COMPENSATION

HC Deb 22 April 1980 vol 983 cc403-16

Amendment made: No. 6, in page 5, line 29, leave out from 'declared' to 'to' in line 31.—[Mr. Mayhew.]

Mr. Harold Walker

I beg to move amendment No. 100, in page 5, leave out lines 34 to 39 and insert— '(2) An application under this section shall be to an industrial tribunal'.

Mr. Deputy Speaker

With this we shall take the following amendments:

No. 99, in page 5, line 37, leave out from 'tribunal' to end of line 39.

No. 101, in page 5, line 40, leave out 'or the Employment Appeal Tribunal'.

No. 102, in page 6, leave out lines 4 to 11 and insert 'shall be such as the tribunal considers appropriate compensation for the loss sustained by the applicant'.

No. 103, in page 6, line 13, leave out 'or the Employment Appeal Tribunal'.

No. 104, in page 6, leave out lines 35 to 46.

Mr. Walker

The principal purpose of this batch of amendments is to fill out from the procedures provided for in clause 4 the role of the Employment Appeal Tribunal. I shall stick to this one point in view of the hour.

Amongst other things, the clause gives the Employment Appeal Tribunal a function which is other than appellate and makes it a court of first instance. We think that is wrong. It perverts the whole purpose of the Employment Appeal Tribunal. We fear that, having departed from its appellate function—at least in this matter—there will be no end to the primary jurisdictions which may subsequently be conferred on the tribunal.

As I said, in view of the hour, I shall not develop the argument at length. This is a matter about which we expressed concern in Committee and we thought it right to express it again on the Floor of the House.

Mr. Mayhew

The arguments for and against this proposal were fully debated in Committee. I propose to follow the example set by the right hon. Member for Doncaster (Mr. Walker) and to try, in a sentence or two, to say why the Employment Appeal Tribunal should have the jurisdiction of deciding at first instance what the compensation should be.

The tribunal's jurisdiction arises only if a complaint has been made to the industrial tribunal that somebody has been wrongfully expelled or excluded from a union and the industrial tribunal makes a declaration "Aye" or "Nay". If it holds that there has been a wrongful expulsion and makes a declaration accordingly, there is then time for the union to act upon that declaration and, if so minded, to reinstate the former member. But, if it does not, the proposal is that there shall be a claim for compensation for the loss that has been sustained as a result of being excluded and the loss that is likely to be sustained in future if that exclusion or expulsion is continued. It is a difficult jurisdiction. We feel that it is one that is not likely to arise in many instances, but, when it does arise, it will be important. Because the Employment Appeal Tribunal is staffed by people with plenty of industrial experience, but presided over by a High Court judge of great distinction, Sir Gordon Slynn, its reputation stands extremely high in trades union and other circles, and we felt it right that it should exercise this much more difficult and delicate jurisdiction. At one time we thought that it should be exercised by the High Court, but on reflection, and after consultation, we felt it right that the industrial expertise of the Employment Appeal Tribunal should be used in these circumstances. Therefore, we think that, albeit exceptionally—though not wholly exceptionally because it has a similar jurisdiction in one or two specialised areas elsewhere—it is right that the Employment Appeal Tribunal should exercise that jurisdiction. I do not think that it is necessary for me to say more than that.

Mr. Harold Walker

May I press the Minister on a point that we raised in Committee but to which I do not recall him responding? The clause provides for divided jurisdiction, where the industrial tribunals will take a certain area and the Employment Appeal Tribunal will take the other area. While there can be an appeal to the Employment Appeal Tribunal against an industrial tribunal decision, it appears that there is no provision for an appeal against an Employment Appeal Tribunal decision in respect of its primary jurisdiction responsibilities.

Mr. Mayhew

An appeal against a decision of the Employment Appeal Tribunal in respect of its primary jurisdiction responsibilities would be to the Court of Appeal, but it would be only on a point of law and not on fact.

Amendment negatived.

Amendment made: No. 7, in page 5, line 44, leave out 'twelve' and insert 'six'.—[Mr. Prior.]

Mr. Harold Walker

I beg to move amendment No. 41, in page 6, line 25, leave out from 'exceed' to 'an' in line 32.

Mr. Deputy Speaker

With this it will be convenient to discuss the following amendments:

No. 38, in page 6, line 32, leave out 'for the time being'.

No. 40, in page 6, line 33, after '75', insert '(1)'.

