§ Mr. Golding
I beg to move amendment No. 7, in page 7, line 34, at end insert—'(2) As regards any wholly owned subsidiary the Corporation shall secure that notwithstanding anything in the subsidiary's Memorandum or Article of Association the subsidiary shall comply with the provisions of Schedule 1(2) to this Act.'.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine)
With this it will be convenient to take the following:
Government amendment No. 8.
Amendment No. 9, in page 8, line 18, at end insert—'(4) As regards any wholly owned subsidiary of the Corporation, the Corporation shall secure that, notwithstanding anything in the subsidiary's Memorandum or Articles of Association, the employees of the subsidiary are employed at all times on terms and conditions of employment which, other than as to the identity of the employer, are the same as those of employees of the Corporation employed on like work.An employee of a wholly owned subsidiary is to be regarded as employed on like work with an employee of the Corporation if their work is of the same or a broadly similar nature and the differences (if any) between the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing their work regard should be had 383 to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences'.Amendment No. 59, in clause 59, page 49, line 39, at end insert—(2) As regards any wholly owned subsidiary the Post Office shall secure that notwithstanding anything in the subsidiary's Memorandum or Articles of Association the subsidiary shall comply with the provisions of Schedule 1(11) to the Post Office Act 1969'.Government amendment No. 60.
Amendment No. 61, in clause 59, page 50, line 22, at end insert—'(4) As regards any wholly owned subsidiary of the Post Office, the Post Office shall secure that, notwithstanding anything in the subsidiary's Memorandum or Articles of Association, the employees of the subsidiary are employed at all times on terms and conditions of employment which, other than as to the identity of the employer, are the same as those of employees of the Post Office employed on like work.An employee of a wholly owned subsidiary is to be regarded as employed on like work with an employee of the Post Office if their work is of the same or a broadly similar nature and the differences (if any) between the things they do are not of practical importance in relation to terms and conditions of employment; and accordingly in comparing their work regard should be had to the frequency or otherwise with which any such differences occur in practice as well as to the nature and extent of the differences'.
§ Mr. Golding
I am pleased that the Government have partly met the amendment that I moved in Committee to ensure that the industrial relations provisions in schedule 1 are extended to subsidiaries. However, why is the wording different?
It appears that disputes in the main corporation will continue to go to the Post Office arbitration tribunal, but I am advised that under the Government amendment arbitration for employees in the subsidiaries will go to ACAS. I do not speak for the unions, but I do not believe that it is desirable for one body to arbitrate in the public corporation and another in the subsidiaries. I am neutral. I am not opposed to ACAS or the facilities that it provides. However, it could prove difficult for management and unions if employees of the corporation and employees of the subsidiaries have to take the same case to different tribunals.
I hope that the Minister will take advice. If my point is valid, I hope that the Government will sort it out in another place. The problem may have arisen inadvertently.
I was pleased to see that the Government, in one respect, had met the spirit of what was requested by hon. Members in Committee. That is not true, however, of the request that was made about terms and conditions. We want a declaration from the Government on the result of discussions with the chairman designate on this matter. I put strongly in Committee, and do so again tonight, that it would be totally unacceptable to the Post Office Engineering Union if the terms and conditions of staff transferred to subsidiaries were different from those that would have been enjoyed in the main corporation. Enormous industrial relations difficulties would be created by the Government. I do not see how the unions can accept this situation. It will be seen as an industrial relations matter rather than a political one if the terms and conditions of members of staff are changed.
The Minister for Industry and Information Technology stated in Committee: 384However, I undertake to look at the matter, as I have undertaken for the other amendment, because it is clearly our intention that if employees of the Post Office are moved to subsidiaries, their terms and conditions of work will remain the same.I hope that the Minister sticks by those words. The important words are "remain the same" rather than the same as at the moment of transfer.
In Committee the Minister referred to the protection of schedule 1. Do the Government still believe that schedule 1 will protect members of the staff in subsidiaries? Will their terms and conditions remain similar to those that they would have enjoyed had they stayed in the main corporation?
