HC Deb 17 November 1966 vol 736 cc775-99

10.1 p.m.

Sir John Hobson (Warwick and Leamington)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Industrial Tribunals (Selective Employment Payments) Regulations, 1966 (S.I., 1966, No. 1231), dated 23rd September, 1966, a copy of which was laid before this House on 5th October, be annulled. There is another Prayer, Mr. Deputy Speaker, in respect of exactly similar Regulations, S.I. 1966, No. 1232, affecting Scotland, in almost precisely similar terms. I do not know whether it would be for your convenience and that of the House if we were to discuss that second set of Regulations at the same time.

Mr. Deputy Speaker (Sir Eric Fletcher)

If the House agrees, it will be convenient for both sets of Regulations to be discussed together.

Sir J. Hobson

I am obliged, Mr. Deputy Speaker.

These are procedural Regulations which affect the procedure by which the citizen may attempt to establish a claim for refund of the Selective Employment Tax—or for a refund plus a premium if he comes within that category—when the Minister acting on behalf of the Government refuses to make such a payment and the citizen considers that he is entitled to have such a payment.

In the majority of cases, the Minister concerned would be the Minister of Labour. One must observe that these Regulations are made by the Minister of Labour himself to affect the rules of the game in which he will play a substantial, if not always the leading, part. It is, therefore, important that we should scrutinise with care the rules which the Minister is laying down for a game in which he will usually be the defendant.

These Regulations are of great importance because they affect the whole question of the procedure by which these important questions will come up for decision, because it is on the claim for refund of Selective Employment Tax, or for a refund plus premium, that the whole bite of the S.E.T. is to be found. It is in those cases where a citizen does not get any refund, or any refund and premium, that the bite of the S.E.T. falls upon the individual citizen. Therefore, it is of great importance for citizens that one should ensure that the procedure by which their claims are tried is fair, precise and in accordance with the House's idea of what is just.

In large cases, tens of thousands of pounds may well be at stake. In many other cases, while small sums may be at stake, it may be the difference between liquidity and bankruptcy for individual traders whose cases are under consideration and whose claims are being put forward. It has been said that justice is secreted in the interstices of procedure, and procedure can make the whole difference between a successful and an unsuccessful claim.

My first question to the Parliamentary Secretary to the Ministry of Labour, who is to reply to the Prayer, is whether she has considered whether these Regulations are intra vires or whether they may not be ultra vires. They purport to be made under Section 46 of the Redundancy Payments Act, 1965. The only relevant power under that Section is in subsection (1, e.) That power can only be used with respect to proceedings to determine any question which, by or under any statutory provision passed or made after the passing of this Act"— that is, after 5th August, 1965— is directed to be referred to and determined by a tribunal as defined by this Act". The important words are: is directed to be referred to". After reading Section 7(5) of the Selective Employment Payments Act, 1965, I would have said that there was no direction. It merely says that if any question arises the employers may require the question to be referred to the industrial tribunal. We get in different terms the very same point in other statutory provisions where it is expressly provided that where any question arises it shall be referred to the industrial disputes tribunal and I should have thought that Section 7(5) merely gives an employer an option to go to the industrial tribunal or to go to the ordinary courts if he so desires.

It merely says he may go to the tribunal. Certainly, it does not direct that he shall. He, then, having some option or discretion whether he will or will not go, I would have said there is certainly nothing under the terms of Section 46, from which the power to make these Regulations is alone derived, which enables regulations to be made, because Section 7(5) of the 1966 Act does not contain a requirement and direction for reference.

This was a point which I drew to the attention of the Financial Secretary to the Treasury during the passage of the Selective Employment Payments Bill and he told me he was grateful for it. I do not think that he understood it, because he put down another Amendment which dealt with a point different from the one which I raised. Owing to the hurry of passing the Selective Employment Payments Bill we did not get round to dealing with this point, so I would ask the hon. Lady how she puts the argument that these are Regulations which she has power to make under the 1966 Act.

It will be remembered that in Committee on the Selective Employment Payments Bill the Opposition proposed that the very important questions of the right to repayment should be decided by the ordinary courts of law—perhaps an old-fashioned view, but I should have thought that when important issues of fact or law arise between a citizen and the Government the ordinary courts are not bad places to have them decided. But the Government rejected that view and said, "No, these questions have to be decided by the industrial tribunals" and insisted that a number of the vital questions which will arise should be so decided. We have, therefore, in both these Statutory Instruments a definition of the questions which the industrial tribunals, assuming the Regulations are intra vires, are to decide.

The first one is whether the business is an establishment which is either within Section 1, which entitles one to a refund plus premium, or within Section 2, which entitles one to a refund only, or is not within Section 1 or Section 2 at all, and, therefore, does not entitle one to anything and one has lost one's money and does not get it back.

Now, the question which the Industrial Tribunal has first to decide is whether a business is an establishment. It does not seem to be a very relevant question. Establishments are premises. They are not businesses at all, and repayments are made in respect of establishments, and the register is a register of establishments, and the Minister can only remove an establishment and not a business from the register.

