of Clause 31(4) in a way which it would not be very sensible of the Government to resist.
My Lords, the purpose of Clause 31 is to encourage the use of statutory procedures. It does that by providing that an employment tribunal must reduce or increase any award if the statutory procedures have not been completed according to whether the fault lies with the employee or the employer.
Because of the importance that we attach to the completion of procedures, we have stipulated that the minimum adjustment for non-compliance must be 10 per cent although there may be an adjustment of up to 50 per cent if the tribunal considers it just and equitable in all the circumstances. However, we do recognise that there may be times when a 10 per cent penalty will be disproportionate, so subsection (4) provides that the duty to make an adjustment of 10 per cent does not apply if there are exceptional circumstances which would make such an adjustment unjust or inequitable. In that case the tribunal may make an adjustment of less than 10 per cent or even make no adjustment at all. It will be for the tribunal to decide when this discretion should be exercised. The amendment would remove the word "exceptional" and would therefore weaken the principle that there will be a 10 per cent minimum adjustment, and hence reduce the incentive to complete the procedures.
The noble Lord, Lord Wedderburn, has quite properly raised the issue of the views of the Joint Committee on Human Rights. He has quoted the views of that committee. In her letter to it, the Secretary of State argued that even if Article 6(1) does impose requirements as to the way in which compensation is to be calculated, the obligations require no more than that any restrictions on compensation are imposed for a purpose which is in the public interest, that any restriction is proportionate and that it is in accordance with the law. She further argued that the restriction on compensation provided in Clause 31 is proportionate. In line with Section 3 of the Human Rights Act 1998, Clause 31(4) would have to be read and given effect so far as is possible in a manner compatible with human rights.
I know, and the House has been told, that the committee would have preferred Clause 31(4) to have been drafted in a way which ensured that it would operate proportionately without the need to resort to external aid to interpretation such as the Human Rights Act 1998. But in conclusion, the committee found that the Government's approach was legitimate. It found that the approach was unlikely to give rise to incompatibility with Article 6(1) of the European Convention on Human Rights. Therefore, from the point of view of the Joint Committee, there is no need to remove the word "exceptional". That word is included because we want to have the principle as strongly as possible that there will be an adjustment of an award in order to strengthen the encouragement to use the statutory procedures available.
My Lords, I note what my noble friend has said, but I do not believe that the Minister has adequately answered the plea from myself and my noble friend that the presence of the word "exceptional" will lead to a great deal of uncertainty. We have heard from my noble friend Lord Wedderburn that he believes that it will lead to a great deal more. However, I do not believe that there is much point in pressing the amendment at this stage and I beg leave to withdraw it.
moved Amendment No. 68:
Page 36, line 42, at end insert—
"( ) Where an award falls to be adjusted under this section and under section 38, the adjustment under this section shall be made before the adjustment under that section."
My Lords, there is a difficulty of presentation about this group of amendments, which includes Amendment No. 68 and Amendments Nos. 97 to 106. The difficulty is that the substantive amendments are Amendments Nos. 97 to 106 which refer to Clause 38. I have to include in the group Amendment No. 68 because the others do not make sense without it. In effect it is a paving amendment.
Amendments Nos. 97 to 106 arise because of the huge difficulty that we all had in Grand Committee in understanding Clause 38: it was exceptionally complicated. It was generally felt in the Committee that something had to be done to simplify it. It is the penalty structure for non-compliance with the written statement of employment provisions in certain circumstances.
During consideration of Clause 38, the noble Lord, Lord Razzall, in particular drew attention to the complexity of the system of penalties set out. As currently drafted, where an employee brings a successful claim of one of the types listed in Schedule 5, and it is evident that the employer has failed to meet his obligations under the written statute provisions, the tribunal will increase the award between 5 per cent and 25 per cent. The award uplift will be subject to a floor of one or two weeks' pay depending on whether the statement was absent or just incomplete or inaccurate.
We are confident that the general principle behind this measure is right and that it will help employers to recognise how crucial is the written statement to clarity in the employment relationship and how important it is, therefore, that all employers should meet their obligations to provide the statement. The general principle of encouraging compliance in this way was welcomed by most respondents to the consultation. However, as I said in Grand Committee, on reflection we agree with those who have commented that the penalty regime is unnecessarily complex.
