EMPLOYEES' SECURITY (Hansard, 17 December 1968)

§ Mr. Eric Moonman (Billericay)

I beg to move, That leave be given to bring in a Bill to establish machinery for the regular supply of information by employers on all matters affecting or likely to affect employment both to their employees and to the Department of Employment and Productivity; to set up a security 1238 fund within each industry for redundancy purposes; and for connected matters. There is considerable interest and anxiety among large numbers of people at all levels in industry about the social and personnel consequences of company reorganisation and mergers. Since August, 1965, there have been about 1,500 mergers in Britain. Several trade union leaders—and growing public opinion—have suggested a code of conduct to deal with manpower.

1239 Two issues arise from this suggestion. The first is whether a code of conduct, of work practice, is realistic, and the second is the question who should apply it and oversee it. On the first question, a code of conduct would provide a "direction" for employers and employees. More important, it would enable them to prepare, in a detailed and practical way, for the manpower of a business alongside plans for the production, marketing and distribution of the goods at times of rapid change. This seems essential, particularly at a time of rapid growth.

On the second question—about who should apply it—one thing is certain: the social and personnel consequences of mergers and takeovers cannot simply be left to the individual firm to sort out for itself. While I recognise that a number of companies have shown great compassion when they have had to make a number of their employees redundant, in the main we have found that particularly the medium and small-sized firms have been frustrated by the size of the problem in terms of human relations and what it means to the employee in terms of the traumatic experience involved. Not only must he change his job, environment and area, but he must also suffer a great deal of anxiety for weeks and possibly months.

Nor can we rely on the existing powers—or lack of them—of the Department of Employment and Productivity. A recent booklet issued by the Department shows up what can be done to deal with redundancy procedures. I suggest, however, that the real need is for a more active and dynamic approach to the problems of mergers and takeovers; and this booklet is, at best, a series of tips about what one might do at a time of organisational change. However, it does not meet the great worries and anxieties of employees.

I raise this matter at this time because—this was mentioned by an hon. Member in the earlier debate—there is likely to be a series of important mergers and takeovers during the Recess. Apart from that, there is a growing problem in terms of the rationalisation of industry and an upsurge in takeover activity. Any reading of the business Press justifies this view. More important in terms of evidence—I am not relying on the newspapers—company acquisitions this year will reveal, when the figures are available, 1240 some striking features which will affect all aspects of our industrial life.

The post-war history of acquisitions fell into three phases; the period up to 1952, the period from 1953 to 1958 and the period from 1959 to 1966. I suggest that, based on the evidence that is available, the present period is likely to be the most serious of all. In absolute terms, there was a large increase in the volume of mergers and takeovers in 1964 and 1965 compared with 1963. Between 1954 and 1961 more than 500 quoted companies and no fewer than 2,900 companies were recorded as having been acquired. On a small sample taken in 1967—it consisted of any deal, bid or merger in just three months—311 acquisitions were noted, while the total value for these three months was £436 million.

There are other, indirect features which operate to cause major labour changes. In the 10 years up to 1964, employment in the metal manufacturing industries, engineering and ship building, rose by more than 400,000. In the same period in textiles employment dropped by 200,000. Thus, the movement between industries suggest that in the current year about 1 million employees will be affected. This is a serious problem and is worthy of our attention.

The view that the State should not intervene is strongly held by many of those who speak and write on this subject. Their argument is that if economic and commercial freedom is to be maintained, then each employer or trade union official must be free, within limits, to conduct his business. I do not accept this and it is emphatically not the view of the employee, whether he be in management or not, when he is thrown out of his job as a result of a takeover.

The aim of the Bill is to identify new standards of industrial behaviour at all levels of employment and, in particular to establish effective and fair provisions for all levels of employees whose specialist or craft skills are no longer suitable or necessary within an organisation due to rationalisation, mergers or contraction. Its provisions will ensure that the Department of Employment and Productivity will become more involved in these matters.

The Department will be informed by companies at the earliest possible moment 1241 when organisational change is being considered. A representative of the Department will be required to visit the firm and discuss with management and employee representatives the procedures to be set up, where they do not exist, for continuous communication throughout the various stages of the organisational change. At all meetings, other than sub-committee and informal meetings, a representative of the Department will be invited to attend.

Employee representatives at these meetings will have the right to adequate information covering all aspects of the company's affairs, provided only that this does not seriously jeopardise the firm's commercial interests. Once an agreement has been reached, it will be registered with the Department of Employment and Productivity,

The history of industrial relations is bestrewn with discarded prescriptions offered to hopeful managements for their labour ills, but the most common reason for disappointment is the inability of management to recognise that factory environment is affected as much by the past as by present social circumstances.

I ask for the support of hon. Members for the Bill which, despite its modest intentions, may carry us a little further along the road to making industrial relations more efficient. The worker's rô le is not an optional icing on the cake in management's decision-making. It is one of the essential features of industrial reorganisation and change.