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I have two questions each for you. Mike, your organisation has been very clear about its concerns about the Bill, which has been described as counterproductive and as having potential unintended consequences. Given your representation of members working in HR who obviously have daily front-line experience of dealing with trade unions, industrial disputes and individual disputes, will you explain why you came to those conclusions about the Bill?
Mike Emmott: Thank you very much for that question. Basically, we think it targets a problem that was more evident several years ago than it is today. We do not really have any evidence that the problem has become more acute or needs tackling. In particular, we do not know that, if there is a problem, it should be tackled in this manner. We do not really see the need for legislation on this topic. We do not believe it is likely to have the intended effect of reducing industrial action, or that it is likely to contribute to greater productivity, innovation or performance generally, because it does not really address the issue of relationships on the shop floor, which we see as being at the heart of productivity.
We are more interested in the relationship between employer and employee or workforce and we are a bit concerned that the Bill does not address that in a constructive way. Those are our main reasons. We feel that, particularly in the public sector, the issue of employee engagement—the word “partnership” has been used—the attitude of looking to develop trust, is the way that the Government should tackle the continuing, quite real problems that they will encounter, in the public sector in particular.
Okay. That is very helpful.
Steve, you and Thompsons have said that significant aspects of the Bill are essentially unworkable. Will you explain why you believe that to be the case and whether you believe that the Bill will actually lead to an increase in probably expensive litigation if, as you say, parts of the Bill are unworkable or unenforceable?
Stephen Cavalier: Thank you for the question and thank you to the Committee for the opportunity to give evidence today. First, I endorse the evidence given by the witness from Arriva that it is necessary for the Bill to be clear and workable. Putting it bluntly, it is not. It is unworkable in several respects. We heard from the CBI about the law of common sense, which seems to have gone out of the window in some aspects of the Bill. The Bill needs to be workable but it is unworkable in several ways and, in fact, some aspects seem to be designed deliberately to make it difficult, if not impossible, to comply with the provisions. I shall give the Committee a couple of examples.
On the 40% threshold, the Government kick off by saying that the unions must ballot all members who are affected by the dispute. That is simply wrong; it is a wrong statement of the law. They have to ballot those they expect to call upon to take action. They build on that by trying to introduce these thresholds in a way which is very unclear. The thresholds apply where people are normally engaged in important public services—those are not defined—or in ancillary services. The consultation paper for the consultation, which concluded on 9 September —we have obviously not seen the Government’s response—tries to list a whole load of jobs which are included in “important public services”. The Government recognise the difficulty in doing that—it is very unclear—and it is exceptionally difficult to see how a trade union, when balloting, is able to decide whether or not a particular member or group of members is covered by that definition when the information is in the hands of the employer. You may have a mixed constituency, some of whom are covered and some of whom are not. For example, in a school where some teachers are teaching pupils of under or over the age of 16—so they are partly covered and partly not—it is complete chaos as to whether they are actually going to be covered.
On the ballot paper point, an earlier question mentioned the importance of clarity on the ballot paper. It will be a lot less clear if we have ballot papers as proposed by this legislation. What on earth is a reasonably detailed indication—it is an oxymoron, it is internally inconsistent —of the matters at issue in a dispute? As everybody who knows about industrial relations will know, often one of the issues in dispute in a dispute is what actually is in dispute, so I do not know quite how that is going to be stated clearly. This is not about providing information for members; it is about providing ammunition for employers.
The intention here is clearly to encourage a lot of litigation and that is going to be expensive. It is very unclear and an awful lot of detail needs to be sorted out, even, for example, in terms of describing types of industrial action. We had a meeting with Government lawyers and I felt rather sorry for them. They were trying to explain what the provisions meant—I happen to have a lot of time for Government lawyers and the work they do—and they could not explain what types of industrial action they were talking about. They said, “Overtime bans, work to rule”. Well, those are not legal terms of art. That creates more confusion, rather than less.