Therefore, we have introduced these amendments which have a fixed-rate penalty in place of the current percentage-based approach. We believe that this will do the job just as well and will be simpler for tribunals to administer. Taken together they will substitute an award of two or four weeks' pay for the current system of compensation. Just as in the current drafting, the award will be payable if the statement is incomplete, inaccurate or absent, or if a notification of any change to the particulars has not been given. The award will be a flat rate rather than a percentage uplift.
Perhaps it would help if I outlined how the amendments will work. Amendments Nos. 97 to 100 reword subsection (2) of Clause 38 to direct the tribunals that even where an employee has not received a financial reward they may make an award of two weeks' pay or, if the tribunal considers it just and equitable, a higher amount of four weeks' pay. Amendments Nos. 101 to 104 make a similar change to subsection (3), so that the same regime applies where there is a financial award in the first place. Amendment No. 105 rewords subsections (4) to (6), effectively replacing the original awards structure with the more straightforward options of two or four weeks' pay. Finally, Amendment No. 106 removes the now unnecessary cap of 50 per cent on the combined increase in awards under Clauses 31 and 38.
Whether the tribunals make the higher or lower award will be at their discretion. It will not necessarily be tied to the type of failure. So, for example, tribunals will have discretion to decide that an employer's failure to issue a statement in certain circumstances is not as serious as its inaccuracy in others and hence give the lower award.
I hope that the House will agree that, taken together, these changes can only be for the good because the revised remedy will serve the intended purpose of putting employers on notice that they ignore their written statement obligations at their peril; and it is now a simpler and more readily understandable formula for calculating the penalty.
I turn now to Amendment No. 68, which is a technical amendment. The change that we are making by substituting an award of two or four weeks' pay for the current system of compensation in Clause 38 would have the effect, without this amendment, that the overall amount awarded would vary according to whether the Clause 31 adjustment or the Clause 38 adjustment was made first. If I am forced to do so, I can illustrate that with an example, but I would much rather not. As Clause 38 is currently drafted, the order of adjustment does not matter because the increase in the overall amount awarded is the same in either case.
Tribunals now need to know in what order the adjustments should be made. This amendment makes it clear that the Clause 31 adjustment should be made first. If it were not, the effect would be that the penalty for failure to supply a written statement would vary according to whether the Clause 31 adjustment or the Clause 38 adjustment was made first—and that is not our intention. I beg to move.
moved Amendment No. 70:
Page 37, line 31, at end insert—
"( ) An employer shall not present a notice of appearance to an employment tribunal under a jurisdiction to which this section applies if—
(a) it concerns a matter in relation to which the requirement in paragraph 7(1) or 10 of Schedule 2 applies, and
(b) the requirement has not been complied with."
My Lords, having discussed Clauses 31 and 38, we now come to Clause 32. This is at the core and centre of the apparatus introduced concerning the procedures dealt with in Schedule 2. This clause is concerned, as we saw in Grand Committee, with the limitations on access to justice in the tribunals.
We had a rather unsatisfactory debate on a similar amendment in Grand Committee. That was partly because our amendment was too widely drawn. We have corrected that in order to aim at what I take to be an agreed central objective. In the regulations for employment tribunals in 2001, a new overriding principle was introduced in Rule 10. The rule states:
"The overriding objective of the Rules in Schedules 1, 2, 3, 4, 5 and 6"— which are the relevant rules on employment tribunals—
"is to enable tribunals to deal with cases justly".
In dealing with cases justly—as those familiar with seminars on jurisprudence will perhaps accept—dealing with equal situations equally, and being even-handed, is a fundamental manner of approaching a just administration.
Under subsections (2), (3) and (4) of Clause 32 the employee is obliged to take the first step under the grievance procedure if he is to be allowed admissibility to the tribunal. I deal with his wish to go to the tribunal—which is how "access to justice" is defined. In the debate in Grand Committee all kinds of problems were introduced—for example, that he might have a second chance to go. But principles on access to justice, as the discussions of the European convention make very clear, are not concerned with second chances; they are concerned with primary access to justice. Under Clause 32(2), the employee is prohibited, as I put it, from presenting his complaint to the employment tribunal. Government Ministers tend to say that he will find that his complaint is not admissible to the employment tribunal if,
"it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies, and . . . the requirement has not been complied with".
