Employment Bill

– in the House of Lords at 3:08 pm on 18th June 2002.

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Votes in this debate

On Question, Motion agreed to.

Clause 34 [Procedural fairness in unfair dismissal]:

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

moved Amendment No. 91:

Page 39, line 8, after "1" insert "or 2"

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, after the long wait from the first day of the Report stage after the recess, we now resume the long march through the Report stage of the Bill. In moving Amendment No. 91, I shall speak also to Amendment No. 92.

The amendments are concerned with Clause 34 and, in particular, with subsection (2), which introduces the new Section 98A of the Employment Rights Act 1996. The clause is much relied upon by the Government because it makes into an unfair dismissal any dismissal that does not satisfy the basic disciplinary procedures of Schedule 2, and, for all the criticisms of Schedule 2 on the second day of the Report stage—which noble Lords who were present will remember—that we welcome.

However, the clause—and particularly the subsection—has a rather murky and curious history. The form in which it now stands is not the form in which it began. In the first version of the Bill, printed in November 2001, the authors of the Bill in the Department of Trade and Industry protected an employer from a claim of unfair dismissal only where the employer had utilised the standard procedures of Part 1 of Schedule 2. They did not insert—or apparently forgot to insert—the new, modified procedures.

There was a case for that. Noble Lords will remember from our debates on Schedule 2 how unsatisfactory and uncertain are the modified procedures introduced into the Bill following the Government's first proposals in Routes to Resolution and other documents.

Ministers blamed the drafting for this omission. My honourable friend Alan Johnson, the responsible Minister, said in Committee in another place on 18th December that there had been a technical fault which had been pointed out by a Liberal Democrat amendment. His words were:

"Well spotted, as someone might recently have said at Athens airport".—[Official Report, Commons, Standing Cttee F, 18/12/02; col. 218.]

At Third Reading on 12th February, the modified procedures were inserted, so that the clause as it stands and the new section of the Employment Rights Act as it stands in the proposal now would protect an employer from a claim of unfair dismissal where he had satisfied either the standard procedures or the modified procedures of the disciplinary procedure.

But the Government's rethink on the form of the proposed new Section 98A did not go far enough. The reason is to be found in what can happen in real life, not merely in the design of the proposed new section. What happens in real life was described to the Government in Committee. I quote from paragraph 48 of the code drawn up by ACAS on these matters, which describes what can happen in a disciplinary procedure:

"Sometimes a worker may raise a grievance about the behaviour of a manager during the course of a disciplinary case. Where this happens, and depending on the circumstances, it may be appropriate to suspend disciplinary procedure for a short period until the grievance can be considered. Consideration might also be given to bringing in another manager to deal with the disciplinary case".

Where those circumstances arise, it is quite unfair if the employee does not have the right to have the grievance procedure satisfied as well as the disciplinary procedure. As we made clear in Committee, under the grievance procedure the employer must inform the employee of his decision as the response to a grievance; if he does not inform the employee of his decision, he is in breach of the grievance procedure. If he is in breach of the grievance procedure and fulfils the disciplinary procedure, why should the employee not be able to say immediately and automatically that the dismissal is unfair? The procedures on which the Government rely so much as being the great new innovation by statute and in every contract of employment in the land have not been fulfilled when they should be. ACAS makes that perfectly clear.

It is astonishing that the authors of the Bill, having made a mistake in the first instance, and even having had a rethink over months, have not given the employee the right to rely on a failure of the grievance procedure and as much as the failure of the employer can be relied on in the disciplinary procedure.

It is worse than that. Our proceedings on the second day of Report made it clear that we do not even know what a "grievance" is. We raised with the Minister the question of defining a grievance, which is at the heart of the structure of this part of the Bill. He could not give us a definition. He said that he would write to us, but we still await the correspondence. It seemed that he did not have a brief as to what is meant by "grievance".

Whatever a grievance is, the employee is entitled to have the proper procedure completed by the employer. That includes both the standard and the miserable and unfair modified procedure. If the employer does not complete the statutory disciplinary procedures, that, says the clause, is an unfair dismissal. The same would be true and just as justifiable in the circumstances described by the ACAS code where the grievance procedure should have been completed and was not. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 3:15 pm, 18th June 2002

My Lords, the House will forgive me if I address the Bill as we have it before us rather than any preceding version of it, and if I address the amendment before the House and Clause 34 in which it is placed, rather than going over the ground of Schedule 2, with which we dealt last week.

These amendments are intended to have the same effect as one which was tabled in Grand Committee; namely, that if an employer did not complete his side of the statutory grievance procedure, and then dismissed the employee, the dismissal would be automatically unfair, even if the dismissal procedure was correctly followed.

Let us look first at what must happen now that we are introducing a statutory dismissal procedure. If he follows the procedure, the employer will have applied the minimum standard of fairness on which we are now insisting in the employee's interests. He will have other obligations under unfair dismissal law as well, but as a minimum we shall have ensured that employer and employee have had to get together to deal with the issues which prompted the employer to consider dismissing the employee. If the employer neglects to follow that procedure, the dismissal will automatically be unfair, as the noble Lord, Lord Wedderburn, recognised and indeed welcomed. The link between the two processes will be obvious to all: the dismissal procedure was not completed by the employer; therefore, the dismissal was unfair.

But if the employer did complete the dismissal procedure, I believe that that should be the end of the matter. I do not think that any good purpose would be served by saying that we should cast the net further back in time and take account of whether there was a prior grievance for which the statutory grievance procedure was or was not completed. As I said, there is an obvious link when failure to follow the dismissal procedure automatically triggers a finding of unfair dismissal. It is very far from obvious that failure to follow a grievance procedure in relation to a grievance that arose before that should trigger an automatically unfair dismissal, even when the dismissal procedure has been followed. I did not suggest that following the dismissal procedure will itself make up for any prior deficiencies in the grievance procedure. I said that there would be no logic in finding a dismissal unfair when the dismissal procedures has been followed simply because an earlier procedure designed for a different purpose has not been followed. But, in practice, if the dismissal was related to the earlier grievance there would be nothing to prevent the employee raising any failure to resolve it as part of the dialogue of the dismissal procedure itself. So I do not think that logically it is right to make a finding of unfair dismissal dependent on the employer's handling of a previous grievance.

I am afraid that this is an issue on which I cannot suggest any compromise between us. I hope that the noble Lord, Lord Wedderburn, will recognise that the Government do not have a case to answer in relation to this amendment and that it will therefore not be pressed.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, I am grateful to my noble friend the Minister. Unhappily, what he says appears to be based on a complete misapprehension of the party's case to which the amendment is directed. He talked a number of times about a grievance arising further back in time before the disciplinary procedure and about a previous grievance. That is not what the amendment is about at all.

As I said, ACAS has said that a worker may sometimes raise a grievance about the behaviour of a manager during the course of a disciplinary case. Nothing could be clearer than that; that is what the amendment is about. If the worker raises a grievance during the course of a disciplinary case, surely he is entitled to have the grievance procedure completed. It is laid down in statute. Statute contains no exception of a grievance being raised in the middle of a disciplinary case; it is implied in the contract of employment. Why on earth should he not be able to rely upon that equally and even-handedly as he can rely upon a failure to complete the disciplinary procedure?

This is another case in which, with great respect, by not understanding the amendment, the Government are giving an advantage to the employer and shunting the matter off into what has been called in my noble friend's reply "part of a dialogue". If one has a right to something being done, one does not expect it to be remedied by part of a dialogue unless one is very lucky and the other party says, "I'll do it; I made a mistake". If the other party says that, then there would be no problem. However, if that does not happen, one is entitled to a remedy. That is all that the amendment says.

I hope that the Government will look at this matter again before Third Reading. I appreciate that my noble friend does not want to talk much about Schedule 2 any more because we have passed it. However, this provision is integral to the operation of Schedule 2. We showed the unfairness of that schedule in our previous debate. This is another example of the provision not being applied even-handedly. I hope that the Government will look again at the matter before Third Reading, and that they will tell the employers' organisation which is pressing them that they will not make any further concessions on Part 3. In fairness, this is something that they must look at again. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 92 not moved.]

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

moved Amendment No. 93:

Page 39, line 15, at end insert "other than a requirement or recommendation contained in a code issued by the Advisory, Conciliation and Arbitration Service,"

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, we come now to the meat of the clause which attempts to reverse the principle laid down in Polkey v. Dayton Services, in 1988, by your Lordships' Judicial Committee. This amendment is new; it was not moved in Grand Committee. However, it arises from the debate in Grand Committee, in an attempt to find a compromise on the very worst feature of Clause 34. According to the clause, failure by an employer to follow a procedure other than the statutory disciplinary procedures to which we have just adverted in the dismissal of an employee is no longer to be a reason that renders the employer's dismissal unreasonable, and is therefore no longer a basis for a claim of unfair dismissal.

Most people who work in this field have understood that to mean a reversal of the principle laid down in Polkey v. Dayton Services. The judgment in that case by the noble and learned Law Lords overturned the rule in previous mistaken judgments that the employer could rely on a dismissal even when he had failed to follow procedures if it would have made no difference to his decision to dismiss. That is why people interpret Clause 34 as overturning the judgment in Polkey. That is why people in the field find it very strange and wonder whether Ministers will adhere to what was said in the House of Commons three times by my honourable friend Alan Johnson, the Minister. My honourable friend said that this clause,

"should not be seen as reversing Polkey. It strengthens Polkey in respect of the basic minimum standards, and if those minimum standards are not kept, dismissal will automatically be unfair".

That of course is correct. He went on:

"The Polkey judgment made it likely that an employer who did not follow procedures would lose an unfair dismissal case. Our proposal makes it so important to follow minimum procedures that it will automatically be unfair to dismiss employees without doing so".

How on earth can Clause 34 strengthen the Polkey principle when it reverses it? It is very strange. My honourable friend even said that,

"In the great majority of such cases that we have looked at, the failure"— by the employer—

"was in procedures that would have fallen within the new minimum standards and Clause 34 will be in line with the Polkey judgment".

I hope that my noble friend the Minister will do what no Minister has done so far—and this is very relevant to the thrust of the amendment—and tell us what constitutes that great majority of cases that will not be changed by Clause 34. It is almost impossible for most people to find one.

In another place, in the same discussion in Standing Committee, the Minister said:

"Only in cases in which employers have procedures over and above the minimum will restoration of the no-difference test apply. It is a partial and strictly defined restoration of the test".—[Official Report, Commons Standing Committee F, 18/12/01; cols. 210-11.]

Like other statements on the effect of Clause 34 and the new Section 98A(2), that gives the impression that the employer is allowed under the clause to ignore procedural matters that have been agreed contractually to apply at the place of work which go further than the minimum procedures in the standard or modified procedures of Schedule 2.

In Grand Committee in this House, my noble friend Lord Sainsbury of Turville characterised the problem in the same way. On the aim of Clause 34, he said that,

"many employers believe that introducing detailed in-house procedures is a losing game. Because they can never plead 'no difference', they fear being caught out by a tribunal if they are found to have made the slightest error in . . . their own procedures".—[Official Report 26/03/02; col. CWH 410.]

Other statements by Ministers have given the same impression; namely, that the change is only about failures by the employer to follow special procedures agreed in the procedures at that place of work. But of course that is not what the clause says at all.

The clause says that the employer will not commit an unfair dismissal if there is a,

"failure to follow . . . a procedure in relation to the dismissal", and if the employer "would have decided to dismiss" anyway. The failure makes "no difference" under the new rule introduced by the clause, not only in following domestic/internal procedures agreed specially at that place of work, but in any procedure that the employer fails to follow in relation to the dismissal. The Bill's Explanatory Notes gave the same wrong impression. They state that the matter refers to,

"controversial case law around the question of whether or not the employer has to follow internal disciplinary procedures in order to establish reasonableness".

The notes also state that Polkey,

"removed the 'no difference' test".

In the other place, the Minister even said that the Government's intention was to encourage people,

"to look to the ACAS code, which still holds the field".—[Official Report, Commons Standing Committee F 18/12/01; col. 211.]

That is the point of this amendment. In 1982, in the basic case of Williams v. Compare Maxim, Mr. Justice Browne-Wilkinson, as he then was, called the failure to satisfy procedures in codes such as the ACAS code a,

"blatant contravention of the standards of fair treatment generally accepted by fair employers".

The Polkey case and rule—which said that employers should not have the advantage of a "no difference" rule, and that they could not say, "even if we operated fair procedures, the result of our decision would have been the same"—overturned the "no difference" approach. In the words of the noble and learned Lord, Lord Bridge of Harwich, in 1988 Industrial Cases Report, page 163, the no-difference rule,

"tends to distort the operation of the employment protection legislation in two important ways".

That is why your Lordships' Judicial Committee reversed the mistaken judgments. The noble and learned Lord said that, first, the no-difference rule allowed the tribunal to pose the hypothetical question of whether the result would have made any difference if the employer had followed the proper procedure, whereas what had to be considered—and up to now has had to be considered—was whether the employer's reason for the dismissal was sufficient and reasonable, not whether the employee had suffered an injustice on some hypothetical basis. Secondly, the no-difference rule allowed the tribunal to avoid the question of whether the employee should be granted an order for reinstatement or re-engagement. That is quite clear in the judgments. Yet the Government are now going to reintroduce a "no difference" test on the basis that he—the employer—

"would have decided to dismiss . . . [anyway] if he had followed the procedure".

Our amendment says—this is by way of compromise because we do not like the reversal of Polkey—that if the Government are going to reverse Polkey in regard to the matters they have mainly discussed; namely, internal special agreed disciplinary procedures, they really must not reverse Polkey in regard to basic fundamental principles of fairness in procedure which, we say, can best be judged by looking at the ACAS code. If the Government have some other way of preserving the basic procedures, we should be happy to see it.

Of course, we acknowledge that we cannot tell exactly what will be in the ACAS code because the Government have made it clear that after the Bill is put on the statute book the code will have to be rewritten. However, we have complete confidence that the code will contain all the main recommendations and requirements of fundamentally fair procedures at the place of work, for example, that employers should have regard in disciplinary procedures to principles of natural justice (paragraph 9); that workers should be made aware of the likely consequences of breaking disciplinary works rules (paragraph 7); that procedures should have no hidden discrimination grounds (paragraph 17); that a worker should not normally be dismissed for poor performance without adequate warnings and the opportunity to improve (paragraph 25); and that disciplinary action against a shop steward should always be discussed first and foremost with senior union representatives and full-time officials (paragraph 26).

Those are basic rules of fairness in the ACAS code. They do not depend upon special procedures agreed by an internal code of the employer. Those, we say, should not be included in the no-difference test. That is why we would exclude them and ask the Government to exclude them from the clause as it stands. Of course, we understand that each case must be decided on its own merits. But all that this amendment would do is to preserve such principles of the ACAS code as things on which the tribunal would be allowed to ground an unfair dismissal in itself if it were sufficiently serious. That would not affect the impact of the clause on specially agreed internal procedures to which the no-difference rule would, if this amendment were introduced, still apply.

In that sense the amendment is an offer of a new compromise which would take the sting out of the very deep criticism which has been levelled at introducing a new privilege for employers to dismiss without implementing basic principles of fairness simply on their say-so that they would have dismissed anyway even if they had approached the matter with fair procedures. I trust that the Government will not throw away this opportunity to escape from the darkest corners of the pit which has been dug by this part of Clause 34 and that they will accept the spirit of the new amendment. I hope that if they dislike its wording they will at least come back at Third Reading with something along these lines. I beg to move.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour 3:30 pm, 18th June 2002

My Lords, there is much merit in the amendment moved by my noble friend Lord Wedderburn of Charlton. We have to look at the architecture of the Bill if it goes through in its present form and that of the 1996 Act. One of the great difficulties is that it is hard to see how the "fairness" clauses in the 1996 Act relate both to the ACAS questions which have been highlighted by my noble friend and to the rather convoluted words of subsection (2) of new Section 98A with regard to the employer,

"if he shows that he would have decided to dismiss the employee if he had followed the procedure".

I have a question for the Minister as regards subsection (2) of new Section 98A. Do the Government intend to make it very clear, as it will affect people when they have to deal with it, that those words have to be read as subordinate to the fairness principle set out in the 1996 Act? Is not the guiding principle of all these procedures the fairness principle set out in Section 10 of the 1996 Act? That is a minimum area of clarification, as it were, in relation to the whole of subsection (2).

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I appreciate that the intention behind the amendment is compromise and that the noble Lord, Lord Wedderburn, introduces it in a spirit of compromise. I recognise that his preferred option would be that which he pursued in Committee.

Amendment No. 93 seeks to define the operation of Clause 34 by preventing the employer successfully pleading that not following a procedure beyond the statutory minima would have made no difference to his decision to dismiss if the procedure is a requirement or recommendation of an ACAS code. My understanding is that the code that is relevant here is the code of practice on disciplinary and grievance procedures. That code, in its own words, is about good employment practice and it is central to the decent treatment of employees. We would always encourage employers to follow its recommendations; indeed, many are so fundamental to fair treatment that it is difficult to see how an employer could rationally claim that omitting them made no difference to his decision to dismiss. To that extent, there is no necessity to state that they are excluded from procedures in respect of which an employer could plead "no difference".

But good practice guidance is necessarily general. The code itself acknowledges that disciplinary rules will vary according to circumstances. The noble Lord, Lord Wedderburn, acknowledged that each case would have to be decided in the light of its own circumstances. It would be wrong to make it an absolute that no recommendation of the code could ever be followed less than fully, even if it would have made no difference to the outcome. What we are addressing in this clause is the concern of employers that they can be tripped up by minor procedural irregularities in an otherwise sound case. Our policy is that if following a procedure beyond the new statutory minima would have made a difference, new Section 98A(2) of the Employment Rights Act 1996 will not apply. The noble Lord, Lord Lea, asked me whether that was subordinate to the 1996 Act; of course, Section 98 in the 1996 Act still stands. This is an additional procedure in new Section 98A. If doing so would not have made a difference, it will apply. It is as simple as that. It would be wholly unhelpful to this policy to dictate that some procedures beyond the minima count and some do not. Where following what it recommends would have made a difference to the outcome, the code will remain paramount, which is entirely right. I believe that that is what my noble friends want. They want to ensure that where it makes a difference to the outcome, the code remains paramount.

Of course, there is already a link between the ACAS code and the tribunals' consideration of unfair dismissal cases. It is admissible in evidence, and the tribunals are required to take its provisions into account if they consider them relevant to any proceeding before them. The tribunals already recognise that, where employers have not followed procedures, the employee might still have been dismissed even if the procedures had been followed; in other words, there are procedures which can be omitted without making a difference. Where a dismissal is unfair solely on procedural grounds, tribunals can, and do, reduce an employee's compensation, perhaps to nothing, if they believe that he or she would still have been dismissed if the procedure had been followed.

Therefore, tribunals are trusted now to make judgments about whether following procedures would have made a difference, and they continue to be trusted to do so in the new context. It would be wrong to fetter their judgment in the way that the amendment proposes. Individual cases vary enormously, and it is only in relation to individual cases that it is possible to say whether following any procedure would have made a difference. The tribunals surely know how to make such judgments. I am sure that neither my noble friend Lord Wedderburn nor my noble friend Lord Lea are suggesting that they do not trust them to use their discretion wisely.

We are not undermining or belittling the ACAS code by opposing the amendment. I have stressed the value of the code and I have stressed that failing to follow its core recommendations is very unlikely to allow an employer to plead "no difference". But to prevent employers ever arguing that following any part of it would have made no difference to their decision to dismiss would needlessly hamper the operation of the clause. Surely the real absurdity would be to insist that an employer with a perfectly valid reason for dismissing an employee who has followed procedures in all important respects—in other words, all respects which could have had an effect on the decision to dismiss—should nevertheless be held to have dismissed him unfairly because of a slip-up which was irrelevant to the outcome. I hope that the amendment will not be pressed.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, that may be one of the most important, obdurate government responses made in the course of this Bill. It is extraordinary that the Government do not wish to make the employer satisfy the requirements of fundamental fair procedures, as expressly suggested in the ACAS code. There is nothing new about this. As a matter of fact, the relevant matters were first addressed in the industrial relations code of 1972, which accompanied the Industrial Relations Act 1971. There is no question about whether a set of fundamental fair procedures exists. The Government have not previously advanced those as the things to which this section relates.

My noble friend said that there is no real necessity to state that. He seems to have forgotten that the Polkey case concerned just such a matter. That case did not involve an internal procedure specially agreed by the employer; it was a decision to make redundant three employees, of whom Polkey was one, without any warning or individual consultation. It would have been decided in the previous mistaken case law under the no difference procedure. As both the noble and learned Lords, Lord Mackay of Clashfern and Lord Bridge of Harwich, pointed out, that was a failure to satisfy the basic rules of fairness in redundancy. The noble and learned Lord, Lord Mackay, also said that it was a failure to satisfy the basic code of consultation.

