Clause 2.—(GENERAL EXCLUSIONS FROM RIGHT TO REDUNDANCY PAYMENT.) (Hansard, 21 July 1965)

§ Mr. Thornton
I beg to move Amendment No. 11 Clause 2, in page 2, line 32, at the end to insert: or (c) by giving notice (not being such shorter notice as is mentioned in paragraph (b) of this subsection) which includes, or is accompanied by, a statement in writing that the employer would, by reason of the employee's conduct, be entitled to terminate the contract without notice. It might be convenient to discuss at the same time Amendments Nos. 107 and 108.

§ Mr. Speaker
If the House so pleases.

§ Mr. Thornton
Amendment No. 11 fills a gap in subsection (2) of Clause 2 which was pointed out by hon. Members opposite in Committee. The purpose of subsection (2) is to make it clear beyond 1709 doubt that an employee rightly dismissed for misconduct, except when he is already under notice, in which case the matter would be dealt with under Clause 10, is not to be entitled to redundancy payment, irrespective of whether there may also have been redundancy at the time. Paragraphs (a) and (b) of the subsection provide respectively for the situation in which the employer dismisses without notice or with less notice than he would otherwise have been required to give if the worker had not misbehaved.
The subsection does not, however, provide for the case in which the employer decides to let the employee work out the full notice to which he otherwise would have been entitled, despite his misconduct. The point was made in Committee that if the employer so chooses we should not run any risk of his being penalised under the Bill. It is this gap which the Amendment fills.

§ Mr. Speaker
The hon. Member said that he wished the House to discuss, at the same time, Amendments Nos. 107 and 108. Unfortunately, I have not yet been able to find them on the Notice Paper.

§ Mr. Thornton
They are on page 4593, Sir.

§ Mr. Speaker
It would be a great help if in future Departments would give a hint of the proposals which they intend to make. There will then be no delay.

§ Mr. Godber
I do not think that we need spend any time on this Amendment. The Parliamentary Secretary has echoed the arguments which were used in Committee. We are very glad that we convinced him so completely. He has accepted the point in full and I thank him for doing so.

§ Mr. Thornton
I beg to move Amendment No. 13, Clause 2, in page 3, line 15, to leave out from "offer" to "constitutes" in line 16.
This Amendment arises out of an undertaking which I gave to the Standing Committee to look again at the drafting of this subsection. Hon. Members who served on the Committee may recall that that undertaking was given without commitment. I do not claim for a moment that the Amendment goes all the way to 1710 meet the case which was argued by the Opposition. It is not intended to do so. But it goes some of the way, and it is in any case justified on its own merits.
Clause 2(4) excludes from the right to a payment any employee who unreasonably refuses an offer of suitable alternative work with the same employer. The offer has to be made in writing before the existing contract comes to an end and the new work has to begin within four weeks.
The subsection relates only to the case in which the terms of the contract being offered to the worker differ from the terms of the contract under which he has hitherto been engaged. It is described by lines 10 to 13 on page 3 of the Bill as a case in which the provisions of the contract being offered differ wholly or in part from those of the previous contract as to the capacity and place in which the employee will be employed and as to the other terms and conditions of employment.
If there is any dispute as to whether the employment offered is suitable, it will be for the tribunal to decide. But without the deletion of the words in the Amendment, there would be some danger that the tribunal's attention would be focused too narrowly on only the capacity in which it was proposed to employ the worker and the place where he was to work, to the exclusion of other terms and conditions. I think that it will be generally agreed that tribunals ought to have regard to all the relevant circumstances of the case, which will include any relevant custom or practice in the industry or occupation which is applicable.
If we delete these words, the tribunal will be free to have regard to all these factors and will not be encouraged by the wording of the Act to give undue emphasis to any one of them.
In Committee, hon. Members opposite urged that tribunals, in considering whether or not an offer of alternative employment was suitable, should have regard to the custom and practice of the industry, and that attention to this should be specifically directed in the Bill. We felt and still feel that if we tried to spell out the various criteria to which the tribunals should have regard that would serve only to hamper their freedom in considering all the relevant factors 1711 and giving due weight to each of them in coming to their decisions.
This Amendment will help to ensure that tribunals do this and are left free to take account of all the relevant considerations in assessing the suitability of alternative employment. I hope that the Opposition can accept the Amendment.