May I ask a specific question about clause 14 and the certification officer? Wide-ranging powers are being suggested with regard to changing the role of the certification officer. Essentially, the certification officer will be able to bring a complaint, investigate it, decide on which witnesses, make decisions over the matter, impose fines and enforce them. Do you think that creates a very unwelcome blurring of the lines between investigator and adjudicator?
Stephen Cavalier: I am not sure that it blurs the lines; I think it probably removes them altogether. There will be a lot of applications to be certification officer on that basis, I should imagine, given the sheer range of powers. The pity is that the certification officer does a very good job of arbitrating in disputes between union members and the union—so, the individual member and the union as a collective. This completely changes that role. It means that the certification officer himself has to initiate investigations, can demand documents and demand immediate explanations of documents, and can appoint investigators, who may not actually be employed by the certification officer—they may be from accountants, for example, at enormous expense to the unions themselves, who then have to pay a levy for it.
It is interesting that unlike in employment tribunals, where applicants have to pay a fee to bring a claim, no one seems to be suggesting that a complainant needs to pay a fee before they go to the certification officer. Then, to extend that, to be able to impose fines and the fact that enforcement orders by the certification officer can be enforced not just by the certification officer but by individual members as well, goes well beyond any rule-of-law or natural justice considerations.
We heard from the CBI and the British Chambers of Commerce that all this Bill does is modernise the way in which trade unions behave. It does not introduce a fundamental change in the trade union rules that apply, so it is very difficult in that circumstance to understand why you describe the Bill as unlawful and unwarranted. In the example that you use of not being able to tell what the nature of the dispute is, surely it is in the interests of transparency that that should be settled and be clearly on the ballot paper.
Stephen Cavalier: The problem here—I was in a meeting with some employers’ lawyers and they were expressing it this way—is about forcing such a detailed description of all the matters at issue in a dispute at the start. The lawyers’ concern is that unions will be forced to draw the dispute as broadly as possible to include every single aspect, and moreover, that it is likely to escalate matters because unions will feel reluctant to compromise on individual issues in the dispute, as employers will otherwise argue that consequently the dispute has changed and that there needs to be a re-ballot. It forces extreme behaviour, if you like, and it is likely to mean that a dispute escalates.
In terms of being unlawful, we mentioned in our submission the areas where we believe it contravenes the European convention on human rights and the International Labour Organisation code. The other point to make is that, as the Regulatory Policy Committee said in its response to the impact assessment, there is absolutely no evidence that it will work. In terms of modernising industrial relations, the Regulatory Policy Committee has said that there should be separate assessments of the 50% threshold and of the 40% threshold. It completely rejects the analysis of the likely impact of the threshold on the outcomes of disputes, because there is no analysis of the impact of a threshold on voting behaviour and turnouts in the elections themselves.
The Government are consulting on draft regulations that would repeal the restriction on providing agency staff during industrial disputes. What are your views on these proposed changes? Could they further undermine industrial relations?
Mike Emmott: Our view is that the consultation paper overstates the likely impact of removing the prohibition on employment agencies supplying workers on a temporary basis during industrial disputes. It is already possible for employers to recruit temporary labour without any difficulty, provided that they do it directly. For some of the reasons that emerged from the last witness session, we think that issues of training and safety, never mind the availability of qualified staff, will very considerably reduce the impact of this, which is the third of the consultation issues. It is likely to be pretty much a non-event, except possibly in some cases where employers—maybe large employers—have close relationships with agencies, and on a daily basis they take on quite a lot of temporary labour. It might be difficult to know whether or not particular workers were engaged in replacing workers who are on strike. But in general, we do not think that this particular part of the Bill is likely to have any major impact. I do not speak for recruitment agencies or recruitment businesses, but I think that many of them will be quite reluctant to get sucked into industrial disputes.