So, if he has not complied with the first step under the grievance procedure, he cannot go to the tribunal.
This amendment applies a rule to the employer which is as even-handed as that which is applied to the employee. If the employer has not complied with his first step in the grievance procedure, the amendment would say that he is not permitted to enter a notice of appearance, which in general terms would mean that he is under a precisely parallel limitation to justice as that applied to the employee. If he has not complied with the first steps that he is obliged to take before inviting the employee to a meeting and, in the modified procedure, setting out his written response—the amendment would say that he is under precisely the same sanction as the employee who has failed in precisely the same way. It is a breach of the statute, and it is a breach of his contractual obligations by reason of the provisions of Clause 30.
If the Government really mean to be even-handed and to promote their own objectives, they must say something to the employer who fails in his obligations in a precisely parallel way to that in which the employee is spoken to when he fails to undertake his first obligation in the statutory procedures under Schedule 2. Without such a provision, there is no substance in the Government's claim that the provisions of Schedule 2 will promote dialogue and settlement at the place of work.
The employee must take his first steps, or he cannot go to the tribunal. Even if he does take the first steps his case is held up for 28 days. We have not included the second point, only the first. This is a most modest proposal; namely, that when the employer fails to take the first steps that he should take under his statutory and contractual obligations, he should be under precisely parallel sanctions to those on the employee. In that way, he would be encouraged to get on with the procedure, to do what he ought to do. He would have a sanction against him if he did not do that. At the moment, he has absolutely none so far as concerns access to justice—presumably only the remedy of the employee, who can sue him for breach of contract. But the Government wish not to encourage litigation, so they could introduce an automatic penalty, just as they have done for the employer. I beg to move.
My Lords, as my noble friend Lord Wedderburn pointed out, the admissibility regime in Clause 32 relates directly to employees. Where it applies, the regime ensures that the employees must at least initiate the statutory grievance procedure, and then wait 28 days before applying to a tribunal. My noble friend's amendment seeks to establish a parallel set of obligations on employers. In order to defend an application at a tribunal, the amendment would impose a requirement on employers to take certain acts under the grievance procedures.
We debated a similar amendment in Grand Committee on 25th March. On that occasion, as my noble friend acknowledges, amendments were tabled that sought to require employers to complete all their obligations under the procedures as a pre-condition for defending cases at a tribunal. This latest amendment pares down that obligation to some extent; for example, under the standard grievance procedure, the pre-condition is limited to the obligation on the employer to invite the employee to a meeting.
The idea as advanced by my noble friend Lord Wedderburn is to establish, as he would put it, an "even-handed" system. I believe that we have already done so. If one looks at Part 3 of the Bill in its entirety, it will be seen that Clauses 31 and 34 provide clear incentives to employers to use the procedures. If they do not, increased awards will be made against them, and there will be automatic findings of unfair dismissal. Clauses 31 and 32 provide the corresponding incentives to employees—reduced awards and a procedural bar to bringing proceedings, until the procedure is satisfied. That is the parallel incentive and disincentive, depending on which way one looks at it.
Therefore, when considering the Bill overall, we can see that obligations are placed upon both parties. It would seriously imbalance the position if fresh obligations were placed on employers under Clause 32, as proposed in my noble friend's amendment. On that basis, we are unable to accept the amendment. It would upset the balance of the Bill and unnecessarily restrict the ability of employers to defend themselves at tribunals. In the light of my explanation, I hope that my noble friend will feel able to withdraw his amendment.
My Lords, I am grateful to my noble and learned friend for his response. It proves that the Law Society was right in its view; namely, that Clause 32 (formerly Clause 33) should be struck out of the Bill. The Law Society says that Clause 31 is sufficient. The answer to this amendment from my noble and learned friend is to advise us to look at Clause 31. Very well, he is absolutely right to point out that Clause 31 imposes sanctions on both sides—that is, on employees and on employers. Indeed, that is the sanction under the clause where the tribunal exercises it various powers and discretions to increase or decrease awards, and it applies to both sides.
The trouble with Clause 32 is that there is a sanction on workers but no sanction on employers. I hear someone muttering a reference to Clause 34. We shall deal with that clause later, although I am not sure at what time of night. My noble and learned friend need have no fear. We shall deal with that clause, which is even worse. Clause 34 will reverse a fundamental principle of procedural justice. Therefore, to rely on Clause 34 to justify Clause 32 when you have Clause 31, which the Law Society says is totally adequate for the Government's objectives, is most extraordinary.
