HC Deb 14 May 1986 vol 97 cc731-58

'(1) No deduction

  1. (a) shall be made front any workers wages and no payment shall be required from any worker for any disciplinary purpose of more than 10 per cent. of gross wages in any pay period;
  2. (b) shall be made or payment required for disciplinary reasons unless the employer can show that the worker concerned was guilty of the act or omission complained of.

(2) Any worker who is dismissed for complaining to a tribunal about an illegal deduction or payment shall have a right to apply to the Tribunal for an immediate reinstatement or adequate compensation for loss of employment.

(3) When the Tribunal finds that a worker was subjected to an illegal deduction or request for payment, it shall award compensation to the worker taking account of the loss and inconvenience suffered by the worker and the failure of the employer to comply with the law.'.—[Ms. Clare Short.]

Brought up, and read the First time.

5 pm

Ms. Clare Short (Birmingham, Ladywood)

I beg to move. That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

With this it will be convenient to take the following amendments: No. 3, in clause 1, page 1, line 15, at end insert— 'and; (c) the worker concerned was guilty of the act or ommission complained of'. No. 19, in clause 2, page 3, line 34, leave out 'in retail employment'.

No. 20, in line 34, leave out from 'makes' to 'any' in line 35.

No. 28, in clause 3, page 4, line 34, leave out 'in retail employment'.

No. 30, in page 5, line 2, leave out 'in retail employment'.

No. 43, in clause 5, page 7, line 9, at end insert—

  1. '(e) that an employer has dismissed a worker because he made a complaint to an industrial tribunal under this section, or
  2. (f) that the employer has not shown that the worker concerned was guilty of the act or omission complained of, or
  3. (g) that the amount deducted or paid by one or more workers was greater than the value of the loss complained of'.
No. 44, in page 7, line 44, at end insert—

  1. '(c) the tribunal shall make an award of compensation to the worker taking account of the loss and inconvenience suffered by the worker and the failure of the employer to comply with the law;
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  3. (d) in the case of a complaint under subsection (1)(e) the tribunal shall order reinstatement or adequate compensation for loss of employment'.

Ms. Short

Today we shall consider part I of the Bill. Having completed Second Reading, consultation and consideration in Committee, most people are aware that the Bill is seeking to cut the pay of 3 million of Britain's poorest workers in the wages council sector—for example, textiles, hotel and catering, shops and distribution. It is not widely understood, however, that the Government are making changes, which are set out in part I, to make it more likely that workers will be subjected to fines and deductions from pay for disciplinary reasons. The examples given to us in Committee by the Under-Secretary of State for Employment were lateness, absenteeism and failure to comply with health and safety standards, and the Bill refers to deductions or fines for cash shortages and stock deficiencies. The Bill makes it clear that an individual who can prove that he is not guilty of causing any shortage of cash or stock might still be subject to a deduction and have no right to have that reversed.

The laws that will be repealed by the Bill are set out in the Truck Acts, and the Paymaster General is fond of sneering at their old age and making that a dogmatic reason in itself for repealing them, irrespective of whether they have worked well. The part of the Truck Acts that applies to deductions and fines is not that ancient in that it was enacted in 1896. That measure is currently in force and it limits the extent to which deductions and fines are used to discipline workers. I am sure that its repeal will lead to a great increase in the use of deductions and fines.

The Act lays down a number of conditions, which means that employers must think carefully before making deductions. It provides that there must be a signed contract, with the worker signing and agreeing that he is willing to be subject to deductions. The employer has to provide written particulars of the sum that has been lost or of the omission that led to the fine or deduction. A register must be kept of all fines and the deduction must not exceed the value of the loss of which the employer is complaining. The amount deducted must be reasonable.

In the light of these restrictions, the making of deductions is not a widespread practice in British industry. These restrictions are to be lifted, however, and under the new law anyone will face a fine or deduction if he agrees to sign a contract which states or even implies that his employer might subject him to fines or deductions. There will be no requirement that a fine must be reasonable or must not exceed the loss to which the employer has been subjected. The employer will not have to specify what act or omission led to the loss that led in turn to the deduction.

The only protection that the Government are offering is that a limited number of workers—those in retailing—will not be able to lose more than 10 per cent. of their wages each week if a deduction is made as a consequence of a cash shortage or stock deficiency. The Government have made no case for that protection being restricted to retail workers when many other workers might be subjected to deductions.

