Clause 1 - Enforcement notices

Part of National Minimum Wage (Enforcement Notices) Bill [Lords] – in a Public Bill Committee at 8:55 am on 27 February 2003.

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Photo of Henry Bellingham Henry Bellingham Shadow Minister (Trade and Industry) 8:55, 27 February 2003

It is a pleasure to serve under your chairmanship again, Miss Begg.

I am grateful to the Minister for the clear and concise way in which he has explained clause 1. The essence of the Bill is to restore the position to what the Government believed it to be and what Parliament believed it to be when the original legislation—the 1998 Act—was passed, but I should like to pursue one or two points that emerge from clause 1.

First, there is the six-year limitation. As we discussed on Second Reading, in the county courts there is a six-year statutory limitation period. Most of the cases go forward in the county courts, rather than in the employment tribunals, for the simple reason that a case in employment tribunals has to be launched within three months of the last underpayment. Can the Minister tell the Committee what percentage of the cases brought so far has been brought in employment tribunals? Is it a very small percentage? Are we talking

about 20 per cent., or 10 per cent.? It would be quite useful to know that.

On the six-year limitation, the Minister, Lord Sainsbury of Turville, brought to the attention of the other place the fact that companies only have to keep records going back three years. I made that point on Second Reading, and I hope that the Minister for Employment Relations, Industry and the Regions will elaborate on it today. Although he replied to most of the points made on Second Reading, I still want further clarification. If a company only has to keep records going back three years under company law, what happens if, for example, it has chucked out all its payroll records, but the employee who is claiming underpayment of the minimum wage has kept his pay slips and other relevant payroll information, and the case then goes to court? A company could be at an unfair disadvantage because the person who is taking the action will have information to hand, whereas the company will not. I want the Minister to comment on that.

The discussion in the other place resulted in an amendment being tabled to introduce the six-year limitation. As the Minister pointed out, before that, the period could have been infinite and the enforcement officers could have gone back more than six years, although it is very unlikely that they would have done so. The national minimum wage legislation only came in three years ago, so the discussion is academic. However, it is important for the future. Since Second Reading, I have been lobbied by one or two business organisations, which are concerned about the three-year rule for keeping records.

Will the Minister speak to his colleagues in the Department of Trade and Industry and the Treasury about the three-year rule? It probably makes sense that companies should not have to keep records going back more than three years, given the overall ambit of record keeping in the corporate sector, but perhaps they could keep payroll information for six years. That, at least, would obviate the set of circumstances that I have flagged up, in which a company is taken to court by an employee who has been unfairly treated and that employee had the information to hand. The court may say that the company got rid of its information legitimately under the law and therefore decide that, even though the evidence on the part of the employee was overwhelming, it could not make an award to him.

Will the Minister clarify another point? Am I right in saying that the six-year limitation applies only to Government enforcement officers, either from the Inland Revenue or from the Department for Environment, Food and Rural Affairs? Would it still be possible, in extreme circumstances that are hard to envisage, for an employee to bring a case on his own account? Does the six-year rule refer only to both kinds of Government enforcement officers? The Bill does not make that clear.

The Opposition are satisfied with the Bill and we supported it on Second Reading and in the other place. We feel strongly that when a problem arises like the one involving Bebb Travel, the Government are

right to act as quickly as possible to ensure that the position is restored to what it was before.