The Minister referred to the EEC fifth directive. Had the Bill not come before the House today I would have been accompanying my colleagues on the Select Committee on Employment to Bonn and Brussels, where they are studying the fifth directive. I say that not only to indicate the sacrifice that I have made, especially when. I have seen one of my oldest friends, whom I shall only call "Ernie", being thrown out of the Gallery when sorely provoked by the Minister, but also because I have examined the fifth directive in more detail and more carefully than I had done when it emerged out of the blue in Committee. I cannot see that the directive will provide protection for our members in the subsidiaries for any period. It may provide, as in schedule 1 and as in the Employment Protection Act, protection at the moment of transfer. Nowhere does it provide protection for the years to come, yet that is the important question.
Nobody in his right mind would think that the chairman of British Telecom had forced our members to take different pay and conditions of service now, but the question asked by our membership is "What will happen through time?" We do not want there to be different pay and conditions in the subsidiaries.
If the subsidiaries exist to provide a system of accounting, to make certain that there is no unfair competition, no cross-subsidisation, I say to the Minister "Leave it there. Do not go further and say that they are separate entities in which the staff must have a different regime. If you do, there will be great difficulties."
I am convinced that it would be thoroughly disadvantageous for British Telecom to have a different system of payment—a different set of conditions—as between one subsidiary and another and as between the subsidiaries and the corporation. It would introduce some of the worst features of British industry in the form of lack of flexibility of movement between one group of workers and another. It would take us backwards.
I cannot emphasise strongly enough the attitudes that have been created within the Post Office telecom units in recent years, which have led to the acceptance of productivity bargaining and the acceptance that men and women are multi-skilled, and do not stick to one craft. It will be harmful to British Telecom, reducing mobility in many ways and leading to great frustrations, difficulties and conflicts, if it does apply the same pay and conditions in the subsidiaries as apply in the corporation.
The subsidiaries are creations of the Government; they exist because of the Government's ideology. The staff will not accept having their security and conditions of service messed around with in this way. We shall be heading for a great deal of industrial turmoil if British Telecom presses 385 this matter. I hope that, after consultation with the chairman, Ministers will repeat the words of the Minister in Committee—because it is clearly our intention that if employees of the Post Office are moved to subsidiaries, their terms and conditions of work will remain the same."—[Official Report, Standing Committee B, 20 January 1981; c. 156.]If that is the Government's intention, why is it not on the Notice Paper as a Government amendment?
§ Mr. Charles R. Morris
My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has rightly emphasised the anxieties of British Telecommunications workers about the position of employees in wholly owned subsidiaries. Amendments Nos. 59 and 61, in my name, reflect similar anxieties felt by postal workers in wholly owned subsidiaries established by the Post Office.
My hon. Friend was right when he expressed concern that in any newly established, wholly owned subsidiary the existing industrial relations and collective bargaining practices established in the Post Office over many years should be maintained. Amendment No. 61, standing in my name, provides that the conditions and terms of service of the staff of the wholly owned subsidiaries should be precisely the same as those enjoyed by Post Office workers generally. No doubt the Minister will argue that amendment No. 60, tabled by the Secretary of State, goes some way to meet what my hon. Friend and I said in this connection in Committee.
I should mislead the House if I did not alert Ministers to the difficulties that will arise if the conditions and terms of service in the subsidiaries are different from those in the Post Office. My hon. Friend said that we did not want any difference in the terms and conditions of service. Moreover, I do not believe that Post Office workers will accept any difference. The same unions will be involved in the established wholly owned subsidiaries and the same unions will organise the Post Office and telecommunications workers.
Therefore, even though I am encouraged by their amendment No. 60, I think that the Government should honour the obligation given in Committee, when the Minister said quite specifically that employees' conditions would be the same in the subsidiaries. We are debating not a minor industrial relations issue, but an issue that could develop into a major controversy.
§ Mr. Michael Marshall
We are debating a number of amendments which reflect what happened in the Committee proceedings. We had a valuable Committee stage. Important contributions were made by both sides, and we recognise the expertise that was displayed by a number of Opposition Members. It will be seen from a perusal of the Committee reports that the Government felt it right to bring forward amendments to meet the matters of substance that were raised by the Opposition, and tonight we have sought in our amendments to meet the genuine concern that they expressed.