§ Mr. Godber
Here, again, I welcome the Parliamentary Secretary's conversion, but on this occasion I cannot welcome it quite so wholeheartedly, because he has not gone the full way. On other Amendments he has gone the full distance to meet us. On this occasion he has been somewhat niggardly. He has made a concession—I grant that and I welcome it. Any concession, however small, any acknowledgment of the truth given to him from our side, we welcome, but on this occasion I think that it would have been better if he had gone a little further. I do not propose to debate the matter at any length because I think, Mr. Speaker, my hon. Friend the Member for Kidderminster (Sir T. Brinton) hopes to catch your eye on another Amendment to deal with another aspect of this matter.
However, we wanted to see that the tribunals, under Clause 2(4,a), had the widest opportunity for discretion, and we felt that this was narrowed down too far, particularly the reference to "capacity and place". We thought that that was not appropriate. Those words as they appear in that paragraph are now being deleted—and we welcome it—by this Amendment, but would it not be right also to delete the reference to "capacity and place" where it comes higher up in the subsection? It reads: An employee shall not be entitled to a redundancy payment by reason of dismissal if before the relevant date the employer has made to him an offer in writing to renew his contract of employment, or to re-engage him under a new contract, so that in accordance with the particulars specified in the offer the provisions of the contract as renewed, or of the new contract…as to the capacity and place in which he would be employed…. That is subject now to the deletion of words by this Amendment and there would seem to be no point now in keeping "capacity and place" higher up. I ask the hon. Gentleman to have a look at that to see whether it cannot perfectly 1712 well be deleted, and if the hon. Gentleman accepts the point he might have it dealt with elsewhere.
The Amendment goes some way to meet us, and I think it is helpful, but it does not go far enough, because we wanted more discretion to be allowed. So I give this very qualified acceptance of what the hon. Gentleman has said, and I would ask him to look at the point which I have raised.

§ Mr. John Page
I would like the Parliamentary Secretary to consider his own words when he was commending this Amendment. I wish he had used words such as the new position "appears to be in accordance with the usual terms and conditions of the industry"—the particular industry concerned. I wish he had used words to that effect.
I think it most important that the attention of the tribunals should be drawn to the words of the Parliamentary Secretary at this important stage. Secondly, so that they shall not have to look back at this debate, the hon. Gentleman should try to widen the Amendment at a later stage by inserting some of the words that he has used tonight. If he did that we would all be very much happier.

§ Sir T. Brinton
I beg to move Amendment No. 14, Clause 2, in page 3, line 16, to leave out from "constitutes" to the end of line 17, and to insert: a reasonable offer of suitable alternative employment". We touched on this subject during the short debate on the last Amendment. The point here is that throughout the discussions on this subsection in Committee my hon. Friends and I felt that there was an undue restriction on the future power of tribunals when considering the question of justice and equity in relation to the Clause.
1713 The Clause deals with the restrictions on the right to claim redundancy payment. Subsection (1) deals with the question of superannuation. Subsection (2) deals with the question of a rightful justifiable dismissal. Subsection (3) deals with the offer of an identical job, and subsection (4) is really the important one, because it regulates the offering of a job which, while not the same, is at least reasonably comparable.
The Parliamentary Secretary, who handled this matter in Committee, throughout displayed what to my hon. Friends and myself was a curious attitude to this whole question. He maintained that this must be related solely to the requirements of the employee, which is what the Clause as it stands says. The hon. Gentleman dealt with this in a number of statements in Committee, and he has, by implication, dealt with it in his remarks on the previous Amendment.
During the Committee stage we moved three Amendments of much the same sense to this subsection. The first Amendment was the same as the one I have just moved. The second was a similar one. I shall not go into it now, but it had much the same effect. The Parliamentary Secretary will remember that it merely sought to introduce "in all the circumstances" or something like that. The third Amendment left standing the words which are bothering us somewhat, namely, an offer of suitable employment in relation to the employee but sought to add and to the industry in which he is employed". In other words, it brought in the question already touched on by the hon. Gentleman, that of custom and practice within the industry.
All those Amendments were fairly firmly rejected, and during the final debate on them the hon. Gentleman said: The point is that the job offered must be in relation to the employee because he is going to be the man who will do the job. Neither the employee nor any one else is going to do the job."—[OFFICIAL REPORT, Standing Committee D, 11th May, 1965; c. 136.] He rejected the suggestion that any interests of the employer should be considered. The point was not strongly pressed, even though it seemed to some 1714 of us that the logic of his reasoning was not very sound. It may be true that the employee does the job, but it is the employer who pays him to do it, and I would have thought that his circumstances might have some bearing on the decision of a tribunal.
Another question raised in Committee concerned pay. The Bill contains no directions as to what a tribunal should do in respect of the important question of how much a man earns—