No. 39, in page 6, line 34, at end insert— '(c) in subsection (2) of section 75 of the 1978 Act shall have no application to this section in determining the limits imposed by (b) above.'.

No. 42, in page 6, line 37, leave out from 'exceed' to end of line 46 and insert 'the amount referred to in subsection (7) above.'.

Mr. Walker

I do not intend to detain the House, but this is a matter about which we have continuing concern. While we object to the whole principle embodied in the clause, a matter of special concern is the high level of compensation. We fear that that will induce some individuals, for what may be understandable reasons, to chance their arm and behave in an unreasonable manner calculated to get them expelled from their union in the hope that they could subsequently apply to the industrial tribunal or to the Employment Appeal Tribunal in a bid for compensation, which may be generous according to their length of service and the circumstances in which they were expelled. We are talking of sums which run into tens of thousands of pounds.

I shall not go over the examples that were given in Committee. I remember that my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) described vividly how a person approaching retirement could see an opportunity to gain an amount of money that would launch him into a more easy retirement than might otherwise have been the case, if he could create the circumstances in which he provoked his trade union into behaving in a manner that would subsequently give him grounds on which to go to a tribunal and claim the substantial amounts of money that would be available under the clause. That would be harmful to industrial relations. It is one of the features of the Bill that will be detrimental to good industrial relations, and which should be opposed.

Mr. John Evans

I wish to intervene only briefly. It is essential to put on record what my right hon. Friend the Member for Doncaster (Mr. Walker) has said about those individuals who will seek to take the trade unions for a ride. At this stage, it is essential that the Opposition make it perfectly clear that what the Government are doing, if they are not prepared to accept the amendment, is to create a situation whereby every free-rider in industry will be seeking to make a lot of money out of the trade union movement.

I know that the hon. and learned Gentleman will quote figures to show that in past instances only small amounts of money have been involved. But, in answer to a question from one of his hon. Friends at Question Time today, the Minister made it perfectly clear that we could possibly be talking about sums of £14,000 or £15,000. It is figures such as those to which the characters who operate within British industry will be looking.

Conservative Members should appreciate that certain individuals in British society are nowadays known as "bounty hunters". Such individuals look for firms in which redundancies will be declared in the not too distant future in order to latch on. Of course, such people are not concerned with the State redundancy scheme, but rather with the additional benefits which the trade union movement negotiates on behalf of the workers who are declared redundant.

I assure the hon. and learned Gentleman that there are some very astute characters knocking around industry at present. They will read this clause with some interest, and will recognise that substantial sums of money are potentially involved. It is essential that Conservative Members do not assume that everyone who declares that he has a longstanding, deeply-held personal conviction not to belong to a trade union is interested only in being a non-trade unionist. Such people will be interested in this clause. In the next two or three years, it will be fascinating to read some of the amazing arguments which will be presented to industrial tribunals by individuals who have suddenly travelled various roads to Damascus in order to persuade those tribunals that they have had an amazing conversion and suddenly, because of some deeply-held personal conviction, they do not want to belong to a trade union.

I only seek to put on the record the fact that the Government are giving the go-ahead to every outrageous character in industry, who will try to establish his right to what could potentially be massive compensation, simply because he has no feelings one way or the other for the trade union movement. He will simply seek to make a lot of money as a result of this clause in the Bill.

I wonder whether that is what the Government are seeking to achieve. I am sure the hon. and learned Gentleman will recognise that that will not improve industrial relations or the feelings of genuine trade unionists, even if they are not activists. I believe that the hon. and learned Gentleman and his right hon. Friend will come to regret the insertion of this subsection in this clause.

Mr. Mayhew

This clause has nothing to do with "deeply-held personal conviction". That relates to the conscience clause, which has nothing to do with this clause. This clause is connected with compensation for unreasonable exclusion or expulsion from a trade union. The effect of the amendment is to reduce to a maximum of £5,200 the compensation which can be awarded in that event.

The Bill sets as the maximum for compensation to be awarded for unreasonable exclusion or expulsion the same maximum which can be awarded for unfair dismissal by an employer. Indeed, if there are grounds for any criticism, they are that the figure ought to be higher. If one is sacked from one's job by an employer, one can go and get a job somewhere else. If a person is sacked from his union and his industry is organised in a closed shop, he may very well be deprived of the ability to earn a living in the only trade he knows. That is why, I suspect, there are grounds for criticising us for not pitching the maximum high enough.