I turn to amendments Nos. 7, 8, 59 and 60. We have considered the whole matter carefully. We undertook to have discussions with the chairmen designate of both BT and the Post Office. That we have done, and our amendments are the result of those discussions.
I was glad that the hon. Member for Newcastle-under-Lyme (Mr. Golding) accepted the spirit that motivated us 386 in bringing forward the amendments. I think that he will agree that the amendments provide that both corporations will have to ensure that the wholly owned subsidiaries will have to consult such organisations as they consider appropriate with a view to establishing and maintaining machinery in regard to those industrial relations activities listed here. In other words, the subsidiaries will be under the same statutory requirements for consultation with trade unions as are the Post Office and BT, although details of any machinery established will be for the subsidiary to resolve with its employee representatives. I hope that, in the light of that, hon. Members will not press their amendments on that aspect.
The hon. Member for Newcastle-under-Lyme made a serious point about arbitration. Subsection (4)(a) of amendment No. 8 does not include a specific reference to arbitration procedures as does its equivalent in paragraph 12(1) of schedule 1. We do not believe such a specific reference to be necessary. We made it clear that wholly owned subsidiaries will be Companies Act companies and we have stressed time and again that they should, as far as possible, be subject to the provisions of general law. We recognise that to make no specific statutory provision on industrial relations matters could cause uncertainty among transferred employees. That is why we tabled our amendments, but we do not believe it necessary to go further.
As the hon. Gentleman said, the Employment Protection Act 1975 makes provision for arbitration and conciliation through ACAS. I appreciate his even-handed approach, but we do not believe that subsidiaries should be obliged to establish a separate arbitration service.
The hon. Gentleman also pointed out that there may be recourse to two arbitration facilities on similar problems. Our proposal would seem to lead towards the use of ACAS, but that does not rule out the agreed use of other arbitration. In discussions between employees and the managers of subsidiary companies, the options will be there for them to discuss.
§ Mr. Golding
Will the hon. Gentleman be prepared to discuss the matter with the unions involved if, after consideration of what he has said, they believe that a problem still exists?
§ Mr. Marshall
I shall consider that carefully. I do not want to give an off-the-cuff response. I have made it plain that there will be a fair and open opportunity, but naturally we shall always consider representations.
We gave an undertaking in Committee to discuss the matters covered by amendments Nos. 9 and 61 with the chairmen of the Post Office and BT. We kept that promise, and I believe that the Bill makes adequate provision in that respect.
Clauses 4 and 58, together with paragraph 2 of schedule 2, provide that contracts of employment will be transferred intact when staff are transferred to subsidiary companies. Thus, immediately after reorganisation, employees of the subsidiaries will be employed on exactly the same terms and conditions as before. The hon. Member for Newcastle-under-Lyme referred to the EEC directive on transfers of undertakings. He appreciates that the position will be reinforced once that directive is implemented.
The hon. Gentleman talked about the future, but it seems to us that our proposals on transfers are appropriate. 387 We cannot look into the future and see the sort of locking-in that he urged on us. The hon. Gentleman seemed to imply that those who are transferred may suffer, but the amendments would prevent employees of subsidiaries from negotiating improvements in their terms and conditions which were not, for whatever reason, available to corresponding employees in the Post Office or BT. A profit-sharing scheme is an obvious example.
We do not believe that it would be right, or consistent with the idea of giving the management and work force of a wholly owned subsidiary the opportunity of greater identification with their work, to debar them on the basis of the amendment. I hope that hon. Members will see that the position is much more open and, I hope, more promising as the matter rests and that they will not press the amendments.
§ Amendment negatived.
Amendment made: No. 8, in page 8, line 18, at end insert—
'(4) As regards any wholly owned subsidiary of the Corporation, the Corporation shall secure that the subsidiary seeks consultation with any organisation appearing to the subsidiary to be appropriate with a view to the conclusion between it and that organisation of such agreements as appear to the parties to be desirable with respect to the establishment and maintenance of machinery for—