As the clause stands, that failure by the employer, which, contrary to previous case law, the House of Lords Judicial Committee decided was wrong and should be the basis of unfair dismissal, would not now be the basis of unfair dismissal. I do not know how my noble friend can refer to "minor procedural irregularities", which I wrote down as what he said. I also wrote down that the Government are not concerned with mere slip-ups. He called the failure to warn an employee purportedly made redundant in the Polkey case a mere "slip-up". And, in the most recent case on the matter—that of Whitbread v. Hall in 2001—the Court of Appeal made clear that under the Polkey judgment the same principle applied to misconduct cases. In that case, a manager dealt with misconduct with her mind made up. In hearing the case, she did not properly go through the basic procedures of fairness; nor, indeed, did she go through an appeal procedure properly, as the employee could have requested. That is neither a slip-up nor a minor procedural irregularity.

The Government are in deep trouble on this matter. With the greatest respect, if they continue to misrepresent what the clause will do, there will be wrath to come. Workers will not simply ignore this because they will be the ones who suffer. They will be the people who are dismissed without proper procedures or even without the basic fairness of the ACAS code procedures. They will be told, "Oh well, it makes no difference that we did not satisfy that. We would have dismissed you anyway. So don't come to us complaining about basic failure of natural justice because the Government have given us—the manager and the employer—the right to get rid of you and not to satisfy these basic procedures". The previous case law shows perfectly well how the clause will apply.

Therefore, when we read it in Hansard, the reply from the Government today will be a manifesto to workers to take action in other ways. If that is what the Government want, they will be as obdurate at Third Reading as they are now. I cannot understand how a Labour Government can fail to understand the lack of balance, the unfairness and the lack of even-handedness of the clause as it stands. We offered a compromise to get them out of perhaps the worst of the clause, but they will not take it. We can only hope that more sensible thoughts will overcome them before they are overtaken by Third Reading. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour 3:45 pm, 18th June 2002

moved Amendment No. 94:

Page 39, line 18, after "unreasonable" insert ", provided that the dismissal is in all procedural respects fair,".

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, we debated the Polkey decision during discussion on the previous amendment. I shall not go over that area again because my noble friend Lord Wedderburn has explained in great detail what the Polkey judgment meant and what the Government's attitude to it has been.

In the Bill the Government appear to be accepting the line, which is perhaps advanced by the CBI, that tribunals put too much weight on trivial breaches of procedure rather than on the actual reasons for dismissal. Therefore, this amendment seeks to reverse the House of Lords Polkey judgment. There was a long debate on this issue in Committee during which the Minister was frequently challenged to produce evidence of cases in which trivial breaches of procedure had been held by tribunals to render unfair dismissals which otherwise would have been regarded as fair. I believe that it is right to say that no such evidence was produced. The one case quoted—that of British Airways—did not seem to me or to my noble friends to establish the point which the Government were endeavouring to make. Against that, we have evidence from Judge Prophet, the president of the employment tribunals, to the effect that he believes that the change proposed by the Government could be potentially disastrous.

There does not appear to be any real evidence that tribunals have been in the habit of finding against employers simply because of a trivial failure in procedure in a situation in which a dismissal would otherwise be regarded as fair. During debate in Committee, I and my noble friends endeavoured to explain to the Minister from the employee's point of view the importance of procedures being followed properly prior to any action, such as dismissal. For an employee, dismissal is a matter of great and serious concern. But the procedures are important to an employer as well if he wants to maintain reasonable industrial relations in his company. The problem is that the Government's attempt to reverse the Polkey judgment will send out the wrong signals. It will indicate to employers the opposite of what the Government want employers to understand. It will suggest that it is not important to follow procedures. That is why I find it difficult to understand the Government's stance.

We have been told throughout our discussion at this stage of the Bill that, if possible, the Government want industrial relations issues to be dealt with internally, and that, for that reason at least, minimal procedures must be established in the many small companies that do not have them at present. Yet the clause states that if they are not followed, it would not matter; that one could still win in the event of a case proceeding to a tribunal.

The Government's Explanatory Notes state, and the Minister has repeated today, that the main issue is whether or not the dismissal is fair. In that case, I urge the Government to accept our amendment, which puts the issue of fairness beyond doubt. We simply seek to add to this clause the fact that the dismissal is in all other procedural respects fair. I beg to move.

Photo of Lord McCarthy Lord McCarthy Labour

My Lords, I rise to support this amendment. In particular, I refer to our debate in Committee, in which we sought to discover why the Government objected to our amendment, which in many ways was similar to the amendment just moved by the noble Baroness.

As I understand it, the Government, and particularly the noble Lord, Lord Sainsbury, put it in this way:

"Many employers expressed real concern that tribunals currently place too much weight on minor procedural breaches".

If the Government still say that that is the case, it seems to me that they should, even at Third Reading, produce more objective evidence of it than they have done so far.

When this matter was debated in Committee, I sought to persuade the Government to say what evidence they had. After all, their view, as the noble Baroness has said, was quite contrary to those of people with experience of these matters. For example, Judge Prophet maintained that the reverse is the case—that insignificant, unimportant, minor breaches of procedure based on procedural inadequacy do not result in decisions of unfair dismissal. He said that tribunals will take into account only cases of significant and real issues of procedural inadequacy.

The noble Baroness has referred to one case that did not stand up. When we asked again for further evidence, we were told that it was not a matter of evidence, but a matter of principle. It seemed to me that the Government were saying that if there was no evidence, that it never happened, and that tribunals took into account only significant breaches, it would still be wrong because there had been complaints from employers and because the Government said, "If we do anything about this, there will be many more cases". Of course, if we again ask what evidence there is of "many more cases", we cannot have that evidence, because there is none.

I repeat that the Government do not appreciate why one has procedures at all. The procedures have an educative aspect. The fact is that by now most reasonable employers are quite prepared to discover what is said in the ACAS code so far as concerns substantive issues. If they have no good reason for doing so, employers do not want to sack people; they do not automatically want to dismiss people for unfair reasons. However, once they believe that they have a good case in terms of capacity or conduct, or some other substantial reason, they do not want to be held up and told, "You must get your records up, you must have had warnings, you must examine properly, you must have a proper appeals procedure". All those matters are contained in the procedural aspects of the ACAS code. They do not want to get involved in that procedure. From their points of view, it is unnecessary, because they have already made up their minds, and it is a procedure that takes time and represents an invasion of managerial prerogative.

If that is the case, as I believe it is, the Government want to lead us back, not into imaginary abuses of tribunals, picking up insignificant points, but to personnel managers telling themselves, "We now do not need to bother with the procedure". That is the very bad message that the Government would send out. Therefore, even at this late stage, I urge them to reconsider the matter.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, these amendments deal with that part of Clause 34 which provides that where an employer does not follow a procedure beyond the statutory minima; namely, those set out in Schedule 2, and he can show that doing so would have made no difference to his decision to dismiss, the procedural failure will not "by itself"—I emphasise those words, in line 17 of page 39 of the Bill—make the dismissal unfair. This is a limited, carefully-defined intervention into the unfair dismissal legislation. It deals with the criticism that it is too easy for employers who have a fair reason for dismissing an employee to be tripped up on trivial procedural grounds.

During our debate on the previous amendment, my noble friend Lord Wedderburn objected to my talking about slip-ups. However, it is true that what we propose does not undermine the fundamental tenets of the legislation. Even where an employer is able to show that following a procedure beyond the statutory minimum would have made no difference to his decision to dismiss, the dismissal must be fair in all other respects. The central issue here—

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, I thank the Minister for giving way. He has just advanced a most important proposition and it is important that we should not misunderstand what he said. He said, "The dismissal must be fair in all other respects". Substantively, of course, that is obvious. However, since the clause states that a failure of procedure should not by itself count as a ground for unfair dismissal, if the employer shows that he would have dismissed anyway, how is it possible to say that it must be shown that it was procedurally fair as the clause stands? Our amendment introduces precisely the concept that my noble friend the Minister has suggested, namely, that it must be fair in all other procedural respects, for which the clause at present makes no provision.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, that illustrates very clearly the difference between us. My noble friend Lord Wedderburn and others seem to think that the fact that an employer can show that he would have dismissed anyway gets him off the hook. That is not the case. That is not what the Bill says. The issue is whether, as my noble friend and others seem to think, claiming no difference will by itself make a dismissal fair, because it has happened, because that is the fact of the matter, or whether, as we think, it must also be fair in all other respects. That is the situation. An amendment accepted at Commons Committee made that clear, although we at the time considered that it was implicit in the clause as originally worded.

That is the key to the difference between us. It has to be fair in all other respects. That is why we have the words "by itself" in the Bill. The amendment that we accepted in the other place made that clear, but I appreciate that the concerns remain, perhaps because the clause does not specifically refer to the need for the dismissal to be fair in other respects. Amendments Nos. 94 and 95 both suggest additional wording which specifically refers to fairness. The noble Baroness, Lady Turner, made that point quite legitimately in moving Amendment No. 94.

I hope that it will be helpful if I explain why this is unnecessary. To defend an unfair dismissal claim, an employer must first show that he dismissed the employee for one of the potentially fair reasons set out in Section 98 of the Employment Rights Act 1996. As I said to the noble Lord, Lord Lea, that is still there. Nothing in Clause 34 will change this. The employer who wants to plead "no difference" will still, in the first place, have to convince the tribunal that he had a fair reason for the dismissal.

Next, and finally, Section 98(4)(a) of the 1996 Act requires the tribunal to consider whether the employer acted reasonably in dismissing the employee for that reason. Clause 34 changes this only by saying that a failure to follow a procedure beyond the statutory minimum will not by itself be unreasonable for the purposes of Section 98(4)(a) if the employer can show that it would have made no difference to his decision to dismiss. The words "by itself" make it clear that the employer must still act reasonably in all other respects.

Other wording about fairness is therefore unnecessary to ensure the limited nature of the change, which we have always stressed is not only unnecessary, but unhelpful. The amendments introduce the words "fair" and "fairness" without defining them. As my noble friend Lord Sainsbury said in Grand Committee, that would risk the development of a different test for new Section 98A from that which the tribunals otherwise apply in dismissal cases.

The noble Lord, Lord Wedderburn, when winding up the debate on the previous amendment, described the Polkey case and a particular application of it. On the facts of that case, as he described them, there would have been a clear failure to follow the statutory disciplinary procedures and therefore there would have been an unfair dismissal.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour 4:00 pm, 18th June 2002

My Lords, will my noble friend tell me which step in the disciplinary procedures would have failed on the Polkey case facts?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I am going only on the example which the noble Lord gave. I am not going back into the whole history of that case. My point here is that it is for the tribunals, as I believe the noble Lord acknowledged, to make the decision on each case before them.

The noble Lord, Lord McCarthy, asked for examples. For a Minister to generalise in such matters would not be wise when, as we have always made clear, it is the responsibility of the tribunals to make the judgments.

Photo of Lord McCarthy Lord McCarthy Labour

My Lords, before the noble Lord sits down, will he address or think about the point that I was making that it is not just how he interprets the Act, it is what employers believe him to be doing and the conclusions that they draw? The Government may be right and in five years' time this particularly narrow interpretation of the Act will prove to be right and my noble friend will be wrong. But it will not matter much because employers will say that they were told that they do not have to bother about procedure. It is not just about tribunals, but employer behaviour and sending the wrong messages.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, with the leave of the House, we have to rely on what the Bill says. It seems to us that it is entirely clear. Indeed, in his final remarks, the noble Lord, Lord McCarthy, seems to be acknowledging that the Bill is clear and is asking us to act on misapprehensions which employers might have about the implications of the Bill before us. We cannot do that.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, I am entirely unconvinced by what the Minister has said. He referred us to the wording of the clause, which seems very clear to me. It states,

"making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure".

He had decided to dismiss. It does not say whether the grounds for dismissal were fair and there is no obligation in the clause to compel him to follow a fair procedure. Neither do I believe that the inclusion of "will not by itself" necessarily assists the argument as far as we are concerned.

I believe that the point I made in debate, emphasised by my noble friend Lord McCarthy, is that as the clause stands it will send out the message to employers that they do not have to bother very much about procedure even though they are supposed to have it. If they do not follow it, there is every chance that they will be able successfully to defend a case before an employment tribunal because it is not absolutely necessary that they adhere to all the procedures they are supposed to follow. That is entirely unsatisfactory.

Moreover, the message has gone out that the Government are reversing the Polkey judgment and that is generally known everywhere. It is even stated in the Government's own explanatory memorandum. To many people the reversal of that judgment may well mean in their minds that it is no longer so necessary to abide by procedures because if they do not employers have every chance of getting away with it at a tribunal. It is entirely unsatisfactory, but there is no point at this stage of the debate in pressing the amendment further. I hope that the Government will reconsider their position before Third Reading. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 95 not moved.]

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

moved Amendment No. 96:

After Clause 37, insert the following new clause—

"COMPENSATION FOR FAILURE TO RECEIVE PROPER STATEMENT OF WRITTEN PARTICULARS

In section 12 of the Employment Rights Act 1996 (c. 18) (determination of references) after subsection (2) there is inserted—

"(2A) Where on a reference under section 11 an employment tribunal finds that an employer has failed to give to an employee a statement as required by section 1, 4 or 8, the tribunal may make an award of compensation to the employee of an amount that is just and equitable having regard to the seriousness of the employer's default.""

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, this amendment aims to introduce into our employment protection law a matter which has long been a criticism of a number of commentators. It suggests that where the employer fails to give to the employee a statement of the written particulars of his contract of employment, the employee should be able to bring a case before the employment tribunal for just and equitable compensation. Of course, that does not make up for the failure to have the proper terms of the contract of employment.

Indeed, everything in the law, from the contracts of employment legislation in 1963 and onwards has given the employee a right to have those terms within the stated period provided by the employer. It has always been a gap in the statutory particulars that the employee has not had a remedy immediately if he is not given the particulars that he should have. In the Grand Committee debate on parallel matters, the Minister described it as a failure to provide a stand-alone remedy. That means that there was a remedy to compensation if the employer simply failed to provide what he was legally obliged to do under a number of sections of what is now the Employment Rights Act 1996.

The reason for having a right to compensation is that it provides a sanction against the employer and a warning to him that if he does not provide the particulars which the law says he must, then there will be some remedy. At the moment there is no automatic remedy other than a declaration from the tribunal which has been shown to be ineffective in a number of the cases involved.

In Grand Committee the Government argued that it was quite unreasonable to provide any sanction on the matter because just to fail to give the employee his written particulars of employment was not of itself a matter of damage. That point led us to advance this amendment again. I hope that the Minister will not reply by referring to the Government's amendments and the provisions in Clause 38, to which we shall turn in the next group of amendments. Although they affect the structure of the Bill in a rather complicated and unnecessarily complex manner, they do not provide an automatic remedy, as this amendment would, for an employee deprived of written evidence of his contractual terms in the statement of written particulars.

The reason why a stand-alone remedy—if one wants to use that kind of vocabulary—is appropriate is that a failure to receive the statement of the contractual terms in writing is damaging to the employee. Without the evidence that he should have to prove a matter, an employee is unable to know whether he has good grounds on which to claim that the terms of the employment have been broken. Frequently the tribunals and the Employment Appeal Tribunal have described a written statement of the contractual particulars of employment that an employer should give to an employee as "the best evidence" of what the contract provides. An employee is deprived of the best evidence of his rights under his contract of employment. In itself that is a good reason to enable him to bring an action for just and equitable compensation: he is deprived of the ability to claim when his contract of employment is broken.

Ministers have been quite obdurate on this matter, as on so many. But I hope that on this occasion they will either accept the amendment or explain to the House that they will adjust the remedies under Clause 38, or other parts of the Bill, to provide an employee, who is deprived of his right to have a written statement of his contractual terms, with a remedy in the employment tribunal. I beg to move.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, my noble friend Lord Wedderburn started by saying that he hoped that I would not bring into the argument Amendments Nos. 97 to 106 to Clause 38 that we debated with the paving amendments on Clause 31. I am afraid that I shall do that because those amendments simplify the awards increase for non-compliance with the written statement of employment particulars provisions in certain circumstances. My understanding is that the House, in accepting the paving amendment to Clause 31, and having debated Amendments Nos. 97 to 106, accepted those amendments.

Of course, some noble Lords feel that we should go as far as providing free-standing compensation for any failure to meet the written statement requirements. Amendment No. 96, which was first tabled in Grand Committee, seeks to do that. It seeks to introduce such a right to compensation not only where an employer has failed to meet the requirement to issue an adequate written statement but also for a failure to comply with the equivalent itemised pay statement.

In Grand Committee I made it clear that we believe that we are right to preserve some form of link between a financial penalty for a breach of the written statement requirements and a penalty for a breach under some other type of claim. We also believe that the existing remedy for a complaint under the itemised pay statement provisions deals proportionately with the abuse suffered. Generally speaking, I believe that the amendments to Clause 38 gained the approval of the Grand Committee when there was a considerable degree of confusion and dismay at the way in which Clause 38 was originally drafted.

This is a matter of balance. I recognise my noble friend Lord Wedderburn's good intentions in highlighting the importance of the pay statement, and in particular, the written statement of employment particulars, whose crucial role in dispute resolution is clear. However, I believe that the amendment would take us further than we want to go. We should not forget that Clause 38 introduces a new protection for employees, by creating a new penalty on employers. We are introducing a new right. There is no sense in which we are removing any right by tying the awards increase to complaints under the major jurisdictions and the existing remedy of supplying an adequate statement will still apply where the problem is solely that the written statement is inadequate or non-existent. To go beyond that and to introduce a stand-alone penalty would run the risk of undermining the effective consensus between employers and employees that there appears to be on this issue. I also believe that there is consensus in the House. I hope that the amendment will not be pressed.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour 4:15 pm, 18th June 2002

My Lords, in the face of that reply, for which I thank my noble friend, one is tempted to say that there is scarcely any amendment on the Marshalled List that one would want to press rather than this one. It has been said that the amendments to Clause 38 have already been accepted by the House. Of course, this is where they should be justified. Having read Hansard, they were debated in what was probably the most confusing debate of this Report stage because they were grouped under Clause 31. We could do nothing about that as they were all government amendments. There was no explanation in regard to Clause 38 as to why it was unfair to introduce what is now called a stand-alone sanction. Even now there is no explanation, other than that the balance should once again be given to the employer.

The balance dictates that an employer who has failed in his obligations to provide written particulars—obligations that he or she has been under since 1963—should not be vulnerable to an action for compensation in a tribunal. It is as though the amendment would take the Government further than they want to go because this part of the Act is a deal with the CBI, the EEF and the chambers of commerce, all of whose websites, which are available for noble Lords to read, contain plenty of documents to show that Parts 2 and 3 are a deal on which employers have dug in their heels and on which the Government are obdurate because they feel that their hands are tied, as do some other bodies. It is a deal on which they said, "We shall accept your paternity and maternity rights and we will even accept union learning representatives"—although they are not happy about that—"if you give us Parts 2 and 3 of the Bill".

As I said in Grand Committee, most of the Bill, with small exceptions on which we managed to get the Government to move, is set in stone. Even an employer who fails to give an employee his contractual rights on paper, which by law he is obliged to do, can escape any so-called stand-alone sanction. It is quite absurd. The Government will not change on this matter; there is nothing that we can do to make them, but they will reap an unhappy harvest from being so obdurate on such simple matters of fairness. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 38 [Failure to give statement of employment particulars, etc.]:

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

moved Amendments Nos. 97 to 106:

Page 42, line 10, leave out paragraph (b) and insert—

"(b) when the proceedings were begun the employer was in breach of his duty to the employee under section 1(1) or 4(1) of the Employment Rights Act 1996 (c. 18) (duty to give a written statement of initial employment particulars or of particulars of change),"

Page 42, line 11, leave out "shall" and insert "must, subject to subsection (5),"

Page 42, line 11, leave out "appropriate" and insert "minimum"

Page 42, line 12, at end insert "and may, if it considers it just and equitable in all the circumstances, award the higher amount instead"

Page 42, line 16, leave out paragraph (b) and insert—

"(b) when the proceedings were begun the employer was in breach of his duty to the employee under section 1(1) or 4(1) of the Employment Rights Act 1996 (c. 18),"

Page 42, line 17, leave out "shall" and insert "must, subject to subsection (5),"

Page 42, line 17, leave out from "and" to "may" in line 18.

Page 42, line 19, leave out from "by" to end of line 20 and insert "the higher amount instead"

Page 42, line 21, leave out subsections (4) to (6) and insert—

"(4) In subsections (2) and (3)—

(a) references to the minimum amount are to an amount equal to two weeks' pay, and

(b) references to the higher amount are to an amount equal to four weeks' pay.

(5) The duty under subsection (2) or (3) does not apply if there are exceptional circumstances which would make an award or increase under that subsection unjust or inequitable."

Page 43, line 1, leave out subsection (7).

Amendments agreed to.

Clause 39 [Compromise agreements]:

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, Clause 39 on compromise agreements caused a great deal of concern when we debated it in Grand Committee. My noble friend Lord Sainsbury announced to the House on 30th April, in answer to a question from my noble friend Lord McCarthy, that the Government had decided to bring forward an amendment at Report stage of the Bill to delete the clause.

We continue to feel that some of the concerns expressed are misplaced and perhaps it would be helpful if I run through our reasons for the deletion of Clause 39 once again. They are twofold. First, although we continue to believe that any agreement that attempts to compromise away an employee's future rights would not be a valid agreement, we recognise that recent case law—my noble friend Lord Wedderburn argued this part of the case effectively in Committee—has created some uncertainty in this area.