§ Mr. Deputy-Speaker (Dr. Horace King)
Order. The hon. Member must not now traverse all the debates which took place in Committee. He must address himself to the Amendment, and that means to the question of "reasonable".

§ Sir T. Brinton
I thank you, Mr. Deputy-Speaker. I will endeavour to do so. I was trying to trace out the reasons why we are pursuing this point, which was widely discussed in Committee. Presumably Mr. Speaker accepted the need for its rediscussion.
We covered the question of the difficulties that might arise over pay and retraining, but the principal point made was that which the Parliamentary Secretary has recently touched upon, namely, the custom within an industry. Throughout our discussions he has repeatedly admitted that the custom and practice of an industry must be taken into account by a tribunal in arriving at a decision under the Clause. We all agree about that. Yet he refuses to accept an Amendment which would ensure that this would be done. At the moment, any tribunal considering the question is apparently confined solely to considering the position of the employee.
As the Parliamentary Secretary has said, this is one of the most important considerations, but it is not the only one. A man might establish one part of his case, namely, that an offer of alternative employment was not suitable to him, because he did not like it, or did not feel able to carry it out, or did not see why he should accept a lower rate of pay, and as the Clause now stands the tribunal could consider only that aspect, although the Parliamentary Secretary has said that the custom and practice of the trade—which presumably includes rates of pay 1715 and conditions within the trade—ought to be and will be taken into account by the tribunal.
How is the tribunal to do so, unless the Amendment is accepted? The Parliamentary Secretary has so frequently accepted the logic of this position, by implication, that we cannot understand why he insists on relating the decision of the tribunal solely to a circumscribed area, namely, the interests of the employee alone. This is not fair to all the other interests involved. We therefore ask him to reconsider the question. He has said that he has given us part of our point in a previous Amendment, but that does not go far enough. We do not want tribunals to be circumscribed, however wise they may be. We hope that they will interpret literally the words laid down in the Bill by the legislature, and will not seek to impose their own interpretations on them.

§ Mr. Kenneth Lewis
I hope that the Parliamentary Secretary will reconsider the Amendment, which mentions the word "reasonable" and which is reasonable. As it stands at the moment a built-in advantage is given by the Minister to the "awkward squad". [HON. MEMBERS: "No."] Yes. There will be no difficulty with most workpeople over this Clause and most of the difficulties which arise will, in any case, be ironed out by the tribunal. But the "awkward squad" can then go to the tribunal and the tribunal will have no scope, as the Clause stands.
There is no latitude, because the tribunal has to accept that, if the workman does not want a particular job, he can manufacture any number of reasons why it is not acceptable to him. As the wording of the subsection now stands, any man who is awkward will then be able to leave the tribunal, go back to his employer and say that he is—

§ Mr. Ness Edwards
Does not that equally apply to the awkward employer?

§ Mr. Lewis
Yes, but if the Amendment is accepted it would cover both the awkward employer—if there is one—and the awkward workman. The Amendment leaves the judgment entirely with the tribunal. It gives the tribunal the kind of scope which I should have thought would have been necessary in a 1716 Bill of this kind and is justification for setting up the tribunal at all.