I realise that the question is only picked up from the Act which was not amended or put in proper shape, but yet we find that one of the things which the tribunal, under these Regulations, has to decide is whether a business is an establishment, whereas, of course, we know the establishment is a set of premises. Therefore, the question seems a bit odd, though I think it probably conforms to the way the Act was originally drafted.

Secondly, it has to decide whether a register should be restored to the register kept by any Minister. Thirdly, the date of the first registration on the register if there is a dispute. Fourthly, the question as to the amount to be repaid in any case. These are the questions to which these procedural Regulations are to apply when the tribunal is considering them.

There are two queries I should like to ask the hon. Lady about the scope of these Regulations. The first is that the Regulations appear not to apply to any reference of any dispute as to whether an establishment which has been removed from the register and which the Minister has agreed to restore to the register shall be restored as at the date proposed by the Minister or at some earlier date as requested by the citizen.

This is a question which arises under Section 7(3) of the Act, the question whether it should be restored to within the terms of the procedure Regulations, but there seems to be nothing in the Regulations about any dispute where it is agreed there should be a restoration. There is no agreement as to the date from which the restoration should take place. Would the Minister say whether she agrees that I am right, or give her views on the matter, and say whether anything should be done about this point?

Secondly, it appears—I may be wrong—that if a question arises relating to a person who is employed to work in England, and that work is carried out from an establishment in Scotland, the English tribunal can make decisions about register ability of the Scottish establishment, and vice versa, and, indeed, the English and Scottish tribunals might come to different decisions about the same establishment in different cases affecting different questions. I dare say that that is inevitable. I dare say that this is the convenient way.

It is possible for the English tribunal to decide a question whether or not a Scottish establishment should or should not have been registered in Scotland. If that is so, how does one get uniformity between decisions of the English tribunals and the Scottish tribunals?

The main point which I desire to make is criticism of the rules of procedure, which are found in the Schedule. This is the real substance of the orders. I should like to make my criticism under heads. Firstly it will be noted that all the proceedings, whether they come frome England or Wales, have to be directed to a central office of industrial tribunals in London. I understand from the Financial Secretary of the Treasury that arrangements are being made after the first application for the subsequent interlocutory proceedings to be dealt with at Manchester, Leeds, Birmingham and Newcastle, leaving the whole of South Wales and South-West England still to be dealt with from London. Many questions affecting farming and forestry will arise under the Regulations. The whole of the agricultural areas are being left to be dealt with in these few major urban centres and not in any country district.

Secondly—and this is a very major criticism indeed—the rules provide that an applicant must state his case on the proper forms to the tribunal and then send it to the responsible Minister; but there is absolutely no provision that the responsible Minister shall at any time before the hearing state his case to the tribunal or to the applicant employer.

I regard this as grossly unfair. One knows that even in the county court one is expected to put in a defence in eight days, and even the Crown has to comply with that. If the defendant doesn't put in his case in eight days, the county court can order that he shall do so. Yet under these Regulations the court cannot do anything about it, and there is not a single provision that the Minister, at any stage in the proceedings, before the hearing, shall state what is his case or what are the issues.

The result is that the hearing will come on without the issues properly being defined. The employer will have no idea of the evidence he might have to bring to meet the case which he may have to deal with from the Minister, or the evidence he will have to abut in the defence which the Minister proposes to put forward. He will not know what arguments he should be prepared to meet or what cases he should have prepared himself with in order to meet particular points from the Minister. If there is an appeal, the whole of the proceedings will start on the basis that only one side of the case in the decision of the tribunal is stated, and that of the other side is not.

My third criticism is that the Minister can ask the tribunal, apparently by letter, to order the employer to give further particulars not only of the facts of the employer's case—and that is quite normal—but also of the contention on which the employer relies. That is very unusual indeed. I have never heard of anybody having to give particulars of their line of arguments and contentions. Conversely, the employer can obtain no such remedy against the Minister or get from him the facts on which the Minister relies, or the contention he intends to put forward. That, again, is an inequality between the parties appearing before an independent tribunal.

Fourthly, these interlocutory requests for particulars of his case and contention need not even be notified to the employer. The Minister can send a note to the tribunal, which need not give then the employer any opportunity to argue the matter, to refute the suggestion, or to say that it is unnecessary to make the ex parte order against the employer, which the employer, under these Regulations, cannot apply to set aside. It seems to me to be an extraordinary provision and grossly unfair to the employer that an ex parte application order can be made against him without his ever being able to do anything about it after the order is made. That is unfair as a method of bringing a case for trial before a tribunal. Fifthly, the tribunal may, on the application of a Minister, order discovery of documents against the employer. That is quite a normal pre-trial provision in any judicial process, but it is a bit unusual when only one side can get that remedy and not the other. Here, once again, the employer can get no such remedy of discovery against the Minister. It might not often be necessary, it might be that in the majority of cases the Minister would not have any documents that were relevant, but can anyone say that there will never be a case when the citizen ought not to have discovery against the Minister on the documents in the Minister's possession?