Secondly, we recognise the risk that even though such an agreement would in our view be invalid, an employer might nevertheless attempt to persuade his employee to sign such an agreement. And if that happened, the fact that its legal validity was highly questionable would not alter the fact that having signed the agreement the employee might well then be deterred from going to a tribunal in the future in the belief that he no longer had the right to do so.

I have made clear, as have the noble Lord, Lord Sainsbury, and the noble and learned Lord, Lord Falconer, that it is not the Government's intention that any employee should be deterred in this way. We have concluded that we cannot risk Clause 39 of the Employment Bill being misused like this and we ask the House to support our amendment to delete it from the Bill. The other amendments are purely consequential.

Photo of Lord McCarthy Lord McCarthy Labour

My Lords, I had wanted simply to say that we thank the Government and wish that they could find it in their hearts to do this kind of thing more often. However, the Minister dares me to say something more. He seems to be trying to go back on what he has conceded. He said that his was a good case but he has given in on it. I cannot think why. So I have to draw some quick lessons.

I give three examples. The real significance, if only the Government could acknowledge it, is that they start with a bum brief. When that brief is examined it falls apart. Everything goes back to the bum brief. SETA was a bum brief. The Government began by saying that they had to do what they had to do because employers told them that cases were being held up. They could not settle outside tribunals; and if they did so they still had problems because residual points kept cropping up. The doctrine of residual points is a bum brief. They could not find any examples of residual points, so they moved off that.

Then the Government said that it must be all right because ACAS does it. That is a bum brief. ACAS would be horrified at the whole idea. So when that was examined, it fell down. Finally, they said that the employers would not want people to sell rights like this. But the more the Government looked at it, the more likely that was. They realised that they cannot just put provisions on the face of the Bill and say, "That's the way tribunals and judges will interpret them; and that won't happen". Employers may seek to make it happen. If the Government had been properly briefed, with proper information and research, without accepting everything they are told by the CBI, they could have given many more concessions.

Photo of Lord Razzall Lord Razzall Liberal Democrat

My Lords, I, too, welcome the Government's concession. Perhaps I can say what the Minister may not wish to say. In answer to a Question in your Lordships' House, the noble Lord, Lord Sainsbury, indicated that he was minded to take this action. I suggested that perhaps it was a mistake not to have given the credit for it to either the noble Lord, Lord McCarthy, or the noble Lord, Lord Wedderburn. The remarks which have just ensued may demonstrate how right I was.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, unlike the noble Lord, Lord McCarthy, and the noble Lord, Lord Razzall, I confess that I was surprised when I saw the amendment on the Marshalled List. The Minister wrote courteously to me to say that the provisions had been changed. I was surprised when the answer was given to the noble Lord, Lord McCarthy. Nothing that has been said has made me change my mind about what I regard as a U-turn by the Government.

Subsections (2) and (3) of Clause 39 provide for the repeal or amendment of nine clauses in the several Acts or regulations referred to in Clause 39. The clauses in the Acts and regulations dated between 1975 and as recently as 1999 effectively provided for the right, under very stringent conditions and circumstances, to contract out of the Acts to the extent that the employer and employee were compromising some issue between them. I am sorry if I appear to over-simplify the provisions affected by Clause 39 of the Bill. The noble Lord, Lord McCarthy, laughs. I do not suppose that he is surprised by what I said. The detail is not important for the purpose of considering the Government's volte-face.

Clause 39 was introduced to Parliament on 7th November 2001. It has remained there totally unaltered throughout the stages of the Bill in another place and in your Lordships' House. Not only was it unaltered, it was accepted without discussion in the Standing Committee of another place.

The Government's proposals on Clause 39 would have the effect of removing some of the restrictions on compromise agreements between employers and employees. This would have ensured that agreements compromising disputes did not have to be limited to the particular complaint in issue but could also form a final settlement for related claims or even possible claims.

The clause would have removed the ludicrous necessity for employers to list possible disputes that had not arisen and were not even likely to arise when one particular issue was compromised. For example, it would have removed the possibility for a severance package on redundancy to be settled, only for the employer to be faced with a new claim for race discrimination, sex discrimination, disability discrimination and whistle-blowing and a whole shopping list of other claims. That would be done by the parties entering into an agreement confirming that the settlement was in full and final settlement of all claims then existing between the parties. I stress the words "then existing". "In full and final settlement" is the equivalent of what in divorce cases is called a clean break settlement.

I have to conclude that the reason the Government have been prevailed upon to retain the rigid conditions in the various Acts and regulations is some fear that employers would somehow prevail upon or, worse still, coerce employees to give up the rights that Parliament has given them.

I do not criticise the noble Lords, Lord McCarthy and Lord Wedderburn, whose views are strongly and genuinely held and who have honourably and doggedly fought their corner throughout the proceedings in this House. But I have to say that in respect of this concession they have seemingly wrung out of the Government, their fears are what I can only describe as old, old Labour. I am sure that the two noble Lords will regard that as a compliment.

The days of dark, satanic mills have gone. The days of wicked capitalists grinding the faces of the poor have gone. With all the social legislation passed by this Government, or imposed on us from Brussels—it includes maternity leave, paternity leave, adoption leave, family emergency leave and so on—the employer is more likely to be the grindee than the grinder, especially as the vast majority of workers in this country are now employed by small or medium-sized businesses and not vast international monolithic corporations.

The Government introduced Clause 39 as a result of mature consideration of the workings of the Acts over a period—in some cases a quarter of a century, as appears from the Explanatory Notes to which I shall refer in a moment. The result of the Government's belated change of mind is that the rigid conditions for compromise agreements are restored.

This provision was a sensible one which would have vastly simplified matters and would have reduced the costs payable by both employers and employees in reaching settlements. I am told by lawyers specialising in the field of employment relations that with the formalities currently required, these costs could amount to between £250 and £750 per case and the only people who benefit from the continuation of these unnecessary restrictions are the lawyers.

In the Explanatory Notes the Government refer to the provision that the compromise must relate to a particular complaint. It is stated,

"This requirement has led to uncertainty about the extent to which all claims and potential claims to the employment tribunal can be contracted out via a compromise agreement. This change will ensure that a compromise agreement does not have to be limited to agreement about the particular complaint, and is thus consistent with the current extent of ACAS-conciliated agreements".

It states also,

"The Government's objective in making this change is to ensure that compromise agreements are as effective and as wide in extent as ACAS conciliated settlements".

That was a laudable objective of ensuring consistency between ACAS-sponsored agreements and those arranged between the parties themselves. The Government are now going to abandon that objective because of unjustified fears that workers will somehow be tricked out of their legitimate rights. That was the case made by the noble Lord, Lord McCarthy.

I am prepared to concede that instead of the blanket proposed cancellation of Clause 39, a little more careful drafting could have clarified the matter by limiting the amendment of the various existing statutes and regulations to agreements either made on the termination of employment or, if the employment continues, to the compromise of existing disputes and excluding matters occurring after the date of the compromise.

Like other noble Lords, I have a received a brief from the Law Society complaining about the Government's proposal to delete the clause, which it had previously asked the Government to modify. That, as I said, would have been possible. It wanted the Government to make clear that employees could sign away rights only in relation to past events when a dispute was being compromised. It now complains that the Government have abandoned the clause entirely rather than improved its functioning. I agree with its interpretation.

In rejecting their own sensible proposals, without tabling anything clearer, if necessary to mollify their supporters, in their place, the Government have thrown out the whole clause with the bath water. Rather than do that, they should find a new plug. I urge the Minister to abandon this proposal and instead come up with a proposal at Third Reading in line with the objectives of the Explanatory Notes. Without giving a blank cheque—which, of course, I cannot, as I do not know what the Minister is going to do—I would be happy and willing to discuss any such proposal in a constructive manner before the next stage. As it stands, I totally oppose the Government's proposal.

Photo of Lord Prior Lord Prior Conservative 4:30 pm, 18th June 2002

My Lords, I strongly support my noble friend's remarks. Perhaps I may tweak the Government's tail a little. Whenever I listen to these debates, I find either the noble Lord, Lord McCarthy, or the noble Lord, Lord Wedderburn, on his feet assailing the Government. I know for the first time in my career that the Government must be right because over the years the noble Lords have introduced legislation through Michael Foot, Albert Booth and others that was disastrous to this country and that had to be repealed.

I thought that the Government had for once come to the conclusion that they could stand up to the noble Lord, Lord Wedderburn, and the noble Lord, Lord McCarthy. It is a great pity that they cannot.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, perhaps to the surprise of my noble friends on the Front Bench, I applaud their reaction to what we said in Grand Committee and in earlier discussion of the Bill. We have made the point repeatedly, and in a way the noble Baroness, Lady Miller, referred to it when she said that we had raised the possibility of employers coercing vulnerable employees or would-be employees into giving away the rights they were allowed in law.

That is precisely right. Not only were we concerned, but also unions and other external organisations were concerned that the way in which Clause 39 was drafted could mean that vulnerable people seeking employment could sign away rights to which they were entitled in law in order to obtain employment. The contract between employer and employee is rarely equal. The employee wants the job and is often willing to make some concessions or sacrifices in order to obtain it. We do not believe that vulnerable people should be exploited in such a way. The Government have accepted our arguments and should be applauded for so doing.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, before the Minister replies, in view of what has become a classic occasion of employment law debate, two sentences in addition to those of my noble friend may be appropriate. Of course I welcome the Government's agreement that the clause would have given rise to a risk of unscrupulous employers—who are not the majority—leaning on workers to give up their legal rights to employment protection. Whatever disagreements I may have on the minutiae of the case law were resolved in our Grand Committee debate.

I do not remember the noble Lord, Lord Prior, taking part in that debate and what he understands to be the position is still obscure, except that we have had statements of the Official Opposition's employment law policy from the Front Benches and Back Benches. That policy will be read with great care, as it was presented at great length by the Front Bench spokesman of the Official Opposition. On reading it in detail, commentators will find it to be an antediluvian policy in regard to employment protection rights.

I see that the noble Baroness, Lady Miller, wants to interrupt. She always wants to interrupt when I describe the Official Opposition's position on the Bill. They have not moved one amendment on this clause, or any other, in favour of workers' employment protection rights. They have obstructed the idea of employment protection rights throughout, and now they want to keep a provision that debate has shown would be a danger to employees.

I congratulate the Ministers. There has been a good debate between them and us to which the Opposition contributed nothing. They did not table any amendments. They did not seem to understand what the debate was about, except that it might favour workers. We have now had the antediluvian policy stated at great length. We shall read it with great care—

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, with the leave of the House, I am aware that this is Report stage, although I have to say that the other side are not. I cannot allow the noble Lord, Lord Wedderburn, to continue in the way he did in Grand Committee, talking about us as wicked employers who are virtually grinding the faces of the poor. He called me someone from the past. The noble Lord is living in the past. As I said, with all the directives now coming from Brussels—paternity leave, maternity leave and so on—it is difficult for small businesses to continue. The noble Lord should remember that the day you ruin small businesses and medium-sized enterprises, the poor workers will have reason to thank you. Enough is enough, and the noble Lord should stop it now.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, I always take great care to notice what the noble Baroness says. I am never able to satisfy her or to give her any pleasure in the arguments I advance. It is true that I am old; I now feel very old. But the Ministers and I have exchanged views on the matter. They want to abolish Clause 39 because of its risks. The noble Baroness wants to keep it despite its risks. We will notice that antediluvian policy and workers will know what to make of it.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, the urge to make cheap debating points is almost irresistible, but I shall try very hard to resist the temptation. Perhaps I may bring the debate back to the fundamentals of the clause and the amendment that we are considering, rather than continue with the political, economic and employment history about which we have been hearing.

In putting Clause 39 into the Bill, we wished to build on the possibility that is raised through a number of legislative vehicles; namely, that there might, by full agreement and in full knowledge of the consequences, be compromise agreements that would mean that the full rigour of employment legislation might not always be necessary in particular workplaces. Through Clause 39, we attempted to remove some of the existing limitations in previous legislation that would restrict compromise agreements to particular proceedings, or, in contracts settling certain kinds of complaint, would relate only to the particular complaint. We were of the view that that would be helpful.

When that clause came before the Grand Committee, we were subject to—I do not believe it is rude to say—a barrage of criticism from my own Back Benches; namely, from my noble friends Lords Wedderburn, Lord McCarthy, Lord Gladwin, Lord Lea, Lady Turner, and others. In particular, my noble friend Lord Wedderburn cited the case of BCCI v Ali, a recent Law Lords' decision. He pointed out that the effect of Clause 39 might be to extend the possibility of compromise agreements to cases where employees would be signing away future rights, rights that they did not know existed, or with consequences that they did not know existed.

We did not believe that that was the case. Indeed, I have two pages of notes about BCCI v Ali that I shall refrain from reading to the House. We recognised that it would not be acceptable if the impression were gained from this legislation that it was possible for employers to induce employees to sign away future rights, or rights that they did not understand, and to use that to the disbenefit of employees. We considered the possibility of amending Clause 39. We have read the Law Society brief. We know that there are possibilities—we considered all of them—of doing this by amending rather than by removal. We took legal advice on the matter, and also took ministerial judgment. We came to the conclusion that the simplest course for all concerned in reality, as well as in appearance, was to remove the clause as it stands. We believe that that will be for the benefit of the Bill. We are grateful to all those who have taken part in the debates that made such amendments possible. I commend the amendment to the House.

On Question, Whether the said amendment (No. 107) shall be agreed to?

Their Lordships divided: Contents, 184 ; Not-Contents, 87.

Division number 1 Private Parking: Ports and Trading Estates — Employment Bill

Aye: 182 Members of the House of Lords

No: 85 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Resolved in the affirmative, and amendment agreed to accordingly.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour 4:55 pm, 18th June 2002

moved Amendment No. 108:

After Clause 40, insert the following new clause—

"VICTIMISATION

(1) Part 5 of the Employment Rights Act 1996 (c. 18) (protection from suffering detriment in employment) is amended as follows.

(2) After section 47C there is inserted—

"47D VICTIMISATION

An individual to whom section 29 and Schedule 2 to the Employment Act 2002 applies has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the grounds that the individual has taken or proposes to take, or is suspected of taking or proposing to take, any steps under statutory disputes resolution procedure."

(3) In section 48(1) (complaints to (employment tribunals)) after "47C" there is inserted "47D".

(4) Part 10 of the Employment Rights Act 1996 (c. 18) (unfair dismissal) is amended as follows.

(5) After section 104B there is inserted—

"104C VICTIMISATION

An employee who is dismissed shall be regarded for the purpose of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee has taken or proposes to take, or is suspected of taking or proposing to take any step under a statutory dispute resolution procedure.""

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, I make no apology for introducing—as I did in Committee—an amendment designed to protect employees who seek to exercise employment rights available to them by law. The first part of the amendment stipulates that an employee has a right not to be subjected to any detriment because he is proposing to take, or is suspected of proposing to take, any steps under statutory dispute resolution procedures. The second part deals with dismissal and stipulates that an employee who is dismissed shall be regarded as unfairly dismissed if the reason, or the principal reason, for the dismissal is that he was proposing to take, or was suspected of proposing to take, any step under statutory dispute resolution procedures.

My noble friends and I are surprised that no such protection is set out on the face of the Bill. A no-detriment clause—a no-victimisation clause—appears in much legislation concerned with employee rights. Recently, the Tax Credits Bill received its Second Reading in this House. In that Bill, Schedule 1, "Rights of employees"—the right not to suffer detriment—is a lengthy schedule designed to give precisely the protection that we are seeking with a no- detriment clause in this Bill.

In Committee the Minister, while expressing sympathy for my proposal, claimed that it was not necessary because it was covered elsewhere in legislation. He stated:

"It is beyond dispute that since dismissals for asserting a statutory right are automatically unfair by statute, no sensible tribunal would find a dismissal for using one of the statutory disputes procedures fair".—[Official Report, 26/3/02; col. CWH 372]

As to detriment, he claimed that there was no evidence that "broad rights" not to suffer detriment are needed. I emphasise, in his view, "broad rights" are not needed.

In that case, why do the Government feel that it is necessary to give protection in legislation to employees seeking to invoke rights under the Tax Credits Bill but not necessary in the case of the Employment Bill? I believe that it is necessary to give to employees protection of the kind that we are seeking in this amendment. If all employers were entirely scrupulous when dealing with their workers, legislation would not be needed at all.

However, we know only too well that that is not so. The employer/employee relationship is rarely an equal one. As we know, membership of a union can alter the balance, but many employment environments are not union organised. We know that bullying goes on in many work places. The Work Foundation, formerly the Industrial Society—I and my noble friend Lord Gladwin were council members of the society—has recently undertaken research which shows that bullying at work is fairly widespread. Indeed, the House has recently debated a Private Member's Bill—the Dignity at Work Bill—which was introduced by my noble friend Lady Gibson of Market Rasen.

There is ample reason to insist that employees seeking to exercise their rights should have some protection and that that should be on the face of the Bill. Employers should know that if they seek to intimidate workers into abandoning rights which the law says they should have, they face the strong possibility of losing before an employment tribunal, with the cost that that is likely to entail. Should they seek to dismiss they are going to lose anyway. I beg to move.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, in supporting the amendment moved by my noble friend Lady Turner I wish to speak also to Amendment No. 109 which is concerned with a remedy for victimisation.

There is a sense in which, under parts of the Bill, victimised workers could be the underclass of this legislation. My noble and learned friend Lord Falconer of Thoroton recognised in a previous debate on Report concerning Schedule 4 and Clause 32 that a bad employer might well say to a worker, "If you threaten to take me to a tribunal, I will take you off the overtime rota" or, as my noble and learned friend cited as an example, "I will put you on dirty jobs".

The Acts of Parliament call that "detriment" and we use the same language. But in real life, at the place of work, it is known as victimisation. When workers are victimised by their employers because they propose to enforce their rights, whether it is the right to a national minimum wage or to support union recognition, or even to complain about a breach of safety regulations that puts lives in danger, the Bill says that they cannot enforce that remedy against victimisation immediately—remedies that have been included in every piece of employment protection legislation from both administrations—unless they initiate procedures asking the employer to reconsider the matter and then wait another 28 days during which there is no protection against being victimised further.

That decision, which some see as a decision to punish workers already punished by their employers for daring to enforce rights at work, will be made much worse if the Government refuse to incorporate adequate victimisation clauses in the Bill. They are not extraordinary or unusual; they are perfectly normal in legislation that deals with employment protection rights and employment protection obligations on the part of employers. They are concerned with actions which can make workers' lives miserable just because they take the lawful step of attempting to register access to justice to enforce rights. Ministers rightly claimed credit recently for increasing the ambit of employment protection in Britain, but protection without enforcement is no protection at all.

There is no protection for the worker who is not allowed to breathe the name of the tribunal. That is why Amendment No. 108, moved by my noble friend Lady Turner, is needed, and why Amendment No. 109, which we also tabled, is needed. Indeed, Amendment No. 109 is important because it deals with victimisation for attempting to do something relating to this Bill. Obviously, it is not included under previous legislation. If, as may have been suggested in Grand Committee, previous legislation is said by the Government to cover the ground or part of the ground of either of the proposed amendments, then they must cite a precise section and statute under which they say part or all of the ground is covered—something they did not do in Grand Committee and cannot do because no previous legislation covers it.

Since Amendment No. 109 may not be fully published in Hansard, I shall read it in full:

"An individual to whom section 32 applies"— that is, a worker whose access to justice through a tribunal is limited—

"has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the grounds that the individual has communicated or proposes to communicate, or is suspected of communicating, a complaint to an employment tribunal when prohibited by that section to present the complaint".

It may be that the Government do not like the words,

"when prohibited by that section", and would prefer, "when his complaint is not admissible". If so, I would understand their accepting it in spirit and producing words of their own at Third Reading. The amendment provides the perfectly normal, customary defence against dismissal as an unfair dismissal on the same grounds.

I cannot urge the Government too strongly to ensure that this is not the first Employment Bill which fails to make adequate provision for victimisation. Every previous Bill, under all administrations, has provided against victimisation for daring to enforce one's rights as a worker and for daring to take steps which are lawful under the legislation. That is all that the amendments seek to do. I support the case made by my noble friend and urge the Government to accept Amendment No. 109 also.

Photo of Lord McCarthy Lord McCarthy Labour

My Lords, I want to turn the Government's attention to a narrow but vital issue. In Committee we debated, over five columns of Hansard, what the existing position was; whether there was, in the field of labour law, protection against victimisation and detriment; where it was, and how we could be certain about that, and where it was not.

At col. CWH372 the Minister gave us the nearest we got to a solid statement. But the more I read his words, the more doubtful I was that we had all we needed. If I understood him rightly, he gave us three related statements. He said that,

"there is protection in the Employment Rights Act 1996, and elsewhere, for employees who are dismissed for asserting a wide range of statutory rights".

