Employment Protection

HC Deb 07 December 1981 vol 14 cc677-98 10.15 pm

The Under-Secretary of State for Employment (Mr. David Waddington)

I beg to move, That the draft Transfer of Undertakings (Protection of Employment) Regulations 1981, which were laid before this House on 26th November, be approved. The regulations implement the European Community directive on the approximation of the laws of member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses. They are made under the enabling power in the European Communities Act 1972. They have been a long time in the making, and implementation of the directive is now overdue. The first draft of the regulations was published under the previous Administration in June 1978. The Presidency was a British Presidency when the regulations were born. I do not believe that we could have delayed much longer in carrying out our Community obligations.

The regulations have two main provisions. First, when there is a change of employer they provide for an automatic transfer of the employees along with the business. I emphasise the words "a change of employer", which mean where the identity of the employing company changes. The regulations do not apply to a change of ownership where only the controlling shares in the company change hands. Hon. Members will appreciate that at present, if a business is sold as a going concern, the contracts of employment are normally brought to an end. That will no longer be the case.

Secondly, the regulations provide for recognised trade unions to be given information concerning the transfer by both the buyer and the seller and to be consulted about any measures that the buyer or seller intends to take in connection with the transfer.

The regulations are complicated, and it may be helpful if I go through them in turn. Regulation 1 provides that transfers taking place on or after 1 May 1982 will be covered. As the information and consultation requirements relate to a period prior to each relevant transaction, they will be brought into operation three months earlier, on 1February 1982.

Regulation 2, dealing with definitions, is important because, as the House will see, the regulations following the directive do not apply to undertakings that are not in the nature of commercial ventures. Regulation 3 defines the scope of the regulations and makes it clear that they do not apply when all that is being transferred is the shareholding in a company. They apply only where there is a legal change of employer and where, immediately before the transfer, the undertaking is situated in the United Kingdom.

Mr. Douglas Hogg (Grantham)

Can my hon. and learned Friend clarify regulation 3? Can he tell me whether the transfer has the effect of providing that a period of employment before the transfer counts towards a claim for redundancy or unfair dismissal? Further, is the contract of employment from the original employer simply transferred to the subsequent employer?

Mr. Waddington

The regulation is concerned with contractual rights. One has only to look at the Employment Protection Act to see that already on such a transfer rights to redundancy payments are preserved. If a new employer takes on the employees of the transferor company for the purpose of redundancy payments, the whole period of employment is aggregated.

Regulation 3(5) makes it clear that the right of a seaman to be discharged if his ship ceases to be registered in the United Kingdom is not affected.

Regulation 4 is the product of a great deal of discussion and deals with the fascinating subject of hiving-down. A receiver or liquidator appointed to a company will obviously consider whether a part of the concern might be viable. If he reaches that conclusion he will often transfer the viable part to a wholly-owned subsidiary of the company with a view to its sale as a going concern.

Essentially, the liabilities remain with the original company, and a clean package, free from liabilities, can be offered to a potential purchaser. The employees continue to be employed by the original company, but their services are hired out to the hived-down company until that company is sold or wound up. If it is sold, the employees are dismissed by the original company and the purchaser of the hived-down company offers re-engagement to those whom he requires for carrying on the business.

One can see the problems that would have arisen had the effect of the regulations been to bring about a transfer of employees to the hived-down company and how unattractive hiving-down would have become to liquidators. Where no purchaser was found the employees who had become employees of the hived-down rather than of the original company would have had claims against the hived-down company and that would have had the effect of advancing their claims against those of creditors who would have come before them if no hiving-down had taken place—that is, those who had appointed the receiver. The creditors, therefore, would have seen the practice as against their interests and might even have had a claim against the receiver for acting in a way that was likely to prejudice them.

However, hiving-down clearly is a useful practice which can avoid the breaking up of whole businesses and can save jobs. Therefore, great efforts were made to find a solution, and regulation 4 treats the hiving-down operation as a suspended transfer, which becomes a transfer for the purposes of the regulation only when a purchaser has been found. Immediately before a purchaser takes control of a hived-down company either by buying the company or buying its shares, the operation becomes a transfer caught by the regulations. The employees' contracts are then automatically transferred, and the information and consultation provisions also come into operation.

Regulation 5 provides that the contract of employment of the employee is automatically transferred from the buyer to the seller. All rights, powers, duties and liabilities under or in connection with the contract are transferred to the new employer, except for criminal liability and liabilities for occupational pensions rights, which are dealt with quite separately under regulation 7.

Regulation 5(5) provides that that does not affect the employee's right to resign, but he will have a remedy in law only where he resigns because of a substantial change in his working conditions. He will have no remedy if he resigns only because the identity of his employer has changed, unless he can show that the change in all the circumstances is a significant change to his detriment.

It is somewhat difficult to find examples of where such a change could be significantly to the employee's detriment. When I asked those who advise me to give examples, the only ones that they could think of were examples of new employers running off with their employees' wives or murdering their fathers. We wish to close any possible gaps.

Regulation 6 provides that a collective agreement made by the transferor with the union will have effect as if made by the transferee. As the regulation is made without prejudice to section 18 of the Trade Union and Labour Relations Act 1974, which provides that a collective agreement will be presumed not to be legally binding unless so specified by the parties, there is nothing to prevent either side from renegotiating or ceasing to observe any such agreement.

Mr. Teddy Taylor (Southend, East)

Is that not a desperately important and significant change in the law? Does it not mean that if there is a transfer of ownership, the firm taking over another firm—which may have been in trouble because of bad trade union practices—must take over all wage and procedure agreements and be legally liable for any consequences? Does not the Minister think that that is a massive change in the law for British companies? What on earth is it doing in a regulation?

Mr. Waddington

The short answer is that it does not have that effect. Because of what some may think to be a strange quirk in the law, a collective agreement is not enforceable unless the parties specifically state that they wish to be legally bound. We are in the strange position of honouring the words of the directive through the regulation, but as collective agreements are not enforceable in law—because they are never, in practice, stated by the parties to be legally binding—I can allay my hon. Friend's fears. It is a strange result of our being liable to implement directives. I assure my hon. Friend that as collective agreements are not binding on the parties unless so stated there is no reason for him to fear that a transferee will find himself saddled with wage, procedure or other agreements that he does not like, because he can at once repudiate them.

Mr. Taylor

If I took over a company owned by one of my hon. Friends, and that company had an agreement to pay its employees an additional £6 per week from 1 January, is my hon. and learned Friend seriously saying, despite the regulation that states that there is an obligation to take over agreements, "Do not worry about the agreement; you can tear it up and not pay the £6"?

