HC Deb 23 July 1986 vol 102 cc486-91

Lords amendment: No. 10, in page 10, line 7, after "of" insert "any provision of this Part"

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke)

I beg to move, That this House doth agree with the Lords in the said amendment.

The amendment was tabled by my noble Friend to honour an undertaking that he gave in Committee in the other place. It strengthens the provisions of the Bill from the point of view of the worker. The Bill as it was previously drafted made it clear that any agreement between an employer and employee that sought to exclude the complaints procedure would have no validity. The amendment makes it clear that any provision in any agreement that tries to exclude or limit the operation of any provision of part I will be void. The result is that no worker can come under pressure to agree to abrogate his rights as provided by part I.

Mr. Nellist

As the Paymaster General has said, amendment No. 10 makes void any provision in any agreement to exclude or limit the rights of a worker to go to an industrial tribunal in respect of the unauthorised deductions that appear in clause 5. The interesting point about the amendment and the industrial tribunals to which it refers is that during the lengthy debates in Committee the industrial tribunals were the life-line that the Government offered workers to deal with all the problems that we thought could arise from part I.

This afternoon, with my comrades, I predicted — I almost ran a raffle on it—how long it would take the Minister to refer to industrial tribunals. He did so in less than three minutes in his first contribution from the Dispatch Box. That is indicative of the fact that the industrial tribunal system is what the workers will need should there be any problems with the introduction of the legislation. Obviously the Lords amendment is designed to compound and expand on that premise put forward in Committee.

Committee Members argued against the amendment. The whole ethos of this part of the Bill is the presumption that a worker is guilty of an offence that has led to an alleged shortage. The Government say to such a worker, "Go and prove your innocence before an industrial tribunal." Therefore, an employer becomes the judge and jury. He decides whether a worker is guilty. A worker has to prove his innocence. That is a complete turning on its head of what I was taught in school. No doubt other hon. Members were taught that the basic concept of British justice is that a person is innocent until he is proved guilty. The Government have done a 180 degree U-turn, or S-bend, in their treatment of workers.

Committee Members argued—this is crucial to Lords amendment No. 10—that for workers to be offered that lifeline meant a loss to them of some enormity. It may be that as a matter of principle a worker wants to prove his innocence in an industrial tribunal, but he would probably have to lose a day's pay to take that opportunity.

Mr. Richard Caborn (Sheffield, Central)

It may be two.

Mr. Nellist

As my hon. Friend says, it may be two. The geographical spread of industrial tribunals is not such that workers have only to walk to the end of their street to go to one. In many cases they have to travel miles, and that involves considerable travel expenses. It is not unknown for industrial tribunals to adjourn on one day and give a verdict the next. That involves overnight accommodation, and so on. Those were the basic points of disagreement. All those costs could be doubled if the worker, on a point of principle, wanted to bring a colleague from his work place as witness to back up his case.

Mr. Caborn

Does my hon. Friend agree that the pre-hearing assessments are doubling all these costs, because of the legislation brought in by this Administration? Because of the geographical spread of those involved, the hearing could take four of five days in respect of the limited amount that the employer is trying to take off the employee.

Mr. Nellist

My hon. Friend, with his great shop floor experience and experience of industrial tribunals, has anticipated one of the points that I shall make later. He has made a good point about the potential burdens on workers who exercise their rights. This clause carries a series of caveats because of the expense imposed on the workers.

As ever, even when we are lucky enough to have a few weeks between a Bill being passed in the Commons and being considered in the other place, parallel developments take place about which no one tells Committee Members. One matter to which the Paymaster General and the Under-Secretary of State did not refer, and which was not considered in the other place, has a great bearing on the amendment. I am referring to a press release put out by the Department of Employment on 18 June, entitled: Government seek views on industrial tribunal fee proposal". It mentioned the White Paper, Cmnd. 9794, "Building Businesses … Not Barriers" and it contained a proposal to charge a £25 fee for every one using the industrial tribunal system.