Records of inspection, agricultural returns and a host of other documents of the past history of the establishment which are in the possession of the Minister, reports made for him by his inspectors, will all be highly relevant in the matter at issue between the citizen employer and the Minister of the Crown.

My sixth criticism is that the tribunal may grant an ex parte order for the production of documents at any time against a person not a party to the proceedings and can do so, as I say, without the third party against whom it is made having any opportunity at all to argue about it. This, also, is a rather unusual process. It is well known in the ordinary courts of law that one cannot get discovery against documents of a person who is not a party to the actual proceedings. As far as I can see, there is no right for the individual who is not a party to the proceedings to apply to the tribunal to set aside the order that the tribunal may have made on the ex parte application, in this case, of either the employer or the Minister.

I should like to know what justification there is for a departure from the usual rules of proceedings, both in the High Court and county court, under which third parties are not forced, at the instance of the other parties, to give such discovery before the hearing of all their documents when not parties to the suit.

My seventh query and criticism of these Regulations is that the right to apply to set aside an order for discovery which the Minister has obtained against the citizen is strictly limited to the time within which the order is to be obeyed. If through no fault at all of the employer—for example, if the Post Office did not deliver the thing in time, or the tribunal sent it to the wrong address, or for any other reason which is quite outside the control of the citizen, he gets an eight-day notice and cannot comply within the eight days, he will not be able after the end of the eight days to have the order set aside.

We all know the great injustices that can be effected by strict limits in which there is no discretion for the courts to do what they think is fair and just. In every other instance there is a provision by which the court can extend the time if it thinks that to be fair, and I cannot see why, if the tribunal thinks it fair, the time given to the citizen employer should not be extended. But the provisions are so drawn that if by accident, or any circumstance outside the control of the citizen employer, he has not made application for extension of the time, the Regulations give no power of any sort or description to remit, delay or set aside the order, even though the tribunal might have been persuaded that it was obviously right so to do.

Eighthly, if the tribunal does decide that notice of an application under Rule 3 or Rule 11 should be given to the other party before its decision is taken, then the only right of that other party is to submit a written objection. The rules provide that in certain cir-circumstances the tribunal may say, in effect, "Before we make an order we will hear the other side"—but that does not go very far because it merely allows the other party to send in a written objection.

This means that the other party sends in a document saying, "I object for this or that reason" and the result is that the whole of the interlocutory process of, perhaps, extremely important matters that may involve difficult questions of law or fact are conducted by correspondence without any provision for a contentious argument coming before the tribunal. The result is that the tribunal must decide on this basis on very difficult and, perhaps, nicely balanced questions between the Minister and the citizen.

As a result of this, we will have one person writing to the tribunal giving his objection. The tribunal will say, "Do you have an objection?" and the citizen will reply, "Yes, I have". Following that, the citizen will send, on half a sheet of paper, what he considers to be his objection and the tribunal will decide one way or the other. That cannot be said to be a satisfactory method of proceeding in every case.

I agree that in many cases—if not a substantial proportion of them—this may be a perfectly satisfactory procedure. However, in an issue involving large sums of money and difficult questions of law, in addition to high questions of principle on the interpretation of the Act, it seems wrong that no provision whatever should be made for there to be proper argument and discussion before the tribunal makes these important interlocutory orders which will be the foundation of the procedure on which justice is expected to be done.

These are Regulations made by the Minister of Labour and laying down the procedure by which the citizen can resolve a dispute which will normally be with the Minister of Labour, the Minister of Agriculture, Fisheries and Food or the Department of Agriculture in Scotland. They are, therefore, Regulations in which the Minister is laying down the rules of the game which he will usually be playing. We say that they are unfairly weighted against the citizen. They favour the Minister and allow him to play the game with the cards close to his chest and without giving anything away, whereas the employer-citizen is in the position of having his cards on the table at the request of the Minister and on the order of the tribunal.

We believe that that is unfair and wrong and we hope that the Minister will take the Regulations away and, in the light of what we have said, redraft them to redress the balance.

10.24 p.m.

Mr. Charles Doughty (Surrey, East)

I support the powerful arguments adduced by my right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson).

We must start from the beginning when considering this matter. We are, after all, discussing the S.E.T. Regulations which, hon. Members will recall, were brought forward in the Budget although introduced by the Minister of Labour. We are, in fact, discussing a taxation arrangement which is not a trifling one, because the payments under S.E.T. are extremely large; and some firms have said that they are crippling.

All taxation is unpopular, but this tax is one of the most unpopular ever introduced. This is not one of those things that can be a matter between employer and employee. Essentially, it is taxation. These matters have always been decided, throughout our history, by the courts of the land and many cases have been taken right through to the House of Lords for a decision to be given on what the taxation laws mean; and very often it is difficult for such a decision to be arrived at.