How wide we do not yet know. Are they comprehensive? Suspiciously not, because a "wide range" suggests something left outside. Secondly, intending to reassure us—this may relate to the area outside the wide range, I am not certain—he said that,

"no sensible tribunal would find a dismissal for using one of the statutory dispute procedures fair"; in other words, if one used statutory procedures one could not say it was a fair dismissal. He said, "no sensible tribunal", but of course he cannot tell us that all tribunals will be sensible. So though it looks good, it does not really satisfy.

The Minister moved on to "detriment short of dismissal" on a wide range of grounds in the 1996 Act. That sounds as good as we had in the protection on dismissal. But he went on to say that from time to time further ones had been added. That suggests again that something is left outside. We heard nothing about the criteria used for adding the further ones. There was no list; no definitive announcement of where they exist or where they do not exist. So I suggest we are now in the position of total chaos; we just do not know what the position is.

The Minister then changed tack and started to tell us why he could not accept our amendment. He said that the Government were right to be cautious; that our amendment was rash. He said that there was no evidence that "broad rights" are needed. I had not heard that term before, which is not saying anything. But my noble friend Lord Wedderburn had not heard it either. He could not tell me what "broad rights" are. How broad is "broad"? What about a "narrow" right?

So there is no evidence that we need broad rights. I take it that it is a reference to our amendment; that it creates broad rights because it is intended to be comprehensive. The Minister then said,

"I need hardly say"— though he went on to say—

"that any such broad rights"— here comes the cloven hoof—

"would add greatly to the potential for tribunal complaints".

We have been through this over a long period of time. I shall not ask if he has any evidence for that, because I know he has not. But he believes that the CBI says it would,

"add greatly to the potential for tribunal complaints".

Again we asked for more evidence. My noble friend Lord Wedderburn asked for a particular case. The Minister said:

"I do not have the facilities to go back to all legislation ... I will have to write to ... Lord Wedderburn ... I will copy the letter to everyone else who has taken part in the Committee".—[Official Report, 26/3/02; col. CWH 374.]

I have spoken to my noble friends. They have not received a letter. That was said 12 weeks ago. The letter has not been written. Therefore, as I say, we are as mysteriously uninformed as we were.

I conclude by asking yet again a number of precise questions. First, which statutory rights are and which are not protected by the Employment Rights Act 1996? Secondly, in what legislation, if any, are those which are left out to be found? Thirdly, with regard to detriment short of dismissal, do the Government intend to add more to the list? If so, how many will be added? I think that we are entitled to have this evidence. We are entitled to have that letter. We are entitled to have the mess cleared up. That is why I support the amendment.

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, the first of the amendments provides extra protections against dismissal and detriment for employees who use the statutory procedures. The second provides similar protections in the case where an employee has been "prohibited" from making an application to a tribunal under Section 32 of the Act. My noble friend Lord Wedderburn anticipated that I would not be very happy with the use of the word "prohibited". He is right. If we were in general to support the amendment we would accept it subject to a subsequent amendment referring to "admissibility". That is not the core of the argument here.

We debated similar amendments in Grand Committee on 26th March. I need to repeat some of the same arguments. There are two cases. First, there is the case for providing protections against dismissal. There are already significant protections against abuse in those areas. Importantly, it is already automatically unfair to dismiss a person for asserting a statutory right. It should be remembered that the Bill extends statutory rights by the procedures set out in Schedule 2. Many grievances which employees air with their employer involve a statutory right. Their complaints therefore constitute the assertion of a statutory right. And, of course, virtually all applications to tribunals, including inadmissible ones, also involve the assertion of a statutory right. So, employees are already protected against dismissal in those circumstances.

There are some cases where complaints do not involve statutory rights. Tribunals assess the fairness of such dismissals against the general provisions on unfair dismissal, which are found in Section 98 of the Employment Rights Act 1996. Our considered judgment is that the prospects of a tribunal considering it reasonable for the employer to dismiss an employee simply because he tried to raise a concern with him are unreal in almost all cases. But we must not forget that there might be a case where the employee was dismissed for vexatiously and repeatedly raising complaints via internal procedures—a circumstance which needs to be borne in mind when considering this issue.

It follows from that analysis that there are already adequate protections against dismissal for employees who make reasonable use of the statutory procedures or who make inadmissible applications to tribunals.

I now turn to the protections against detrimental actions short of dismissal for using the statutory procedures. There is no general protection against unfair treatment by employers involving actions short of dismissal. To that extent, I understand the arguments that have been put. Instead, legislation establishes protections in this area on a case-by-case basis.

The range of existing protections is limited. They target key areas of potential abuse. They are listed—mostly—in Sections 44 to 47C of the 1996 Act. I shall mention some because I was specifically asked which cases are protected against detriment—health and safety, Sunday working for shopping and betting workers, working time, trustees of occupational pensions schemes, employee representatives, time off for study or training, protected disclosures and leave for family and domestic reasons. That is not an exhaustive list, but I hope that it is a reasonable, proportionate and sensible response to the question asked.

Having said that, I must apologise to my noble friend Lord McCarthy for not writing to him. It is quite true that I have not written to him. Of course I will do so. I make clear that I shall do so before the Third Reading of the Bill. He is entitled to an apology; he has an unqualified apology.

We must ask whether it is necessary to add these new core areas to that list. We are not convinced that there is a good case for so doing. It is far from certain that problems will arise in practice. If one looks at the analogous circumstances where employees assert a statutory right at their workplace, there are no protections against action short of dismissal for such cases. But what evidence is there that victimisation—a detriment—of this type occurs? We know of none. Likewise, if one looks at the position of the bulk of the working population who are currently covered by voluntary grievance procedures, do we see much, if any, evidence that employees are disciplined for using those procedures? I think that the answer to that must be "no".

It follows that there is no evidence to suggest that those new protections against detriment are needed. If, in the light of experience, the issue arises on any scale in practice, then the Government can reconsider the position. But, from the evidence so far available, there are no sound reasons for adding to the existing list of protections in the 1996 Act.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour 5:15 pm, 18th June 2002

My Lords, before my noble friend sits down, perhaps he can answer two questions. First, in relation to his first argument—namely, that the situations which our amendments aim to cover are covered by the protection of a worker not being victimised for asserting statutory rights—I am sorry to have to set this matter out, but my noble friend did not set it out in detail and it is necessary to put the question to him.

The right not to be victimised for asserting statutory rights is, I am sure he will agree, set out in Section 104 of the 1996 Act. But the term "statutory rights" does not as he suggested—indeed I think he stated—cover all statutory rights, because for the purpose of that section, subsection (4) sets out which rights are covered. They are:

"(a) any right conferred by this Act".

That does not cover our amendments which are about the 2002 Bill's rights and opportunities.

"(b) the right conferred by section 86 of this Act",

That is not what we are dealing with.

"(c) the rights conferred by sections 68, 86, 146, 168, 169 and 170 of the Trade Union and Labour Relations (Consolidation) Act 1992".

That is not what our amendments are about. The last one is:

"(d) the rights conferred by the working time regulations 1998".

If the Minister's brief had set out what "statutory rights" means in respect of the right not to be dismissed for asserting a statutory right, he would have known that that section is totally irrelevant for the matters raised by our amendments. How he can rely on it is extraordinary in view of the misstatement of law which such reliance involves. That is the first question.

Secondly, the Minister says that detriment short of dismissal—what his noble and learned friend referred to in the previous debate as an employer who puts a worker on dirty jobs or excludes him from overtime for daring to approach the tribunal—is not needed. That is not by reference to any section, even a bad section as in the first document, but because either it does not happen, or, as I understood him, we need not bother about it; it will be dealt with in some uncertain way by voluntary procedures.

If the Minister looks at Schedule 4 to the Bill, which he or one of his ministerial colleagues defended so strenuously, he will see the list of detriment provisions to stop employers victimising workers for trying to enforce their rights under specific Acts. They are: the Race Relations Act 1976; the Trade Union and Labour Relations (Consolidation) Act 1992; the National Minimum Wage Act 1998; the Working Time Regulations 1998; and so on. They are all listed in Schedule 4. We are trying to insert a provision in the Bill to stop workers being victimised by actions short of dismissal for the purpose of their rights under the Bill and their opportunity to go to a tribunal. How can the Minister possibly say that there is no need for such protection under the Bill?

So, first, will the Minister withdraw his reliance on Section 104 of the 1996 Act? Secondly, will he tell us why protection against victimisation for action short of dismissal is unnecessary?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, with the leave of the House, I am in danger of exceeding the rules of Report stage. I can only respond briefly by saying that I did not claim that all cases of protection against dismissal involve statutory rights. If my noble friend reads what I said in Hansard, he will find that I said that there are some complaints that do not involve statutory rights. I argued that there could be cases, even where there is no statutory right, in which, although a tribunal would normally, in our considered judgment, be unlikely to consider it reasonable for an employer to dismiss an employee simply because he raised a concern with his employer, an employee could legitimately be dismissed for vexatious behaviour that was not concerned with a statutory right.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, with great respect to my noble friend, under which section?

Photo of Lord McIntosh of Haringey Lord McIntosh of Haringey Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I think that I have already exceeded the rules of debate. I shall of course write to my noble friend about the questions that he raises, which he could have raised in his first intervention.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, I find it disappointing that my noble friend the Minister has said little different from what was said in Grand Committee. I still do not understand why it is apparently felt reasonable to have a "no detriment" clause in other legislation, including the legislation that I have just cited. The Tax Credits Bill has a lengthy schedule entitled, "Rights of employees", which includes a no detriment clause, including cover in respect of dismissal. If anyone seeks to secure his right to tax credits and feels that he is being victimised for trying to pursue it, that lengthy schedule gives him cover.

There is no cover in the Bill and there has been no adequate response to our submissions today or in Grand Committee. I am sorry that that is the case because in Grand Committee the Minister went some way in expressing sympathy for the case we advanced. As has been said, he promised to write to my noble friend Lord Wedderburn. He also said that he would copy the letter to everyone else who took part in the Committee,

"and my letter will include a reflection on the matters that I am asked to reflect on".—[Official Report, 26/3/02; col. CWH 374.]

I should welcome a copy of the letter that the Minister has just promised to send to my noble friend Lord Wedderburn.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, in the meantime, with great regret, I have no alternative but to withdraw the amendment. It is a good amendment; it is well drafted—the Minister himself acknowledged that—and it is a reasonable amendment in the circumstances. I do not understand why employees who are covered by the Bill should not have the benefit of a no detriment clause, as already exists in other legislation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 109 not moved.]

[Amendment No. 110 not moved.]

Clause 45 [Fixed-term work]:

Photo of Lord Razzall Lord Razzall Liberal Democrat

moved Amendment No. 111:

Page 49, line 7, leave out "employees" and insert "workers"

Photo of Lord Razzall Lord Razzall Liberal Democrat

In moving this amendment, I shall speak also to Amendment No. 114, with which it is grouped. The purpose of these amendments is to return to our discussion in Grand Committee. They would extend the rights of an employee against discrimination to fixed-term workers who are not also employees and so, we submit, give proper effect to European Directive 1999/70/EC. I am not entirely clear from our discussion in Grand Committee—we shall await with interest what the Minister has to say—whether the Government do not believe that the provision should extend to fixed-term workers who are not also employees or whether they think that the clause as drafted provides sufficient cover for fixed-term workers.

We believe that the clause as drafted and what we know about the regulations to be made under it relate specifically to employees—that is, individuals who have entered into or worked under a contract of employment. That is insufficient to give effect to the directive because it does not cover the broader category of workers.

I shall not repeat our discussion in Grand Committee about how Section 230 of the Employment Rights Act 1996 defines workers, but I assure noble Lords that it does. In that section, as the class of "employee" is entirely enclosed within the class of "workers", extending the coverage to "workers", as I propose, would cover all "employees" as well.

Directive 1999/70/EC itself gives effect to the ETUC-UNICE-CEEP framework agreement on fixed-term work. As the Minister will be aware, clause 2 of that agreement provides that it should apply to,

"fixed term workers who have an employment contract or employment relationship as defined in law, collective agreement or practice in each Member State".

Clause 3 of the framework agreement defines a "fixed term worker" as,

"a person having an employment contract or relationship entered into directly between an employee and a worker where the end of the employment contract or relationship is determined by objective conditions such as reaching a specific date, completing a specific task or the occurrence of a specific event".

So it appears that the framework agreement is intended to include workers who are not also employees. We submit that limiting Clause 45 to employees means that it does not give effect to the framework agreement incorporated in the directive. In Clause 45 the Government are legislating to implement the directive.

There are two issues here: first, do the Government intend to include fixed-term workers under the Bill in addition to employees? If not, why not, because the directive requires it? Secondly, if the Government claim that the clause as drafted covers both categories—fixed-term workers and employees—we believe that that is wrong. In those circumstances, incorporating Section 230 of the Employment Rights Act 1996 would do the job more felicitously. I beg to move.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, I support the amendment. In Grand Committee, I spoke to a similar amendment and I support everything that the noble Lord, Lord Razzall, said. I am concerned that certain types of worker will be excluded from the Bill's provisions—in particular, people working on short-term contracts in the construction industry, who used to be called workers on the lump. They were supposed to be self-employed but in reality were not. They should be covered by the Bill. I support the amendment.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation) 5:30 pm, 18th June 2002

My Lords, Amendments Nos. 111 and 114 seek to amend Clause 45 by placing a duty on the Secretary of State to make regulations that would ensure fixed term workers are no less favourably treated than comparable permanent employees. However, I believe that the intention of the amendments is to question the coverage of the entire clause rather than its first paragraph only.

We take the view that in making provision about employees we are fully implementing the European Community fixed term work directive. Let me explain why. As the noble Lord rightly said, the directive requires us to legislate in respect of,

"fixed term workers who have an employment contract or employment relationship as defined by national law and/or practice".

It is clear from these words that this is not a case where there is a single, Community-wide meaning of "worker"; therefore the UK can choose its own definition provided that it is defensible. The use of the word "worker" in the directive does not mean that the UK must implement in respect of all workers.

We take the view, both on underlying legal principles and precedent from the UK's existing employment legislation, including the implementation of other directives, that it is within the UK's discretion to implement in relation to employees only. In so doing, we would be replicating the coverage of most domestic UK employment rights legislation, including rights related to collective redundancies and European works councils, rights to parental leave and written statements of employment particulars. All of these implement EU directives. We would also be protecting those most likely to have the length of their working relationship determined by reference to time in line with the purpose of the directive.

It has been argued that the reference to "employment contract or relationship" in the directive requires us to cover employment relationships other than contracts of employment. The draft Fixed Term Employees (Prevention of less favourable treatment) Regulations cover not only employees but also Crown servants, House of Commons and House of Lords staff and certain police officers who are not employees. These categories of person will not necessarily have contracts of employment. Applying the regulations for these employment relationships replicates the coverage of other domestic legislation. The wording in the directive was also used in the parental leave directive. Regulations implementing that directive apply to employees only.

I have seen no evidence that fixed term non-employee workers are being less favourably treated than comparable permanent non-employee workers because they have fixed term employment relationships. It is therefore very difficult to identify any beneficiaries of an extension in the coverage of the regulations.

The key group of workers who might qualify as workers but not as employees are agency workers. As my honourable friend in another place pointed out, the fixed term directive specifically states that it does not apply to temporary agency workers. This does not mean that all other workers are included on the grounds that they are not specifically excluded. In particular, the directive does not cover members of the Armed Forces, but there is no specific exclusion.

As noble Lords will be aware, we are currently conducting a review of employment status in relation to statutory employment rights. As my noble friend Lord McIntosh informed the House on 2nd June, we intend to publish a discussion document on this issue as soon as possible. This will seek views on the current definitions used in employment law and whether there may be a case for extending the coverage of certain rights.

I hope that I have answered the noble Lord's questions. It is difficult to see who would benefit from the amendment. It is also not timely given that we are currently conducting a review of employment status in relation to statutory employment rights. I hope that that explanation of our thinking is helpful and I would ask the noble Lord to withdraw the amendment.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour

My Lords, before my noble friend sits down, I understand his argument that we have a discretion to implement the directive; I understand his argument that there is no European-wide definition of "employee" or "worker"; but I do not understand his argument that we are under no obligation to implement the very clear statement in the directive. The directive states that it covers those under a contract of employment—in British terms, such people are employees—and those in an employment relationship, obviously without a contract of employment. It then states that some of the people under an employment relationship are not included—that is, agency workers, as my noble friend rightly said.

The interpretation which restricts implementation in the British sense to employees is patently defective. Why does my noble friend insist that public money should be wasted on litigation in the Court of Justice in Luxembourg, which undoubtedly will be in prospect if the Government fail to implement the directive in the way that the noble Lord, Lord Razzall, suggests in his amendment?

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, it is quite clear that we have been given different legal advice. The terms of the directive state:

"fixed term workers who have an employment contract or employment relationship as defined by national law and/or practice".

That seems perfectly in keeping with the line we are taking.

Photo of Lord Razzall Lord Razzall Liberal Democrat

My Lords, I thank the noble Lord, Lord Wedderburn, for his intervention. He said very much what I intended to say in responding to what the Minister said. When moving the amendment I suspected that, ultimately, this would come down to differing legal interpretations of the directive and the clause.

I understand the Minister's confirmation that the Government are reviewing the whole issue of what "employment" means. I welcome that because I suspect—as I am sure that various of the Minister's noble friends suspect—that there are genuine employees out there who are required to work either as fixed term workers or as self-employed when the real nature of their relationship is one of employment. It is that group of "quasi" employees to whom the noble Baroness, Lady Turner, referred. I am concerned about the effect that this Bill and the absence of protection will have on them.

The noble Baroness referred to people in the building and construction industry who are "on the lump". I suspect that even in modern, high-technology industries there are equivalent people who are in reality employees but are on fixed-term contracts. Under the current drafting of the clause, those people would not be protected. Dare I say it while looking straight at the cameras, there are probably many people in the television and media world who are equally affected. Having said that, I shall read what the Minister said between now and Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

moved Amendment No. 112:

Page 50, line 8, at end insert—

"( ) No regulation made by the Secretary of State under subsection (4) shall exceed the requirements of Directive 99/70/EC or any amendment, modification or re-enactment thereof for the time being in force."

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, in moving Amendment No. 112, I shall speak also to Amendments Nos. 113, 115, 116 and 117 even though they appear in three different groupings. I have made sure that the Minister knows that I shall be speaking to these amendments together. There is an error in the way the amendments were grouped.

Amendments Nos. 112 and 116 are identical, one applying to fixed term work in England, Scotland and Wales and the other to Northern Ireland. Clause 45(4)(a) and Clause 46(4)(a) each enable the Secretary of State to make regulations enabling the implementation of the European Council Directive 99/70/EC, which relates to terms and conditions of employment for fixed term work. It is right that the Secretary of State should have such a power. However, experience since 1997 has shown us that the Government frequently take EC directives and gold plate them—that is, they make them more stringent than our international obligations require and put the United Kingdom at a commercial and competitive disadvantage.

Hence, these two amendments, which are specific to, and limited to, the regulations made under subsection (4). They require the Secretary of State not to make regulations purporting to comply with the EC directive but which in fact exceed the requirements of that directive.

The opening words of both Clause 45(4)(a) and Clause 46(4)(a) read as follows:

"for the purpose of implementing Council Directive 99/70/EC".

That is the objective to which the Government should stick. But the Government give the game away in the Explanatory Notes, which state:

"The Government takes the view that, on account of its legal base, this directive does not apply to pay and pensions . . . the Government intends to prevent pay and pensions discrimination against fixed-term employees, in addition to implementing directive 1999/70/EC".

Let me repeat those words:

"in addition to implementing [the] directive".

As I pointed out in Committee, that is in direct contradiction to the phrase in Clauses 45(4)(a) and 46(4)(b). This is not the time or place to go into the matter in greater detail. Elsewhere, I shall propose an amendment that will ensure fair play for fixed-term employees, with a minimum of regulation, and nothing further is needed.

The Minister ignored this point in his reply in Committee. He simply said:

"Other EU member states have already stopped or are expected soon to stop pay discrimination against fixed-term employees".—[Official Report, 11/4/02; col. CWH 513.]

That is not the point. They are not doing it under the pretext of complying with the directive; and, as I have said, my Amendments Nos. 113 and 117, to which I shall speak next, resolve the problem with a degree of legislative succinctness that the Government would do well to emulate.

Amendments Nos. 113 and 117 again apply in tandem to England, Scotland and Wales under Clause 45 and to Northern Ireland under Clause 46. The provision is one of absolute simplicity. In exchange for the Government not gold-plating the EC directive, these two amendments stipulate that an employee on a fixed-term contract shall not be deemed to be treated less favourably than other employees if he receives money or money's worth in lieu of the benefits received by permanent employees of the same employer which cannot reasonably and practicably be accorded him.

I have mentioned the impossibility of admitting an employee to a company pension scheme when he will be working for the employer for only a couple of months. Annual holiday, a company car, even an invitation to the annual outing may all be impossible to give to a temporary employee—one who is perhaps engaged as a locum for a permanent employee who is taking his paternity or adoption leave.

I have proposed that recompense for the absence of such benefits should be compensated for, but I believe that it would be right to do so by cash or money's worth. It is very simple. A fixed-term employee who is dissatisfied with the cash compensation he is offered still has exactly the same remedy before the employment tribunal as any other employee whose rights under this legislation are not complied with.