Mr. Waddington

My hon. Friend knows perfectly well that I am not saying that. I am saying that the reality of industrial power may be different from the strict law. Whereas one company may take over another and say that it is not strictly bound by an agreement made by the previous employer, it would be hard put to escape the consequences of wage bargaining carried on by the previous employer. All I am saying is that the regulation makes no difference in practice, because the position under the present law does not give rise to actions in the courts, and the new position dealt with in words in the regulations will not give rise to action in the courts because collective agreements in Britain are not enforceable in law.

Mr. Taylor

Why have the regulation at all?

Mr. Waddington

As a result of the activities of the right hon. Member for Deptford (Mr. Silkin) and others, who signed the directive at Strasbourg, the Government have an obligation to put into the form of regulations the obligations that were taken on by a previous Government. That is the simple answer. I assure my hon. Friend, who no doubt will speak later, that a change of Government does not automatically enable the successor Government to shed legal obligations assumed by the previous Government.

We are therefore implementing now what may be thought a nonsensical bargain—or perhaps a good bargain—struck by the previous Government. It is our obligation now to put into regulations a Community obligation assumed as long ago as 1977 and 1978.

Mr. Douglas Jay (Battersea, North)

Is the Minister saying that the House has no power to negative this provision if it so wishes?

Mr. Waddington

Of course I am not saying that for one moment. I am sure that the right hon. Gentleman did not expect me to agree with that proposition. I am merely saying that a previous Government assumed this obligation and we are now tabling the regulation giving effect to it.

Mr. Douglas Hogg

I can quite understand that we have assumed certain obligations, but is my hon. and learned Friend recommending the regulations or not?

Mr. Waddington

I am recommending them with a remarkable lack of enthusiasm.

Mr. Hogg

In that case, let us vote against them.

Mr. Waddington

I am not recommending that.

Mr. Michael Grylls (Surrey, North-West)

Reverting to trade union agreements, my hon. and learned Friend referred to collective agreements not being enforceable. What would be the position of a closed shop being taken over in this way?

Mr. Waddington

I do not think that the question of the closed shop need come into the debate. The closed shop relates to an agreement entered into by a specific employer and his employees. Here we are talking about collective agreements affecting a trade, industry, or whatever. Perhaps I may continue my explanation of the regulations and return -to these matters later.

Regulation 7 follows the directive by excluding occupational pension schemes from the regulations. Employees' rights established up to the point of transfer are protected to some extent by existing legislation, which is the responsibility of the Secretary of State for Social Services.

Regulation 8 provides that where the transfer or a reason connected with the transfer is the reason or principal reason for dismissing an employee, that dismissal shall be deemed to be unfair. The normal provisions governing unfair dismissal, qualifying periods, and so forth, continue to apply in cases where employees are dismissed because of the transfer. Where, however, the dismissal is due to an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant tranfer", the dismissal will be regarded as having been fair, provided that the employer satisfies the tribunal that he acted reasonably in treating the economic, technical or organisational reasons as a sufficient reason fix dismissal.

Regulation 9 provides that a trade union recognised by the transferor is recognised by the transferee, but makes it clear that the transferee is in exactly the same position as the transferor, and any recognition bestowed can, of course, be withdrawn and any agreement may be varied or rescinded.

Regulation 10 places a duty on the employer to inform and consult, and regulation 10(2) provides that he must inform the recognised union representatives of the legal, economic and social implications of the transfer for the affected employees. The term "union representatives" is our interpretation of the term representatives of the employees provided for by the laws or practice of the Member States". The words legal, economic and social implications come straight from article 6.

Sir Charles Fletcher-Cooke (Darwen)

I am very interested in this regulation and this statutory instrument that my hon. and learned Friend says does not matter very much. Since we have no binding agreement, the fact that the obligations are to be forcibly transferred again does not matter, because there are no obligations. Nevertheless there seems to be an obligation in regulation 10(2) which says: Long before a relevant transfer … the employer shall inform those representatives. That seems to be an obligation that stands upon its own. I should like to know the sanction if the employer, for good reasons or bad, by ignoring the regulation or through his inability to observe it, does not so inform the representatives.

Mr. Waddington

The sanction is two weeks' wages in respect of each of the affected employees. I am trying to find the passage that appears later in the regulations. I shall be able to inform my hon. and learned Friend later precisely where it falls. The Government took the view that there could not be an obligation without a sanction, and therefore imposed this sanction.

There is no mention of a sanction in the directive. The words "long enough" were the best that the Government could do with the wording "in good time" in the directive. There was need for some flexibility. It would have been dangerous to lay down a given number of days. "Long enough" seemed preferable to "in good time" to fulfil the intention of the directive.

Sir Charles Fletcher-Cooke

Both are pretty awful.

Mr. Waddington

On consultation, the regulation uses as a model the redundancy handling provisions of the Employment Protection Act 1975. Regulation 10(6), which provides some guidance on what is involved in consultation, follows the wording of section 99(7) of the 1975 Act. Regulation 10(7) provides the employer with the same defence of special circumstances for any breach of his obligation to inform and consult as is provided in section 99(8) of the 1975 Act. In other words, the draftsmen, wherever possible, have followed the wording of previous employment protection legislation.

Regulation 11 enables trade unions to present a complaint that they have not been informed or consulted. Where it finds the complaint well found, the industrial tribunal—I come now to the point that I was unable to find a few moments ago—will make a declaration to that effect and may order compensation to a maximum of two weeks' pay to be paid to the affected employees.

Any more would provide a substantial burden on an employer with a great number of employees, particularly as compensation may be awarded to all affected employees and not simply those who have been transferred. It is hard to see how an obligation can be imposed without having some sort of sanction for a breach.

Mr. Teddy Taylor

Is the Minister saying that under the regulation, if passed, I can buy a business but if the tribunal concludes that I did not consult the employees adequately beforehand I can be asked, out of the blue, to pay every employee two weeks' wages? Does the Minister think that it is right for this sort of provision to be contained in regulations coming before the House after 10 pm?

Mr. Waddington

We are following the model set in the Employment Protection Act and we are saying that the industrial tribunal is the body responsible for imposing a sanction if there is a breach of the obligation—just as it is responsible for imposing a sanction if due notice is not given, under the 1975 Act, of an intention to declare redundancies.

Mr. Taylor

Will my hon. and learned Friend, the Government or anyone else be giving tribunals or employers guidance on what constitutes adequate consultation?

Mr. Waddington

That is the sort of problem with which tribunals have to deal almost every day of the week. It is impossible for the Government to lay down strict criteria. It is better to follow the existing machinery and leave it to the good sense of tribunals to consider what has happened, relate that to the obligations in the regulations, and decide whether there has been compliance. If my hon. Friend wants us to provide that a certain form of consultation must take place within five days and another form must take place within 10 days, let him say so. Surely it is far better to leave such matters to the industrial tribunal.

Regulation 12 provides that any agreement that proposes to exclude or limit the operation of the regulations shall be void, and regulation 13 excludes people working abroad and dock workers, the latter because they have their own arrangements affording equivalent protection.