Often they are very difficult, I assure hon. Members. Yet in the Redundancy Payments Act, which is not a taxation matter but a matter of payments put into a redundancy fund, there is a Section which says that subsequent references may be made to the tribunal. The whole of the order is ultra vires and one has to look at what will happen in a discussion in respect of Selective Employment Tax. I call it Selective Employment Tax advisedly, because that is what it is.

It will go before an industrial tribunal. The worthy gentlemen—and, for all I know, ladies—who sit on those tribunals to consider questions referred to them will give their decisions on them with their customary ability, but if this Order goes through they will be called upon to decide questions of taxation to which they are unaccustomed. They will reply to the best of their ability, but their decisions can be only those given by people not used to making decisions of this kind.

This procedure ought never to have been applied to taxation questions, which should be left as in the past to the courts to decide and to interpret. They should decide whether the reluctant taxpayer should pay or should not pay and—more important—whether he should get the refund of premiums to which, rightly or wrongly, he thinks he is entitled.

Assuming that the order is passed, when one looks at the regulations to be made one sees that they are entirely one-sided. When the Revenue authorities and the taxpayer have a dispute and go to law one can at least say that the regulations are not one-sided. The Revenue authorities and the taxpayer—leaving financial questions out of the matter—are on an equal footing. There can be mutual discovery and there must be discovery pleadings. Each side sets out its arguments for the other side to examine and they are tied down in the hearing to the matters already raised. That is fair to both sides, but here it is entirely different. The Minister is not obliged to disclose before the hearing by the tribunal, which has no experience of tax matters, what the contentions of the Minister are.

Put yourself, Mr. Deputy Speaker, in the position of someone arguing the case on behalf of a taxpayer, a lawyer briefed for the purpose. He goes before the tribunal totally unaware of the contentions he will have to meet although he has had to disclose to the Minister, the opposing party before the tribunal, what his contentions are and the full facts on which they are based. Not only that, but if the Minister should think that the contentions have not been sufficiently disclosed, without giving any notice to the applicant, he can, by ex parte means, even by written application, get an order that the applicant should make further disclosure of facts and without his having the slightest opportunity of objecting to the order being made or giving grounds or reasons why he objects and why the tribunal should not make the order. Is this justice? If it is, it is a different kind of justice from what I have been used to during the many years that I have practised in the courts.

These are just a few of the reasons why I say that this is not a tribunal for deciding tax questions and that, if these orders go through, and the tribunal is given these duties, the odds are unfairly loaded against the applicant taxpayer and in favour of the Minister who is, in fact, the Chancellor of the Exchequer but, for curious reasons of which the House is aware, is the Minister of Labour in name. It is contrary to the spirit of justice to which people have been accustomed in this country ever since we have had a taxation system. I hope that the Regulations will not be approved.

10.31 p.m.

Mr. Antony Buck (Colchester)

The whole of this legislation relating to the Selective Employment Tax may be regarded as having been born in lunacy and ending here tonight in inadequacy. Even looked at from the point of view of the hon. Lady the Parliamentary Secretary, it would seem to me that the Regulations are totally inadequate because, as my right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson) has pointed out, their very validity must be in doubt and, even if they appear to be intra vires, it is doubtful whether they exclude, as intended by the Government, the rights of the courts to deal with these matters.

They are also grossly unfair, as has been ably said by my right hon. and learned Friend and my hon. and learned Friend the Member for Surrey, East (Mr. Doughty). In the first place, they are quite unprecedented, as far as I am aware, in that the pleading is to be on one side through their provision for one side to present its case and to be able to have its case probed by the other side without any quid pro quo. It is without precedent and is grossly unfair, far different from the ordinary county court procedure which is called in aid in certain matters relating to the rules of procedure.

In county courts, the system is fair. Here, it is not. Rule 3(1,a) deals with what we lawyers call the provision of further and better particulars. This is a perfectly well-known formula and a part of the legal process. But it is quite unprecedented that one side should have to provide further and better particulars and not the other. It is quite unprecedented, as far as I am aware, that one side can be required to give further and better particulars by a tribunal or a court without having the right to test the order to give them.

Rule 3(1,a) gives the Minister power to apply, without notice to the applicant, to the tribunal for the applicant to be required to provide further particulars of his claim—and, as has been pointed out, not only particulars as we lawyers understand them but going even further in requiring the applicant to point out in his further and better particulars any "conventions relevant thereto".

This provision comes near to expecting the applicant to have to plead his arguments and his law as well. How extraordinary it is that this should be able to be done ex parte. There is clearly no method of appeal in this provision. In Rule 3(5), one finds that, where discovery is required under these turgid Regulations, a person on whom a requirement has been laid under Rule 3(2) … may apply to the tribunal to vary or set aside the requirement. But this is not the case with the requirement in Rule 3(1,a), although 3(1 b) is brought in at the beginning of 3(5). Why should not a person have the right to argue as to what matters are relevant for him to have to disclose? This is perfectly normal legal procedure. If, for example, the Ministry concerned were calling upon an applicant to reveal all sorts of trade matters which he wished to contend were not relevant to the issue, he ought to be allowed to do so.