12.45 am

Everything that the hon. Member for Newton (Mr. Evans) has said might have been argued in defence of employers. It might have been said that the bounty hunters would go round trying to exploit the jurisdiction to get compensation for unfair dismissal from an employer, when the provisions were first introduced in 1971. I never heard that type of argument being advanced from the Labour Benches. The tribunals are well able to spot a useless case. We hope, before long, by changes in their administrative procedures, to enable them to filter out the really useless case before it gets off the ground.

What we are proposing to do is to say "Very well, if you consider that you have been unreasonably expelled from a union and suffered loss in consequence, you may go to the tribunals—first the industrial tribunal and then the employment appeal tribunal—and claim compensation from the union." We do not think that it could be right, when the maximum for unfair dismissal by an employer is £16,000, to say that the maximum under the terms of this amendent shall be only £5,200, if it is established that a person has been unreasonably expelled from his union.

As I said at Question Time today, it is rare for a claim to reach anything like the maximum. The median compensation award for unfair dismissal is about £375. There may well be circumstances in which someone is expelled from a union and is able to show that he will suffer considerable ongoing loss of earnings. Such cases will be rare, but they should be catered for. That is why we feel entirely confident in advising my right hon. and hon. Friends to resist the amendment.

Mr. Harold Walker

Once again the hon. and learned Gentleman has trailed this issue of pending changes in the administrative procedures of the tribunal across the debate. That is wholly irrelevant to the many matters under the Bill which will be dealt with by the industrial tribunals. We are entitled to know what changes the Government propose to introduce and when, and when we shall have an opportunity to debate them, so that the House can make up its mind on these pending changes. We are entitled to more than these coy hints that the hon. and learned Gentleman keeps dropping. I hope that he will give us more information about this matter before we leave the subject.

Mr. Mayhew

With the leave of the House, I shall reply to the right hon. Gentleman. We said in the working papers published last summer that we wished to make changes in the administrative procedures of the industrial tribunals so that, for example, costs could be more readily awarded against an unsuccessful claimant where it was unreasonable that the claim should have been brought. We also believe that there should be a procedure whereby the tribunals can seek to filter out the claim that appears to have little chance of success. Of course, the claimant should have every opportunity to make himself heard. Such changes should be made to cut down the number of cases brought for unfair dismissal which have virtually no chance of success but which take up a great deal of time and money and cause a great deal of administrative inconvenience. That is very much in the interests, in this case, of a trade union in the parallel jurisdiction with which these two clauses are concerned. That was the relevance of introducing it, albeit at a late hour—

Mr. John Evans

Does the hon. and learned Member accept that there is a difference here in that a frivolous trade union claimant will not be supported by trade union officials? I can assure the Minister that that is the position. Fulltime union officials are too busy to advise claimants with bad cases to approach the tribunal. That still leaves such claimants free to approach the tribunal themselves. When a person is seeking to prove unfair dismissal by a trade union he will undoubtedly be assisted by Right-wing lawyers looking for easy pickings from the trade unions.

Mr. Mayhew

That goes to the root of the policy of the two clauses. The Government believe that it is right that a person should be able to claim for compensation if he has been wrongfully expelled from his union. If a person working in a firm where a closed shop is operated—clauses 3 and 4 relate only to closed shops—loses his union card, he loses his ability to work. Everything that was said by the hon. Member for Newton goes to the root of the policy of the clauses. I understand why he is opposed to the clauses, but I disagree with him. I should have thought that it would be in the interests of the trade union to have a mechanism to filter out the bounty hunter or the bum case that he has in mind. If he would prefer that it did not apply to trade unions, no doubt that could be arranged.

Mr. John Evans

Will the hon. and learned Gentleman accept that if an individual is expelled from a trade union for whatever reason he has a right under common law to appeal against the decision of the trade union in the courts? There are a number of cases on record where individuals have appealed to have their union cards restored on the grounds of natural justice, and the courts have made awards in their favour. But the Government are setting up new legislation that will allow the individual who regards himself is wrongly dismissed to ignore the courts and the claims of natural justice because he will be interested in the compensation arguments that have been propounded in the clause. Is not that what the bounty hunters are seeking?

Mr. Mayhew

The hon. Gentleman is saying that at present the courts have jurisdiction in at least two circumstances if a person is expelled from a union. They have jurisdiction if he has not been given an opportunity to hear the complaint against him, or if he has not been given an opportunity to explain his story—that is, where the rules of natural justice have not been complied with. They also have jurisdiction if the expulsion from the union has taken place not in compliance with the rules of the union. But that does not wholly meet the justice of the circumstances.