Regulation 14 makes some consequential amendments to the relevant employment legislation in the United Kingdom, the effect of which will be that the transferee will not be required to give employees completely new written particulars of terms and conditions of employment, provided that there is no change in those particulars. Of course, he will have to alter the employee's written statement to reflect the change of employer.

Let me summarise the main effect of what we are doing. At the moment, when there is a transfer of a business, an employee's contract of employment is normally brought to an end. From 1 May it will automatically be transferred to the new employer. It is a major change in principle, but in practice it will be nowhere near as far-reaching as some have assumed.

In reality it will matter little where the responsibility for the employee's contract of employment lies, since any shift in that responsibility will be reflected in the purchase price of the business. The business will usually be a profitable one—

Mr. Taylor

Why?

Mr. Douglas Hogg

What about Times Newspapers?

Mr. Waddington

My hon. Friends can make their own speeches. Perhaps the arguments do not appeal to them, but if they hear me out they will see the thinking behind the regulations.

It will usually be the intention of the new employer to re-engage the old work force.

Mr. Taylor

Oh!

Mr. Waddington

I wish that my hon. Friend would await what I have to say. If the new employer thinks that he will not require the old work force and will have to make some redundancies for economic, technical or organisational reasons, he will pay less for the firm than he would otherwise have been minded to do. Alternatively, the original employer may have made some redundancies before the transfer, to make the business more saleable. He will get more on the sale but will have had to spend money in order to get that greater sum. From the business man's point of view, it is as broad as it is long.

Mr. Hogg

I do not like to interrupt, but my hon. and learned Friend seems to have forgotten that the industrial tribunal has the power to order the employer to re-engage or reinstate. In those circumstances an employer would not be able to shift labour in the way that my hon. and learned Friend has suggested.

Mr. Waddington

I invite my hon. Friend to examine what is said in the regulation, which provides that a person may declare somebody redundant for economic, technical or organisational reasons. That is what he can do now.

As I say, if the obligation to make the redundancy payments is to rest on the purchaser of the firm, the purchaser will pay that much less for the firm. If the obligation to make the redundancies to make the business more saleable is to rest on the transferor, it follows, as night follows day, that the transferee will be minded to pay more for the firm. One way or the other, if the object of the exercise is to have a firm that is more viable because it has fewer employees, either the original employer will have to pay for the redundancies or the new employer will have to pay for them. On reflection, that is not very much different from the present situation.

Mr. Taylor

The Minister said that the transfer was of an undertaking. That is mentioned in regulation 3. Precisely what does "undertaking" mean? For example, could it possibly refer to a local authority cleansing department being privatised, or must it be a private business?

Mr. Waddington

It certainly does not have to be merely a private business. In the European Community context, "undertaking" implies commercial or economic activities. According to Cunningham in "The Competition Law of the EEC", The word 'undertaking' is not defined in the Treaty. It is wide enough to cover all legally recognised types of economic unit … such as an individual carrying on a business, partnerships, companies, corporations established by charter, statutory bodies, local"—

Mr. Hogg

It is defined in regulation 2.

Mr. Waddington

Perhaps my hon. Friend will bear with me for a moment.

Regulation 2 says that an "undertaking" includes any trade or business but does not include any undertaking or part of an undertaking which is not in the nature of a commercial venture. I thought that my hon. Friend the Member for Southend, East (Mr. Taylor) wanted me to try to spell out how that definition got into the regulations, and as the word "undertaking" appeared inthe directive, I was trying to help my hon. Friend by telling him the reason for the word "undertaking" being in the directive, and what the word "undertaking" in the directive means. According to a learned author, it means what I have just been saying. Cunningham continues, referring to local authorities carrying on a business, charities which are trading"— but not charities which are not trading— co-operative societies, and so on. In other words, it is very similar to a profit-making body. It is a body that is engaging in business. It is not a body that is not engaging in business.

The other main change is to require employers to give trade union representatives certain information connected with the transfer and to consult trade union representatives about any measures that may be taken in connection with the transfer. There is, understandably, anxiety about placing an additional statutory burden on employers at present, but in the interests of good industrial relations many employers contemplating a transfer of business are probably already doing something very much along these lines.

As there will be no dismissal on a transfer covered by the regulations, an employer will no longer have an obligation, under the redundancy handling provisions, to consult recognised trade unions about what amounts to technical redundancies—that is, dismissals that are by virtue solely of a transfer, and where all employees are to be taken on by the new company. From 1 May 1982 employers will be freed from this obligation.

In all the circumstances, I commend the regulations to the House.

10.49 pm

Mr. Harold Walker (Doncaster)

Deciding how to respond to the proposals contained in the draft statutory instrument has been a difficult task, involving some mind searching and heart searching—mind searching because of the complexity and technical nature of some of the provisions, and heart searching because the provisions are mainly beneficial to employees.

In reaching our view we have had to take account not only of the substance of the regulations but of the way that the Government have proceeded in bringing them before the House. As the Minister said, the regulations seek to give effect to the terms of EEC directive 77/187—the so-called acquired rights directive. The Minister also acknowledged that there had been an earlier draft with the same purpose and with the same title—drawn up by the Labour Government in 1978—which fell because of the intervention of the general election the following year.

The revised draft now before the House contains a number of additions to and a number of major changes from the earlier draft. Most of them seem to be aimed at weakening the previous proposals, most of them appear to dilute the benefits that the EEC directive sought to give to workers, and none of them has been introduced after consultation with the TUC or any single trade union representing the workers to whom they apply.

In reply to the TUC, and in defending the absence of consultation, the Secretary of State for Employment brushed off the complaints of the trade unions by saying that the EEC Commission was pressing him hard to implement the directive. But two and a half years ago the Secretary of State inherited a finalised draft that he could immediately have put before Parliament. Had he wanted to look again at what was then proposed, he had two and a half years in which to do so.

In a terse note to the TUC, the Secretary of State said that he has taken full account of the comments received by the Labour Government. Putting aside for a moment the impropriety of such a statement, the earlier draft was made in the light of those representations, and the changes that have been made now, to which I have just referred, can mean only that the Secretary of State has deliberately turned his back on the views that were then expressed by the TUC and others. If that reflects the attitude of the Secretary of State to the process of consultation, and if it reflects the importance that the Secretary of State attaches to the view of the TUC on legislation which bears directly on the interests of the members, it bodes ill for the future of industrial relations.

I come now to the substance of the regulations, and in particular the changes introduced, compared with the earlier draft to which the Minister referred. Industrial Relations Legal Information Bulletin No. 195 of 20 October 1981 said: In terms of its likely practical impact, this is one of the most important pieces of employment legislation in recent years. How long that claim may be valid depends very much on what the Secretary of State chooses to inflict on industrial relations in the weeks and months that lie before us. It is important, therefore, that Parliament should get it right. Unfortunately, the butchered version that we have before us appears to have suffered from political prejudice—and the interests of the Government's friends in the City—to the detriment of the spirit and intention and, indeed, the words of the EEC directive which gave birth to those regulations.