In a Standing Committee recently, we have been discussing the meaning of natural justice. These Regulations go very much against natural justice. They do not allow one party the right to challenge the making of an order to cause him to reveal matters which he may think irrelevant to the whole inquiry. That is the effect of Rule 3(l,a). Under Rule 3(1,b), there is the remarkable provision that discovery and inspection of documents is required one way and not the other.

This is a remarkable set of Regulations. In my submission, late though it may be, it is appropriate that the House should consider the matter. It is an example of extraordinary arrogance on the part of the Government.

Now, the question of costs. Will the hon. Lady tell us what circumstances she envisages to justify an applicant being ordered to pay the Ministry's costs, which at present can be required under Rule 9? I should have preferred to see a provision that costs shall not be awarded against an applicant save on the ground that, in the unanimous opinion of the tribunal, the application was frivolous. I would not quarrel with that, but only in those circumstances would I think it right that costs should be awarded against the applicant, particularly when the whole Selective Employment payments business is in such an extraordinary muddle.

Industrialists are in utter confusion as to which employers and which establishments fall into which category. It is entirely wrong for there to be a general power in the tribunal, in any circumstances, with no guidance given, to award costs against an applicant.

I ask the hon. Lady to give us a reply to these questions, but, better still, will she take these nasty Regulations back and look at the whole matter again, with a view to putting before the House something which is in accordance with natural justice and is somewhat fair, which would be more than can be said for the basic tax giving rise to the Regulations?

10.38 p.m.

Mr. Ian Percival (Southport)

When we debated the Selective Employment Payments Bill, I urged the Minister to think again about his decision to refer these very important and difficult matters to this tribunal. I did so because it seemed to me to be utter folly to do otherwise when we have in this country courts which are the envy of the rest of the civilised world for the manner in which they dispense justice between the greatest and the humblest, between the citizen and the State, without fear or favour and without any advantage to either. I see an hon. Gentleman shaking his head. I do not know whether he means it in dissent. Perhaps we shall hear from him later. I should be astonished to hear anyone in the House deny that our legal system is the envy of the rest of the world.

We have in our courts procedure well tried and tested over the years, worked out by people, from the Lord Chancellor downward, who have spent a lifetime with one object only, to see that the standard of our legal processes is maintained. It is utter folly, when we have that procedure, to look for some other. I opposed what the Minister wanted to do because I felt certain that any alternative to the procedure of our courts already available could only be less satisfactory. Anybody who doubted the validity of those arguments at the time need only look at the Regulations to see how right the arguments were.

The Parliamentary Secretary should think a little more about this matter than the Minister did. She should heed the arguments and not brush them aside as the arguments of lawyers dealing with lawyers' law. The legal system and lawyers have one purpose only. It is to provide a service for the fair, and manifestly fair, resolution of disputes between one person and another. It is especially important that the procedure should be fair, and manifestly fair, when the disputes which are to be resolved are between the individual and the State. That is the kind of disputes here in question.

The Regulations provide for a procedure which, however it may be wrapped up, is heavily loaded in favour of the very man who has introduced them. My right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson) and others of my hon. Friends have gone into details to demonstrate that. I will endeavour to avoid repetition, but it is necessary to stress some of these points. Those who do not practise the law perhaps have some difficulty in seeing how in practice the rules they make work out. I therefore hope they will not be too proud to listen to the advice given to them by those who spend their lives seeing how these things work out in practice.

Attention has been drawn to Rule 3(1,a). I hope that the hon. Lady will not brush aside the arguments which have been adduced on this Rule. She will do them a great deal less than justice unless she answers them fully and fairly. It is standard procedure in all disputes in all courts that both sides give to the other the essence of their case. This is so that there may be fairness to both sides, so that neither side can be taken by surprise and thus be unfairly treated.

It is more than that. The duty of the court is not simply to the parties. The duty of the court is to ensure that justice is done so far as it can and to avoid having freak decisions because one party is taken by surprise and does not know the case of the other party. The stating of the issues in advance is for the benefit of the court as well as for the benefit of the parties, so that the court may do its duty to ensure that justice is in fact done and that somebody is not denied justice by default.

The procedure here laid down is entirely novel. I hope the hon. Lady will tell us why a different procedure has been chosen. You will be glad to hear, Mr. Deputy Speaker, that I do not propose to go into detail on the questions set out in the forms. If I were to do so, I should go on for ever. How an applicant will answer some of these questions on the little bit of space provided goodness only knows. For instance, question No. 3 on Form 1 is: Is access between all parts of the area comprised in those premises or parts of premises available without leaving premises occupied by the applicants? I should not like to have to try to answer that one. But one side will have to try to answer it. If the Minister thinks that he would like some more information he writes to the secretary, an order is made, and he has to give some more.

I hope that the hon. Lady will put herself in the position of the applicant, solicitor, counsel or any other person who, under these rules, may appear and ask herself how she would deal with the case at the hearing when she has not the slightest idea how many facts are agreed by the Minister, what the real point is, or what points will be argued.

