EMPLOYEES IN TRANSFERRED PARTS OF UNDERTAKING (Hansard, 15 January 1971)

§ The Minister for Industry (Sir John Eden)
Since the Second Reading, I have had further discussions with the staff side of the Authority. I promised that I would look further into some of the points which they made to me, and I gave an undertaking to the House that I would consider closely some of the representations which hon. Members have made. This Clause gives me a chance to say something on one of the points which have been raised.
The effect of subsections (3) and (4) is to ensure that the staff who are transferred to the companies by subsection (1) are employed by the companies on terms and conditions as near as possible equivalent to those which they enjoyed in the Authority immediately before transfer. There is, from then on, an interim period, from the time of transfer until, in accordance with the next Clause, the negotiating machinery has been established and new terms and conditions of employment have been negotiated.
In my discussions with the staff side and in correspondence that I have had, it has become clear that they still feel a certain amount of concern that, during this interim period, the staff in the companies might be in some way worse off than had been the intention of the Bill. They particularly asked that the staff in the companies should benefit from any 399 improvements in terms and conditions during that interim period which might affect staff still remaining in the Authority.
The staff side went even a little further than this and suggested a more permanent link. They wanted to try to establish some form of permanent link between the terms and conditions in the companies and those existing in the Authority at any time in the future.
I have given careful thought to this and my hon. Friend the Under-Secretary of State replied to this point on Second Reading. He said then that, in the Government's view, it would be inappropriate. I have considered the matter further, and I must still hold to that view. A permanent link of this kind would not, I think, be possible. I endorse what was said in reply to a similar point by Lord Delacourt-Smith on Second Reading in another place, and I commend hon. Members to read the OFFICIAL REPORT of that reply, which they will find in column 345 of the issue dated 14th April, 1970.
He then made it clear that in his view—and obviously, at that time, in the view of the then Government—while he thought it was right that the short-term position should be catered for as far as possible, particularly in the interim, he believed that it would not be proper to try to give a set of guaranteed terms and conditions by linking them to what might obtain in the Authority in the long-term. The major point was that, after the interim, it would be replaced by adequate effective negotiating machinery.
On the question of a temporary link, an assurance has already been given that for a reasonable interim period any changes in Authority pay and conditions that would have applied to the staff concerned had they remained in the Authority will be applied to them, from the same effective date, except to the extent that the managements and staff representatives may otherwise agree.
This was intended to cover the period until negotiating machinery in the companies was well established and procedures had been agreed, which would have included arrangements for arbitration. It was accepted that this interim period and this process of establishing the machinery would take about one year. If by any 400 chance it took longer, then it was accepted—indeed, this has already been accepted—that a further limited extension of that undertaking could be discussed.
This seemed to me to be a reasonable assurance, but I have looked further into the matter and I am informed that to ensure that ample time is available for the negotiation of appropriate changes in conditions of service, the prospective managements of the companies are now prepared to replace the previous assurance—that is, for one year—by an undertaking that the link with A.E.A. pay will, if necessary, be maintained for up to two years from the appointed day. I have no reason to doubt that by then not only will the negotiating and arbitration agreements have been concluded, but that most, if not all, of the companies' terms and conditions will have been agreed, and I feel that that guarantee to the staff side will ensure that its best interests are looked after.

§ Mr. Benn
I am grateful to the Minister for that statement, but he will appreciate that my hon. Friends and I will wish to examine it more closely, as no doubt will the union side.
It is right that I should point out at the outset that when the I.P.C.S. came to see us and asked for a definite assurance that everything would be exactly as it would have been had they remained in the A.E.A., we felt unable to give that assurance, first of all because it seemed that to have done so would have introduced too rigid a position, and, secondly, because it was felt that as they were in a growth business, they should be able to do better than had they remained in the A.E.A.
Although some disappointment was expressed by the union at that time, I am sure that it broadly accepted our view that what it required could not be done; though an assurance was given that there would be a maintenance of A.E.A. conditions until new machinery was introduced.
There are really two interim periods. One is the interim period between the transfer of the people from the A.E.A. to the new company, before new negotiating machinery is set up, during which time, I understand, they will be getting any improvements in A.E.A. conditions 401 negotiated by their representatives in their old capacity. Have I understood the Minister aright? The second interim period is the one which will occur after the negotiating machinery has been set up, but before that machinery has led to the actual agreement being reached under it in relation to terms and conditions. This second interim stage is equally important to the staff side because one could find that one was left with new machinery but no agreement under it.
Although I do not raise this point in a controversial spirit, I must point out that the provisions of the new Industrial Relations Bill relate very much to this issue. The staff could find itself left for some time with a large number of people with negotiating machinery but no agreement under it at a time when even verbal agreements—this will apply if the Industrial Relations Bill is passed—would be legally enforceable, and this could present considerable difficulty.
It sounds as if the Minister has gone as far as he could in this matter. However, I do not like the idea of a time-scale in terms of years or months. One hopes that this will be concluded much more quickly. Two years should cover these two interim periods and, subject to my having understood the Minister's remarks correctly, I trust that he will allow me to return to this matter at a later stage or, if necessary, have it raised in another place. On that understanding, I will not press the issue.
However, I must point out, in connection with our discussion about the transfer of assets, patents and so on, that we should never lose sight of the fact that the real assets being transferred here to the company are the people. They are infinitely more valuable than anything else. After all, they made the patents.
In all modern industry, and particularly in this one, it is the quality of the minds of the people and the sense of security that they have that is of paramount importance. In so far as the Minister appears to have met their anxieties, I express my gratitude to him, subject to my returning to the matter, if necessary.

§ Mr. Neave
As I have a considerable interest in staff matters in the Authority, I would like to know, since my hon. Friend referred to arbitration agreements, whether there will be provision for arbitration on any new superannuation 402 scheme which is written into the fuel company scheme. I was not clear from my hon. Friend's comments what the position will be in regard to arbitration agreements. In other respects I welcome everything he said.

§ Sir J. Eden
I absolutely echo the sentiments of the right hon. Member for Bristol, South-East (Mr. Benn) when he said that the most valuable assets of all are the human assets. Without these the company would have no future at all. I assure him that this is fully endorsed and understood.
I believe that the point he made is fully met in the form of words I used. I appreciate that he will wish to have a chance to examine my remarks. It is the intention to extend the period of guarantee, as it were, from one to two years, and by that time it is believed that not only will the machinery be established but that the terms and conditions will have been agreed. This is the spirit which lies behind my remarks.
I assure my hon. Friend the Member for Abingdon (Mr. Neave) that there is machinery for arbitration in respect of superannuation, but it may be more appropriate for me to answer his question more fully when we debate Clause 9 stand part.