For example, we see at the outset that the explicit power to extend the scope of the regulations to territorial waters and the continental shelf has been dropped. That may be mere drafting. Perhaps it is explicit in the regulations that they so apply in any case. Perhaps the Minister will tell us. Article 1 of the directive appears to require that it should be so.

In regulation 2 a number of interpretations have been redefined, not only in a more restrictive way, but to give such terms as "employee" and "contract of employment" a meaning sufficiently different from that which applies elsewhere in employment legislation, with the inevitable likelihood of ambiguity and confusion, not least in the courts. The hon. Member for Southend, East (Mr. Taylor) raised a point about the word "undertaking". I should like to put his point in a different way. Why has the word "undertaking" been given a more restrictive meaning here than in the 1978 draft regulations? The TUC has already pointed out to the Government that excluding from the scope of the regulations undertakings that are not in the nature of a commercial venture could lead to the exemption of a wide range of employment, including, for example, the Property Services Agency, British Telecommunications, the Ordnance Survey, and so on.

Regulation 5 provides protection for a worker's contract of employment in the event of his firm being taken over or merged. The 1978 draft declared that an employee's rights arising from the employment contract would be transferred to the new employer, and it provided that any other rights otherwise arising in connection with his employment would also be transferred. Presumably those additional words were deliberately included then—as they should have been—and equally deliberately, no doubt, they have now been dropped. The Minister has not told the House, but we are entitled to know why they were dropped and what will be the effect of the change.

One likely effect is that certain rights that are often implied terms of employment—for example, equal pay and sex discrimination rights provided by a statute—may not now be regarded as transferred, or at least they will be the subject of legal controversy.

Mr. Frank Hooley (Sheffield, Heeley)

If those rights are guaranteed by statute, they remain guaranteed. Surely the transfer can have no effect against the statute.

Mr. Walker

I make no pretence of having legal knowledge of these matters, but I understand from people who are better qualified than I that the contrary may be the case.

The Minister will know that in this connection the TUC raised a further point. Under the original draft, the new employer would have been jointly and severally liable with the old employer in respect of any claim by the transferred employees, whereas under these proposals, employees' rights against their old employer are transferred to the new employer. That deprives employees of any ability to make claims to industrial tribunals against their former employers or to sue them in the courts.

The Government replied in the most extraordinary terms when the point was drawn to their attention by the TUC. The Secretary of State said in his letter to the TUC: It was thought that such a provision would be ultra vires the enabling power in section 2(2) of the European Communities Act 1972. If there is any weight in that point, why were the 1978 proposals so drafted? I was not the Minister responsible at the time and I had nothing to do with the matter. Why did the Government's draftsmen and advisers—they are still the same people—include in the draft a form of words that the Government now say is ultra vires?

The second limb of article 3(1) of the Act specifically seems to invite the words that the Government have rejected. It states: Member states may provide that, after the date of transfer within the meaning of article 1(1) and in addition to the transferee, the transferor shall continue to be liable in respect of obligations which arose from a contract of employment or an employee relationship. Are we really being told that the United Kingdom Parliament cannot legislate beyond the protections laid down by the EEC? Article 7 of the directive states that the right of any member State to introduce or apply more favourable provisions is not affected.

Regulation 8 deals with dismissals of employees arising out of transfers. That has also caused anxiety. The regulation states that dismissal shall be unfair if the transfer or a reason connected with it is the reason or principal reason for a person's dismissal. However, the exclusion from that safeguard of dismissal for, as the Minister said an "economic, technical or organisational" reason has caused considerable concern to trade union officers.

As the TUC has said, the provision introduces major ambiguities into the law on unfair dismissals during transfers, since the new provisions will need to be interpreted alongside the existing unfair dismissal provisions. The TUC adds that the regulation unnecessarily introduces complexity and the lack of definition of the new qualification creates further doubt about the law.

It is no less a cause for concern that apparently, the specific new grounds that would justify and make fair a dismissal apply equally to an employee who has not been transferred but who is nevertheless affected by the transfer in either the transferor's or transferee's employ. In other words, a large conglomerate that is making yet another killing can—for vague, open-ended, and ill-defined, "economic, technical or organisational" reasons—dismiss an employee or employees elsewhere within its commercial empire who may have believed that their company's further acquisition had little to do with them, and may even have been totally unaware of it.

Let us consider the hypothetical case of a large engineering group, such as Tube Investments Ltd., which might take over a small engineering firm in Belgium. Because the firm that has been taken over has a well-equipped tool room, Tube Investments Ltd. might instantly—and apparently legitimately, as a result of the provisions—dismiss toolmakers at some remote subsidiary in the United Kingdom.

Mr. Douglas Hogg

That cannot be.

Mr. Walker

The hon. Gentleman may say that, but he should consider regulation—

Mr. Hogg

rose—

Mr. Walker

I hope that the hon. Gentleman will forgive me if I do not give way, but I still have a few more pearls to cast before hogs. If the hon. Gentleman looks at regulation 8(3) he will see that I am reflecting those provisions. I very much doubt whether the result was any part of the intention of the EEC directive, yet it seems the possible effect of the Government's proposed regulations.

While on the subject of dismissals, I must press the Minister on yet another point—the submission of claims to industrial tribunals by workers who have lost their jobs as a consequence of a merger or takeover. The 1978 draft apparently left the position that the tribunals hearing complaints that arose from such situations should apply the usual two tests: first, was the dismissal unfair; secondly, had there been unfair selection for redundancy? These regulations would seem to eliminate the second test of unfair selection.

The regulations then provide that where an employer claims an "economic, technical or organisational" reason for dismissal, the industrial tribunal must consider this as "some other substantial reason" for the purposes of the unfair dismissal provisions of section 57(1)(b) of the Employment Protection (Consolidation) Act 1978.

It has been put to me that the right has hereby been removed from an employee to claim that he had been dismissed for redundancy reasons in the circumstances dealt with by the regulations, and that far from strengthening protection for employees, they are to be deprived of an existing safeguard.

I draw the attention of the House to the provisions of article 6 of the EEC directive. It sets out in detail the obligations to inform and carry out consultations with representatives of the employees affected by the transfer, or who may be affected by measures connected with it. In view of my recent remarks, I hope that the Government will make it clear that the article may apply much more widely than to the employees who appear to be directly involved, particularly in large groups or conglomerates.

