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Committee (4th Day)

Part of Trade Union Bill – in the House of Lords at 11:52 am on 25th February 2016.

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Photo of Baroness Wheeler Baroness Wheeler Opposition Senior Whip (Lords) 11:52 am, 25th February 2016

My Lords, I speak to the seven amendments in the group and the clause stand part Motion from the Labour and Liberal Democrat Front Benches. It is a large and important group, so I hope noble Lords will bear with me, as there are a lot of issues to address, including matters arising from the Minister’s last-minute publication on Monday of the skeleton regulations on facility time and check-off, and Tuesday’s debate on those and on which public sector organisations are covered by the Bill.

Our Amendment 92 is an important one with which to start this debate, because it is aimed at probing exactly what problem the Government are trying to address by implementing an arbitrary and blanket ban on public sector employers reaching voluntary agreements with trade unions to deduct union subscriptions from staff pay, often preventing the staff themselves freely and openly choosing this option for paying their subs. Ministers must be clear and concise about their concerns over the current system. What is so wrong with it that it has to be abandoned in this draconian way, and what evidence is there that justifies an established system, currently well supported and valued by employers, trade unions and their members, and recognised as forming a crucial part of local industrial relations, partnerships and frameworks, just being dropped? Unless the Government can come up with solid evidence and the objective justification called for by the Joint Committee on Human Rights, and unless they frame their arguments and comments in the context of displaying a far better understanding of the role and work of trade unions in a modern society than was so blatantly evident from Ministers throughout the Bill’s progress in the Commons, the only conclusion that can be drawn is that the main purpose of getting rid of check-off is to undermine trade unions, prevent them being able to organise in the workplace and represent their members, and attack and seriously weaken their finances. In other words, as my noble friend Lord Collins said at Second Reading, it is pure vindictiveness.

Amendment 92 is also aimed at ensuring that the check-off system remains central to partnership and staff engagement agreements between employers and unions in the public sector. It underlines the need for an ACAS code of practice to promote openness, transparency and consistency in check-off agreements. Central to the code is members having clear options on payment methods and employer costs in administering the schemes being clear and consistent across employing authorities and open to report and scrutiny. Our amendment would also make clear the open and agreed principles and criteria for assessing the admin costs of the check-off system, and for the costs to be regularly reported on and expressed as a percentage of the employer’s overall admin and HR costs.

The Government have three broad contentions for their proposals to ban check-off in the public sector. They say that check-off deductions are not modern and that everyone has a bank account, so what is the problem? They say that the relationship should be between the trade unions and the member and not involve the employer, and that the system and admin costs of deduction are a burden and should not be borne by employers or the taxpayer. If Clause 14 stands, private and voluntary sector employers will be able to continue to operate check-off, but public sector employers will not have this choice and will have their hands tied by central government—this from a Government who herald their commitments to localism and empowerment of local employers so that decisions can be made locally in the light of local circumstances and needs. We know from the debates on the earlier clauses that the Government have got themselves into a mess over this Bill in relation to the devolved national Governments. We will hear still more evidence of the mismatch between the Government’s rhetoric on this brave new world of devolution and the proposals in this Bill in the debate on Amendment 97, from my noble friends Lord Harris and Lord Beecham.

In the Cities and Local Government Devolution Bill, the noble Baroness, Lady Williams, made many bold statements about how central Government have to stop interfering in local decision-making. I quote just one of the typical examples, when she said:

“Through the decentralisation that the Bill will enable, each city will be empowered to forge its own path, to play to its own strengths and to find its own creative solutions to the particular challenges that they face”.—[Hansard, 8/6/15; cols. 652-53.]

But they do not seem to have the autonomy to decide locally and continue tried and tested industrial relations agreements and partnerships, of which check-off is a key element, which underpin the positive, everyday working relationships between employers and trade unions. No wonder not a single public sector employer has spoken up to support the Government’s check-off ban. It is very pertinent that key councils at the forefront of devolution—for example, Manchester and Sheffield—are among the many that have expressed dismay and concern. Can the Minister explain how Devo Manc is to be delivered in Manchester, for example, including closer integration between NHS and social care, at the same time as long-standing partnerships and agreements with trade unions are being dismantled, while local reps scuttle around thousands of workplaces to talk to members and get them re-signed up so that they can carry on representing them?

One thing that we keep coming back to in this Bill is the question of fairness, which is no less relevant to the proposals for banning check-off. How can it be right to single out the public sector when the private and voluntary sectors can choose to continue the schemes? Why is it right to exempt some organisations that the Government favour, such as the police and crime commissioners and chief constables, who will be allowed to decide whether they want to operate check-off, although the choice will be allowed only for police officers and not for police staff?