In Committee the Minister gave the arguments for the industrial tribunal system, but the press release contains all the arguments against it. It states: The main problem employers have encountered with employment protection legislation is the cost and management effort required to deal with ill-founded claims to industrial tribunals which also result in considerable public expenditure though they may cost the applicant little or nothing. I disagree with that. The press release continues: The Government are therefore considering introducing a requirement for applicants to pay a fee, perhaps £25, when making an application to an industrial tribunal. Such a fee would be refundable if an applicant won the case at the tribunal or a subsequent appeal, or if the claim were withdrawn before the date for a full tribunal was fixed. On the one hand, despite the fact that the Bill is designed to presume their guilt, the Government are offering workers the chance to prove their innocence by going to an industrial tribunal, but on the other hand, they are seeking to discourage workers from using that mechanism by charging a fee of £25 before they put any evidence to the tribunal.

Mr. Mikardo

It is even worse than my hon. Friend says. The Government are not just discouraging people from going to the tribunals. They have built a barrier in a paper called "Building Businesses … Not Barriers".

Mr. Nellist

That is absolutely true. It is a little difficult, because the press release and the White Paper do not make it clear whether all cases go before industrial tribunals or whether only unfair dismissal or sexual discrimination cases do so. In any case, the consultation period ends in September. Tonight we are asked to accept on our constituents' behalf the use of industrial tribunals with the possibility that, in a couple of months, the Government will bring forward their proposals to introduce a £25 fee.

Earlier, Mr. Deputy Speaker, I raised our difficulties with you, because the Bill had received its Third Reading in the other place only last night and it was not until this morning that we saw the Government's final amendments when they were printed and available in the Vote Office. There has not been much time for people to get in touch with me.

This morning I received a memorandum which pertains to this clause. It was from the British Institute of Management. It is not normal for me to quote the British Institute of Management, but, as somebody once said, "any port in a storm". The BIM says that it does not think it is helpful to regard all cases lost at tribunals as ill-founded. Cases could be lost on technicalities. Tribunals did not divide claims into black and white, but judged from their experience where the balance lay. Such claimants should not be deterred from seeking justice. I submit that passing this Lords amendment, with the implication of a £25 fee in a couple of months time before people can use the facility in the Lords amendment, is a discouragement and a deterrent to those seeking to prove their innocence.

The memorandum goes on to say that the British Institute of Management was not convinced of the necessity to introduce a fee for applications; it would be preferable to encourage more use of the existing pre-hearing system. That was the point made by my hon. Friend the Member for Sheffield, Central (Mr. Caborn).

The BIM added: It should be noted … that in a recent consultation with its members only 17 per cent. sought to reduce employment protection legislation. Perhaps we might come back to that statistic on future occasions when, from the Dispatch Box, we are told what wide support the Government's measures have among British management for attacking the rights of workers and their trade union institutions and organisations.

All the way from 25 July last year, when the bones of the Bill were announced in this Chamber, to its appearing in a more structured form later in the year to a Commit tee being set up, the message of the Minister was, "Go to the industrial tribunals." We now find that people are being discouraged from taking that avenue.

Mr. Caborn

The cost factor of my hon. Friend's point needs underlining. In Sheffield in the past few days a case was taken to an industrial tribunal for wrongful dismissal. I have been involved in the case. The fees to the lawyers on one side were over £1,000. Therefore, about £2,000 to £2,500 was spent on lawyer's fees alone, and it never went through the door of the tribunal. If people have to defend themselves and prove their innocence before industrial tribunals, we are talking about considerable amounts of money. As I said, in the case to which I referred the sum involved was in excess of £2,500 without the tribunal even being involved.

Mr. Nellist

My hon. Friend is right. As these large sums of money are in themselves a discouragement, we may ask ourselves why there is to be a further £25 fee to rub salt into the wound and provide a further indignity to discourage workers from using industrial tribunals.

My hon. Friend the Member for Sheffield, Central mentioned pre-hearing tribunals. There are already financial penalties under the industrial tribunal system against certain categories of dismissed claims. Tribunals are already empowered to award costs where either party acts frivolously, vexatiously or otherwise unreasonably. To complete my argument, I checked to see what case would define those two words. It is a relief to be able to say that I have the case in front of me. "Frivolous" and "vexatious" were defined in E. T. Marler Ltd. v. Robinson in 1974 as follows: If the employee knows that there is no substance in his claim and that it is bound to fail, or if the claim is on the face of it so manifestly misconceived that it can have no prospect of success it may be deemed frivolous". It goes on: If an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some improper motives he acts vexatiously". There are already sufficient definitions of frivolous and vexatious for the point to be dealt with, particularly at a pre-hearing assessment level, and to see whether a worker is genuinely trying to prove his innocence or is engaged on a campaign of spite.