It is astonishing that anybody could have laid down this procedure. The most charitable excuse that one can make is that these are the rules laid by the Minister and that perhaps the full implications of them have not been appreciated. I hope that the hon. Lady and her advisers will have another look at them, will ask herself whether it is right that these rules should be loaded in favour of one side—because that is certainly what they are—and that if she proposes to persist with these Regulations she will grasp the nettle and tell us why they should be so loaded.

The second illustration of this loading is to be found in Rule 3(5): An applicant on whom a requirement has been made under paragraph (1)(b)"— that is discovery— of this Rule on the ex parte application of the Minister", and so on. No doubt the hon. Lady knows what an ex parte application is. It is an application in which only one side is heard. Why should any order be made in these proceedings without giving the other party the right to be heard? What is achieved by it?

I know of no other legal procedure, save in the case of extreme urgency, in which a court has any right to make an order on an ex parte application. How can it be necessary to adopt this procedure? If the Minister wants an order for discovery, why should not the normal, accepted procedure be adopted of giving notice to the other side that the Minister seeks such an order and giving that other side the right to make its representations first?

The fact that that party should have a right to be heard is clearly recognised in the next sentence, because it goes on: … a person on whom a requirement has been made under paragraph (2) of this Rule may apply to the tribunal to vary or set aside the requirement. Why do it in that order? Why not give that person the right to be heard before an order is made and not place on that person an obligation to apply to set it aside?

Mr. Buck

Even that concession is not given concerning the further and better particulars under Rule 3(1,a).

Mr. Percival

I am obliged. That saves me one sentence. Even that is not all. This is an Alice in Wonderland procedure.

An application to vary can only be made or heard if it is made before the time or, as the case may be, before the expiration of the time so appointed. My right hon. and learned Friend has pointed out that that may cause great hardship if the notice is not received in time. The situation is made even worse when it is borne in mind that there is no provision here that I can find saying what notice is to be given to an applicant against whom an ex parte order has been made, and nothing saying how much time is to be given to him to make his application to set it aside.

If one were to allow these ex parte orders to be made—which, for the reasons I have put forward, is in itself bad—it would be essential to make certain that there was a specific requirement for the giving of notice of that order to the applicant with a minimum time allowed to him for applying to set it aside. I support what my right hon. and learned Friend has said. It is extraordinarily difficult to see why this time limit, which could be of great importance, should be singled out as the one time limit which cannot be extended in any circumstances.

I go into these points of detail for this reason. One cannot understand the effect of a document like this without examining in at least a little detail these practical aspects of it. All these things to which my right hon. and hon. and learned Friends have referred may be very convenient administratively for the Minister, but in my view they breach a fundamental requirement of our legal system.

If there is one aspect of our legal system which is more important than another, it is that the procedure should be such that there is no weighting in favour of either party. If there is to be any departure from that, then in cases where the dispute is between the citizen and the State, if any favour is to be given to either side, it is of paramount importance that it be given to the citizen and not to the State.

I hope that the Parliamentary Secretary—I have said this before, but it bears repeating—will face these difficulties and not simply try to sweep them aside as lawyers' law. They are not. It is attention to matters of this sort and the principles underlying them which has led to the position that we have a legal system which is the envy of the world. It ill behoves us to depart from it. I hope that if there be a good reason for these departures, the hon. Lady will grasp the nettle and tell them to us straight out. I hope that if, on reflection, she feels, as we on this side feel, that there are no such good reasons, she will be big enough to take another look at them and come back with other proposals which hold the balance between the State and the individual.

10.55 p.m.

The Parliamentary Secretary to the Ministry of Labour (Mrs. Shirley Williams)

I am under no illusion, as a non-lawyer, that I am in the easiest possible position in this debate. I can only argue that perhaps an economist has something to contribute to the Ministry of Labour, though I am not sure that it is to this particular aspect of its work. I shall endeavour to answer as clearly as I can the points which have been raised in the debate, and I declare in advance that perhaps legal language does not come tripping off my tongue.

First I come to the two most crucial points made by right hon. and hon. Gentlemen opposite about the county courts not being used on appeal against removal from the register, or on an application for restoration to the register by a company with regard to the refund or premium payments.

I think that the first point to make is that Section 7(5) of the Selective Employment Payments Act does itself indicate that the tribunals shall be used, and this Act has, of course, been passed by the House. I will not rely purely on that point, however, but I will add a few more reasons why I think it was the view of my right hon. Friend that extension of the work of the tribunals in this respect was more appropriate than appeal to the county courts.

First of all, as the right hon. and learned Gentleman the Member for Warwick and Leamington (Sir J. Hobson) will be very fully aware, the chairman of a tribunal must in any event be a lawyer, and he must be a lawyer of the sort of seniority which is normal for a county court judge. He is supported by two laymen, one drawn from each side of industry, but this may well be felt by employers appealing to the tribunal to be something of a safeguard, since they can be sure they will have somebody who understands their problems as employers, and not only purely legal questions.