The impact assessment fails dismally to provide any evidence or justification for the Government’s proposed ban. It assesses just two options: do nothing, or get rid of check-off. There is nothing in between the pros or cons of the current system, how it could be improved and made consistent across employing authorities, or ensuring that trade union members continue to have choice on paying their subscriptions by the method that best suits them, in the light of their work, circumstances and financial situation, be it by check-off, direct debit or a cash-based system. Will the Minister explain why a middle way was not even considered? The impact assessment dismisses this option in two sentences on the grounds that if trade unions paid the admin the policy objectives would not be delivered. Why did the policy objectives not include all the options?

Let us also address head-on the Government’s contentions about modern employer/trade union relationships in the workplace. It is nonsense to say that check-off should not be part of a modern industrial relations partnership and framework. Check-off arrangements are not only practical; they are a demonstration by employers that they recognise trade unions and are willing to undertake collective bargaining, and demonstrate that employees, employers and trade union representatives are all working together to deliver quality services to the public. That is also true in the private sector. Private employers such as E.ON and United Utilities, the retailer Tesco and many other large companies facilitate check-off because they find that it is beneficial to positive industrial relations.

Check-off systems enable employers and unions to know their workers and to match and verify information for ballots and other arrangements. They create a transparent relationship between the employer and the union. The Government’s approach is blinkered and embedded in false assumptions and ignorance about the day-to-day work that trade unions do in the workplace. Of course, there is a deafening silence about what sanctions will be imposed on employing authorities if the Government’s ban is not carried out for whatever reason. Where is the fairness in ceasing to offer public sector members the choice that private and voluntary sector employers will have in having union subscriptions deducted from pay? Time and time again, the underlying, and false, impression put across by Ministers is that union members are shanghaied into paying via payroll. In the words of the Minister Nick Boles, they are “locked into check-off”. It is not so. They currently have the choice of payment methods, but my amendment recognises that this choice needs to be underlined and enshrined in a code of practice applicable to all partnership and check-off agreements.

Check-off is trusted by trade union members and helps them manage their finances. For unions, the starting point is not, “How can we get as many members as possible on to check-off?”. Instead, particularly for the hundreds and thousands of members in low-paid jobs, the starting point is, “What is the best system for members to enable them to maintain their membership eligibility and entitlement to key benefits?”. Bearing in mind the high percentage of low-paid trade union members across the public sector, it is a real fear that, under a direct debit or cash-only system, they will lose their eligibility for representation, key legal benefits and workplace indemnity insurance.

Public sector employees are paid through bank accounts but many members have current or savings accounts that support only cash withdrawals, not direct debits. They fear they will be overdrawn if their pay is paid in late, resulting in the direct debit being refused and bounced back or a bank charge being incurred. This is the world of the low paid, particularly those in part-time work or who have to do two jobs. They are living from day to day and week to week, but the impact assessment does not seem to be aware of them. If you are on a low income, you do not manage your bank account as easily as some of the throw-away remarks by some Ministers seem to imply. More direct debits just add to the worry about and fear of being overdrawn and not able to pay your bills. Why was no work undertaken in the impact assessment on assessing groups particularly vulnerable to the changes, such as people with disabilities and low-paid women in particular?

I referred earlier to the Joint Committee on Human Rights’ call for the Government to provide objective justification for their differential treatment in removing the contractual right of public sector workers to check-off. On the first day in Committee, the noble Lord, Lord Pannick, argued strongly that if the Government do not compromise on some of the Bill’s proposals, including check-off, they will be at much greater risk of a human rights complaint being taken seriously by the European court. I look forward to the Government’s response on that.

It is all pretty differential, unfair and arbitrary. Charities and other voluntary organisations and private sector businesses will be able to continue to operate check-off. Indeed, major charities such as the Stroke Association and Macmillan underline that give as you earn or salary sacrifice pay-deduction schemes are the easiest and simplest to use. The nonsense and unfairness of the Government’s position is underlined by Amendment 97ZA, tabled by the noble Lord, Lord Kerslake. He sets out a possible system of deduction at source for trade unions parallel to that currently operated for charities. If deduction at source is okay for charities—and, of course, we think it is—then why is a similar system not acceptable for trade union members?

There is also a list as long as your arm of deductions from pay that are currently operated by councils and authorities and other public authorities, presumably destined to continue. These are either promoted by the Government, such as pension opt-ins and the payment of additional voluntary contributions or student loan repayments, or operated by employers to help staff to manage their finances, from deductions for professional fees, council tax, credit unions, childcare, rail season ticket loans through to the repayment of bicycle loans and staff benevolent fund contributions. Trade unions are the largest voluntary organisations in this country. Where is the fairness and justification for singling out public sector trade unions?