More specifically, article 6(2) of the directive states: If the transferor or the transferee envisages measures in relation to his employees he shall consult his representatives of the employees in good time on such measures with a view to seeking agreement. I am in favour of that. I hope that the House, too, is in favour of it. If we had had such a statutory provision we might have avoided the helicopter hooliganism at Laurence Scott Electromotors Ltd. at Openshaw. Where in the regulations is that provision of the directive? There was such a provision in the earlier draft, but it has been dropped. Why? The absence of such a provision makes it doubtful whether the regulations satisfy the directive's requirements.

In view of the time I resist the temptation to pursue some of the other disquieting features of the revised regulations, but I must comment on two other matters. The first applies to regulation 4, with which the Minister dealt in detail. That regulation legitimises and gives respectability to hiving-down. Apparently that is a complex device used by receivers, usually with the effect of lining the pockets of asset-strippers and other fly-boys in the City. I have spent a long time trying to grasp the implications of that regulation. Understanding still eludes me.

I have seen the Secretary of State's reply to the TUC. I understand what he has to say. First, he vigorously defends hiving-down. He says that he does not agree that it is against employees' interests. He argues in his letter to the TUC that regulation 4 protects the interests of employees when hiving-down occurs. The Secretary of State is either contradicting himself or is trying to have it both ways.

The letter states that regulation 4 is the result of informal discussions with officials of the European Commission. My information confirms that such discussions took place and that they arose from the Commission's deep disquiet about hiving-down and the intentions of the United Kingdom Government, as reflected in the regulations.

I understand that the reason why the House has had to wait for so long for the regulations is that the Commission felt that the provision on hiving-down could not be reconciled with the spirit and intention of the directive. I hope that the Minister will comment on that.

The Secretary of State's letter says that the regulations will not apply where an insolvent company is to be wound up with the consequent loss of all jobs. I thought that one of the purposes of hiving- down was to fillet the saleable parts of a company from the unsaleable part or parts, reorganise them into separate companies, sell off the profitable pieces and let the rest, with any unwanted employees, go down the drain.

Surely that is what happened in the Brentford Nylons case in 1978 when Lonrho, the unacceptable face of capitalism, took it over. After hearing that case argued before the employment appeals tribunal, Mr. Justice Phillips was sufficiently concerned to say that when amending legislation is under consideration attention ought to be directed by those responsible to the problems which arise in such cases." The Government and their Ministers are responsible. Can the Minister say, hand on heart, that in the regulations the Government have responded to that plea? Are they confident that regulation 4 not only responds to the plea but fully satisfies the directive's requirements? I am bound to say that my answer would be "Definitely no".

One other matter on which I feel bound to make some comment is that of the redress that will be available where an employer fails to carry out his duty to inform and consult under regulation 10. Again, the Minister dealt with that as the regulation spells it out.

As in the 1978 draft, trade unions are given the right to make a complaint to an industrial tribunal and for awards to be made to the employees affected. However, unlike the 1978 draft, which placed no upper limit on the amount of compensation that could be awarded, the proposals now before the House limit the amount of compensation to two weeks' pay for each employee. It then diminishes that paltry sum by stipulating that any compensation that is awarded will be offset against any projected award made under the redundancy consultation provisions in the Employment Protection Act 1975 or against any employer liability for breach of contract during the period of the protective award.

From their own indifference towards consultation with the trade unions and the TUC, and now from this derisory penalty for employers who fail to carry out the statutory obligations, we may judge the Government's attitude towards consultation and information generally as an ingredient in good industrial relations. Perhaps it is not merely indifference. Perhaps, for their own obscure reasons, the Government are bent on provoking the trade unions by treating them with derision and contempt whenever the opportunity presents itself.

At the outset of my remarks I commented on the difficulty faced by Opposition Members in determining how best to respond to the regulations. However, two matters are clear. First, these proposals have been weakened and diluted from those proposed by the previous Government, to an unacceptable degree. Secondly, there are serious doubts about whether these proposals satisfy the requirements of the acquired rights directive. Certainly they are difficult to reconcile with the spirit and general intention of that directive. No less important is the fact that they fall short of what experience in recent years has demonstrated to be necessary in such matters.

I believe that the Government should take away the proposals and revise them in the light of what has been said not only in the debate but by critics and the trade union movement. If they are prepared to do that, Opposition Members may find themselves more able to respond in a warm and welcoming manner. In the absence of any such undertaking, I must ask my right hon. and hon. Friends to demonstrate the unacceptability of the regulations by joining me in the Lobby against them.

11.13 pm

Mr. Michael Grylls (Surrey, North-West)

As my hon. Friend the Member for Southend, East (Mr. Taylor) said this evening, it is strange that the proposals are in the form of a statutory instrument. If this sort of thing is to be done at all, it is better done in the form of primary legislation, which the House can consider in more detail and at greater length.

I speak in the debate more in sorrow than in anger—sorrow that a Government who have gone a long way down the path of the demands of businesses and those who wish to see more jobs and have asked for a policy of deregulation to take place right across the spectrum, are now going in exactly the opposite direction and starting to regulate and introduce a new Employment Protection Act, with all the damage that the first one did in destroying jobs. It is sad, because many Conservative Members felt that during the past two and a half years much progress had been made in simplifying the Employment Protection Act 1975, especially as it affected smaller employers and encouraged people to start new businesses.

How could a small trader who was contemplating passing on his business work his way through the 12 pages of the statutory instrument, possibly comparing it with the earlier directive agreed under the Labour Government in 1977—as did the right hon. Member for Doncaster (Mr. Walker)—to decide whether he could transfer his business? The regulations open up a minefield for the smaller business man, who does not have the time or professional advice to find his way round them.

I fear that if the legislation is introduced we shall have fewer new businesses. If we make it more difficult to transfer a business—which is part of the free flow of market forces—we must not be surprised if we have fewer businesses. Passing on a business may be part of the process of improving businesses. Alternatively, people may wish to retire and pass on the business to the new generation.

With great respect to my hon. and learned Friend, to come before the House with such legislation displays—perhaps only in the Department of Employment—a total lack of understanding of the small business man's psychology. The complication of the law puts people off.

Consultation took place three years ago, but it is sad that there has been no new consultation this summer. The right hon. Gentleman fairly said that there had not been further consultation with the TUC, but neither has there been with the organisations that represent smaller and medium-sized businesses—the unincorporated businesses. Organisations such as the Institute of Directors and the Small Business Bureau, with both of which I am connected, have not been consulted; neither have the other organisations representing smaller firms. That is a bad mark. Suddenly to come forward with draft regulations on the eve of a recession, after such a long time, is extraordinary.

When the Government are attempting to restore a fairer balance between industry and trade unions it is sad to note that these measures appear to increase the statutory power of trade unions, as they will have to be consulted more and more. I do not believe that the Government are there to do that.

My right hon. Friend the Secretary of State for Employment has gone on record expressing the Government's opposition to the new statutory employee consultation requirements stemming from the proposed EEC Vredeling directive. However, the regulations lay the ground for precisely such a development. They appear to be going directly against the expressed views of my right hon. Friend on employee consultation.