Secondly, I think it is fair to say that work of the tribunals, both under the provisions of the Industrial Training Act under which they were originally set up, and subsequently under the Redundancy Payments Act and then the Selective Employment Payments Act, has been regarded as very satisfactory. Moreover, there is the protection, of course, afforded by the Council on Tribunals.

We felt that another reason for using the tribunals rather than the county courts is the informal atmosphere of the tribunals, which we felt would itself be an advantage particularly for small employers who wish to be but who may find it difficult or expensive to be represented.

Finally there is the point raised by the hon. and learned Member for Surrey, East (Mr. Doughty), that among those who will be drawn from the employers' panel are many people with a good deal of experience of taxation matters. He asked whether I can explain why the tribunals should be used for taxation matters. I would point out that generally the Special Commissioners of Taxes are used as tribunals in Income Tax cases, and that it can be argued that the tribunals have at least as much experience of tax matters as the county courts.

Mrs. Margaret Thatcher (Finchley)

Oh, no.

Mrs. Williams

The hon. Lady disagrees, but this is a matter, perhaps, of different advice from different lawyers.

The right hon. and learned Gentleman argued that conceivably the Regulations now being laid before the House were ultra vires. I think that I can only here refer him to the words directly to be referred to and determined by a tribunal in the provisions of Section 7(5), and which give the employer the right to require a question to be referred; and if he exercises that right—this is the force of the word "may" in this context, which differs from the Redundancy Payments Act—the case shall be determined by the tribunal, which is a way of giving the right and obligation to refer the matter to that tribunal.

With regard to the questions about the Minister's case, which were raised by a good many hon. Members opposite and the right hon. and learned Member, I think that perhaps the best thing I can do is to try to explain fairly fully the background to Rule 3(1,a) in the Regulations, under which, of course, there is no corresponding right for an applicant to apply for an order requiring the appropriate Minister to give particulars. This is a point which aroused a good deal of feeling on the other side of the House.

I would say, in reply to this, that the only information in the possession of the appropriate Minister—that is to say, either the Minister of Labour or the Minister of Agriculture—would be information supplied by the applicant himself. Certainly, the Minister's decision in any particular case would be based on the view he took as to the legal effect of information supplied to him by the applicant. It was felt that this was hardly an appropriate matter to be sup plied by the applicant, and that it would be a more appropriate matter to argue before the tribunal. Therefore, it was submitted to the Council on Tribunals that the effect of making Rule 3(1,a) bilateral, having in mind that the Minister would not have information on the matter in any event, would impose an unjustifiable burden on tribunals and confer no benefit on applicants—

Mr. Percival

I do not quite follow the hon. Lady there. What burden would it impose on tribunals? All they have to do is to make an order. What the hon. Lady says does not go anywhere near the length of the argument, be cause it is normal in any case for the one side to say how much of the facts it admits or how much is in dispute. What she says does not at all meet the point of why the Minister should not do that. It does not impose any burden on tribunals. Likewise, the grant—

Mr. Deputy Speaker

Order. The hon. and learned Gentleman cannot make a second speech. He can ask a question.

Mr. Percival

Then I will do that. Does not the hon. Lady agree that her proposition does not deal with the obligation on the applicant to give grounds, or why the Minister should not state his grounds?

Mrs. Williams

Had the hon. and learned Gentleman waited for a moment, I would have come to that point.

There is an obligation on the Minister to state his grounds—that is one of the important points I wish to make—and to give his reasons for a decision to include an employer, or exclude an employer from the register, for the purposes of premium or refund. That decision basically arises from the whole of the information available to the Minister on the matter. It is, therefore, because an application for further information other than that already comprehended in the application to the Minister to supply reasons would be an application for information not available to the Minister in any event, since it is in the light of the reason given by the Minister that the employer feels he has further information to give on the basis of which he applies for reconsideration, that we see no purpose, in justice or otherwise, would be served by this bilateral or mutual application both ways.

The point made by the hon. and learned Member for Southport (Mr. Percival) is already dealt with by the obligation on the Minister to give reasons for refuting the application.

Sir J. Hobson

If the Minister gives a reason and then there is an application that reveals a lot of new facts, the Minister may desire to contest those new facts on quite different grounds from those at the original decision. It may raise points never raised before. Why should the Minister not be obliged to say what he has to say against the case put by the employer?

Mrs. Williams

This is a point we thought should be argued before the tribunal. The point is that it is only in the light of the information given in the application that the Minister will be able to reconsider or add to the reasons he originally gave for refusing an application, or refusing to accept the employer on the register.

The right hon. and learned Gentleman raised the question of jurisdiction between English and Scottish courts. I would point out that it would be for the employer to decide—if there were any question about the precise area in which his premises were—which of the jurisdictions he wished to use. By passing through a central registration, namely, that of the London secretary to the tribunals, in the first place, there would be no question of a clash of jurisdiction. The area of jurisdiction would be decided at that point.