Stephen Cavalier: Indeed, the recruitment businesses’ own organisation, the Recruitment and Employment Confederation, has said that this is a very dangerous proposal which it does not support. The Regulatory Policy Committee itself said that there was absolutely no basis for the Government’s assertion that 22% of days lost would be solved by this. Moreover, there are very good emergency arrangements in place to ensure that cover is provided in the public sector, certainly in the fire service and in midwifery. I am sure that people would much rather have those arrangements than agency workers brought in to put out fires or to deliver babies.
My questions really relate to the certification officer, which you present in your evidence as a sort of big bad wolf, and you seem very concerned about the prospect of the additional powers. I put it to you that really the prospect of having a certification officer is surely a sensible solution to difficulties with compliance, and an appropriate response to situations where non-compliance may have occurred. What strikes you as so outrageous about having to produce documents?
Stephen Cavalier: Well, first, the certification officer is not a big bad wolf, and his current iteration is doing a very good job. I would be very interested to hear from the Government what consultation there was with the certification officer about his own powers and his current arrangements, and whether he felt that his powers needed to be extended, and indeed what consultation there was with other agencies on the impacts of these powers. The purpose of the certification officer was to enable individual union members who felt that they were getting the wrong end of the stick from a collective issue to have a voice, which they would otherwise not have had. It is not about allowing outside agencies to influence the state regulator or to put pressure on the state regulator to initiate action. I cannot see how a state regulator can be impartial if they can be prevailed upon externally to take action. Also, if they were funded in the way that is suggested, that would completely alter the nature of the role.
Stephen Cavalier: Well, I am not sure that it is to establish whether there has been non-compliance. Non-compliance with what? At the moment if there is an issue to do with rules or statute, a member can complain to the certification officer. What is actually changing here is to take it beyond that and start, for example, requiring unions to report to the certification officer details of industrial action, which are really none of the certification officers’ concern. A certification officer is essentially there to deal with internal matters within unions to do with disputes and rights within unions, whereas here they are talking about the possibility of any person initiating a complaint with no written notice, and calling on unions immediately to produce documents and immediately to explain documents—it is difficult to see what the purpose of it is. It is very intrusive. This would certainly impact on unions’ own regulation and their democratic right to organise and be accountable, which is likely to call into question the European convention and ILO matters.
Stephen Cavalier: The certification officer does not range around the country investigating trade unions and looking at what they are doing to find out whether he has a concern. Where are the concerns going to come from? At the moment, the certification officer is dealing with complaints that are made to him from legitimate concerns about individual union members or groups of members. If he thinks that that complaint has some grounds, he can deal with that, and in the course of that hearing, he is entitled to ask for documents and to have documents produced in the same way as an employment tribunal.
Stephen Cavalier: For example, were you suggesting that there should be a labour inspectorate that could decide whether it thought there were poor labour practices going on around the country and could call for employers to produce and explain documents, like a health and safety inspector can, that would be a very different situation. The proposal here completely alters the role of the certification officer from deciding on legitimate complaints to going out and fishing around to try to find issues. Where would the certification officer make these decisions? Why would they be making these decisions? The Law Society is very concerned about the complete change in this role and the fact that it fundamentally alters the nature of his role.
I am grateful, Sir Edward. I understand from social media links that I read yesterday that many of the suggestions in the consultation on the Trade Union Bill are likely to be withdrawn, although we have not had that confirmed yet. I find that disappointing, because I was personally looking forward to a sustained bout of wildcat or secondary tweeting. The Government’s proposals treat abstentions as no votes. How would it impact, for instance, on the likelihood of a trade union ballot reaching a threshold if everyone who wants to vote no just abstains? Would that raise any prospect of legal challenge, given that the ILO has confirmed that only votes cast should be taken into account in industrial action ballots?