There are also circumstances in which a union complies with the rules of natural justice and with its own rules but none the less considers that a person should be expelled—in circumstances that are unreasonable. I agree that the tribunal will have to decide what is unreasonable. We propose that there shall be a code of practice in respect of the closed shop—as has been made clear many times—which will seek to give guidance in those circumstances, and which will be of value to all concerned. Clauses 3 and 4 deal with this separate jurisdiction, which will award compensation for unreasonable, as distinct from unlawful, expulsion from a trade union.

Amendment negatived.

Mr. Harold Walker

I beg to move amendment No. 105, in page 7, line 2, after 'law', insert 'or fact'.

Mr. Deputy Speaker

With this it will be convenient to discuss amendment No. 71, in page 10, line 43, clause 9, at end insert— '(4) An appeal shall lie to the Employment Appeal Tribunal on any question of law or fact arising from any decision of, or arising in any proceedings before, an industrial tribunal under this section.'.

Mr. Walker

The amendment arises from clause 4, but we cannot ignore the way in which that clause hangs on clause 3 and follows from it. I shall quickly remind the House that clause 3 gives a person who feels that he has been unfairly or unreasonably excluded or expelled from a trade union the right to go to a tribunal for a determination to be made. If he is successful, he can ask the Employment Appeal Tribunal to make a compensation award.

If on that person's application to the tribunal under clause 3 he fails, he can appeal. Clause 3(8) provides that An appeal shall lie to the Employment Appeal Tribunal on any question of law or fact arising from any decision of, or arising in any proceedings before, an industrial tribunal under this section. It seems clear that almost invariably the appellant will be an applicant who has failed following a decision of the tribunal in favour of the union.

I direct the attention of the House to the parallel provision in clause 4 for an appeal against the determination of the amount of compensation that has been awarded. Subsection (9) states that An appeal shall lie to the Employment Appeal Tribunal on a question of law "— and only on a question of law— arising from any decision of, or arising in proceedings before, an industrial tribunal under this section. As I suggested that it would be almost inevitable that it would be the person appealing against the trade union under clause 3, equally inevitably it would be a union that would be appealing against a decision under clause 4. However, we find that for some odd, inexplicable and clearly inequitable reason we have appeals under clause 3 being determined on questions of law or fact while under clause 4 the grounds of appeal are substantially narrowed by excluding appeals on questions of fact. That seems inexplicable and unfair. The appeals should be on all fours under both clauses, which hang together.

1 am

Amendment No. 71 seeks to remedy an omission in clause 9 in so far as no right of appeal arises out of its provisions. Where a person or trade union has successfully applied to a tribunal and is awarded compensation, the employer may require the person or trade union to be joined in the proceedings so that that person or trade union may have to pay part of or all the compensation that is awarded. There is no provision for a person or trade union—or the employer for that matter—who feels that the tribunal has wrongly directed itself to have a right of appeal. We believe that a right of appeal to the Employment Appeal Tribunal on a question of law or fact should be set down in the statute.

Unless the Government can explain to the satisfaction of the House why no such right of appeal is written into the Bill, they should either accept amendment No. 71 in toto or alternatively tell us what they propose to provide by way of a right of appeal.

Mr. Douglas Hogg (Grantham)

The right hon. Gentleman is suggesting that there should be an appeal against a finding of fact. Will he concede that that would be an almost unique provision in English law and that as a general principle there is no appeal against a finding of fact in any court?

Mr. Walker

The hon. Gentleman could not have listened to what I said or read the Bill. As I said, clause 3 provides for an appeal to the Employment Appeal Tribunal on grounds of law or fact. Under clause 3 there is an appeal by an individual against a decision in favour of the trade union on grounds of law or fact. Under clause 4 the appeal will almost invariably be by a trade union and it will be an appeal only on grounds of law. I hope that the hon. Member for Grantham (Mr. Hogg) has now woken up sufficiently to read that part of the Bill.

If it is sensible to make that provision in clause 3, it is equally sensible to make it in clause 4 and clause 9. We are suggesting that the Government should put clauses 3, 4 and 9 on all fours.

Mr. Mayhew

Clauses 3 and 4 run together, and a person can appeal to the Employment Appeal Tribunal if the industrial tribunal has made a declaration that he has been unreasonably expelled or excluded from his union. I do not know why the right hon. Member for Doncaster (Mr. Walker) says that it will almost always be an applicant who has failed before the industrial tribunal who will wish to appeal to the Employment Appeal Tribunal.