It would certainly be a lot easier for employee and employer alike—who are the only two people involved—to calculate the employee's rights and to put a cash value on them. That would save the Government from attempting to produce a large number of highly prescriptive and impractical regulations, many of which—for example, in relation to pensions—will be impossible to enforce. It is not practical for an employer to give someone working for him for a very short period the same advantages as an employee who is in the pension scheme.

I turn finally to Amendment No. 115, which seeks to add a further subsection to Clause 45, which I imagine would become subsection (7). Before speaking to the amendment, I should mention that there is not a similar amendment down to Clause 46 dealing with Northern Ireland. If the Minister were to accept the amendment, naturally we could introduce a suitable further amendment to Clause 46 at Third Reading—not that I have any great hopes that the Minister will accept my amendment. I cannot believe that he has not accepted a single amendment that I have tabled through the long and lengthy process on this Bill.

Clause 45 sets out detailed rights for a fixed-term employee and detailed machinery for implementing them. I acknowledge that one of the purposes of these provisions is to prevent unscrupulous employers from using a series of consecutive short fixed-term contracts to deprive an employee of certain of his legal rights.

However, some people voluntarily take up fixed-term employment for a variety of reasons, frequently to suit their own convenience or personal circumstances. In the same way, employers often take on employees for fixed terms for genuine commercial reasons—to carry out a specific project, for example; to set up a computer or book-keeping system; to handle a particular piece of work for a client; or to replace a permanent employee who is temporarily away.

Assuming that the employer is genuinely acting in good faith and is employing someone on a fixed-term contract, and then decides that he would like to employ him permanently, he should be able to make an offer of permanent employment under the stringent conditions set out in the proposed new subsection, leaving that employee to decide for himself whether he does or does not want the job. If he takes it, then he should get the same benefits as the other permanent employees, which is what this provision aims to give him. If he chooses to stick to his fixed term for his own reasons, clearly he cannot have his cake and eat it; he cannot stick to his fixed term and continue to enjoy the new privileges being granted to fixed-term employees. I beg to move.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation) 5:45 pm, 18th June 2002

My Lords, I shall deal with all the amendments the noble Baroness has put forward, beginning with Amendments Nos. 112 and 116. These amendments would have the effect of preventing the regulations under Clauses 45 and 46 from imposing any obligations beyond those required by the EC fixed term work directive. This would mean that the regulations made under the clauses would allow employers to pay their fixed-term employees less than their permanent staff and give them less favourable pension rights, just because they were on fixed-term contracts. This could encourage employers to pay their fixed-term employees less than permanent ones, even where they do not currently do so.

In our view, the fixed term directive does not require us to prevent pay and pensions discrimination against fixed-term employees. The noble Baroness quoted words which she said gave the game away; she said that we were acting under the pretext of implementing the directive. There is no question of "giving the game away"; there is no question of doing this under the pretext of implementing the directive. If that were the situation, primary legislation would not be required. I believe that everyone in this House will be able to recognise that we are doing it under primary legislation for just this reason. We are quite open. We want to include this provision because we believe that it is the right thing to do.

Following a full public consultation last year on the implementation of the directive, we had evidence of pay disparities between fixed-term and permanent employees and anecdotal evidence that fixed-term employees had been excluded from pensions even though they had been employed on a series of fixed-term contracts for many years and would no doubt have benefited from pension provision. This evidence, I believe, justifies using primary legislation to prevent pay and pensions discrimination against fixed-term employees.

I am aware that the noble Baroness has some concerns about the operation of the regulations if pay and pensions are covered.

The draft Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 on which we recently consulted do not necessarily require fixed-term employees to be admitted to occupational pensions schemes; they simply require that fixed-term employees are not less favourably treated than comparable permanent employees. I believe that these regulations will help to ensure that employers no longer refuse fixed-term employees access to an occupational pension scheme purely because they are on a fixed-term contract.

Some employers may have objective reasons that justify denying fixed-term employees access to a pension scheme and can therefore exclude them. Others may seek to ensure that a fixed-term employee's overall employment package is not less favourable than that of a comparable permanent employee. The regulations also allow for that situation. There will be situations where an employer will be able to justify excluding an employee on a short-term contract from an occupational pension scheme if including him has disproportionate cost and/or is of no benefit to him.

This will not mean that employers have to offer alternative compensation or change established pension schemes to meet special needs of fixed-term employees. It is important that an appropriate balance between business requirements and employee protection is struck and that fixed-term employees' access to pensions is considered on a case by case basis. We believe that the draft fixed-term regulations achieve this balance by minimising burdens on employers and ensuring fairness for employees. Employers may also find that they offer fixed-term employees access to an occupational pension scheme, but the employees may choose not to enter that scheme as they anticipate that it will not benefit them.

The noble Baroness, Lady Miller, also asked at what point a fixed-term employee can gain access to a pension scheme. The answer is that employers will need to look at what point they offer pensions to their permanent employees. The fixed-term regulations require that any period of service qualifications for benefits, including pensions, should be the same for fixed-term employees as for permanent employees unless a different period can be objectively justified. Employers will not therefore be required to offer fixed-term employees access to schemes at an earlier point than they would offer access to permanent employees.

It is probably worth noting here that, when we transposed the part-time work directive, we also decided to cover pay and pensions, despite our view that this was not a requirement of the directive. Fixed-term employees are in a similar position to part-time ones. They work for the same employer as comparable permanent or full-time employees but have a different contractual arrangement. Fixed-term employees have an important part to play in our labour market and they are entitled to a fair deal.

As I explained in Grand Committee, giving fixed-term employees a fair deal by preventing pay and pensions discrimination will not place UK business at a competitive disadvantage compared with European counterparts. Most other EU member states have already stopped pay discrimination against fixed-term employees and we expect others to do so in the near future. Preventing pay and pensions discrimination will protect about 1.2 million fixed-term employees in Britain. We do not see why British fixed-term employees should be treated as second class.

I turn now to Amendments Nos. 113 and 117. As they have the same aim, I shall speak to them together. These amendments would mean that regulations on fixed-term work have to provide that fixed-term employees are not considered to be "treated less favourably" if they receive an adequate amount of money or money's worth in lieu of benefits received by permanent employees of the same employer which cannot reasonably and practically be accorded to them. I shall explain why I consider this amendment to be unnecessary and why it is not the best way to introduce the flexibility which the noble Baroness, Lady Miller, seeks for employers and employees.

Such amendment is unnecessary because the draft fixed-term regulations—on which we recently consulted, and a copy of which has been placed in the Library—already achieve the aim of this amendment. The means of applying the equal treatment principle to fixed-term employees is best dealt with in regulations, and the powers in Clauses 45 and 46 allow this to be done in a flexible manner. Subsection (2)(c) of both Clauses 45 and 46 states that regulations may,

"specify circumstances in which employees in fixed-term employment are to be taken to be, or not to be, treated less favourably than employees in permanent employment".

The noble Baroness seems to be concerned that the enabling powers in Clauses 45 and 46 would require the Secretary of State to regulate every term of a fixed-term employee's contract. This is certainly not the case. The powers as currently drafted allow the Secretary of State to make regulations which will allow a fixed-term employee's benefits to be looked at "in the round" when considering whether he is being less favourably treated than a permanent employee. The draft regulations already do this. They provide that less favourable treatment of a fixed-term employee is permitted if it is justified on objective grounds. The regulations specifically provide that where the value of a fixed-term employee's total package of employment conditions is equal to or higher than that of a comparable permanent employee, less favourable treatment in respect of one or more employment conditions will be objectively justified.

This means that employers can balance a less favourable condition with a more favourable one. For example, an employer and a fixed-term employee may agree that the employee would not benefit from access to an occupational pension scheme, but should receive a higher salary instead. Alternatively, the employer could pay the fixed-term employee a higher salary to compensate him for having fewer days' paid holiday than a comparable permanent employee, provided he received at least four weeks' paid annual leave per year in accordance with the working time regulations.

Alternatively, the draft regulations provide that employers need not give fixed-term employees a particular benefit—and will not be obliged to compensate them for it by alternative means—if excluding them is objectively justified. Where fixed-term employees are on very short contracts, their exclusion from an occupational pension scheme may be objectively justified, for example. I am not convinced that the amendments would allow less favourable treatment where it is objectively justified. Since objective justification is provided for in the directive, the proposed amendments could be described as gold-plating.

I turn to Amendment No. 115. The intention of this amendment seems to be that the regulations made under Clause 45 should not apply to fixed-term employees who have been offered suitable permanent employment at any point in their employment and refused the offer. This would mean that the Government fail to comply with their European Community obligations and incorrectly implement the EC fixed-term work directive.

I am extremely concerned that there is a risk that employers could ask fixed-term employees early on in their contracts to accept permanent jobs knowing full well that the fixed-term employee will reject such an offer, the possible bonus of this for unscrupulous employers being that the fixed-term regulations would no longer apply. The fundamental provision of the regulations—"preventing discrimination against fixed-term employees"—would no longer apply to those who have chosen not to accept a permanent position, and it would also mean that the provisions in the regulations limiting the use of successive fixed-term contracts would be invalid. An employer could therefore continue to employ a fixed-term employee on an endless series of fixed-term contracts, something which the fixed-term work directive specifically aims to prevent.

Allowing fixed-term employees to sign away their right to a permanent job would really be allowing them to sign away protection under fixed-term regulations. I am very concerned that it would cause there to be a loophole that allowed the regulations to be circumvented. That would put off students, older people and parents from working on a fixed-term basis.

The EC fixed-term work directive confers certain rights on all fixed-term employees. These include the right not to be treated less favourably than comparable permanent employees and not to be employed on a succession of fixed-term contracts, which is abusive. These rights apply to all fixed-term employees, with a couple of exceptions permitted by the directive, regardless of whether they have been offered or refused permanent employment. This amendment would result in inadequate implementation of the directive by allowing fixed-term employees to sign away their rights to a fair deal.

I hope that the noble Baroness accepts my explanation of why these amendments should not be pressed and that she kindly withdraws Amendment No. 112.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, at this point I can only beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 113 to 117 not moved.]

Clause 49 [Work-focused interviews for partners]:

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

moved Amendment No. 118:

Page 57, line 15, at end insert "connected with types of employment suitable for that person"

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, Clause 49 makes full entitlement to a number of benefits conditional upon work-focused interviews for a partner. Regulations may make provision for a requirement for the partner of a claimant to take part in a work-focused interview as a condition of benefit continuing to be payable to the claimant. Among the benefits which could be adversely affected if the partner does not comply are not only income support and jobseeker's allowance but also incapacity benefit, severe disablement allowance and invalid care allowance.

I sought amendments to this clause in Committee. I have very strong misgivings about this provision, and these were not assuaged by the reply given in Committee by my noble friend Lord Bassam, the Minister. Nor am I alone in having doubts about the clause. NACAB has voiced some concerns, as have a number of other organisations.

Of course, the Government maintain that this measure is not intended to bring pressure to bear on the partners of claimants to accept employment. It is simply a question of letting people know what opportunities for employment are available. The Government will no doubt maintain that the intentions are entirely benign. I am sure they are. However, I doubt that they will be seen in that light by claimants and partners. There may be very good reasons why a claimant's partner does not want to accept employment: there may be children to be cared for; there may be children with disabilities or behavioural problems; the couple may take the entirely laudable decision that one of them should devote himself or herself to a child.

Of course, the Government have claimed, as they did in Committee, that benefit will be adversely affected only in a minority of cases, and then that not all the benefit, but only a percentage of it, will be lost. The noble Lord, Lord Bassam, referred to 20 per cent. But people who are dependent on benefit are poor anyway, and the loss of even a part of it is a serious matter.

I do not like this clause at all. Why should a claimant risk losing benefit simply because his or her partner fails to attend for an interview? However, we seek, as we have throughout our discussion on this Bill, to be constructive, and our amendment simply seeks to soften the impact of it. We say that the work-focused interview should be connected only with types of employment suitable for that person, so that there should be no pressure on people to take whatever employment is available simply in order to reduce the benefit that would otherwise be paid. Clearly, it would cover the position of anyone responsible for the care of young children. That is one of the aims of this amendment.

I hope that the Government have given further thought to the arguments that we advanced in Committee and are now able to respond sympathetically to our amendment. I beg to move.

Photo of Earl Russell Earl Russell Liberal Democrat 6:00 pm, 18th June 2002

My Lords, we are considering three amendments under Clause 49. It may save the time of the House if I make remarks relating to all three amendments—otherwise, I may have to repeat the same points three times and the House may become a little tired of that.

This is one of a series of measures that the Government seek to introduce, dealing with the withdrawal or partial withdrawal of the right to social security benefit. We have considered it for some time. As a party, our position on it is clear. The Government justify it on the ground of linking rights and responsibilities. They say that the right to receive benefit carries with it the responsibility to look for work. Taken in isolation, that is not a particularly controversial statement. The trouble is that responsibilities are a whole cat's-cradle of different matters that relate to each other. To take one relationship between rights and responsibilities in isolation is a little like taking a single stitch out of a garment and trying to exhibit it in a museum—you end up making a little bit of a mess.

Over and above any responsibility that recipients of benefit may have to look for work is the over-arching responsibility of the state to protect those whom it governs. The responsibility of the state is to preserve the lives of its subjects. It has been agreed since at least 1601, and probably a good deal longer, that that responsibility does not extend only to providing external defence. It also involves a responsibility to protect people against the effects of famine, poverty and other matters that may threaten their lives. If we take that away, we deprive the subjects concerned of that which binds them to a contract to obey the state. In fact, we turn them into outlaws. That can be an imprudent process.

Therefore, granted that the state is entitled to some sanction against those on benefit to abuse their position, that sanction must fall short of any measure that lowers them below the subsistence level. It is, therefore, a little unfortunate that the Government have absolutely no idea what the subsistence level actually is. The present level of benefits is based on work done by Beveridge, extrapolated in 1948 from work that he had done before the war. Any relevance to present standards of poverty levels or subsistence levels is, therefore, almost purely coincidental.

We have previously debated this point on social security Bills. An amendment was moved by the noble Lord, Lord Morris of Manchester, on the need to research a minimum income. Our party policy is that when that research has been done, there will be a case for reducing benefits, where people misbehave, down to the level of the minimum income, but no lower. That is a vital distinction. At present, the Government cannot tell us whether or not they are meeting that condition. That is one fairly serious objection to the proposal in this clause.

The Minister may tell us that it is only such-and-such a percentage and therefore does not matter, but she will not know whether what she says is true. She will hope that it is, but she will not have any solid research base on which she can rest it. For this Minister, that is something rather unusual, and one would imagine that she must find that a little uncomfortable. The Minister shakes her head. I await her reply with a great deal of interest. She will have to justify that shake of the head.

The other question to be considered is the effect of the introduction of a measure of this kind. We should not introduce any measure without understanding roughly what kind of effect it is likely to have. On that, so far as I can understand, we simply have not the first idea, because we have not the first shred of information.

There are two theories on what may be the effect of disentitlement to benefit. One is the short, sharp shock theory—that it will make people wake up, pull up their socks, pull themselves together, get themselves a job, and the whole list of slogans that go with it. I may describe the other as the theory of throwing out the lifeboat—that it leaves people to drown. Until we have clear research evidence taken from a reasonable sample of people who have been subjected to disentitlement to benefit, we have no idea which of those theories is the case. To introduce a measure such as this, without any idea of its likely effects, is politically irresponsible.

We have a certain amount of anecdotal evidence, which indicates that it may cause extreme distress. However, we have no research about the level of debt among people on benefit. The Reverend Paul Nicholson keeps drawing our attention to this subject, which is the cause of a great many uncomfortable proceedings in magistrates' courts. We have no information on whether there is any connection between disentitlement to benefit and the level of indictable offences. We have one study, carried out by the University of Wales for South Glamorgan Tech, which discovered that among those in South Glamorgan aged 16 or 17 and not on income support, the word "shopping" means shoplifting. That may create a suspicion that such measures represent a temptation to increase crime. It would be nice to know whether that is actually the case. By itself, it is a slender piece of evidence, but it raises a question that deserves an answer.

We have no information on the correlation between disentitlement to benefit and the level of hospital admissions. We have no information on the correlation with the level of suicides. Only from private research by Crisis do we know that 347 people died among the homeless on the streets of London in 1993. I am fairly certain that your Lordships will not find that in any figures from the Department for Work and Pensions. The Government are therefore asking us to buy a pig in a poke.

We have here three different amendments. The first one, to which the noble Baroness, Lady Turner of Camden, has just spoken, invokes the other end of the network of rights and responsibilities, which is a part of the principle of subsidiarity. My right honourable friend Mr Kennedy has said that the way in which we raise our children is a private matter, not the state's business, and that the state is not the most competent judge of when and in what circumstances people are capable of going off and doing a job and the children are capable of flourishing. The state cannot judge whether the childcare facilities and the journey to work are compatible. Only those who are doing it every morning can judge whether they are two compatible journeys.

I shall not again remind the Minister of the speech made in our debate on single parents by the noble Lord, Lord Evans of Parkside. It was a moving speech. She remembers it perfectly well and I shall not take her through it again. But this lower end of the network of rights and responsibilities, which is implied in the words of the amendment about work "suitable" for the persons concerned, is also vital. So what the Government have done is taken one particular bit of the network of rights and responsibilities and attempted to isolate it from all the rest as if the rest did not exist. You really cannot do that; it does not work. Our amendment in the name of my noble friend Lord Razzall would exempt from that those who receive all the various disability benefits.

Here, again, what people with a disability or a physical handicap can do is in the last resort something only they can answer. Very often when one knows people who are subject to a disability, one is equally surprised both by the things that they can do and by the things that they cannot do. We cannot know exactly how much pain a particular series of manoeuvres causes to someone with a bad back. We cannot know how regularly they are able to do something which they may be able to do occasionally. In the end these must be matters for individual judgment; they cannot be matters for conscription. So, again, here the authority of the state is limited. That is the thinking behind our amendment.

We also have a considerable degree of sympathy with the amendment in the name of the noble Baroness, Lady Miller of Hendon, to leave out Clause 49 altogether. But I look forward to hearing the noble Baroness, Lady Miller, speak on that in due course.

Photo of Lord Razzall Lord Razzall Liberal Democrat

My Lords, I support my noble friend. In doing so, having made my remarks on the amendment we are discussing, I do not propose to repeat them on the following amendment. It is obviously a matter for the noble Baroness, Lady Miller of Hendon, whether she wishes to add her remarks at this point. As my noble friend indicated, three different ways are proposed in which to amend the clause. I shall not repeat the argument other than to say that, like my noble friend, I have considerable sympathy with the noble Baroness's amendment. Indeed, I initially toyed with tabling such a provision but, having seen the amendment of the noble Baroness, Lady Turner, I decided to press the Government at this stage to see whether they were prepared to make any concessions, with the possibility of returning to an amendment to eliminate Clause 49 altogether on Third Reading. However, that is obviously a tactical matter.

I should like to add to what my noble friend said. He was untypically kind to the Government, if I may say so. To use the phrase that we hear so often from the noble Lord, Lord Wedderburn, I find it absolutely incredible that the Government should attempt to insert Clause 49 in this particular Bill. The interchange that will take place between my noble friend and the Minister will indicate why the clause is entirely inappropriate in an employment Bill. Although I know quite a lot about employment law, as, indeed, do many noble Lords who are present, I find myself completely incapable of understanding the clause. The requisite knowledge that is necessary in order to make a decent fist of understanding Clause 49 is such that it properly belongs not in the Employment Bill and not in a Bill brought forward from the DTI but in a Bill brought forward from the department of the noble Baroness, Lady Hollis. I defy most noble Lords who have expertise on the Employment Bill to have the necessary expertise to scrutinise the clause properly.

It is significant that neither the noble Lord, Lord McIntosh, nor the noble Lord, Lord Sainsbury, feels qualified to respond to Clause 49 and that a Minister from another department is brought in in order to do that. It is for that reason that I encourage my noble friend to come in our side. To say that it is an abuse of the procedure is going too far, but it is entirely inappropriate that the clause has been plucked out in the way that it has. Presumably it is on the agenda of matters that the department of the noble Baroness, Lady Hollis, wanted to introduce, and some bright civil servant spotted the fact that it could be tacked on to the Employment Bill. I do not think that that is the way to legislate.