Stephen Cavalier: On the point about thresholds, as the Regulatory Policy Committee has said, the likelihood is that the existence of the thresholds will have an impact on turnout and behaviour. In terms of modernisation and coming back to the previous question, if we are genuinely looking to modernise trade unions, electronic and workplace balloting are essential for that and for increasing turnout. You are absolutely right that the provisions under the ILO convention specifically say that an abstention should not be treated as a no vote, and that is a clear area of potential illegality. There are not similar thresholds in any other European Union member states or Council of Europe convention states. The Bill introduces a new requirement that is likely to be found to be unlawful. In particular, the treating of an abstention as a no vote is likely to be subject to legal challenge.
Thank you both for giving up your time today. I want to turn to the clauses about the transparency of political donations. Stephen, I noticed that in your submission you made the point that you do not think any other bodies are subject to similar provisions. I am not a lawyer, so perhaps you can help me, because my understanding from my business life is that the Companies Act 2006 requires the annual disclosure of political donations by companies and, further than that, requires active shareholder consent and a resolution to be passed, rather than an opt-out system, which is obviously a higher threshold than what we have today. I think you used the language “oppressive”. Would you consider the system of corporate donations we have today to be oppressive?
Stephen Cavalier: I would like to see a lot more transparency around corporate donations—things such as the Midlands Industrial Council, which is the major contributor to one of the political parties—and funds that are channelled through intermediaries into political parties. I would like to see shareholders having a real say in whether there are political donations. We have heard the point about the wider political implications of the political fund rules on broader campaigning. There is already complete transparency of the donations that are being made.
It is extraordinary to suggest that every trade union whose total donations exceed £2,000 per annum has to give details of every single individual donation, what it is used for and to which recipient on an annual return each year. That is an extraordinary intrusion of privacy on the individuals who make those donations. I do not see any equivalent provisions in relation to companies. I defer to you if there are such provisions.
The difference would be that a company cannot just take money from shareholders, give it to political parties and ask shareholders to opt out; they have to acquire active shareholder consent. Unions today do not have to do that. Do you think that balance is right?
Stephen Cavalier: Well, that is not a correct characterisation of the situation. At the moment, unions have to ballot every 10 years for a political fund. You have heard from Mr Hannett already; 93% of USDAW members voted in favour. That is quite a common percentage among trade unions. Every single union must have a political fund ballot every 10 years. Every single member is legally required to have a notice when they join that gives them the opportunity to opt out of the political fund if they want to. Those provisions already exist.
The measure suggests that that should be changed, by the way, on the basis that within three months of the Bill becoming law, every single trade union member who pays the political fund will have to write in by post or by hand to opt in, with no opportunity to do so electronically. It completely fails to take into account that, as matters stand, unions are required by law to have a political fund rule adopted under their own constitutional provisions, which is approved by the certification officer. If you change the law in this way, every single union will need to change their rules, have those rules approved by the certification officer and get their members to sign up, which they simply cannot do within three months. To my mind, it is another example of a deliberate attempt to draft the legislation in such a way as it cannot be complied with by trade unions.
This is the basic issue of fairness—of people’s contributions being taken without their active consent at the time of membership. We heard in earlier evidence that some unions support that but it is very much not the widespread practice among all unions to provide that information to their members. If you support transparency, it is clear today that that transparency does not exist across the entire board.
I have several questions. First, do you agree that there is a danger in introducing thresholds—the impact that it will have on some gender equality issues, for example? Shift changes impact workers trying to pursue equal pay issues and the like. Secondly, is there a new danger of public bodies having to reissue new, individual contracts on the basis of opportunities to check-off and those sorts of issues? Do you see any impact on the devolved Administrations given that your organisation has offices across the UK?