What we are talking about first is someone who has either got his declaration or has failed to get a declaration, or has had a declaration made against him as a trade union of unreasonable expulsion.

I agree with my hon. Friend the Member for Grantham (Mr. Hogg) that it is unusual for there to be jurisdiction for appeals on questions of fact, but he will know that one can appeal on questions of fact from the magistrates' court to the Crown court and always could do so from the magistrates court to quarter sessions. It is not unique.

There is a difficult and new jurisdiction in the question whether someone has been unreasonably excluded or expelled from a union and we feel that the industrial tribunal is the right body, because of its tripartite structure and its industrial expertise, to deal with that. However, because of the difficulty, delicacy and importance of the issue, there ought to be an appeal on questions of fact, as well as on points of law, to the Employment Appeal Tribunal.

The right hon. Gentleman pointed to the contrast with the provisions of the Bill under which the industrial tribunal makes an award of compensation. If a person gets a declaration from an industrial tribunal that he has been unreasonably excluded or expelled, time is allowed for the union to decide what to do about that. The person cannot take any steps towards getting compensation for a period of four weeks.

Let us assume that the union agrees to admit that person to membership. It will be open to him to go to the industrial tribunal and say that he has been out of work for four weeks and wants to be compensated for lost earnings. The tribunal has the power to award that compensation. Against that part of its jurisdiction, there is a right of appeal to the Employment Appeal Tribunal only on an issue of law, and not on a question of fact. The reason is that it is a much simpler and less important job.

As the right hon. Gentleman said, we do not want a flood of appeals on questions of facts, and the latter part of the jurisdiction is much simpler and less important and is one which the industrial tribunal is quite capable of getting right. Therefore, the appeal should be on a question of law only.

Mr. Harold Walker

The hon. and learned Gentleman cannot keep riding off on generalised assertions without producing any reasoned arguments. Suppose that the individual who goes to a tribunal for compensation is able to trot out what is seen, after the tribunal has made its decision, to be a load of codswallop about how much bonus and overtime he has lost. It may not be possible to examine such details at the time and the union may be lumbered with forking out money that ought not to be paid.

The Minister says that the union should have no right to go back to the tribunal and say "This man told a load of damn lies and we have the employer's accounts to prove it." I hope that the hon. and learned Gentleman has not overlooked that aspect.

Mr. Mayhew

It is not overlooked, but there must be an end, at a reasonable time, to legislation—just as there must be an end, at a reasonable time, to debates.

Labour Members are always pointing out to me that one of the advantages of belonging to a union is that members have at their disposal the expertise of the union's legal department. When a union is at the sharp end of a claim for compensation for unreasonable exclusion or expulsion, it can be relied upon to use its lawyers to go through the process of examining the case made against it.

It is not too difficult to test the evidence that may be brought forward by the claimant that he has been kept out of a job and that, although he was earning £100 a week before he got the sack, he has been earning nothing since his dismissal. That is the nature of it. It is very simple. There is no injustice there.

The effect of the amendment is to create a right of appeal to the Employment Appeal Tribunal on fact as well as law regarding industrial tribunal proceedings in which a party has been joined under the provisions of clause 9. Clause 9 deals with joinder. The only question that arises is whether there ought to be a right of appeal on questions of fact, so we are assuming that the industrial tribunal has said "Yes, we have dealt with your claim. We think that the union has had a part in the responsibility for your getting the sack, because we find that it exerted pressure upon the employer to sack you because you were not a member of the union. We find that the union must contribute 30 per cent. of the compensation."

Should there be a right of appeal on questions of fact there or not? The Government believe that there should not be. This is a relatively simple matter. Appeal on fact as well as law is provided for under clause 3, because such cases may involve extremely delicate questions of judgment on which it would be advantageous to facilitate a complete re-hearing of the case by the more senior tribunal.

But no such question arises, we believe, on joinder, and there is the further point that it is not easy to see how there could be appeal on questions of fact on the question of contribution and not on compensation for unfair dismissal more generally. There is not, of course, in that case. There is no need for such a change. Industrial tribunals are extremely skilled in assessing compensation and no difficulties need be anticipated. The only proper questions for appeal in such cases are, we believe, questions of law.

Amendment negatived.

Further consideration of the Bill adjourned.—[Mr. Mather.]

Bill, as amended (in the Standing Committee), to be further considered this day.