My noble and learned friend does not take account of a very simple point. We all like to appear to be reasonable and not mention unfortunate possibilities. However, I have to tell my noble and learned friend that among working people and their representatives, especially recently, there is a belief that the Government have given in to the pressure of employers' organisations to make the procedures under Schedule 2 and Clause 32 unfair to working people. The imposition of a sanction upon workers under Clause 32 with no corresponding sanction upon employers when the Law Society has said that Clause 31 is adequate, coupled with the response by my noble and learned friend to the case that I put forward in which he cited Clause 31 as a justification, will give them good reason to conclude that that pressure has succeeded.
Before Third Reading, the Government must come forward with a further provision in relation to Schedule 2 and Clause 32 that will somehow make fairer the standard of modified procedures; otherwise, when the first cases reach the tribunals and the courts and this unfortunate set of principles applied to workers in Parts 2 and 3 of the Bill comes to light, the Government will have to face an explosion of wrath because that will be seen as the price for gaining acceptance by employers' organisations of union learning representatives and increased maternity and family rights.
It just will not do to tell me that no sanction can be placed upon employers in Clause 32, simply because equal sanctions are placed on workers and employers in Clause 31. However, there is not much that we can do about the situation. The Bill was sent upstairs to a Grand Committee; it received little notice; and it is now being pushed through in an extraordinary Report stage. All we can do is ask the Government to put aside the pressures that have been placed upon them. They must reconsider the way in which Clause 32 operates before we reach Third Reading. I beg leave to withdraw the amendment.
My Lords, Clause 32 deals with complaints about grievances, something about which we have, I suppose, the most criticism. The clause states that you cannot start to redress your grievance—in other words, you cannot get on your journey to a hearing—unless the statutory conditions are fulfilled. The worker must present the written grievance. He has then to wait for the employer to reply, after which he has to attend a meeting. Thereafter, if he so desires, he can take the matter to appeal. If he receives a reply to the appeal, he must wait for 28 days.
We discussed this issue at length in Grand Committee, but we have been unable to understand why this fifth restriction on access should be imposed. If there are four restrictions on access, why does there need to be a fifth? We are being extremely modest here, because we are only asking for 14 days. Indeed, we might as well ask, "Why not?" We put that question in Grand Committee and received a reply from my noble and learned friend Lord Falconer. Unfortunately, we were perhaps a little provocative because we suggested that the Government had gleaned their information from the CBI. Alternatively, we thought that the Government had some reason for stipulating the 28-day period. We wondered whether there was something that we had not really appreciated which made the 28 days the most appropriate time-scale.
In his reply in Grand Committee on 25th March, my noble and learned friend asked himself a rhetorical question:
"Why did we set the 28 day period? Not because the CBI asked us to; there is no particular research"— so we received an answer to our question about research—
"that says that 28 days is the right course. In setting the 28 day period, we had to balance two considerations".
I thought we were getting somewhere at that point.
"First, we did not want to set a period that was too long and which would unnecessarily delay an employee's access to the tribunal system. We think that 28 days is not too long to wait. Secondly, we wanted to ensure that there was a sufficiently long period to provide a window of opportunity".
So 28 days turns out to be not too long, not too short, but just right; and it provides a window of opportunity. However, we are not told why the 28-day period will provide this "window of opportunity".
My noble and learned friend went on to say:
"Within our proposed 28 day period, it should be possible in many cases—obviously, however, I accept that this is not possible in every case, as my noble friend Lord McCarthy rightly said—for the parties to meet at least once and to establish a dialogue. They may also take other steps, outside the statutory procedure, to try to clarify and unravel their problems. In our judgment, a 14-day period would be too short".—[Official Report, 25/03/02; col. CWH 325.]
This is a very strange type of defence. It is as though people cannot talk to each other once ACAS arrives. It is as though the parties separate once ACAS arrives. It also does not seem good enough to provide for an arrangement telling ACAS to come back. The Government seem to be saying that the parties can talk to each other only when no one is around.