I wish to ask about the famous regulation 8(2), which provides that an economic, technical or organisational reason entailing changes in the workforce would obviate having to take on the employee. Those are odd words, and I do not believe that they appear in other statutes. What do they mean? If a new employer taking over a business decides that he can run it more efficiently with fewer people, by introducing automation, for instance, or if, like the French, he wishes to run it as a family business, is that covered under the regulation?

I attach the greatest importance to the productivity element. If the regulation encourages overmanning and restrictive practices, because the agreements would be passed on and would have to be honoured by the new owner of the business, that is dead against what the Government really want to do and would remove many of the benefits to a new employer of transferring a business.

Mr. John Ward (Poole)

Does my hon. Friend agree that the Minister has been saddled with the matter by the previous Labour Government and is doing his best to make a bad job of it? Would it not be better to withdraw the proposed legislation and rewrite it? It appears that my hon. and learned Friend the Minister is saying "The Government have been saddled with it; we do not like it, and we have watered it down as far as possible". Should not the Government withdraw the wretched legislation immediately and think again?

Mr. Grylls

My hon. Friend has anticipated my remarks. He is absolutely right. I wish to offer my hon. and learned Friend the Minister a tantalising way out. He heavily implied his distaste for the legislation. It must be disagreeable for a Minister to introduce legislation that he does not like. We must help my hon. and learned Friend in his difficulty. One escape route would be for him to withdraw it. Another, if that proves too much, would be to do what the Government did, quite rightly, two years ago in the Employment Act 1980, when they changed the unfair dismissal provision to exempt all businesses of up to 20 employees for the first two years. If all small businesses of up to 20 employees were exempted from this legislation, it would be a great help. The smaller businesses find it difficult to understand such complicated laws. It is yet another difficulty that operates against their starting business.

What reaction did my hon. and learned Friend receive when he discussed the legislation with the Minister responsible for small businesses, who is an effective Minister in that area? It makes nonsense of his job if a Minister in another Department introduces legislation that will damage the interests of smaller firms. It clearly shows the need for someone in the small firms division of the Department of Industry to fulfil the advocacy role of reviewing any new legislation to determine its effect on small firms. We must do that if we are to create the right climate for small business.

It would be better for my hon. and learned Friend to withdraw the legislation now—which would please the Opposition, although for different reasons—and reconsider it. Let us consider how, by further negotiation with the EEC, the potentially damaging legislation can be further blunted. That would save much damage to the small business community, which all sides of the House say they want to protect.

11.23 pm

Mr. Michael Martin (Glasgow, Springburn)

The first few regulations give the impression that they are being introduced to protect the work force on the transfer of business. Having read all the regulations, it is clear to me that they give no protection to either the employer or the work force. The regulations provide that a tribunal cannot consider the problems if there are economic, technical or organisational reasons for a dismissal. Any new employer could drive a horse and cart through that loophole. The Government are performing an exercise in introducing absolutely useless regulations. Even if an employee wins his case at a tribunal, it can recommend only that he be re-engaged. At the end of the day, an employer can pay a sum of money to get rid of an employee.

As my right hon. Friend the Member for Doncaster (Mr. Walker) said, the regulations provide only the bare minimum. Surely we could have built on the regulations.

It is sad that when firms are taken over or contracted many of the early casualties are those who have served three years of their apprenticeships. The regulations should protect apprentices who have to serve only a few more years.

When employment protection legislation was introduced, it could have been argued that in many instances part-time workers were in employment for pin money. Given the present economic situation, it cannot be said that those workers—especially females—are interested only in earning pin money. Employment protection legislation gave little protection to part-time employees and the Government should have considered their position before introducing the regulations. In many instances a part-time worker has to be with a company for about 10 years before he can present his case to an unfair dismissal tribunal.

The regulations will give respectability to the unscrupulous, who I accept may be in the minority. Equipment is sometimes sold abroad following factory closures. Linwood, in the West of Scotland, once employed thousands. Former employees stood at the gates and watched machinery that they had used pass through on its way to foreign parts. That was a tragedy.

I have worked in engineering and I have been made redundant. It is not unusual for an engineering company to have both heavy and light engineering sections. Employees if long standing can be transferred from one section to the other. If a new employer decides to close the heavy section of his new company, employees with 20 years' service in the section can be put out of the door while others with only two years' service are retained. If a worker has two years' or 20 years' service, it is an equal tragedy for the individual if he is put off, but the old argument is that the person with the longest service should have the opportunity to stay on. The regulations should have provided for that. The Government should take the regulations back to the drawing board and redraft them. Consultations should take place. Any employer who is worth his salt should be prepared to consult the trade union movement. If he is not prepared to do so, that is a recipe for bad industrial relations.

11.28 pm

Mr. Teddy Taylor (Southend, East)

It is interesting that no one has supported the regulations, including my hon. and learned Friend the Under-Secretary of State. My hon. and learned Friend said, in effect, that unfortunately he had to introduce the regulations because a previous Labour Government signed a directive a few years ago and there was no option but to proceed. They are not being introduced because they will improve industrial relations or make Britain a happier or wealthier country. It is an outrage.

Mr. Harold Walker

rose—

Mr. Taylor

This shows clearly the change in our system of democracy. We are tonight discussing and probably voting upon regulations that no one believes in, that no one thinks will do any good, and that almost every speaker agrees will do a great deal of damage to our industry. We are doing so only because a Labour Government signed a directive a few years ago leading to this regulation, which implements some but not all of that directive.

Mr. Harold Walker

Of course, the Council of Ministers signed the directive. It was then subject to ratification in this House. It was debated here. Hon. Members on both sides of the House had the opportunity to vote at that time, but they decided to endorse it without a Division and without criticism.

Mr. Taylor

The directive is not a law; the regulations are. I am sure that the right hon. Gentleman accepts that the regulations are accepted by no one. Nevertheless, the Minister says that we should implement them, simply because of the EEC's decision.

To avoid any doubt about that, let me quote from a letter written by my right hon. Friend the Secretary of State to the Institute of Directors as recently as 23 September. The institute is deeply concerned about the regulations. The Secretary of State said: We should have liked to have consulted further on the Regulations and … on the amendments which have been made to the draft since the change of Government. However, the Commission has seen fit to launch infraction proceedings against the UK for non-implementation of the Acquired Rights Directive and there was no alternative but to lay the Regulations before Parliament without delay". That would probably not matter if this were a minor issue, but, irrespective of our views on the regulations, we must all accept that they represent a major change in our employment law. One consideration that stands out a mile is that if there is to be a change in that law it should be made by a Bill, so that we can propose amendments.

Labour Members have suggested some changes that they would like. My hon. Friend the Member for Surrey, North-West (Mr. Grylls) suggested changes that he would wish for. However, we cannot change the regulations. We can say only "Yes" or "No".