§ Mr. Howe
While the Amendment made before this eliminated one of the difficulties created by the Clause, I suggest to the Parliamentary Secretary that he may now be leaping out of one kind of frying pan into another kind of fire. The nature of the fire was indicated by him in the debate in Committee, when he said, of the general intention which the Government are obviously trying to achieve, that … it would be wrong to try to lay down rules that would limit the discretion of the tribunals or unduly influence them in one direction or another in coming to a common sense decision."—[OFFICIAL REPORT, Standing Committee D, 13th May, 1965; c. 145.] With the elimination of the previous ten words or so in lines 15 and 16, the Clause as it now stands, with no reference to the word "reasonable", could work harmfully and adversely for the employee.
If one considers the bare words, "constitutes an offer of suitable employment in relation to the employee" one sees that it does precisely what the Parliamentary Secretary said was not to be done. It enjoins a tribunal to look at only one aspect and with very narrow terms of reference. It has merely to consider, without regard to capacity or place—those words are now gone—whether the offer constitutes an offer of reasonable employment in relation to the employee, in other words, whether it is appropriate to his aptitude—conceivably, though not certainly, appropriate to his previous wages—but it may consider none of the other matters which ought reasonably to be considered.
I suggest that the absence of any reference to "reasonable" might lead the tribunals not only away from factors on the employer's side which ought to be considered, but could lead it away from factors on the employee's side. Mere consideration of suitability in relation to the employee enjoins the narrowest possible consideration. I would suggest, as a possible—

§ Mr. Thornton
While this does provide for the narrowest possible consideration, would the hon. Gentleman not agree that it gives the widest possible discretion to the tribunal?

Hon. Members
No.

§ Mr. Howe
No. That is exactly the point. I do not want to weary the House by pursuing it too far, but there is no tendentious issue between us on this. The hon. Gentleman repeated often in Standing Committee that he wants to give wide discretion to the tribunal. Our proposition is that he has eliminated one narrowness by deleting capacity and place and that, by accepting our Amendment, he would retain the narrowness of the Clause but widen the tribunal's discretion.
It is a consideration which arises in many statutory provisions. In the rent legislation there are two considerations. When a tenant is being offered suitable alternative accommodation the court must be satisfied that it is suitable and that it is reasonable to make a possession order against him.
Under this Clause as it stands, the discretion is narrowed rather than widened and if the Government are in compromising mood about this they might like to consider, perhaps in another place, a reconciliation between the two possible suggestions by using the words proposed by us while retaining their own favourite provision in relation to the employee. Thus, the provision could stipulate a reasonable offer of suitable alternative employment in relation to the employee. That would achieve the breadth of discretion that the hon. Gentleman wants and retain the emphasis on the employee's position, being more effective and appropriate than the narrow words now used.

§ Mr. Thornton
On the previous Amendment, I indicated that the deletion of the words concerned was the result of our reconsideration of the arguments advanced by hon. Members opposite in Committee. The object of that Amendment was to ensure that, in considering whether or not the employment offered was suitable to the employee, the tribunal's discretion to look at all the relevant circumstances of the case should not in any way be circumscribed.
We now think that we have the provision right. In the light of that and our explanation I hope that hon. Members opposite will feel able to withdraw the Amendment. But if they persist I must adhere strongly to the position that the 1718 Amendment would undermine the objective that the offer of employment by an employer should be suitable in relation to the employee. To that proposition I stick hard.
The effect of the Amendment would be that, in the event of a dispute, the tribunal would have to consider whether the offer was reasonable not only in relation to the employee but also in relation to the circumstances of the employer. This would be quite wrong. The difficulties that the employer happened to be in at the time should not be relevant to the issue. If they were, we should get all kinds of anomalies and injustices.
Suppose that the employer's trade has dropped of and the best offer of employment he can make to a redundant worker is far less favourable than the terms on which he has hitherto been engaged.