So we have raised our various objections and said that we do not think the "window of opportunity" was a very good argument. What the Government have never dealt with is the delay affecting applicants after they fill in the ET1. The Government give the impression that those involved in running tribunals sit around waiting for work and fire off an ET3, ring up ACAS and start acting as soon as they receive an ET1. But that is not what happens. As I tried to say in Committee—but I did not receive any further figures from the Government—the tribunal system is extremely cagey about how long cases take. One cannot obtain that information. Those involved in the system say that they have a target of 26 weeks, and that 77 per cent of cases are heard within 26 weeks whereas the other 23 per cent take a bit longer. However, that is not what we want to know. We want to know the proportion of cases settled in one week, two weeks, three weeks and so on, but we have not been told. When one asks, one is simply told, "The information would just confuse you. You do not really want to know. Anyway, we do not like to look too closely into it; 77 per cent of cases get a hearing within 26 weeks. If we could get that up to 80 or 85 per cent, we would be cooking with gas". That does not really help.
On the hearsay evidence of those I know who work on tribunals or act as side-persons in tribunals and even chair tribunals, it seems that all sorts of cases take six weeks, seven weeks or eight weeks to go to tribunal after the case is lodged. Why the dickens do the Government want to impose an arbitrary 28 days on top of all that? That has never been explained. Of course the Government say that they will not necessarily apply this to everyone. However, we are not told for whom it will not work. We have therefore tabled subsequent amendments to address that issue.
We are making a very modest proposal. We are simply saying that if the Government cannot justify the 28-day proposal or accept that ACAS ceases its involvement as soon as it cannot proceed any further, after which the parties will again negotiate, we do not need that 28-day dead period in which nothing will happen. Other methods of facilitating a settlement should operate as and when they are required and useful. If a poor worker has to wait five or six weeks before he gets to a tribunal, I fail to see why he should be subject to another 28 days of delay. So if the period cannot be eliminated entirely, let us make it 14 days. I beg to move.
My Lords, I have a few brief remarks to support the case made by my noble friend Lord McCarthy for Amendment No. 71. This amendment interrelates with the problem to which we shall come in Schedule 4 as to the ambit of Clause 32. Clause 32 applies to a vast number of situations, as we shall see when we come to Schedule 4. There is much to be said about Schedule 4 and its interrelationship with Clause 32. For example, this 28-day period in which the worker has to return to work applies to sex discrimination cases, race discrimination cases and disability discrimination cases, during which time the worker has to go back to work and continue to suffer for 28 days if the employer does not deal with the matter in dialogue, as some employers will and others will not. What is the point of that? Why do the Government not say, "You must go back for 28 days, but that does not apply unless the employer gives a guarantee that he will negotiate"?
The Government do not say that. They do not put any obligation on the employer during those 28 days. They just say, "It may happen that there is dialogue during those 28 days". It may happen and it may not. What kind of guarantee to workers is that? Do they not understand why workers are not satisfied with this structure, in which they are told to work and suffer discrimination before they can get anywhere near the doors of a tribunal? It really will not do. The list in Schedule 4, as we shall see, goes much further than that, listing cases in which workers have been victimised. Those workers will have to go back and be victimised again, for 28 days. It is a quite preposterous idea.
My noble friend Lord McCarthy is of course right that, in proposing 14 days, we are questioning why the period should exist at all. In Grand Committee, my noble and learned friend Lord Falconer of Thoroton said:
"Ultimately, it is a matter of judgment. In considering the correct period, the Government and those advising them have sought to take a balanced view in relation to all sorts of cases . . . In some cases, the effect of promoting the use of the grievance procedure in this way will be to bring the detriment to an end more quickly than would otherwise have been the case".—[Official Report, 25/03/02; col. CWH 326.]
We accept that in some cases. But what about the other cases? The worker will have to suffer for 28 days more, and that is not reasonable.
My noble and learned friend really must face up to that fact. Whatever guarantees have been given about this limitation on access to justice really should be reviewed, and my noble friend's arguments for this amendment should be seriously considered before Third Reading.
We debated an identical amendment in Grand Committee. The arguments then advanced were similar, and the Government's response is inevitably similar. The overriding objective of Part 3 is to encourage a dialogue between employer and employee. We consider that the existence of a tribunal application complicates that dialogue and in some cases completely sours it. That point largely deals with the point made by my noble friend Lord McCarthy that, after the application, there are inevitably delays before a case is heard.