The Government tell us that we need not worry and that all workers will be properly protected. They say that if a worker is subjected unfairly to a deduction, he will be able to take his case to a tribunal. However, if a worker goes before a tribunal and says that he was desperate for a job, signed a contract which said that he might face deductions in certain circumstances, had £5 or £10 deducted from miserly low wages, can prove to the tribunal that he was not responsible for the loss and states that a fellow employee is willing to confess, the tribunal will not be able to reverse the deduction.

The tribunals will be extremely weak. They will be able to impose a penalty on an employer only to the extent of ordering him to restore the amount of deduction or fine. Therefore, the Bill is a charter for employers to make a deduction when in doubt. If an employer is found to have broken the law in making a deduction, he will have to pay back only the £5 or £10 that was deducted. That sort of sum might be considerable for someone earning £50 a week, but it will not be very much for the average employer.

The new clause and the amendments seek to amend the Bill to prevent the widespread growth of deductions from workers' pay for disciplinary reasons. The Government seem to envisage the operation of the Bill as part of a great move to macho management. The new clause would impose a limit of 10 per cent. of gross wages on all deductions and fines for all workers. If the Government are not willing to accept this proposal, they must tell us why retailing is so special. Why will it be all right to deduct 20 per cent. of the wages of a cleaner or hotel chambermaid, for example, who might be working for similarly low wages of £40 to £50 a week, and not all right to take more than 10 per cent. from the wages of a retail worker? We accept the 10 per cent. limit—we would like a lower limit—but there is no reason why such protection should extend only to retail workers.

My argument is not theoretical. In the past, employers have taken enormous sums from low-paid workers. Petrol pump attendant work is notorious. The famous case of Barrett was taken under the Truck Acts. A young man who was unemployed agreed to accept a job at a low rate of pay because he was desperate for employment. His contract stated that he would be responsible for any till shortages. He thought that that was reasonable, but he did not know that many others would have access to his till. In time, he faced deductions of £20 a week from a wage of slightly more than £50 a week. If the Bill is enacted without the amendments that we are proposing, it is likely that many more workers will face deductions of that sort without being able to take action.

Secondly, the new clause provides that an employer who makes a deduction from a worker's wages will be required to show that the individual facing a deduction or fine was guilty of the act of which he complains. It is remarkable that under the Bill an individual who can prove that he had no responsibility for a shortage of cash or stock, or some other loss or damage, and can prove that someone else carried the responsibility, will still face fines and deductions if he has signed a contract that states that he might be subjected to fines or deductions. That is unacceptable, and we believe that all reasonable people will take that view. We are proposing that workers should be subjected to deductions and fines only when the employer can show that the worker was guilty of the act or omission of which he complains.

Thirdly, the new clause addresses itself to those who are subject to an illegal deduction and take their case to a tribunal in the way that the Government propose, only to find that they lose their job because the employer is annoyed at being dragged before a tribunal for breaking the law. At present, a worker who has been employed for less than two years has no right to initiate an action for unfair dismissal. A part-time worker—40 per cent. of retail workers are part-timers, and it is a sector where the Government expect many deductions to be made because they have made special provision for retailing—has to be employed for five years before he has the protection of being able to complain that he was dismissed unfairly.

Under the Bill, someone who faces an unfair deduction and loses money from a small wage packet that he cannot afford to lose is offended and hurt by the suggestion that he is guilty of dishonesty when he is not. He may go to all the trouble and loss of time from work that is involved in taking and proving a case before a tribunal. But if he takes that course, he can be sacked, and he will find that he can do nothing about that. This is outrageous. We are saying that anyone who is sacked for taking a case to a tribunal that finds his employer guilty of making an illegal deduction should have the right to bring an action for unfair dismissal and be restored to his job or to receive compensation for the loss of employment.

New clause 9 would empower tribunals to award compensation to a worker, taking into account the loss and inconvenience to that worker of taking the case to the tribunal. The Minister told us repeatedly in Committee that we must not worry about some low-paid workers being likely to lose large chunks of their money because, if anything wrong was done, they would be able to take their case to an industrial tribunal. Taking a case to an industrial tribunal takes an awful lot of courage, organisation, time, energy and money. It means loss of pay for the days that have to be taken off to prepare the case and to appear before the tribunal, and travelling time.

A worker in retailing might earn £50 or £60 a week and be subjected to a deduction of £5 or £6, but it will cost more than that to take the case to a tribunal to prove innocence, and the worker can be awarded only the £5 or £6 deduction. The Government are saying that people have the theoretical right to take their case to a tribunal. In practice, employees will be scared to take a case to a tribunal because they will be sacked if they do, or they will not be able to afford to pursue the case. No employer will be intimidated by the possibility of being taken to a tribunal, however, because the punishment that can be meted out is so small.