§ Mr. Howe
I can see the force of the argument that some concentration needs to be directed to the position of the employee but would not the hon. Gentleman recognise that there is a middle way which still deserves consideration? This would incorporate the use of the words "reasonable" and "alternative" as well as the words that he regards as important in relation to the employee.

§ Mr. Thornton
I would give consideration to it, but I could certainly not give any promise because I think that our definition is as fair as we can get and that it will leave a very wide discretion to the tribunal in relation to the employee—and it must be in relation to the employee.
As I was saying, an employer whose work has dropped off may offer a worker employment that is reasonable from the employer's point of view but completely unreasonable from the worker's point of view. It may be the best that the employer can possibly do, but it would not be good enough for the employee.

§ Sir Harmar Nicholls
The hon. Gentleman is putting a rather strong point in a quiet way. Should not all the circumstances be taken into account? That is what the Amendment suggests. It is true that there should be some bias, if the hon. Gentleman likes, in favour of the employee but to suggest that the overriding circumstances, which are not necessarily the fault of the employer, must be 1719 disregarded in order to give special bias to the employee is not reasonable. I would have thought that the hon. Gentleman could accept a point where all circumstances of the employer were taken into account without this rather unreasonable bias as he explains it.

§ Mr. Thornton
I suggest that all the circumstances should be taken into account in determining whether a job is suitable for the worker concerned and not suitable for anyone else. I emphasise that this is not a question of the employee's own assessment of the offer of the employee giving a subjective opinion against the opinion of his employer. It is a matter of an employee, say a skilled fitter, being in the position of his employer's business having run down so that his job has disappeared. In such circumstances he might be offered a job which no skilled fitter could reasonably, in the opinion of an independent tribunal, accept, either because of the nature of the work or the wages and conditions attaching to the job.
In those circumstances, the Bill says that the employee is redundant and that his employer must pay. I suggest that this is the only possible basis on which the tribunals could proceed. It is also equitable and sensible from the point of view of manpower policy. The employer does not have a job which is suitable for the employee and it is right, therefore, that he should release him for the benefit of others who have.

§ Mr. Kenneth Lewis
The Parliamentary Secretary has given the example of a fitter. He knows perfectly well that there are fitters who are used to doing work of a particular type. In the case he cited the firm might have run out of that type of work and could not offer the employee the same type of work on which he had been engaged for perhaps a number of years. It would be pointless the firm offering work of a different type, perhaps work being done by other fitters, because the union would not wear it, so to speak. In such circumstances, where the employer might offer employment of a different kind to a fitter, surely that is where the tribunal should have a certain amount of elasticity and discretion in making its decision.

§ Mr. Thornton
The tribunal would have that discretion. If an alternative type of work was offered to a fitter and if the tribunal thought that it was suitable, although the fitter had refused the job, it would be for the tribunal to determine whether or not that refusal was reasonable. If it was unreasonable, then the worker would lose his claim. I submit that the Amendment would completely undermine this position and greatly damage the scheme. I certainly could not recommend its acceptance. Indeed, I must ask the House to reject it.