In our judgment, a period of 28 days is needed to give time for the parties to consider the grievance and act upon it. It provides enough time for them to meet and communicate directly with one another without the extra pressures, complications and, in some cases, sourness imposed by a tribunal application. A shorter period would be insufficient. In our judgment, a longer period would be excessive and unnecessarily delay access to the tribunal. To our knowledge, there is no recent survey evidence showing how much time is taken up by grievance procedures. However, the ACAS code gives some guidance on the time that should be taken by the parties when undertaking parts of procedures. For example, employers should give their response to a grievance within five working days of meeting the employee to discuss the grievance. Likewise, after an appeal hearing, managers should communicate their final decision within 10 working days. When one factors in this advice by ACAS, a total period of 28 calendar days does not seem excessive.
My noble friend Lord Wedderburn cited cases in which there was harassment and difficulty. As we have said, there will be some special cases, and the threat of violence or other forms of serious harassment fall into this category. Likewise, we do not want to force employees to raise a grievance as an individual complaint if it has already been addressed as a collective issue by a union on their behalf. We intend to cover these two main categories of exemptions in the regulations. There may be others which it would be sensible to add by consulting fully on the draft regulations. Interested parties can give us their own views on this key subject.
In the light of what I have said, I hope that my noble friends Lord McCarthy and Lord Wedderburn will feel able to withdraw or not press their amendments.
My Lords, this is simply a dialogue with the deaf, is it not? We have tried to explain—it has not been contradicted—what goes on in disputes of this kind. It begins with action by the employer. The worker then reacts by taking out a grievance. He goes to see the employer and, from that moment on, they can, if they wish, negotiate. They can, if they wish, make a settlement. If there is no settlement, the worker may decide in desperation that he will make an application to a tribunal. This is the type of case to which I am referring; there may be others when a worker decides to go straight to a tribunal.
The Government now insist that it cannot be as simple as that. The moment that a worker decides that he wants to apply to a tribunal, he must go through a new statutory procedure. The operation, or completion, of this procedure is not decided by the worker; it depends on the employer replying. If, at that moment, the employer wants further negotiation to take place, there is nothing to stop that happening.
But then the employer may say, "All right, I'll send you back the form. We'll start a hearing and we'll let you complete the procedure". At that point, perhaps six or seven weeks will have passed. We do not know as no research has taken place. Then the Government say that a period of 28 days will be allowed.
In Grand Committee we moved an amendment relating to that point. In that amendment we sought to ask why ACAS should not be allowed to be brought in during the 28-day period. We asked why there should be absolutely no guarantee that anything was going on. The employer could very well say—if I wanted to be nasty about it, I should say that the Government know this all too well—"Ah, now we have a 28-day dead period. During that period, the chances are that he will give up. He might get another job. He might go away. But let's stick him in a bin for 28 days".
As my noble friend said a moment ago, if the Government were genuine and wanted something to happen, they would make it happen. In Grand Committee the Government told us that, if it wished, ACAS could enter the procedure during the 28-day period because it has general provisions. We asked the Government how ACAS would know what was going on, but there was no reply. The only thing which, in the real world, can activate ACAS is the receipt of the necessary forms.
If the Government wished, they could legislate so that certain sanctions were placed on the employer during the 28-day period. However, they do not want to do that and we can come to only one conclusion. They believe that people will not be active during the 28-day period. Why should they be active? It is one more cue that the worker must observe. However, the Government will do nothing about the matter this evening. Therefore, I beg leave to withdraw the amendment.
My Lords, an applicant is told that he must carry out various procedures and, if he fails to observe them, he will experience a delay in the process. However, if the employer fails or prevaricates in relation to the procedures, nothing will happen. We are saying that some sanction should be imposed on the employer. If the employer has informed the employee within seven days of receipt of the written statement of the investigations, that is all right. But the employer must do something and, if he does nothing, the worker will be free to go forward to a tribunal. This is another very small amendment which improves the situation a little. I beg to move.
My Lords, I want to make one point before my noble and learned friend replies. I hope that nothing will be said here about investigations being uncertain. The employer must only say what investigations he has made, and therefore there is no question of uncertainty here. That point was raised previously.