The Minister made much of the fact that small employers are worried about industrial tribunals. Surveys show that they do not like to be taken to tribunals and that they fear cases of unfair dismissal. We accept that, but the Government have to take account of tribunals' powers in such cases. They can force an employer to take back a sacked employee or to award compensation, which can be thousands of pounds, for loss of a job if the employer is unwilling to take the worker back.

Small employers find tribunals frightening because they fear losing and what might be done to them. Employers will laugh at the tribunals on deductions, however, if their only power is to force the employer to pay back £5 to some low-paid employee. The employer will not bother to go along. Rather he will send the office-keeper or even write a letter saying, "I do not care about the outcome." Being taken to a tribunal will not be onerous. It will prove no sanction in preventing employers from imposing illegal deductions on low-paid employees.

Everything about the new clause is reasonable. If it is not accepted, workers throughout the country should note that, from now on, any employer who wants to impose fines or deductions on workers can have a field day. It will be simple to take large chunks from workers' pay. That is likely to happen extensively in the least well-organised sectors of the economy, where low pay and bad employment conditions are prevalent.

The Government have introduced a power, but seem unconcerned to include sufficient protections to ensure that the right to make a deduction or to impose a fine will not be exercised unless there is real evidence that a worker is guilty of an offence. Nor have they ensured that, if an employer behaves wrongly, a worker can have his or her rights protected.

Without the new clause, the Bill will be deeply objectionable. It will lead to a widespread growth in deductions, conflict and tension in industry and unjust reductions in the wages of some of the poorest paid workers in the country.

5.15 pm
Mr. Ian Mikardo (Bow and Popular)

In Committee, we often complained—the complaint was made by some Conservative Members as well—that much of the Bill showed' evidence of having been drafted by people who had never seen the inside of a factory, store room or retail establishment. Many factors about real commercial and industrial life have not been considered in the least.

We see things most clearly if we take hard practical examples. I shall take the example of a trade supplier. It may be a supplier of motor accessories or tools. It is therefore outside the retail industry—a wholesaler. The front part of the establishment has a trade counter, behind which is a store. The chap who owns it employs a young fellow as a storesman, who goes to the back to fetch stuff out.

Mr. Richard Holt (Langbaurgh)

The hon. Gentleman used the words "trade counter". I did not hear him mention them in Committee, but they are relevant in this context. According to the explanatory notes, we are concerned with places where members of the general public are served. Would he like to guess whether a person who goes to a trade counter is a member of the general public or some other special type of person who is not covered by the Bill?

Mr. Mikardo

I am talking about an establishment that sells to the trade, such as a builder's merchant who sells to builders, not members of the general public, or a chap who sells tools to engineers, or a chap who sells motor accessories to repair garages. His having a trade counter takes us entirely out of the ambit of retailing.

The storesman picks up the requisition and puts two of these, one of those and two of those in a tray and brings them out to the trade counter to sell them. There is nothing to prevent the owner from telling his storesman at the end of the week, "There is a stock deficiency of £40." He does not have to prove it. He can tell his storesman, "I shall make a deduction from your pay," and because the business is not retail, the deduction is not limited to 10 per cent. of the storesman's wage.

The owner does not have to say that the deficiency is in five-inch spanners, and that nine have gone. He does not have to say, "I know that you are responsible because I saw you going out with some spanners in your jacket pocket." He does not have to adduce one tittle of evidence to demonstrate that the storesman is responsible for the stock shortage. Indeed, he does not have to produce one tittle of evidence to demonstrate that there is a stock shortage at all. He can invent a stock shortage. He can even create a stock shortage himself by nicking half a dozen electric bulbs and taking them home. He could then tell his assistant, Joe Bloggs, "Half a dozen bulbs are missing and you have to pay for them."

I hope that the Minister will not say in reply, "Not many employers would behave in that way." Of course not many would, but the law tries to deal as well as it can with all contingencies, not merely with majorities or minorities. Only a small percentage of the population engages in house-breaking, but that does not stop us having laws to deal with those who do.

The employer can tell an employee, "There is a stock shortage," but he does not have to prove that there is one or that the employee is responsible for it. Someone else may have been responsible. He may have been responsible himself. On that basis, he can make a deduction

The lad knows that he was not responsible for the shortage because he knows that the old man nicked the bulbs and took them away. He is angry about that, so he decides to go to an industrial tribunal. That is not easy. As the Minister said—my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) agreed—there are difficulties for employers, but the difficulties for employees are much greater. Those who work in sizeable establishments which are unionised have the help of their unions, but the wages council industries are almost entirely composed of trades where the average establishment is small and the turnover of labour is rapid by comparison with other trades.