The date of the restoration of the com pany to the register is for the tribunal to decide. The Minister does not decide it. I would refer the right hon. and learned Gentleman to Section 7(5,b)—

Sir J. Hobson

It is quite right—I appreciate that it is Section 7 to which the hon. Lady refers—but the only matter to which the procedure applies is what is set out in the order, and surely that question is not remitted, under the procedure in these Regulations, to the industrial tribunal.

Mrs. Williams

I understand that the tribunal would have the right to decide on the date of the restoration of the company to the register, unless that date was the date on which the company had applied for restoration.

Section 10(2) makes it clear that the reference is not merely to "premises" but to the business carried on. Both matters must be taken into account. Costs concerning hearings before the tribunal would normally follow the decision made. It would not be the case that the costs would necessarily always be awarded against the applicant.

I was also asked about the question of timing. The timing of this matter is within the discretion of the tribunal under Rule 10(2). Notice will normally be required under that Rule, and the tribunal may grant an ex parte application in connection with Rule 3(5). Under that latter Rule it is possible for an applicant to require documents to be produced for inspection and to be set aside or varied. Under Regulation 24(2, 5) a party can apply for a summons to be dispensed with and under paragraph (6) of that order a summons against a party taken out within the expiration period can mean that documents may be required to be produced.

I come to some of the other points raised by the right hon. and learned Member for Warwick and Leamington. First, the question of the original application. That must be made through the central office. The reason is because the central office will be free to allocate an appeal to the appropriate offices and then the office must at once inform the applicant of the address of the relevant office.

The reason for doing this is to build up a central register of appeals and to avoid any of the complications that might flow as a result of firms which have many branches being uncertain as to which area of the country they should apply. There might be a number of complications about this and it seems simpler to arrange for all original applications to go through the central office and then be allocated to the regions which are most appropriate.

On this and other occasions the right hon. and learned Gentleman has referred to the tribunal itself. Originally, as he is aware, tribunals were set up to deal with appeals under the Industrial Training Act against assessments to levy. It was later agreed that it would be very much in line with the recommendations of the Franks Committee, which reported on the subject of tribunals, that wherever possible new jurisdiction should be given to the existing tribunals.

The Act indicates that the matters should go to tribunals and not to county courts and that suggestion was in line with the recommendations of the Franks Committee. My right hon. Friend agreed to assimilate appeals under the Act, and it was agreed that the industrial tribunals already set up to deal with the Redundancy Payments Act, the Contracts of Employment Act and the Industrial Training Act should be used in this way.

It was pointed out that when the Redundancy Payments Act was added to the sphere of responsibility of the tribunals, the Council on Tribunals welcomed the concentration of jurisdiction in fewer and stronger tribunals. It emphasised the importance of having people of the right calibre to serve on these tribunals.

I need not go into detail into the make-up of the tribunals, except to refer to a Question which the right hon. and learned Member for Warwick and Leamington put to my right hon. Friend some time ago arguing that there were some delays in obtaining hearings before tribunals. I would not deny that, but it is interesting to note that there has been a rapid increase in the panels of both employers and employees since that question was raised.

In July, 1966, there were 134 employers on the employers' panel and there are now 214. There were, at that time, 118 employees on the employees' panel, and today there are 190. The reason why there is not a better balance is because of the greater commitments of employers, and this makes it more difficult for them to attend as frequently as employees.

In this connection, when my right hon. Friend replied to the right hon. and learned Gentleman's previous Question, a reference was made to "frequent changes" in the panels. Some suggestions have been made indicating that there had been many resignations and a heavy turnover in staffing the panels. That is not so. There have been only eight resignations, and the reference to "frequent changes" was simply a reference to additions to the existing panels.

I shall say a word or two about the areas in which the tribunals sit. Here again, a point made by the right hon. and learned Gentleman has been to some extent met by my right hon. Friend. There are now 14 centres in England and Wales and six in Scotland, The tribunals have sat for a period of 100 days and they sit simultaneously.

The order extends the power of the presidents to the chairmen nominated for the purposes of the tribunals. One of the purposes is to give powers to the chairmen under which they can hold hearings in certain places, appoint the times of the sittings, and appoint lay members. This lifts a burden, which is very great, from the presidents of the tribunals. It is my right hon. Friend's intention to set up regional offices of industrial tribunals in Newcastle, Leeds, Birmingham, Manchester, North Wales and the Midlands and in addition to appoint two assistant full-time chairmen to the central office to enable hearings to be held as rapidly as possible.

Another matter which may be of assistance to the House relates to references to tribunals. The employer will always have an opportunity first of clearing factual questions with the local office of the Ministry. If he is not satisfied, he may clear such factual questions with the headquarters of the Ministry of Labour. We felt that it should be possible to make reference to the Central Office and for employers not to have to deal with questions which were far from their own addresses.

In the light of the various points I hope that I have shown why the tribunals were considered more appropriate than county courts. I stress that this is precisely in line with what the Act says.

Question put and negatived.