We strongly support Amendment 94 from my noble friend Lord Lea and Amendment 95A from my noble friend Lady Donaghy, which confront the Government’s attempts to keep extending the scope of the Bill in terms of the number of public bodies covered by the check-off ban through the issue of future regulations, and to make unilateral changes to contracts of employment or collective agreements. This is not an appropriate use of secondary legislation.

Noble Lords will know that there was an extensive debate on Tuesday on the,

“funded wholly or partly from public funds”,

wording in the Bill and the so-called skeleton regulations published the day before, covering the facility time and check-off publication requirement clauses and check-off Clause 14. Both drafts were obviously hastily cobbled-together last-minute work and caused even more confusion. They extend the check-off ban even more widely than was previously thought, fail to provide clear guidance on the types of organisations that will be covered and do not help us in our role in scrutinising Clause 14 or, for that matter, Clauses 12 and 13. The Minister promised to review this whole issue and clarify it by letter and consultation. I ask her to confirm that new Section 116B(2) and (3) in Clause 14 are included in this review. Will we get another, not so skeletal draft of the regulations before Report?

Lastly, I shall deal with the third area of concern for the Government, the so-called admin burden of check-off for employers. Our amendment underlines the importance of costs being clearly identified, recorded and published, honestly and openly. No one tries to hide the cost of current agreements. Trade unions made it clear in the Commons Bill Committee that they agree that the taxpayer should not have to bear the cost, in response to an amendment from Conservative MP Jeremy Lefroy, which the Minister, Nick Boles, promised to consider further. I am grateful to the noble Lord, Lord Balfe, for his work on this issue and for bringing forward Amendment 93, which I hope the Government will accept in principle today along with our amendment. There are further considerations on who should be the body responsible for drawing up a code of practice or judging the costs judged by employers to be reasonable, but these can be further discussed before Report. The point is that if the openness and transparency of costs issue is dealt with and trade unions pay reasonable admin charges so that check-off is cost-neutral to employers and the taxpayer, what is the problem?

Before closing, I have some further comments on the impact assessment. If the Government were hoping that it would provide the evidence and balanced and reasoned arguments to meet the JCHR challenge of objective justification and the widespread criticism and concerns over this clause, they hoped in vain. How can a balanced view of risks and costs be arrived at when only two start options are considered—do nothing or end check-off? Little evidence is provided to substantiate the actual costs of the so-called admin burden on employers, which are completely exaggerated when the systems are essentially electronic data-based payroll exchanges between employer and trade unions, with usually annual electronic exchanges of amendments and updates.

The reference to there being “some” resulting loss of good will with employees and trade unions through the measures is a huge understatement. Of course there will be, as current agreements and arrangements are thrown up in the air and abandoned. Some 90% of public sector unions currently provide check-off, and millions of trade union members in thousands of workplaces will be involved in the changes to payroll systems in the rewriting of their existing collective agreements.

As the final part of this group, we support my noble friend Lady Donaghy’s Amendments 123A and 124A calling for Clause 14 to come into effect five years after the passing of the Act. This is the period of implementation that we have argued for changes to the political fund. This and check-off present huge organisational and resource challenges to trade unions to seek agreement from members for alternative pay methods and arrangements. It is a nonsense for the Government to imply that they are being generous and conciliatory by extending the implementation period from six months to a year. UNISON alone, for example, will have to reassign 80,000 members to direct debit in thousands of large and very small workplaces.

Finally, I, my noble friend Lord Collins, the noble Lord, Lord Stoneham, and the noble Baroness, Lady Burt, oppose that Clause 14 stand part of the Bill. We do not accept this clause. The debate will highlight the fundamental flaws and problems and the unfairness and injustice of singling out the public sector, its employers, trade unions and trade union members for actions which will not apply in the private and voluntary sectors. Clause 14 threatens the partnership arrangements at every level of public services in England, Scotland and Wales, including local government, emergency services, education and the NHS, undermining the positive industrial relationships built up over years between the bulk of employers across the public sector. Amendment 92 in my name and Amendment 93 in the name of the noble Lord, Lord Balfe, address stated government concerns about transparency and openness; about public sector employers having the choice of operating check-off systems and trade union members having the choice as to which method they choose to pay their subs by; and about ensuring that unions meet any reasonable admin costs for the operation of check-off so that there is no admin burden to the employer or the taxpayer. So, as I said before, what is the problem?