§ Mr. Ronald Bell
The Parliamentary Secretary's answer was most disappointing, although not surprising, because we debated this matter in Committee and got the same sort of answer. We felt strongly enough about it to table the Amendment again so that the issue could be debated at this stage.
We must make progress, so I will be brief in going over some of the arguments again. I must repeat them because we wish to leave this matter clearly in the mind of the Parliamentary Secretary. He must remember how this situation arises. We are dealing with Clause 2. If a man who is dismissed is offered the same job again, this does not arise. It arises where he is offered not the identical job but a job which is slightly different. That will happen in a great many cases.
We pointed out in Committee that subsection (3) is so tightly drafted that it excludes every new offer of employment which is even minimally different. Therefore, almost every offer of employment would come under subsection (4), and under that subsection there is provision that the offer may take effect as much as four weeks after the date of termination of the previous employment.
The Parliamentary Secretary is giving a wrong significance to the fact that the employee may change his position during the four weeks. The hon. Gentleman referred in Committee to the employee's family circumstances changing. Let us look at the position as the Bill is now drafted. The man's employment comes to an end. Then the employer, suddenly finding that he has suitable work available, offers renewed employment to the dismissed employee. That renewed employment is to begin within four 1721 weeks, and so comes within subsection (4). The employee refuses the offer, and the matter has to go to the tribunal. The only matter that the tribunal can consider is whether that offer was suitable to the employee. It cannot consider the general circumstances.
It is perfectly possible that the offer would have been entirely suitable to the employee. It could be virtually the same job again—with a change, however slight, so as to take it out of subsection (3), but, to all intents and purposes, the same job again. Is that man to be entitled to say, "No, the job is no longer suitable to me, because I have now made arrangements to live in Newcastle" or something of that sort? In other words, is he to be at liberty to alter his circumstances, or have them altered by some external means, so that, in effect, he is at liberty to refuse the same job again within four weeks?
As I pointed out in Committee, these cases will not be rare but frequent, because almost all the offers of renewed employment will come under subsection (4) as a result of what I consider to be the Government's most unwise rejection of our Amendment to loosen subsection (3). Had the Government accepted the addition of the word "material" in the subsection—

§ Mr. Deputy-Speaker
Order. With all respect, the hon. Gentleman cannot go back to that point now.

§ Mr. Bell
I was not going back, Mr. Deputy-Speaker, but the whole importance of this Amendment lies in the wide range of cases that will be covered as a result of the continued rigidity of subsection (3).

§ Mr. Thornton
We debated this point end and side, up and down, in Committee, I do not think that we should go over it again. At the same time, I cannot let the hon. Gentleman get away with it as he seeks to do. Instead of two clearly defined positions, he aims at creating three—

§ Mr. Deputy-Speaker
Order. It looks as though both Front Bench spokesmen are going back to what I asked them not to do, and that is to debate a stage of the Bill that has already passed. We must now debate only whether the word 1722 "reasonable" is a word that we should add.

§ Mr. Bell
I respectfully agree, Mr. Deputy-Speaker. I was not transgresing there, but I must agree that the Parliamentary Secretary was. The only point I wish to make is that Clause 3 is still in that exclusive form which means that virtually all cases of re-offered employment come under subsection (4), to which the Amendment relates. That is the point.
10.30 p.m.
As paragraph (a) of subsection (4) is drafted the tribunal can consider nothing but the suitability to the employee. We welcome, of course, the Amendment we have just passed striking out the words in lines 15 and 16, but the value of that is lost unless it is a paving Amendment to such an Amendment as that which my hon. Friend the Member for Kidderminster (Sir T. Brinton) has moved. If the Parliamentary Secretary looks at lines 15 and 16 as we have amended them he will see that no widening occurs. The Amendment we have agreed to could be a useful one if it were supplemented by this one.
I see the point made by the hon. Member that the suitability for the employee should weigh more than the suitability to the employer. I accept that, but it should not be excluded altogether and the tribunal should not be debarred, as it explicitly and unquestionably would be, from considering anything but the suitability for the employee. It may be that the Parliamentary Secretary thinks that this Amendment puts the employer and the employee on the same terms by leaving out any words which give emphasis to the position of the employee. Our purpose is to widen the discretion of the tribunal and not in any way to displace the emphasis in favour of the employee.
Could the Parliamentary Secretary say that he and his right hon. Friend were willing to direct their minds to this matter again? The Bill must go to another place and any hope that the Parliamentary Secretary cherishes that it will come from there wholly unamended to avoid a subsequent stage is, I am sure illusory. We have had about 200 Amendments and I do not suppose that we have achieved perfection yet. There are bound to be 1723 some little points which have been forgotten and no doubt there will be Government Amendments in another place.
I therefore beg the hon. Gentleman to say that he will look at this again and see whether a form of words can be found to open the discretion of the 1724 tribunal while still leaving the emphasis on the suitability for the employee. On that understanding, I think my hon. Friend the Member for Kidderminster would be willing to withdraw the Amendment because it would meet the object which we have in mind.