As I say, I support the noble Baroness's amendment and I have produced my own amendment. I suspect that unless the Government are prepared to make concessions, I shall ultimately at the last ditch, or even at the last stitch, be forced to support the abolition of the clause entirely. However, I shall see how matters proceed.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative 6:15 pm, 18th June 2002

My Lords, I support Amendments Nos. 118 and 119. I could follow the suggestion of the noble Lord, Lord Razzall, that I should at this point speak to Amendment No. 120. However, I shall not be tempted to do so simply because the Minister's response to Amendments Nos. 118 and 119 may enable me to cut short my remarks on Amendment No. 120. I do not want to keep on repeating the same remarks and I am sure that noble Lords, much as they like my remarks, do not want to hear them again and again. As I say, I most definitely support Amendments Nos. 118 and 119.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, I take it that there will a separate set of speeches on Amendment No. 119 as it is not grouped with Amendment No. 118; otherwise, I shall be happy to run my remarks together—

Photo of Lord Razzall Lord Razzall Liberal Democrat

My Lords, I hope that I may assist the noble Baroness. I indicated that I had addressed my remarks to Amendment No. 118. I shall formally move Amendment No. 119 later.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, I was working this morning on the basis of the Marshalled List. However, perhaps I can move across the amendments. I remind your Lordships what Clause 49 does. It calls to interview after six months the partners of those on IS, JSA, IB, SDA and ICA to explore various opportunities. That is it. I hope that I do not disappoint the noble Lord too much, but as he knows my answers in advance I do not think that he will be deeply disappointed or deeply surprised when I say that I shall not be enticed into a debate on the adequacy of benefits and the legitimacy of sanctions. I do not think that it is appropriate to do so.

However, what I want to emphasise, first, is that what we are proposing is standard practice for those on JSA. More importantly, the Welfare Reform and Pensions Act 1999, approved by Parliament, already ensures that those who receive disability benefits or carer benefits attend an interview. This clause extends that call to interview to the partners of those on disability benefits or on ICA—partners who are not themselves disabled and partners who are not themselves carers. Parliament has already agreed that if someone is disabled, he or she should none the less attend a work-focused interview in order to explore the opportunities available. It cannot be sensible that the disabled person attends but a carer who is only a part-time carer because he or she is not themselves on ICA, perhaps caring for 10 or 15 hours a week, or perhaps not caring at all, who may have a far more realistic opportunity of contemplating work, should not be called to the interview. Alternatively, as we do now, we can bring in a carer who is receiving ICA and looking after an elderly parent for 35 hours a week. However, at present, we do not bring in her non-working husband, who perhaps is doing nothing at all. He may be 49 years-old, fit and well but is neither working nor caring.

My first point is that we already bring to an interview those who are furthest away from the labour market—that is, the disabled person or the full-time carer. Therefore, I am puzzled that anyone should object to our calling to an interview those who are nearer to the labour market—that is, the partners who may have no impediment whatever to entering the labour market in due course.

My second point concerns whether the work-focused interviews are of any value. I know, because I have sat in on many of them, that such interviews do help to keep people attached to the labour market. Your Lordships know that, in order to get a job, one already needs to have a job or to live with someone who has a job. Obtaining a job is not a matter of a visit to the job centre; it is about knowledge of the labour market. The more one lives among a community of unemployed people, the less likely one is to know about the existence of a job, even if it only a few streets away in a London borough.

At the work-focused interviews at which I have been present, they not only discuss work opportunities but benefits; for example, housing benefits and some of the linking rules. They discuss the relevance of voluntary organisations, which might be helpful, for example, if someone is caring for a person with Alzheimer's disease. They might talk about pension prospects and the state second pension. But they also talk about training opportunities—for example, the right to learn IT skills free of charge at the local college in order to improve one's prospects of obtaining a job.

They also discuss job opportunities, help with interview skills, guidance on childcare facilities, and the better-off calculation, taking into account the new tax credits. If someone learns that, as a result of going into work, they may be £80 a week better off than when receiving benefit, I believe that we would consider that to be a useful piece of information. Given the inevitable complexity of tax credits, it is not the type of calculation that people can make for themselves on the back of an envelope. If they could, they would already be employable by the financial services industry. Most people do not have that knowledge-base. In a work-focused interview, they can obtain that type of information and it will help to inform their choices. The interviews are positive, helpful and unthreatening.

I do not know whether any of your Lordships have visited one of the new jobcentre plus offices which are being rolled out across the country next year. I can assure noble Lords that they are full of stripped-pine floors, comfortable sofas in navy and deep red and pleasantly angled desks. They are a cross between a building society and an airport executive lounge. Lone parents and disabled people have invariably said to me—noble Lords may say, "Well, they would, wouldn't they"—how helpful the interviews were. They have said that, even if they do not wish to return to work straight away, it is helpful to know how to set about doing so when they are ready.

That brings me to my third point. These are opportunity interviews. No one—not even the fit and well non-working husband of a carer—is required to work following the interviews. They are not receiving JSA. But we know that most people want to work when they feel they are ready, and the interviews help them to make informed choices. They may help them to overcome the barriers that they perceive to stand in their way.

In that case, one might ask: why make such interviews compulsory? Three years ago, I held the same view. I believed that they should be voluntary and I opposed compulsory interviews backed by sanctions. I have changed my mind on the basis of evidence, as I believe I should. The same difficulties that inhibit people in finding a job often inhibit them in taking the first step, which is to attend an interview.

Quite simply, when interviews are voluntary, the people to whom we most want to reach out in order to help do not come. When we first piloted the ONE scheme, people thought that the interviews were compulsory and a condition of benefit, and they turned up. When they learnt that the interviews were voluntary, the numbers fell away dramatically and they did not attend.

Obviously if interviews are to be compulsory, they must have a modest sanction. A compulsory interview without a sanction is not compulsory; it is voluntary. But the sanction is proportional and modest. Pace the noble Earl, Lord Russell, it is 20 per cent of the single person's allowance. That means that if a person did not have children but was receiving IB and the average housing benefit, he would have a total income of, say, £202.45. At 20 per cent of the single adult allowance, the sanction would be £10.79, or just over 5 per cent of that person's household income.

Of course, the sanction would end the moment the person walked through the office door. And it would not be applied until at least three attempts had been made to contact the person and until after personal contact with him had been made by telephone or through a home visit to ensure that letters were not being delivered to an empty house. Equally—I can enlarge on the matter if your Lordships wish—there is a shopping list of decent and reasonable good cause.

Thus far, I have no evidence that deferring a work-focused interview on the grounds of good cause has been a problem among our client groups. I believe that your Lordships will have gathered, as my noble friend said, that calling people to work-focused interviews not to make them work but to enable them to have the information that they need to make informed choices is helpful and benign. It is a matter of information and the knowledge network. Many people on benefits do not have that knowledge and therefore cannot make the necessary choices.

That brings me, finally, to the point of Amendment No. 118. The amendment seeks to ensure that a person is not called to an interview unless the interviewer already knows that suitable jobs are available. But how on earth does anyone know that? The personal adviser or the interviewer will not know, and it is probable that the person attending the interview will not know either. We are not talking here about lawyers and doctors, who have a fairly clear idea of what their job will be; we are talking about men and also, largely, women who have all types of skills but often not much work experience.

I remember talking to one woman who was receiving ICA and who had cared for her elderly mother for years but had little formal education. Her mother died. The woman was isolated, lonely, depressed and poor. She believed that she was unemployable until, at a work-focused interview, it was pointed out that she had precisely the type of experience and skills appropriate to working in a residential care home. She is now the assistant manager of a care home and says that we have helped her into a new life. Yet, until the work-focused interview, she considered that she was unemployable.

I also met a man who had had a fairly skilled heavy-manufacturing job. The jobs had gone. He was 52 years-old and resigned to being unemployed for the rest of his life. He wondered whether somehow—this is why he came to the interview—he could receive higher benefits, possibly by providing evidence of a disability. However, like most men, he had a driving licence. We paid for his driving lessons as an HGV driver. He is now busy, happy, employed and very appreciative of the help that he received.

The point is that, while many noble Lords may indeed have stayed in the same type of job all their lives and know what is out there in the marketplace, that is not true of many people who receive benefit. Without such an interview, they will not know where the skills that they have could take them—that is particularly true for women—or, as with IT, what new skills they could acquire if they so chose.

A man to whom I was close had, during his lifetime, worked as a poacher, part-time; a farm labourer, full-time; a fish seller when young; a bus driver on Saturdays; a gardener on Sundays; an unskilled builder when temporarily unemployed; a professional drummer most evenings; a trades union official when his mates were sacked; a parish councillor to extract playing fields from the farmers; a special constable to help out the police; and an MoD van driver in order to obtain a pension. On the basis of the amendment, in advance of meeting him and discussing options with him, how could any interviewer decide whether or not certain types of employment might be available for my father?

Photo of Lord McCarthy Lord McCarthy Labour

My Lords, I thank the Minister for giving way. I am becoming increasingly confused. The amendment states,

"at end insert 'connected with types of employment suitable for that person'".

The Minister appears to believe that, by that, we meant that that person thought it was suitable. That is what she said. Then she asked how one could expect a person to know. We expect the organisation to know, but the intention is not to bother a person with employment which is not suitable.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, I had hoped that my noble friend was listening to me a little more closely. That is precisely why I detailed the range of experience and types of job that a not untypical working-class man had had. How could an interviewer know, in advance of meeting him, what his experiences were and whether, as a result, he could move into a related job or whether he had the skills to port into such a job? That also applies to other working people and to their partners.

The amendment is back to front. Neither the interviewer nor the person being interviewed can possibly know until after the interview whether work is a realistic choice. That is the point of the interview. No one can or should prejudge that in advance. The amendment writes off people. Once a steel worker, always a steel worker. There are no steel worker jobs; therefore no interview; or, worse, if as the wife of the steel worker she is not working, never again will she work so do not bother to call her in. That is cruel, patronising and belongs to a world long lost.

Photo of Earl Russell Earl Russell Liberal Democrat 6:30 pm, 18th June 2002

My Lords, if the noble Lord, Lord McCarthy, were to bring the matter back at Third Reading making clear that what was at stake was a job that appeared suitable after interview, would the noble Baroness consider the amendment more favourably? We do not want it turning into a form of conscription.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, we already bring into work-focused interviews disabled people—people on a disability benefit some of whom are the furthest away from the labour market. We bring into interview people on a carers' allowance who are working 35 hours a week as a carer. Yet in all seriousness, noble Lords are saying to me that their partners—they may be doing no caring and are fit, healthy and well—should not be brought in for interview to discuss their future options. We bring in the disabled person. We bring in the full-time carer of the disabled person but we do not bring in someone who has no impediment vis-a-vis the labour market. Is that what noble Lords are saying? In that case, there can be no meeting of minds because that is genuinely perverse.

The point about an interview is to explore the option. No compulsion to work follows from that. We know in particular that, for example, for a carer on ICA the average time is about three and a half years. When that benefit ceases, the partner who is piggy-backing off that person's benefit will have to go into the labour market but will have lost attachment to the labour market having been denied the opportunity to come into work-focused interviews and the like.

No one can know in advance of the interview what makes good sense for that person. The interview gives the person being called—the partner of someone who is disabled but who is not a full-time carer or the partner of a carer—the information they may need on which to make an informed choice. I think that the work-focused interview gives people hope, opportunity, information and choice. Early findings from our research on work-focused interviews demonstrate that that is what people get from those interviews. I deplore any efforts to deny people the right to the information on which they make choices. I hope that my noble friend will be able to withdraw the amendment.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, I am not assuaged by the statements from the Front Bench. I return to the query that I posed when moving the amendment. Why should someone on benefit risk losing that benefit because his or her partner fails to show up for a work-focused interview. I fail to see why the claimant's benefit should be put at risk in that way.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, if my noble friend will give way, it is not a claimant's benefit. It is a family benefit in which the claimant and his partner are receiving a larger benefit than would be the case if there were just one of them. It is their joint benefit and they have a joint commitment to maintain their family standard of living. If it is reasonable—of course, I believe that it is—to pay a benefit on a family basis, if there is no impediment, it is not unreasonable to call members of that family in to see whether they can benefit from a work-focused interview.

Photo of Baroness Turner of Camden Baroness Turner of Camden Labour

My Lords, again I am not assuaged by that comment. The noble Baroness responded that the interview would be helpful, positive and unthreatening. But the threat is that benefit can be affected. A deduction of 20 per cent matters a great deal to people on benefit. I agree with the noble Lord, Lord Razzall, that this is not a matter for an employment Bill. It is a social security issue. If it had been part of a social security Bill we should have had a great deal of interest shown and detailed debate on this section. As it is, the issue is slipped into an employment Bill. In that context, it has not received the necessary scrutiny that it might otherwise have had. The noble Lord, Lord Razzall, is right. This is not an employment issue; it is a social security issue.

That does not make the situation any better. I believe that the provision should not be in the Bill. We have sought to be supportive and constructive. That is why we tabled an amendment in relation to a suitable type of work so that an individual would not feel that he or she was being intimidated into taking work which was not suitable. I detailed a number of situations in which people would not feel capable of taking work: children, perhaps disabled children, may need to be looked after. There may be other reasons why employment would not be a suitable option for a partner.

There is no point in pressing the amendment at this point in the proceedings. I may well come back to the issue at Third Reading. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 119 not moved.]

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, the amendment seeks to delete the whole of Clause 49 which the Explanatory Note describes as making,

"Full entitlement to certain benefits conditional on work-focused interview for partners".

I thank the Minister for her courtesy in taking the trouble to write to me at some length to explain the background and objectives of the clause; and for stopping me on more than one occasion in the Prince's Chamber to explain it in a little more detail. I hope that she will not consider me churlish when I say that I was not happy with what she told me. I did not understand everything she said. I agree with the noble Lord, Lord Razzall, and the noble Baroness, Lady Turner, that the issue may be more appropriate in a welfare Bill. Some of the initials used by the noble Baroness were unfamiliar to me. I am used to dealing with employment Bills.

In describing the provisions of the clause, I can do no better than to read the first paragraph of the Explanatory Note provided by the department. It states:

"Partners of working age benefit claimants who are themselves of working age will be required to take part in a work-focused interview, in default of which, benefit sanctions will apply. This will provide partners with the opportunity to discuss their skills and experience, the barriers they face in moving closer to the labour market and the help and support that is available to overcome those barriers".

The Explanatory Note continues for another seven paragraphs covering five closely printed pages. I find it difficult to imagine how claimants will be able to find their way through this legislative nightmare. At Second Reading, I said that it was an extremely badly-drafted clause. A partner is defined as a person who is a member of the same couple as the claimant. One then has to discover what "a couple" is. A couple is defined as a married or unmarried couple within the meaning of Part 7 of the Contributions and Benefits Act. That is a sloppy piece of drafting because the correct name of the Act is the Social Security Contributions and Benefits Act 1992.

At Second Reading, I complained about that and invited the Minister to clarify the issue by a drafting amendment but that has not been done. On the contrary, in her courteous letter to me the Minister simply points out that the "Contributions and Benefits Act" means the Social Security Contributions and Benefits Act 1992 in accordance with Section 191 of the Administration Act. For someone who is not familiar with this area, it is quite a long way round to find out what we are talking about.

I was eventually able to find out for myself, with some difficulty, and with the aid of the solicitor who happens to be my partner within the meaning of the Act. That was the only way in which I could sort out what was meant. But how is the average claimant going to do that? I have the greatest admiration for parliamentary draftsmen who usually do a magnificent and complex job under great pressure of time and the weight of vast volumes of legislation. Nevertheless, it is very difficult. Is there not enough paper and ink in the DTI to enable the definitions to be contained within one Act, even repeating definitions in other Acts, in order to save applicants and their advisers from hopping from one Act to another including one which is inadequately named?

Should this clause remain after this debate—I suspect that it will—I hope that the Minister will at least ensure that its provisions in this respect, which apply particularly to applicants who are not lawyers, will be amended to make them self-contained within it. The reason why I said that I believed that the clause would remain is because I said to the noble Baroness that really I wanted information. As I could not get what I wanted in a letter, I have tabled the amendment in order that the noble Baroness can tell the House exactly what the provision means and its effect. I was very glad to see the amendments tabled by the noble Baroness, Lady Turner, and the noble Lord, Lord Razzall, because they have enabled me to cut out quite a great deal of what I was going to say. They have made certain points even though they have not been totally accepted. The Government may like to think again on certain matters.

However, I wish to make two quite short points. We know from the Explanatory Notes that to operate the scheme of work-focused interviews will entail the employment of 650 extra civil servants at an estimated cost of £35 million. With engaging frankness, the Treasury admits that the benefits to the Exchequer cannot be estimated at this time.

I accept what the noble Baroness said: that the benefits enable the partner of the claimant to have access to information such as has never happened before, and that the evidence shows that such people are then able to get jobs. Everyone in the House knows, particularly the noble Lord, Lord Razzall, that the noble Baroness does not say that there is evidence unless it really exists. I am prepared to accept that this has been helpful. I expect that the noble Baroness will say a little more to me about it. If it is so, and if it helps people, the extra civil servants at a cost of £35 million would be justified.

The other point is that the measure does not place any requirement on the partners beyond taking part in the interview. They do not have to seek work. Do they really know that or are they coerced into thinking that they have to look for work? Is it made absolutely clear to them that this measure is there to help them in some way, but that they will not be forced into taking a job? That is a very important issue. It is wrong if the measure is meant to coerce them. One would like to think that everybody who can get a job will do so. I do not believe that we are in the business of forcing people in that regard.

As the noble Baroness knows well, I have always been interested in women's affairs. I suspect that in many cases it would be the woman partner who goes for the interview. Let us suppose that the partner of the man was of the same sex. I do not know if they would be described as "a couple". Would he also be forced to go for the interview? I suspect not. In that case, it seems to me that it is discrimination against heterosexual couples and particularly against women. I hope that I have not put a fly in the ointment for the noble Baroness. I beg to move.

Photo of Earl Russell Earl Russell Liberal Democrat 6:45 pm, 18th June 2002

My Lords, I was tempted to make only one speech, but since the noble Baroness, Lady Miller of Hendon, has not grouped this matter with the others, she has given me an opportunity to reply to what the Minister has just said, which I shall take.

My noble friend Lord Razzall accused me of being uncharacteristically kind to the Government. I believe that by now the Minister is able to recognise the appearance of Greeks bearing gifts, so I shall bring her a few more. She talked about the reasons why she changed her mind. She said that she had done so on the basis of evidence. I accept what she says. I believe it is true that certain people may be discouraged and refrain from taking the opportunity to attend a work-focused interview, although perhaps, having attended, they might have discovered things which might help them.

But one has to balance evidence one way against evidence from the other. One has to decide which is the lesser of two evils. That is why I believe that it is a very great pity that the record-keeping of the Department for Work and Pensions has meant that the downside of the evidence arising from this clause, if it should become law, will be permanently concealed from them. They will not know what harm is done by disentitlement to benefit. To be open to the evidence in one direction without being open to it from the other is a somewhat unscholarly procedure.

What the Minister said about partners calls for rather more wide-ranging thought than it has been given. We are in the middle of a very large social change, from a world in which it used to be assumed, or at least hoped for by some who could not actually achieve it, that the world consisted of men who worked and women who stayed at home and looked after children. Those days will not return. But what we do not know is whether we are moving to a world in which the two-income, two-career family is normal or whether we are moving to a pluralistic world in which some families have one earner and some have two. That is a question which is better decided by social evolution than by legislation. It is a question in which the state cannot be particularly authoritative and in which it cannot lay down the law for the great mixture of cultures which we have in this country.

I think of the effect of applying this clause in a Bangladeshi community, for example. It could cause rather more offence than envisaged. It is a piece of social engineering of the sort which all governments are tempted to undertake. But one should not really imitate Oscar Wilde and say that one can resist everything except temptation. Some temptations ought to be resisted and the temptation to impose a uniform pattern of expectation on the relations of the sexes in marriage or partnerships is one of them. We have to let this matter work itself out spontaneously because nothing else is going to be acceptable.

I also hope that the Minister will cease using the argument, "All they have to do is to comply". That is an argument which can be used in defence of any measure, however draconian, however authoritarian, however unjustifiable. It gives gross offence on this side of the House. I hope that we will not hear it again.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, the point about using that expression is that, as the noble Earl will know very well, some sanctions run for a defined period of time such as 13 or 26 weeks, and there is nothing the claimant can do about it. The point about saying, "All they have to do is to comply", is that at the moment, if after three efforts at contact they come through to the work-focused interview, the sanctions stop. That is the weight of it.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, is the Minister saying that if there is no compliance, the sanction never stops?

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, if there is no compliance, the sanction will continue. That is why we are trying to reach people through three efforts, including looking at good cause.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, I do not believe that the Minister has improved her case.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, it has been a very interesting short debate. I was very glad that the noble Baroness moved the amendment in the way she did. The clause seeks to bring people who are partners of anyone on benefits into a work-focused interview. We have already explored some of the basic issues. I want to approach the matter from a slightly different angle, but first I shall address the particular questions which the noble Baroness asked of me.

First, what is a couple? As far as I am aware, the definition of a couple, whether married or unmarried—for example, a cohabiting couple—has not changed for over 50 years. In a similar discussion the other day the noble Earl, Lord Russell, helped me out in that regard. The basic tests are well known in relation to social security. There is a shared financial arrangement; there is presumed to be a shared sexual arrangement; they possibly have children; and the relationship has some degree of stability. Those are the usual tests that are applied to married or to unmarried couples. It is also a test in relation to people who are permanently separated.

Before as a Parliament we discuss and determine the possibility of the Bill proposed by the noble Lord, Lord Lester, in law the term "couple" applies only to a heterosexual couple. Therefore, if two men or two women were living together in a sexual relationship, they would not be treated as a couple under social security law. That is the downside for them; on the other hand they would not gain advantages of inheritance rights, property and the like. Until, when or if the law changes that position, it applies only to cohabiting heterosexual couples.