The amendment concerns a simple matter of fairness. The employee must commence the procedure and then wait for 28 days. We say that if the Government insist that he waits for 28 days, at least he should be entitled to know what is going on. Therefore, in the first week, his disability or inadmissibility to present a case to the tribunal will not apply if the employer does not tell him what steps he is taking to investigate the matter. What is wrong with that? As my noble friend suggested, some obligation should be placed on the employer. This is a minimum obligation and it is surely just.
My Lords, this amendment takes us back to our earlier debate about investigations. I do not want to repeat the same arguments here that we dealt with in relation to that. Suffice it to say that we feel that our amendments to Schedule 2 deal effectively with that issue while avoiding the use of the term "investigation". I believe that that is at the heart of what my noble friend is submitting here.
As a separate issue, I believe that the amendment seeks to impose obligations on the employer as part of the admissibility regime. Both my noble friends are nodding in that respect. As I argued earlier, it is not our intention to use this section of Part 3 to impose obligations of this kind. Therefore, we oppose it on that ground.
However, the way in which the amendment is drafted puts up another barrier to an employee bringing a claim. If my reading is correct, the criterion imposes a limitation on an employee bringing a claim and that limitation is wholly dependent on the actions of the employer; namely, the employee could not access the tribunal unless the employer, within seven days of receipt of the Step 1 letter, had informed the employee of the results of an investigation into the issue. On the face of it, it would seem that an employee could never access the tribunal if the employer did nothing during that period. I cannot believe that that is the desired result. Therefore, even within its own terms, the amendment appears to be defective.
My Lords, my noble and learned friend will remember that we experienced a problem in relation to one of our amendments in Grand Committee when he interpreted it as meaning the exact opposite of what it did mean. With the greatest respect to my noble and learned friend, he is now doing the same with this amendment. I may be wrong but I believe that that is the case.
In order to make the matter clear, perhaps I may read the subsection as it would read with our amendment:
"An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if—
(a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies"— that is, the grievance procedure; and,
"the requirement has not been complied with", and,
"the employer has informed the employee within 7 days of receipt of the written statement of the investigations which he has made into the grievance".
If the employer has informed the employee of his investigations, then the proposed new paragraph will apply. If the employer has failed to say what investigations he has made, the employee can go to a tribunal. That is what the amendment means and not what my noble and learned friend suggested.
My Lords, I obviously treat with great respect what my noble friend said. However, with regard to the wording, it is utterly clear that the consequence of not carrying out the action set out in proposed new paragraph (c) is, as my noble friend read out:
"An employee shall not present a complaint to an employment tribunal".
Therefore, the consequence of the amendment is that the employer must do something before the employee can present a complaint. I believe that the wording is fairly clear.
My Lords, I believe that the Minister now understands what we intend to do. We could argue all night about whether the amendment contains the right words. But he is right; we do not want to do the reverse. We want to do that terrible thing, as he told us at one point: we want to benefit the worker by putting a little restriction on the employer. That is what we want to do. That is often what we want to do. If we have used the wrong words, there is a long tradition in this House in which the Government says, "We see what you want to do but it is not properly drafted. Take it away. We shall write a proper amendment and you will hear from us in due course". The Minister could say that, if that is what he wanted to say, but we are benefiting the worker, and he does not want to say that.
I shall ask the Minister again. Let us assume that the Minister or a member of his staff had drafted the amendment. Can he tell the House whether he is likely to accept a small amendment which puts some kind of pressure on the employer? That is what we want to do. We feel that this matter is so one-sided that the employer can sabotage the procedure by refusing to act. If he refuses to act, there should be some way in which the worker can say, "As I have not heard from you; as you were not present; as you had gone away, I take it that I can now go to the tribunal". That seems to us to be perfectly fair.
My Lords, I accept the chiding of my noble friend Lord McCarthy, because of the points that I took. My noble friend Lord Wedderburn made such a tempting series of remarks about the meaning of the amendment that I responded vigorously. The noble Lord, Lord McCarthy, is right. I should address the substance, which I did in my submissions.
First, we feel that we have dealt with the investigations provision by way of amendment to Schedule 2. Secondly, we do not think it appropriate to have restrictions on the employer's right to bring claims in this particular section. On both those grounds we are not minded to accept the substance of the amendment.
My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion I suggest that the Report stage begins again not before 8.33 p.m.