Mr. Jay

We can say "No".

Sir Anthony Meyer (Flint, West)

My hon. Friend is making much of the cross-party agreement on opposition to the regulations, but he is slurring over the fact that my right hon. and hon. Friends dislike them because they confer too many rights on the workers, and that Labour Members dislike them because they do not confer enough. My hon. Friend might at least acknowledge that there is that difference.

Mr. Taylor

My attitude to this whole business is different from that of my hon. Friend the Member for Flint, West (Sir A. Meyer). He has some very strange ideas. Surely he would accept, however, that if everyone thinks, for different reasons, that these are rubbishy regulations we should chuck them out and start again. That is the only approach.

Is my hon. Friend prepared to say that he regards the regulations as splendid? I ask him and others of my right hon. and hon. Friends whether they have studied the consequences of the regulations. Do they understand that we are conferring major new rights on trade unions—rights that are not available to non-union employees? One major change is that if, for example, one of my hon. Friends wished to buy my business and we made the transaction without adequate consultation with the work force, every employee affected would be entitled to two weeks' wages as compensation. But does it apply to all employees who are not consulted? Far from it. It applies only to employees who are members of trade unions that are represented in the company. Does my hon. Friend the Member for Flint, West suggest, therefore, that we, as Conservatives, should pass a regulation to ensure that those who are inadequately consulted should receive compensation if they are trade unionists, but get none if they are not? The most obvious consequence of that will be a new recruitment drive by the trade unions in small companies.

Will my hon. and learned Friend the Minister justify giving this new power and form of compensation only to closed shop companies? Small firms, such as painting or engineering concerns that have no recognised trade union structure, would not be covered by the compensation scheme. Surely it is wrong for that proposal to be advanced by a Conservative Government, and surely it is contrary to the whole trend of our approach to employment law.

A further major change is that we are creating a new concept in British employment law. It is that an employee can acquire a right to a job in perpetuity, akin to a property right, which subsists independently of the capacity of any employer to continue that employment. For example, if I take over a small business I have to take over all the employees and continue their employment as it was before, unless I can prove to a tribunal that I am getting rid of some of them as a direct consequence of that transfer for economic, technical or organisational reasons.

Thirdly, where is the justice of the situation? If I take over a firm and am prevented by the regulations from getting rid of any employees, how will that protect original employees I might have whom I might sack because of the new merger or takeover? They will have no rights.

It seems incomprehensible that regulations should be brought forward that are unfair to employers, will create confusion for small businesses, will make it more difficult to sell small businesses, and will be desperately unfair to some employees, because those who will be protected will be those in the company being taken over and there will be no similar protection for those working for the original firm.

Because it is late at night, and because hon. Members are fed up and want to go home, there is a danger that we shall allow a major change in employment law to slip through without a great deal of thought. My hon. and learned Friend said that he was reluctant to put through the regulations because he did not like them and that he was doing so only because of a directive signed by the Labour Government. I suggest that it is wrong in principle to bring forward a major change in employment law in regulations and not in a Bill. The regulations will make life more difficult for small businesses. They will add enormously to the powers of trade unions. They will discriminate against firms which are not unionised. Finally, they will create a new concept of employment that will give an employee a right to a job in perpetuity.

I should be surprised if my hon. and learned Friend can find any industrial organization—the CBI, the Institute of Directors, or even the trade unions—that supports the regulations as drafted.

We should reject the regulations. We should start again. We should not bring forward major employment law changes in the form of regulations.

Mr. Waddington

rose—

Mr. Nigel Spearing (Newham, South)

On.a point of order, Mr. Deputy Speaker. References have been made to the regulations, which cover 10 pages, and to a mini-Bill, and you have heard about the complexities in the speeches.

Standing Order No. 3(1)(b) provides that, if Mr. Speaker shall be of opinion that, because of the importance of the subject matter of the motion, the time for debate has not been adequate, he shall, instead of putting the question as aforesaid, interrupt the business, and the debate stand adjourned". In the circumstances, and in your discretion, should not that Standing Order apply?

Mr. Deputy Speaker (Mr. Ernest Armstrong)

I have re-read the Standing Order and considered the relevant issues. I do not propose to adjourn the debate.

11.38 pm

Mr. Waddington

My hon. Friend the Member for Southend, East (Mr. Taylor) said that major changes of this kind should not be brought into effect by regulation, but the practice of the House is to implement European directives precisely in this manner.

I invite my hon. Friends to bear in mind what was said by the right hon. Member for Doncaster (Mr. Walker). He wants me to take the regulations away to get them toughened up. I do not think that that is the wish of any of my hon. Friends. They object to the regulations because they are too tough and need to be blunted. Therefore, there does not seem to be much common ground between the two sides of the House.

I remind the House that we are fulfilling an obligation. Some of us may not like the task that has fallen to us, but we cannot get away from the fact that we are parties to a directive, and we should have passed regulations in February 1979 to give effect to that directive. We have taken a great deal of time to try to mitigate some of the damaging effects that might have followed the passing by the House of the original draft regulations. We feel that we have made considerable improvements.

I shall try to deal swiftly with the points raised by the right hon. Member for Doncaster. As I have said, we have applied a definition to the word "undertaking" which we believe, on the best advice, is the correct definition, bearing in mind European practice. The right hon. Gentleman's mind may be set at rest with regard to obligations placed upon employers under, for instance, the Sex Discrimination Act. All those rights of employees stand.

The right hon. Gentleman referred to the fact that the transferor and the transferee were not to be jointly and severally liable. Article 3(1) gives a power that is not mandatory. Section 2(2) of the European Communities Act requires us through this procedure to do that which is required of us and to place in regulations those mandatory matters and burdens that are placed upon us.

With regard to regulation 8, the right hon. Member for Doncaster and some of my hon. Friends do not like the words economic, technical or organisational reason." They are, of course, lifted straight out of article 4. They are no invention of the Government. We are merely incorporating in the regulations the precise obligation placed on us by the directive and which by law we are bound now to put into effect through regulations.

With regard to hiving down, I remind my hon. Friends that the fact that there is now provision in the regulations for hiving down is a tribute to the efforts that we have made while in Government to mitigate some of the more dangerous effects of the directive. We believe that we have gone a good way towards saving jobs by preserving what is a very valuable power in the hands of liquidators.

I must tell my hon. Friend the Member for Surrey, North-West (Mr. Grylls) that of course I appreciate that people do not like to see any new burdens placed on small employers. I fully understand his feelings on this matter, but I repeat that these regulations should have been introduced as long ago as February 1979. What I said in the letter to the Institute of Directors—I think that it was I, although it may have been my right hon. Friend the Secretary of State—was no less than the truth. Infraction proceedings would have been brought against the British Government if we had not honoured the obligation that they took upon themselves as a result of the activities of the right hon. Member for Deptford (Mr. Silkin). I am not blaming the right hon. Member for Deptford, but that is a fact. It was during the Presidency of Great Britain back in 1977 that this obligation was taken on board.