Stephen Cavalier: First, on the equality point, the TUC has already submitted evidence. There is a disproportionate impact of thresholds on women workers; it is absolutely clear that there is a discriminatory impact. On the question of check-off and facility time, we are also a large employer. We have check-off and facility time and we are pleased to do so. It is something that we have agreed with our workforce and it works very well for us. I very much endorse the comments made in a 2012 paper by called “Stop the Union-Bashing” by Robert Halfon MP, who says that Whitehall should not dictate to employers and that it should be a matter for employers to agree facility time. I commend that paper to the Committee. It is certainly right that employers should agree facility time and check-off. It is a matter for them.
There are serious issues here associated with the devolved Administrations. As I understand it, they have the right to determine these arrangements within their own spheres. This does cut across that, and it does so in a very negative way. It is very concerning that the impact assessment itself—in fact, I think the European convention assessment that the Government have produced says specifically that this removal of existing contractual arrangements and collective agreements may have retrospective effect. That is a serious potential breach of article 1, protocol 1 of the European convention.
Thank you both for coming. You have both spoken about thresholds and their potential impact, but neither of you seem to have focused on the key point that matters to the country at large, which is that it is so unfair to our commuters, our parents and so on that their public services can be brought down for days on low turnouts. We heard earlier from Arriva that on a 17% ballot, 50% of their buses were out for a day, causing massive disruption to its passengers. Do you not accept, in principle, that it is right to deal with that?
Mike Emmott: Our view is that although it is conceivable that the increased threshold will influence the outcome in some cases, it is quite unclear whether it is going to make striking more or less likely. There are lots of way of causing problems. We do not have a view on whether or not the thresholds are right in principle. We simply take the view that they are just as likely to cause more trouble as they are to reduce it.
The point is not whether it makes it more or less likely, in my view. The point is that if the strike goes ahead with the sort of turnout we will require, the public are much more likely to accept it. That is surely the point. At the moment, these strikes are happening on a very low turnout. Do you accept that we are right to deal with that?
Stephen Cavalier: Can I come in on that premise? The Regulatory Policy Committee has said that there is no evidence that the thresholds would have that impact. Strikes are not going ahead on those low thresholds. One particular example was given by a colleague from Arriva, and what he said about inward investment in response to the question was very interesting. The fact of the matter is that the current legislation and the current situation have not prevented the Governments of France, Germany, Holland and other countries from investing in the UK rail network and owning train operating companies. There simply is not that problem.
So you do not think we should be doing anything about thresholds. You think it is right that schools, buses and other major public services can be brought down for a day or more on the basis of very low turnouts. In principle, do you think that is fair?
Mike Emmott: Simply, if you have a ballot, the unions are going to take into account the likely response by members and choose situations where they are more likely to win rather than lose, and why not? Once you get a big majority in favour and it is clear and transparent, I think that legitimises the action. Whether it makes it more acceptable I am quite doubtful of, but you have to take account of the fact that you may be pulling in members who actually support the action that is being called rather than appealing to some supposedly moderate majority who do not want it.
We have heard a lot about schools, hospitals and transport. Obviously, those are devolved matters. We are hearing from the Scottish and Welsh Governments later on today. In your view, is there a fundamental breach of the devolution settlement here and potential legal proceedings as a result of some of the measures in the Bill impacting on decisions that are actually fully devolved to those Governments and, indeed, in a number of cases, to local governments across England?
Do you agree with that, Mike? Do you think there is a risk here? You deal with Governments, public services and businesses across the UK. Do you think there is a problem here in terms of devolution?
Mike Emmott: I do not know what the devolution settlement would say specifically about these collective issues. I understand something about individual conflicts, tribunals and so on. We have not consulted members, but I think it is appropriate for these issues to be dealt with on a national basis. It is going to be quite odd for employers dealing with different rules applying in different jurisdictions, where there may be issues that go across the whole of the UK.
We have come to the end of our time. Thank you for speaking to us. I thank the Members. We are going to adjourn until 2 pm, when my colleague Sir Alan Meale will take the Chair. He is a very kindly gentleman, so I hope you will be equally well behaved with him. It has been a very good session, and everyone has got in who wanted to.