Lords amendment No. 10 enhances the argument that we had throughout the Committee stage about the Government encouraging workers to use the industrial tribunal system. The hon. Member for Langbaurgh (Mr. Holt), who is not with us this evening, unfortunately, was the only Tory Member who argued against the industrial tribunal system. He used the same arguments as the Minister and Paymaster General used in their press releases to back up the £25 fee. The Government are encouraging workers to use industrial tribunals, but at the same time are trying to discourage them by the imposition of the £25 fee.

A final indignity is that even if we pass the amendment and then the Bill, and a worker chooses the industrial tribunal to prove the innocence which, under British law, should be assumed from the outset, and wins the case, he can get back to work next morning and be sacked if he has not worked there for two years full time or for five years part-time. He cannot go back to the tribunal a second time, because he has no protection against unfair dismissal.

I advise workers to rely, not on the amendment, on clause 5, on industrial tribunals or on the injection of the legal process into the workers' movement, but on their traditional trade union organisation, because the strength of those organisations can protect them when employers act unreasonably against them by deducting money to which they are not entitled.

Ms. Clare Short

The points that my hon. Friend the Member for Coventry, South-East (Mr. Nellist) made about tribunals and the proposal to impose, in effect, a £25 fine on anyone who tries to go to a tribunal are important and relevant. They deserve, at some point, some comment from the Ministers whether they propose that the £25 will apply in the case of tribunal applications where people are complaining that a deduction has been wrongly made.

In Committee we talked at length about the fact that people will be subjected to deductions that will not only make them short of money—as we all know, workers in retailing are low paid — but cast a doubt on their integrity and honour. A relatively small amount of money might be involved — a £5 deduction, for example. However, the suggestion is that the individual has behaved dishonestly. He might feel deeply aggrieved and want to go to the tribunal to put the record straight and have his honour protected, but another barrier has been put in his way. In his defence of this part of the Bill, the Minister relied heavily on the ability of any worker to go to a tribunal. The introduction of a £25 fee leans against many of the undertakings that he gave in Committee and will not make it easy for workers to have access to a tribunal.

I am glad that the Paymaster General was straightforward in saying that Lords amendment No. 10 was the implementation of an undertaking given in Committee. We said that it might be possible for an employer to impose a contract on a worker, or make one with him that would remove the protections of the Bill, but we were told that would not be possible. The Government obviously had another look, decided that it would be possible, and introduced this amendment, so that it would be impossible for an employer to go behind the door and reduce the protections, limited though they are, that are afforded to workers.

Does this clause make it impossible for workers, through their trade unions, to get better protection than is afforded in the Bill? Does it work both ways? Does it mean that they must be subject to the 10 per cent. deduction, whether the employer wishes to impose it or whether they have the strength to impose further conditions? We welcome the change. It implements an undertaking that was given at our request, but I should be grateful for an answer on that point.

Mr. Kenneth Clarke

The press release that was quoted by the hon. Member for Coventry, South-East (Mr. Nellist) invited comments as part of the consultation process upon our proposal to introduce a returnable fee of £25 for those who wish to apply to industrial tribunals. I listened with great care to his speech and regard it as an interesting contribution to the consultation process that is now under way. As it happens, this amendment has nothing whatever to do with access to industrial tribunals. That is already provided for and protected by the provisions of the Bill.

This amendment was moved in another place to make it clear that, in addition to the protection already provided by the Bill, any attempt to reach an agreement between an employer and an employee that seeks to set aside or limit any provision in part I is void. The hon. Member for Birmingham, Ladywood (Ms. Short) welcomed that protection. It would apply only if an agreement was entered into between an employer and an employee that sought to exclude or limit the operation of part I. I do not believe that any agreement that gave additional protection to the employee would fall foul of that provision. It would be open to the employer to give greater protection to the employee than is provided for by the Bill, if he so wishes.

Ms. Clare Short

But if workers reach an agreement that there will he no deductions in certain circumstances, it will limit the provisions of the Bill which allow for deductions in those circumstances.

Mr. Kenneth Clarke

No. Deductions are lawful only if there is an agreement in the first place between the employer and the employee which allows them. If the contract of employment does not allow for deductions, all it means is that the Bill does not apply. This amendment in no way weakens the protection that is given to an employee.

Question put and agreed to.

Subsequent Lords amendments agreed to.

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