I was pressed on the degree of coercion. It will be made perfectly clear that the interview will be exploratory, considering work and its options. The point is that there will be one work-focussed interview, six months after the benefit has started. At the moment there are no proposals for any subsequent or second interview and the benefits will continue to be paid. Therefore, it cannot be, as the noble Baroness pressed me, a coercive interview.

I want to return to the substantive point raised by the noble Baroness. She is absolutely right to say that largely this is a clause about women. Something like 79 per cent of the partners of those on JSA are women and of those on disability benefits, 84 per cent of the partners are women. The noble Earl, Lord Russell, is right to say that we are seeing profound changes. Why does it matter? The more I work in this field the more I am convinced that we need to address the issue of poverty through considering the position of second earners in the family. The noble Earl, Lord Russell, and my noble friend Lady Turner know as well as anyone that for a workless family the best way out of poverty is for someone to go into work.

Increasingly, it may be easier for the woman to find work than for the man. Roughly three-quarters of married women are in work. Over the past three years the number of jobs available to women has run at considerably higher figures than the jobs available to men. Increasingly, she is more likely to find work than he is. One of my favourite small statistics is that there are more widows in work over the age of 50 than widowers, yet too often we persist in seeing her as a passive dependent on him.

The noble Earl, Lord Russell, is absolutely right to say that that world view is changing and rightly so. For the sake of her family well-being, she, as much as he, needs to stay in touch with the labour market. That is why I am delighted that the new tax credits will be based on gross income and not on net income. That gives her much more of an incentive to go into the labour market without losing some of the tax credits.

That is not only for the benefit of the family—the two of them must make the decision—but it is for her own sake too. We know that 75 per cent of lone parents have come out of a couple relationship. We know that the poorest children in our society—they scar our society with their poverty—are children of lone parents who are not in work and not receiving maintenance. We know that if she was working while part of a couple, she is far more likely to continue to work as a lone parent, protecting herself and her children from long-term and persistent poverty. Anything that we can do to keep her as a married woman or a woman in a partnership in contact with the labour market so that she can make informed choices, not only helps to protect her family as a couple from poverty, but also helps to protect her and provides some future insurance should her relationship splinter so that she is on her own seeking to support her children.

Furthermore, if she is in work, she may well be able to build up pension rights, although given the complexity of the pension system, she may well need an informal and helpful, but positive, interview to explain how that may happen. If she is a carer, for example, she could receive access to a state second pension. A woman who was able to earn even a modest pension that is worth £25 a week or £100 a month for a couple who otherwise would be dependent on the state retirement pension with a pension credit, would now keep £60 of that. But I bet she does not know about that now; she cannot know; it is far too complicated given the technicalities of pension credits. A helpful, positive, unthreatening interview would give her that information. Her ability to work not only shelters the family from poverty while of working age and protects her from poverty should she become a lone parent, but it would also reduce the likelihood of carrying that poverty into old age.

Men are much more likely to have labour market contacts, a brother or a mate in work who can let them know when a job possibility is opening up. Women, especially if they have had children, may be many years away from having carried out waged work and they need far more help. They may need more confidence boosting, the offer of re-skilling, support through the early months and that is where personal advisers and work-focused interviews can take them through the territory. Virtually every lone parent whom I have met—I have met hundreds and hundreds—sing the praises of their advisers based on work-focused interviews who have helped them to make informed choices.

We want all women as partners to have that opportunity and to have the right to make choices and work-focused interviews can do that. Some of the partners may have health problems; as my noble friend Lady Turner rightly said, others may have young children; others may have multiple caring responsibilities and the interviews may be able to help them with better support mechanisms. Equally, they may want to work and not yet know how to start. This clause is about empowering women as partners with much of the information that the husband takes for granted.

Do not take my word for it. There is the evidence of the Select Committee on Education and Employment which held a joint inquiry into the ONE service and stated:

"ONE interviews offer positive advantages to all those claiming benefits. We take the view that the requirement to attend an interview is not onerous in itself; but the element of compulsion may well be necessary to bring along those people who are demoralised, isolated, or lacking in confidence, in order to connect them to the help and encouragement which is available".

The research that I have mentioned, of which I have seen the early findings and which will be published in July, confirms exactly that.

I hope that the noble Baroness will agree that I have tried to answer her specific points about partners and the like. If we are to help women to keep their families out of poverty, if we are to protect them should they become lone parents and if we are not to push poverty into old age, the most helpful way will be to bring them into work-based interviews where all those matters and ways forward that suit them can be discussed and explored. I hope that the noble Baroness will feel able to withdraw her amendment.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, having given the Minister the opportunity to make that clear explanation I thank her for it. If anyone else stood at the Dispatch Box and made some of the points that she has made I would be tempted to say, "That is all apple pie" and so on. However, I believe that the reputation of the noble Baroness is such that when she says that she has seen the evidence, which will be published in July, I believe that she has seen it and that it is good. She also mentioned what the Select Committee said. Despite the fact that I had doubts, and in view of the way that the noble Baroness has put the matter, I can see the argument. I believe that the House will want to see the evidence. I am happy to take the word of the noble Baroness so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

moved Amendment No. 121:

After Clause 51, insert the following new clause—

"UNFAIR DISMISSAL: PARTICIPATION IN INDUSTRIAL ACTION

(1) The Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52) is amended as follows.

(2) In section 238A (participation in official industrial action)—

(a) in subsection (2) the word "(a)" and the words ", and (b) subsection (3), (4) or (5) applies to the dismissal" are omitted; and

(b) subsections (3) to (7) are omitted."

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

My Lords, at earlier stages of the Bill we have set out at length the reasons for abolishing the eight-week rule. Amendments Nos. 121 and 122 view the matter in complementary ways. Later this summer there will be a major review of a number of aspects of the Employment Act 1999 which in many other ways has bedded down well. The Central Arbitration Committee, for example, has looked at trade union recognition. Everyone agrees that one aspect of the 1999 Act, which in this amendment is amended technically as a schedule of the Trade Unions and Labour Relations (Consolidation) Act 1992, was never satisfactory. It means that in a difficult dispute, such as the current case at Friction Dynamics in Caernarvon, at the end of eight weeks the 87 workers who had taken lawful industrial action were dismissed.

I shall restate the question we have always posed: since when did a fundamental human right have a shelf life of only two months? We must address the problem. No doubt we shall not solve it tonight, but it is important that we start to feed some credible thinking into the review. The eight-week rule has to go. One of the perverse consequences of the current system is that the employer has no incentive to make a reasonable offer. After eight weeks he can simply get rid of the workers. That is one of the rights and wrongs of the matter, but surely it is not a position we can live with. It is a difficult problem to solve.

One way to make progress is to consider why, after eight weeks, workers typically do not want to go to arbitration or be forced into a less than satisfactory agreement and to return on the basis that it will save them money in the long run. That is to do with the emotiveness of many disputes, but surely it is not a process that we are looking for in the modern world. It is a question of public policy. We want to look at why satisfactory arbitration or mediation schemes do not come into effect within the present ACAS arrangements as much as they should. That would have to be side by side with the abolition of the eight-week rule because then we would have to deal with the canard that people could be on strike forever. Of course, that is a ridiculous way of looking at the issue, but it has been posed in that crude way.

In a civilised society we need not only to abolish the eight-week rule but also to consider in the review changes in public policy so that workers' right unilaterally to go to arbitration are built into public policy at an earlier stage. I beg to move.

Photo of Lord Wedderburn of Charlton Lord Wedderburn of Charlton Labour 7:00 pm, 18th June 2002

My Lords, I rise to speak to Amendment No. 122, which has been grouped with Amendment No. 121 in the name of my noble friend Lord Lea of Crondall. Both amendments concern the dismissal of those who take part in lawful strike action.

English law unhappily is still in the age of the dinosaurs when most other modern systems, especially European systems, have moved on to a different evolutionary stage. As has been said, since the problem will be addressed in the Government's long promised review into collective labour law issues, it is right to make a preliminary statement at this stage in the hope that we can be assured the Government will look at the problem in the round. It must be placed on the agenda.

We were confirmed in that belief by the remarks of my noble and learned friend Lord Falconer in Grand Committee:

"We will begin the review in May or June this year"— it is now quite late in June—

"The Government will include within the review an examination of the Act's provisions on the dismissal of strikers".—[Official Report, 21/5/02; cols. CWH 291-292.]

Our amendment speaks of a stoppage of work, which is protected within Section 238A of the Trade Union and Labour Relations (Consolidation) Act 1992, as not constituting a breach of the contract of employment. It states that further provision would have to be made in our law that such lawful industrial action would have the effect of suspending the contract of employment and then exceptions would have to be made in regard to obligations arising under it. In the last respect, I refer to a suspension of the employer's obligation to pay wages, no doubt taking account of the continuance of certain obligations such as the obligation to preserve confidential information. That is a common part of systems that understand that lawful industrial action suspends the contract of employment.

The question of whether it is right that workers should be lawfully dismissed from their jobs by reason of taking part in industrial action even when that action is protected on the part of their trade union after a proper ballot, notice and all the other required procedures in the 1992 Act, must be looked at.

I must speak carefully to the amendment since its object is to put the issue on the agenda in a preliminary way. The case that I am arguing, which is that one needs to go a little further than the amendment in the name of my noble friend Lord Lea, is often met with misunderstanding, and sometimes misrepresentation. The matter would not raise an eyebrow in most jurisdictions, particularly in western Europe. It has been accepted in the 20th century by employers in Germany, France, Italy, Spain and elsewhere, but it has not really been confronted by employers in Britain.

When a worker takes part in collective industrial action, in the eye of a large number of international standards and in jurisdictions throughout the world that person does not by those standards break the contract of employment. The reason is that the right to take part in collective industrial action is regarded internationally and in those systems as a basic human right. Jurisprudentially it is difficult to see why the exercise of a basic right can be made into wrongdoing, especially by contractual obligation. The human right to take action to stop work collectively is to be regarded as something that inheres in the worker as well as the organisation.

The reason it is not recognised in the United Kingdom is that since 1906 our law has concentrated on the basis that it is adequate to promote the protection of those who organise and induce industrial strike action, leaving aside the individual and in effect not changing the old master and servant principle that industrial action is a breach of an obligation owed contractually by the worker; that the servant who goes on strike is guilty of a breach of contract and has no other rights. The individual worker is still essentially governed by the same principles as those springing from the Statute of Labourers 1351.

The difference between protecting the inducement or organisation of industrial action and protecting the action of individual workers remains fundamental in our law when it does not reign throughout most jurisdictions elsewhere. The definition of what constitutes industrial action or a strike varies in individual jurisdictions, but modern systems suspend the contract of employment in relation to normal, lawful strike action. The French principle in the Code du Travail and in the constitution since 1946 is that,

"a strike does not break the contract of employment unless the employee is guilty of serious (other) misconduct".

That means misconduct apart from exercising the right to stop work. Similar legal consequences flow from the Italian, Spanish and German constitutions, and from elsewhere. In each system appropriate exceptions are made to the basic concept of suspension, as I mentioned earlier.

As our law stands, the breach of the contract of employment in Britain, as the Donovan report set out as long ago as 1968, will normally result from virtually all industrial action. It is time that Parliament debated the matter, and that the Government reviewed the issue in the round—in particular because the principle that a right to strike is a right and should not amount to a breach of the individual's contract of employment falls under many international standards by which we are bound. One needs only to mention the United Nations International Covenant on Economic, Social and Cultural Rights, the Council of Europe's Social Charter, and especially the International Labour Organisation's Convention on Freedom of Association (Convention No. 87/1947, as supplemented by the convention of 1948).

The bodies in the ILO—the International Labour Organisation—such as the Committee on Freedom of Association and the Committee of Experts—have held for decades that the right to strike is,

"one of the essential means available to workers and their organisations for the promotion and protection of their economic and social interests as guaranteed by the Convention".

In their reports, the ILO's Committee on Freedom of Association and Committee of Experts have frequently shown that United Kingdom law does not accord with that standard. The governing body has accepted those reports. As government Ministers constantly point out, it is true that the governing body has not in fact adopted a specific paragraph on the United Kingdom. But it is impossible to read the ILO records without knowing that the governing body has accepted those reports from the committee and from the experts as meaning that UK law does not accord with that basic principle of a right, as opposed to a liberty, for trade unions to take industrial action.

The European Social Charter of 1989 affirmed:

"The right to resort to collective action in the event of a conflict of interest shall include the right to strike".

In Article 28, the European Union's Charter of Fundamental Rights 2000 affirmed:

"Workers and employers, or their respective organisations, have in accordance with Community law and national laws and practices, the right to negotiate and conclude collective agreements at the appropriate levels and, in cases of conflicts of interest, to take collective action to defend their interests, including strike action".

In that formulation of the Charter of Fundamental Rights to which we subscribe, it is true that the phrase,

"in accordance with national laws and practices", is included. But it is impossible to believe that that intends to abolish the basic right to take,

"collective action to defend their interests, including strike action".

The Council of Europe's Social Charter has been interpreted as not including certain limited types of industrial action. It means a complete cessation of work. We have, therefore, included the words "stoppage of work" in our amendment to take account of that. But under the conventions of the ILO and the European charters of various kinds, the UK has also been much criticised—and this must be borne in mind in the review—in making illegal all forms of what are now called "secondary" and "sympathetic" industrial action. That principle does not accord with international standards, especially those of the ILO.

It is also true to say—this is a very serious issue for the Government—that the matter has been considered many times by the Council of Europe's experts and governing authorities, as well as by the bodies of the International Labour Organisation. The United Kingdom has been condemned in both bodies in respect of its failure to observe the fundamental principle of a right for workers to take strike action.

There is voluminous literature on the matter. But in a recent article in the spring edition of the International Journal of Comparative Labour Law and Industrial Relations for 2002, one of the many journals in which the scholarly literature has again and again brought this matter to light, Professor Tonia Novitz and Dr Paul Germanotta write:

"UK defiance in the face of international criticism would seem to flow from two complementary and inter-related factors. The first is the limited status of international conventions under UK law: there are no means by which to seek the enforcement of ILO Conventions and the European Social Charter in the national courts. The second is the perception that economic dictates must take precedence over international obligations. This can be attributed to the pressures that UK governments have felt to attract and maintain international investment".

They also refer to some of the excuses given for that failure. British Ministers have frequently defended our failure to institute a right to strike in the same manner as the other systems to which I referred.

In putting this on the agenda, one must face the fact, as my noble and learned friend Lord Falconer said when replying to a similar case made in Grand Committee, that:

"This is a very radical step. It would in principle overturn long established law on the effect of industrial action on contracts of employment that my noble friend Lord Wedderburn set out in full for us. It would make it considerably more difficult for employers to protect what they would regard as their legitimate business interests during prolonged periods of industrial action. It is therefore not an approach that readily commends itself to the Government, but again I refer to the review".—[Official Report, 21/3/02; col. CWH 292.]

I very much hope that the Government will not approach the problem that Amendment No. 122 puts to them on that rather pre-judged basis. It would change a rule—an ancient master-and-servant rule—very fundamentally. Indeed, it would go beyond the amendment moved by my noble friend Lord Lea of Crondall; but, with great respect to him, I believe that it is a logical consequence of his correct argument that, at present, we have an arbitrary eight-week rule that limits what is a human right. An eight-week limitation on a human right is very odd. It is also very odd to say that individual strikers are in breach of their contract of employment but that for eight weeks the employer can do nothing about it. It would be much more sensible to face up to the core issue of the problem.

The Government cannot solve the problem tonight, but I very much hope that we shall receive an assurance that this logical consequence will be on the agenda for discussion in the review; that it will be fully argued; that the literature on the subject will be properly addressed—something that no British government have ever yet done; and that the arguments in respect of the international standards to which we do not conform at present will be looked out sensibly and without prejudgment by the Government. I know that this asks a lot of them, because it will not be a popular discussion among employers and their organisations. Indeed, the CBI, the Engineering Employers' Federation, and the Chambers of Commerce have already expressed alarm at the very fact that there will be a review. It is time for the United Kingdom to look at its law in a manner that takes regard of international standards, which other systems have not found it impossible to accommodate. I support my noble friend's amendment, but hope that the review to which he referred will take account of our Amendment No. 122.

Photo of Lord McCarthy Lord McCarthy Labour 7:15 pm, 18th June 2002

My Lords, naturally I want to support Amendment No. 122, but it is important to begin by looking at what it actually says. It is an attempt to direct attention to what we believe to be the long-term solution, but it is also, in a sense, an attempt to specify how constructive the solution is. I draw noble Lords' attention to subsection (2) in particular, which reads:

"The Secretary of State shall make regulations by order to provide for such industrial action having the effect of suspending the contract of employment— that is, the basic solution—

"and, subject to such exceptions as are specified— so we are saying that there can be exceptions, if they are agreed—

"the obligations arising under it".

I should like to return to a comment made by my noble and learned friend Lord Falconer in Grand Committee. We put down an amendment designed to do something about the eight-week rule and he said at col. CWH 292 that we were seeking to disturb a "carefully constructed compromise". I do not believe that the eight-week agreement, or concession, or movement, was a "carefully constructed compromise". It was the best that the trade unions could get at the time. It was not that they liked it; it was all that they could get from an incoming Labour government. It was not a "carefully constructed compromise" which he suggested needed time to bed down. If the Government are saying that we have largely solved the problem by a "carefully constructed compromise" which must have time to bed down, then what chance is there that we are going to get any significant change in the promised review which is about to begin?

I believe that the Government must accept that it was the best that could be obtained at the time. As my noble friend Lord Wedderburn said, the whole issue goes back a very long way to 1351. I would rather that we go back at least as far as the struggle in the 19th century for the trade union movement to rid itself of the effects of common law liability. That struggle went on. Several times the trade union movement thought that it had achieved what it wanted to achieve by various statutes. Common law liability developed new forms of liability. That was a very long political struggle that has influenced our attitude to the whole question under review. It went on until the 1906 Trade Disputes Act which was a political struggle and a political victory.

In 1906 the trade union movement thought that it had established what it required—immunities for unions which lasted a long time—and that that would deal with the issue. At that time, if someone had asked about the workers who might be dismissed during the course of a strike, I believe there would have been several answers. One answer would have been that in collective bargaining—and this is an issue which arises in collective bargaining—one of our objectives at the end of a strike is to negotiate a no-victimisation understanding or agreement.

As the unions saw it in 1906, the solution to the problem was that if the union funds were beyond the reach of common law and if union action was covered by effective immunities, if there were problems—for example, if there were employers who were looking for victimisation of workers on strike—that could be settled as an issue at the end of the strike. No-victimisation was an important concern in industrial disputes. If one looks at the history of the 1920s, 1930s and beyond, many strikes and major disputes in this country dragged on longer than needed because the unions were refusing to return to work unless they could obtain some protection for their members.

If one had asked why there was not some form of suspension of the contract, the fact is that in that period there were no frameworks of individual rights at work of the kind we have today. Now we can look at the situation and say that if we have protection for discrimination, if we have protection for unfair dismissal, if we have a whole range of directives coming from Europe, then why do we not have individual protection for the individual worker in a strike situation? We have a different situation from that which faced the trade union movement, employers and the government in the years before the growth of individual rights.

In addition, the immunities no longer exist in the way that occurred after the 1906 Trade Disputes Act. Now the Government have accepted that and, in effect, the trade union movement, broadly speaking, has accepted that part of the Thatcher legacy. We must have balance before we have strikes. We now even have to tell the workers that they are breaking their contract, or that they may be breaking their contract, and they may be dismissed when they go on strike. They did not happen in 1906. We now have to give proper notice and, as my noble friend Lord Wedderburn said, in effect the protection which the trade union movement has is limited to primary action. There is no protection in secondary action.

Therefore, immunities provisions are considerably more narrow and more specified by law, and the whole of the worker's individual rights at work have been widened. As my noble friend Lord Wedderburn said, the world of individual rights is now an international world. It is the international norm that that situation should exist. Therefore, in effect, it is known everywhere that they exist except in America and this country.

That is why we asked for the review to consider the option of suspension. We have to ask ourselves why there is so much resistance among British employers. I do not want to set this aside as though it did not exist. I believe the answer is that many British employers have an exaggerated view of what suspension could mean. When one discusses it with some well informed people, they believe that it results in workers not only not being sacked but actually being paid during the period of strike.

First, nobody is suggesting that we have the doctrine of suspension; that people are going to be paid for sitting idle while the strike goes on. It is the absence of pay—the fact that the worker has no resources during the strike— which is the killer factor on the worker's side. Similarly, on the employer's side the killer factor is that he is denied supply. It is the interaction between the sanctions of supply denial on the employer's side and pay denial on the worker's side which brings most strikes to an end—not the question as to whether or not people have or have not got suspension.

Secondly, I do not believe that most people who oppose this in the way that many employers oppose it actually realise that we can have restrictions in the labour force; that the employer would possibly be free to replace the workers on strike. We are not suggesting that there should be a suspension policy; that the employer cannot seek to replace the worker, or transfer the work outside the area of the worker. We are not saying that we would guarantee that nobody would be declared redundant after the strike. We are saying that the worker cannot be dismissed because he has broken his contract. However, if the strike lasts a long time then the worker may find that the job has disappeared. As specified in our amendment, we are also saying that we can consider the issue of exceptions.