Mr. Douglas Hogg

We are told that we have assumed a burden, and I understand that. What terrible fate will befall this country if the Government's attempt to pass the regulations fails?

Mr. Waddington

Of course no terrible fate will fall upon the Government or upon the United Kingdom, but the fact remains that when a British Government take on an international obligation they are expected to honour that obligation. It is as simple as that.

The hon. Member for Glasgow, Springburn (Mr. Martin) also mentioned the phrase: economic, technical or organisational reason". I have explained that those words are taken straight from the directive.

My hon. Friend the Member for Southend, East said that it was an outrage to have to implement the directive. I know his views about the EEC, but the fact remains that what we are doing today is precisely what we have had to do on many previous occasions in order to put into British law a Community obligation adopted at the Council of Ministers by means of a directive.

The Government have done a great deal to mitigate some of the worst effects of the directive. I do not believe that it will have the drastic effect on British business that some people seem to imagine. I have already spelt out how limited will be its effect. It will not be to the prejudice of employees as the right hon. Member for Doncaster suggested. In all the circumstances, I commend once again the regulations to the House.

Question put:—

The House divided: Ayes 109, Noes 62.

Division No. 16]	[11.45 pm
AYES
Alexander, Richard	Lang, Ian
Ancram, Michael	Langford-Holt, Sir John
Beith, A.J.	Lee, John
Bendall, Vivian	Lester, Jim (Beeston)
Benyon, Thomas (A'don)	Lloyd, Ian (Havant & W'loo)
Berry, Hon Anthony	Lloyd, Peter (Fareham)
Blackburn, John	Lyell, Nicholas
Boscawen, Hon Robert	McCrindle, Robert
Bright, Graham	Macfarlane, Neil
Brinton, Tim	MacGregor, John
Brooke, Hon Peter	MacKay, John (Argyll)
Brown, Michael (Brigg & Sc'n)	McNair-Wilson, P.(N'bury)
Bruce-Gardyne, John	McNair-Wilson, P. (New F'st)
Buck, Antony	Major, John
Budgen, Nick	Mather, Carol
Butcher, John	Maude, Rt Hon Sir Angus
Cadbury, Jocelyn	Maxwell-Hyslop, Robin
Carlisle, John (LufonWest)	Meyer, Sir Anthony
Carlisle, Rt Hon M. (R'c'n)	Mills, Iain(Meriden)
Clarke, Kenneth (Rushcliffe)	Moate, Roger
Cope, John	Montgomery, Fergus
Cranborne, Viscount	Murphy, Christopher
Dorrell, Stephen	Myles, David
Douglas-Hamilton, Lord J.	Neale, Gerrard
Dover, Denshore	Needham, Richard
Dunn, Robert(Dartford)	Nelson, Anthony
Dykes, Hugh	Neubert, Michael
Fairgrieve, Sir Russell	Newton, Tony
Faith, Mrs Sheila	Normanton, Tom
Fenner, Mrs Peggy	Page, Richard (SW Herts)
Fowler, Rt Hon Norman	Patten, Christopher (Bath)
Gardiner, George(Reigate)	Pattie, Geoffrey
Garel-Jones, Tristan	Penhaligon, David
Goodlad, Alastair	Proctor, K. Harvey
Gorst, John	Pym, Rt Hon Francis
Gow, Ian	Rathbone, Tim
Griffiths, Peter Portsm'th N)	Renton, Tim
Hampson, Dr Keith	Roberts, M. (Cardiff NW)
Hawkins, Paul	Roberts, Wyn (Conway)
Hawksley, Warren	Sainsbury, Hon Timothy
Heddle, John	Shaw, Giles (Pudsey)
Hordern, Peter	Shepherd, Colin (Hereford)
Hunt, John (Ravensbourne)	Speed, Keith
Jopling, Rt Hon Michael	Speller, Tony
Kershaw, Sir Anthony	Spicer, Michael (S Worcs)

Stainton, Keith	Watson, John
Steel, Rt Hon David	Wells, Bowen
Stevens, Martin	Wheeler, John
Stradling Thomas, J.	Wickenden, Keith
Temple-Morris, Peter	Wilkinson, John
Thomas, Rt Hon Peter	Winterton, Nicholas
Thompson, Donald	Wolfson, Mark
Thorne, Neil (IlfordSouth)
Thornton, Malcolm	Tellers for the Ayes:
Waddington, David	Mr. Selwyn Gummer and Mr. David Hunt.
Walker, Rt Hon P.(W'cester)
Waller, Gary
NOES
Adams, Allen	Jay, Rt Hon Douglas
Ashton, Joe	Jones, Barry (East Flint)
Bennett, Andrew(St'kp'tN)	McGuire, Michael(Ince)
Brotherton, Michael	McKelvey, William
Brown, Hugh D. (Provan)	McNamara, Kevin
Brown, Ronald W. (H'ckn'yS)	Marshall, D(G'gowS'ton)
Callaghan- Jim (Midd't'n & P)	Martin, M (G'gowS'burn)
Campbell-Savours, Dale	Millan, Rt Hon Bruce
Cocks, Rt Hon M. (B'stol S)	Molyneaux, James
Concannon, Rt Hon J. D.	Oakes, Rt Hon Gordon
Cowans, Harry	Palmer, Arthur
Craigen, J. M. (G'gow, M'hill)	Parry, Robert
Cryer, Bob	Powell, Rt Hon J.E. (S Down)
Dalyell, Tam	Powell, Raymond (Ogmore)
Davis, T. (B'ham, Stechf'd)	Prescott, John
Dean, Joseph (Leeds West)	Roberts, Albert(Normanton)
Dewar, Donald	Sever, John
Dormand, Jack	Silkin, Rt Hon J. (Deptford)
Douglas-Mann, Bruce	Skinner, Dennis
Dubs, Alfred	Snape, Peter
Duffy, A. E. P.	Soley, Clive
Eastham, Ken	Spearing, Nigel
Evans, John (Newton,)	Stott, Roger
Ford, Ben	Taylor, Teddy (S'end E)
Foulkes, George	Varley, Rt Hon Eric G.
Fraser, Rt Hon Sir Hugh	Walker, Rt Hon H.(D'caster)
Grylls, Michael	Welsh, Michael
Hardy, Peter	White, Frank R.
Harrison, Rt Hon Walter	Winnick, David
Haynes, Frank
Home Robertson, John	Tellers for the Noes:
Homewood, William	Mr. Allen McKay and Mr. Hugh McCartney.
Hoyle, Douglas

Question accordingly agreed to.

Resolved, That the draft Transfer of Undertakings (Protection of Employment) Regulations 1981, which were laid before this House on 26th November, be approved.