Finally, there is no sign that where that right exists, where it is the case that the doctrine of suspension applies, that this transfers the power from the employer to the workers. It is merely a factor in the general mix; it is merely a civilised way of conducting industrial relations; it is a civilised way of dealing with the question of the status of the worker during the period of the strike.

However, one might ask, "Why make so much of it? It does not fundamentally affect the power balance. If it could be introduced with the use of exceptions; if it does not mean that the workers are sitting there being paid, why make so much of it? Why demand it? Why is it preferable to a change in the period of protection or any kind of idea that might be put forward?".

I believe that certain points can be made. Nowadays, loss of a job—especially loss of a good job, and especially loss of a good job where a worker has been employed for some period of time and hopes for further progression—is a much more serious matter than it used to be. We are trying to advance high wages and commitment to the organisation. That is dependent on continuity of a contractual relationship. That is why we want to protect it in a period of dispute.

Secondly, one has to prevent the unjustified assumption that people have been dismissed for misconduct. If we break our contract of employment, most people think we have done something reprehensible which strikes at the root of the contract. If someone loses their job in a strike, it is assumed it is because of some industrial misconduct. But a strike is not industrial misconduct. It is wrong to think of it as such. It is a perfectly lawful action. It should not be associated with the notion of breach of contract.

So there are many reasons why it is a positive action to change the Bill as proposed. It is the gateway to civilised industrial relations. And if we do not take this action, we are bound to get employers like Friction Dynamics who will exploit a situation. They will deliberately drag out the period of negotiations until they get into a strike situation. They will not advance any settlement. They will sit and wait for the eight weeks to run out and then dismiss the labour force. That is not a civilised way of resolving problems in industrial relations.

We ask the Government, in their review, to look at this option very carefully. I have thought for a long time about the matter. I cannot see any long-term solution to the problem other than something based upon the notion of suspension. I support the amendment.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation) 7:30 pm, 18th June 2002

My Lords, these three amendments draw us into a debate about the effectiveness of the protections against dismissal for taking certain types of industrial action. These protections were introduced in the Employment Relations Act 1999. We debated the same or similar amendments in Grand Committee and I shall therefore repeat the arguments my noble and learned friend Lord Falconer used then in resisting the amendments.

I begin with Amendments Nos. 121 and 145. These seek to re-write substantially the changes introduced by the Employment Relations Act 1999. They seek to make it unfair in all cases for the employer to sack those taking protected industrial action. That is achieved by removing various parts of Section 238A of the Trade Union and Labour Relations (Consolidation) Act 1992 which currently qualify the protection against dismissal in these circumstances.

As my noble friend Lord Lea reminded us, the Government are about to undertake a major review of the Employment Relations Act 1999. The comments of my noble friend setting out some of the arguments are a valuable input to that review. Although the review's terms of reference have not been published, we have made it known that the Act's provisions on the dismissal of strikers will be included within it.

The review gives us an opportunity to examine how the new law has operated in practice. It is certain that the experiences at Friction Dynamics will feature prominently. However, it is worth remembering that Friction Dynamics is but one example where strikers have been dismissed. There are very few others. Also, the Friction Dynamics case is as yet unresolved. Various complaints to tribunals have been made but those will not be heard until the autumn. It is difficult to judge how the new protections have worked until the complaints are heard.

We shall consult in detail during the review. This will allow all sides to express their opinion and feed in their evidence. Only then will the Government decide whether the law in this or other areas of the 1999 Act needs to be changed. However, if we conclude that legislative changes are required, we have promised to introduce the necessary legislation in the life of this Parliament.

I therefore ask my noble friends not to press their amendments. I am sure that they will have many opportunities to put across their views to the Government on this issue in the course of the forthcoming review.

Amendment No. 122 would in effect make it unfair to dismiss any person taking protected industrial action because it would remove the main grounds for dismissal; namely, that the striker had broken his contract of employment. As I said in Grand Committee, my noble friend is proposing a very radical step. I am sure he accepts that. In principle it would overturn long established law on the effect of industrial action on contracts of employment. It is therefore not an approach which readily commends itself to the Government.

In the light of my remarks, I am sure that my noble friend Lord Lea will understand that the Government cannot support the amendment.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

My Lords, so many points have been made on the two major amendments that all we can say at this stage is that, as the Minister said, the review is intended to be wide-ranging and nothing will be excluded from it. To that extent the review must go into the fundamentals of the main thrust of the two main amendments. Some of the more radical suggestions put forward may not prove to be practicable when looked at in depth. But the review is a good opportunity to examine them.

My noble friends Lord Wedderburn and Lord McCarthy have gone deeply into the principles of the nature of the contract of employment. Suffice to say the Minister indicated that the review will take on board the wide range of suggestions made. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 122 not moved.]

Schedule 7 [Minor and consequential amendments]:

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

moved Amendment No. 123:

Page 76, line 31, at end insert—

"( ) In section 5 (regulations about claims for and payments of benefit), in subsection (5) (application to statutory sick pay and statutory maternity pay) for "and statutory maternity pay" there is substituted ", statutory maternity pay, statutory paternity pay and statutory adoption pay"."

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, in moving Amendment No. 123 I shall speak also to Amendments Nos. 128 to 131. These technical amendments to Schedule 7 simply ensure that the appropriate minor and consequential amendments concerning statutory paternity and adoption pay are made to the Social Security Administration Act and the Employment Rights Act.

Amendment No. 123 rectifies an oversight by inserting reference to statutory paternity and adoption pay into the part of the Social Security Administration Act that deals with some of the finer administrative details. This amendment will enable us to make clear in regulations some of the minutiae of how claims and payments are administered, as existing references in the Act already enable us to do for statutory maternity pay. For example, it will enable us to specify in regulations that payment calculations involving fractional amounts are rounded to the next whole pence.

The remaining amendments in the group put right inaccuracies that have crept into a few of the paragraphs that amend the Employment Rights Act. I ask noble Lords to accept the amendment.

On Question, amendment agreed to.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

moved Amendment No. 124:

Page 77, line 33, at end insert—

"In section 212A(1) (claims and proceedings to which ACAS arbitration scheme applies)—

(a) after "tribunal" insert "under, or", and

(b) after "contravention of" insert— "(za) section 80G(1) or 80H(1)(b) of the Employment Rights Act 1996 (flexible working),", and

(c) in paragraph (a), for "the Employment Rights Act 1996" substitute "that Act"."

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, in moving Amendment No. 124, I shall speak also to Amendments Nos. 126 and 132 to 134.

I advised the Grand Committee that the Government would be making changes in connection with Clause 47 of the Bill concerning flexible working. These amendments by the Government concern those changes, comprising an exemption regarding the Armed Forces and provision for the Advisory Conciliation and Arbitration Services (ACAS) to provide binding arbitration in cases where the employer and employee are unable to agree. It is therefore appropriate that they are grouped together and I shall speak to all five as one.

Amendments Nos. 132 to 134 relate to the proposed exemption of the Armed Forces from the flexible working provisions. As was explained in Grand Committee, the Bill as currently drafted applies those provisions to the Armed Forces. However, all members of the Armed Forces are in a unique position of being liable to be deployed operationally at little or no notice if national interests require it. Those unique working conditions make it impractical to apply long-term flexible working arrangements to service personnel as envisaged in this new right to apply for flexible working. Accordingly, we concluded that the new provisions should not apply to them.

It is worth noting that the Armed Forces will continue to seek to comply with the spirit of the legislation, subject always to overriding operational requirements. They fully recognise the benefits of flexible working to individuals and their organisations.

Amendments Nos. 124 and 126 provide for ACAS conciliation and an ACAS binding arbitration scheme for disputes concerning flexible working. The main priority of the flexible working provisions is to foster dialogue between parents and employers in order to find a flexible working pattern to suit them both. As part of this commitment, we always intended that there should be a binding arbitration scheme prepared by ACAS to deal with disputes regarding requests for flexible working which cannot be resolved in the workplace. These minor and technical amendments will allow us to do that.

The provision for a scheme relating to flexible working will also help to ensure that as few cases as possible end up at an employment tribunal. Because the arbitration is binding, those who opt to use the scheme also waive their right to have their case heard at tribunal.

I am aware that concerns were raised during Grand Committee as to the low take-up of the current ACAS scheme. As I explained then, it is too early to assess the success or otherwise of the scheme.

That said, I believe that the flexible working provisions lend themselves very well to an ACAS scheme. Disputes arising under those provisions will be relatively straightforward, concerning whether procedures have been contravened or if a decision by an employer to reject an application has been made on the basis of incorrect facts. These are essentially factual rather than legal issues.

Amendment No. 126 has the additional effect of ensuring that conciliation is also an option in the resolution of any disputes arising out of the flexible working provisions. Again, that is entirely consistent with the Bill's key approach of ensuring that alternative avenues of dispute resolution are available and contributing towards keeping employment tribunals to a minimum. I therefore beg to move this sensible and necessary amendment.

On Question, amendment agreed to.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

moved Amendments Nos. 125 to 134:

Page 77, line 34, at end insert—

"The Employment Tribunals Act 1996 is amended as follows."

Page 77, line 35, leave out paragraph 21 and insert—

"In section 18(1) (claims and proceedings to which provisions as to conciliation apply)—

(a) in paragraph (b), after "168," there is inserted "168A,",

(b) in paragraph (d)—

(i) at the beginning there is inserted "under or", and

(ii) after "28," there is inserted "80G(1), 80H(1)(b),", and

(c) in paragraph (f), at the beginning there is inserted "under or".

Page 77, line 37, at end insert—

"In section 19 (conciliation procedure), at the end of paragraph (a) there is inserted "and"."

Page 78, line 1, leave out "12A" and insert "12ZA"

Page 78, line 2, leave out "12B" and insert "12ZB"

Page 78, line 9, after "tribunal)," insert "in subsection (1),"

Page 79, line 7, leave out "substituted" and insert "inserted"

Page 79, line 28, after "192(2)" insert "(e)"

Page 79, line 28, after "of" insert "Part 10 of"

Page 79, leave out lines 30 to 33 and insert ", after "103" there is inserted ", 104C"."

On Question, amendments agreed to.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

moved Amendment No. 135:

Page 81, line 15, at end insert—

"In section 23(5), omit the words "or otherwise""

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, in his response to the same amendment in Grand Committee, which was the last one to be called, the Minister began by saying that the debate on the Bill was,

"liable to end with a whimper, rather than a bang".—[Official Report, 22/4/02; col. CWH 549.]

I inform the Minister that I do not introduce amendments for fun as jokes, to waste time, or for anything other than proper and serious purposes. This one has such a purpose. If the Minister had treated our previous discussions and our subsequent correspondence with proper seriousness, instead of as a joke, perhaps he would not have been so dismissive of what is a perfectly proper amendment, to which it is clear that he has no answer.

For the benefit of those of your Lordships who have been following this matter with less than bated breath, or have not been following it at all, perhaps I can explain this very simple issue. Schedule 7 to the Bill deals with minor amendments to other Acts. Section 23 of the Employment Relations Act 1999 is described in its marginal notes as:

"Power to confer rights on individuals".

Subsection (5) states:

"An order made under this section may make provision in such way as the Secretary of State thinks fit, whether by amending Acts or instruments or otherwise".

Your Lordships will note the words "or otherwise" which the amendment seeks to omit.

On 4th December 2001, at Question Time, I asked the Minister:

"Can the Minister tell the House what the word 'otherwise' means in this context? Does it mean that the Secretary of State would be able to bypass Acts of Parliament or statutory instruments?".—[Official Report, 4/12/01; col. 702.]

The Minister frankly admitted that he could not explain what the words "or otherwise" meant, and offered to write to me, which in due course he did.

In the words of the old song:

"He sent me round a note, and here is what he wrote".

I shall quote it verbatim, because I want your Lordships to get the same full flavour of it as I offered the Grand Committee. He said:

"The use of 'or otherwise' were intended to ensure that an order made under Section 23 could also apply to rights to individuals by means of a free-standing provision rather than by an amendment".

He continued:

"This was simply to give the Secretary of State the flexibility to extend rights in the way that seemed best from the drafting point of view. The words do not extend her powers in any way".

There are only two ways to amend an Act of Parliament—either by another Act of Parliament or by a statutory instrument. There is absolutely no such thing as a "free-standing provision".

I asked the Minister in Grand Committee what this new constitutional device was, but of course he could not tell me. The only interpretation of "free-standing provision" has to be that the Secretary of State wants power to amend legislation by whatever means suit her, and by bypassing Parliament.

I invited the Minister to say whether putting announcements in the London Gazette or some obscure local paper would suffice. I suggested that perhaps a "free-standing provision" could be the amending of legislation by distributing leaflets via sandwich-men parading up and down Whitehall with their boards. Never mind posting an announcement on the Secretary of State's generally unread website, maybe she would simply open her office window and shout out the news.

This is a perfectly serious point. The Secretary of State is seeking power to amend legislation without—and I believe that it is without—parliamentary sanction. I know the Government keep on about this free-standing thing, but it is not appropriate. It is a dangerous precedent which should be decisively stamped on. In fact, I believe that this peculiar phrase had its origin when the draftsman became, in the words of William Gladstone,

"inebriated with the exuberance of his own verbosity".

He just stuck on the extra two words for no reason except mere prolixity. Any government, except perhaps this one, would say that this was a drafting error and would not try to attempt to justify it with meaningless gobbledegook about free-standing provisions. The Minister told the Grand Committee that. He said:

"The noble Baroness's amendment would simply take away the current flexibility for the Secretary of State to extend rights in a way that is best from a drafting point of view".—[Official Report, 22/4/02; col. CWH 550.]

He has certainly got that right. I want to take away the flexibility of the Secretary of State to amend legislation in a novel and previously unheard of way that the Minister did not—and, I suspect, cannot—explain. I do not believe that we have yet reached the state in this country where we can be governed by mere ministerial decree, which in fact is what "or otherwise" allows. The more the Minister continues to try to defend the indefensible and is unable to explain what is clearly the inexplicable, the greater the suspicion that the Government now wish to seize on a slip of the draftsman's pen and to create what I have just described as a dangerous precedent.

I should like to think that, just for once, this arrogant government will admit that they made a minor mistake, and not try to bluster it away. I know that the noble Lord will say to me, because he always does, that there is some reason. But, on the number of occasions that I have spoken to or written to the noble Lord he has been unable to give me any answer at all, until all of a sudden, up came this free-standing thing, which is unheard of anywhere. None of my parliamentary colleagues has ever heard of it. So I say to the noble Lord, more in hope than expectation, I beg to move.

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation) 7:45 pm, 18th June 2002

My Lords, Section 23 of the Employment Relations Act 1999 empowers the Secretary of State to extend the coverage of statutory employment protection rights by order to individuals not currently covered by them. Subsection (1) lists the legislation containing the rights in relation to which the power can be exercised. Subsection (5) permits the Secretary of State to make the extension to the legislation listed under subsection (1) in such a way as she thinks fit, whether by amending Acts, instruments or otherwise.

I shall now make a final attempt to explain the point to the noble Baroness. It is quite simple and really quite boring. I shall try to explain it again, but on condition that she removes the amendment and permanently withdraws it.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, I say to the Minister, "No, if you do not manage to convince me, I shall not withdraw the amendment; I shall divide the House".

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, in spite of that I shall try to explain the matter again.

The words "or otherwise" do not give the Secretary of State the power to extend any extra employment rights to any category of individuals; nor do they mean that the Secretary of State can make an order using a different process or extend rights without making an order at all. It is merely a question of how an order under Section 23 is drafted to apply employment rights to particular categories of individuals. As I explained to the noble Baroness in Grand Committee, the present wording of Section 23(5) enables an order made under Section 23 to extend rights to individuals by means of a "free-standing" provision in an instrument, if that appears preferable, rather than by an amendment to existing primary or secondary legislation.

The advantage of this approach might be that the order extending the rights would be easier for business to understand, because it would say what rights the individuals now have, rather than listing a series of Acts and orders that have been amended. It would also allow the Secretary of State to confer rights on particular groups in the most appropriate manner. That does not mean that we can put a notice in the press stating that employment rights are to be extended, and it is certainly not a device that would allow the Secretary of State to circumvent Parliament.

All of that is rather technical, so let me give your Lordships an example of how that will work in practice. If we were to extend certain rights to everyone called Doreen, "or otherwise" means that we could draw up a list listing the rights—that is, rights already established in law—and say that they applied to people called Doreen. Or we could draw up an order individually amending each piece of legislation conferring one of the rights so that those pieces of legislation said that the rights applied to people called Doreen. Both methods of drafting achieve the same result, but one may be better than the other. Of course, both methods require affirmative law. So it is a small technical point that is understood well by the lawyers; it simply concerns which way round we put it. It has no constitutional significance; it gives the Secretary of State no greater rights; it is simply a question of which way draft the legislation. I hope that that satisfies the noble Baroness and that, despite her fighting comments, she will withdraw the amendment.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, Section 23 is entitled:

"Power to confer rights on individuals".

Subsection (5) states:

"An order made under this section may make provision in such a way as the Secretary of State thinks fit, whether by amending Acts or instruments or otherwise".

The Minister came up with his explanation about all the different ways that the provision could apply to Doreen—I do not know whether that was meant to placate me and make me feel more kindly towards the Minister, although I always do think kindly towards him, even when I think that he is wrong.

I return to the point about "or otherwise". The Minister said that he has explained that to me several times. In fact, he has not, because the first time that I asked the question across the Dispatch Box, he did not know the answer. When I wrote a letter and spoke to him about it afterwards, he said that he did not see what the problem was—in other words, he still did not know. The first time that he came up with the "free-standing" explanation was in Committee. A few moments ago, I think that he said that in any case, an affirmative order would be laid. Did I hear him correctly?

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, the power to confer these rights exist in the basic legislation. The "or otherwise" is simply a question of which way it is phrased. If the noble Baroness is objecting to the power to extend those rights, that is in the basic legislation. As I explained, "or otherwise" simply means that it can be done in two ways: by amending each piece of legislation or by having a piece of legislation that states that the powers in those Bills apply to a group of individuals. It is as simple as that. In either case, an affirmative order is required, as is stated in the legislation.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

My Lords, the noble Lord said that lawyers would understand the provision. I have had two lawyers examine it and neither of them understood it. Neither did they understand it to mean what the Minister has just described. So I obviously cannot really accept what he is saying. But rather than divide the House at this stage, I shall read carefully the explanations that he has given and take them to the lawyers again. I have also spoken to people in the Library, who say that they cannot find any evidence of any such provision in any other Act.

Perhaps the Minister will talk to his officials and tell me where else we may find such a thing if there is one. This is a serious matter. If my interpretation is correct and the Minister's is incorrect, the provision would be inappropriate for any Bill. Apparently, it is not contained in any other Bill.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Conservative

Indeed, my Lords, and, as I said to the noble Lord, Lord Sainsbury, that was not mentioned, noticed or spoken to when the Bill passed through the other place. Neither did I spot it at first, but the minute that I did, I drew it to the Minister's attention and this is the first time—other than in Committee—that it has come up. The fact that a tiny little bit has been stuck there unseen has nothing to do with it. It has not been copied anywhere else. It has not been used anywhere else and I find it extraordinary. However, as I said, I shall read carefully what the Minister said and I shall most definitely take advice on it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 8 [Repeals and revocations]:

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

moved Amendments Nos. 136 to 143:

Page 81, leave out lines 24 to 26.

Page 81, leave out lines 36 to 38.

Page 82, leave out lines 2 and 3.

Page 82, line 4, column 2, leave out "Section 19(c)." and insert—

"In section 19, paragraph (c) and the word "and" immediately before it."

Page 82, leave out line 10.

Page 82, leave out lines 17 and 18.

Page 82, leave out lines 32 and 33.

Page 82, leave out lines 38 to 41.

On Question, amendments agreed to.

Clause 55 [Short title etc.]:

Photo of Lord Sainsbury of Turville Lord Sainsbury of Turville Parliamentary Under-Secretary (Science and Innovation), Department of Trade and Industry, Parliamentary Under-Secretary (Department of Trade and Industry) (Science and Innovation)

My Lords, Clauses 45 and 46 will enable regulations on fixed-term work to be made that will transpose the EC Fixed Term Work Directive and prevent pay and pensions discrimination against fixed-term employees. The amendment provides that those clauses will come into force as soon as the Bill receives Royal Assent, thus allowing the fixed-term regulations to be laid immediately. That time-saving measure means that the Secretary of State will not have to make a commencement order for the fixed-term regulations, as would otherwise be the case.

The Fixed Term Work Directive needs to be transposed soon in order to meet EC obligations. If we can lay regulations immediately on Royal Assent, employers and employees will have more time to prepare for their coming into force. That should ensure compliance with the regulations. We shall, of course, be producing guidance on the new legislation.

Most respondents to the recent consultation on the draft fixed-term regulations said that they would benefit from more time to prepare for the regulations. I hope that your Lordships appreciate the benefits of the amendment and I beg to move.

On Question, amendment agreed to.

In the Title:

[Amendment No. 145 not moved.]