That is true of the hotel and catering industry. It is true to a lesser extent in some parts of the garment and needle trades and to an even lesser extent of retailing. In all those trades, unionisation is rare because of the difficulty of organising in establishments where only a handful of people are employed, and where that handful of people is liable to change rapidly.

Therefore, the trade supplier for whom the lad works is unlikely to be unionised.

Ms. Clare Short

My hon. Friend is right to say that the workers who are most likely to be subject to deductions are low-paid workers in the wages council industries, but the provisions mean that, in future, all workers will be liable to such deductions.

Mr. Mikardo

I appreciate that it could happen to any worker. The Bill gives the employer greater power than rests with the judiciary, because it gives him the power to fine without proof of guilt. No magistrates court, county court, assizes, appeal court or High Court could fine me without having established that I was guilty of something. But under the Bill, any worker anywhere—those who will get it in the neck will be the low-paid workers in the wages council, non-unionised industries—can be fined by his employer in a way that the Lord Chief Justice could not fine me. He can be fined by his employer without a jot or tittle of evidence that there has been any culpability.

For the life of me, I do not understand how anyone can begin to justify that position. There is no hon. Member who, if it happened to him, would not believe himself to be the victim of a gross injustice and who would not scream to high heaven about it. How can we justify inflicting upon others a condition which we would never accept for a moment as applying to ourselves?

Let me return to my trade supplier. The lad is aggrieved and, notwithstanding the fact that he knows little about tribunals and that he does not have a trade union to represent him and that he does not know where the tribunal is or how to get the forms, he asks round—perhaps at the citizens advice bureau or perhaps his friends—and he appeals to a tribunal. His employer says, "You had better drop that, Harry, because if you continue with it, you will get your few quid from me, but you will get the sack as well." There is not one word in the Bill to prevent that.

Even worse, the employer need not even forewarn the lad. The lad goes to the tribunal and gets an award giving him back his own money. That is the only award that he will get. There will be no compensation for the time during which he lost the money or damages for the aggravation that he has been caused or the injustice of being falsely accused of theft. There is not a halfpenny of compensation for that. All that he will get from the great victory is his own money back. Then his employer says, "I am fed up with you. You were out last Thursday at the tribunal. I do not want you; I want people who will be here every day." There is nothing in the Bill to prevent that.

I shall listen with great care to the Minister, who, in his personal relationships, is a fundamentally decent chap, trying to justify, within the parameters of his personal morality, this hideous, raving injustice.

Mr. Holt

We had many a happy hour in Committee debating this element of the Bill. Like the hon. Member for Birmingham, Ladywood (Ms. Short), I am sure that many thousands of people will discover, to their surprise, the legislation that the Government have introduced. I found elements of surprise even at the highest levels of the Institute of Personnel Management. Indeed, I found a Minister who was amazed when I told him what the Government proposed to do, and who encouraged me to continue my vendetta against the Government on this part of the Bill.

The Government have been extremely clever in many ways; one must give them credit for that. Many Conservative Members, not necessarily supported by Opposition Members, are in favour of the proposals in the wages council element of the total package. But this curate's egg brings with it not only the simple abolition of the wages councils or their restructuring and reformation, but more work for the lawyers in the industrial tribunal courts. I put down a marker that I shall return to industrial tribunals several times.

I endorse the view of the hon. Member for Bow and Poplar (Mr. Mikardo) that the Government's proposals will create a minefield of trouble for them. I have the simplistic view, as one who has worked in industry for most of his life, that the best industrial relations are those engendered between employers and employees without interference from Government. The Government should be only a last resort when all else appears to have failed.

The Truck Acts have been on the statute book for a long time, but that does not necessarily make them bad. Marriage laws have been on the statute book for a long time, but we are not proposing to abolish marriage and to introduce some new consolidation Bill.

Mr. Tom Pendry (Stalybridge and Hyde)

Give them time.

5.30 pm
Mr. Holt

The Government have no right to bring before the House change for the sake of change, without justification. The Government have made no case for changing and abolishing the Trucks Acts' element regarding deductions from wages. I can find no Government supporters for the fundamentals of this issue.

The Government will say, "We carried out a survey which showed that the majority of employers favoured the 10 per cent. deduction method." If one is asked whether one wants to be shot in the left or right foot. one makes a choice, but one would prefer not to be shot in the foot because it is unnecessary. From my practical experience and from what I have read in the media and, more particularly, in my institute's journals, I can find little evidence that there is a minute case, let alone an overwhelming one, for the introduction of this element.

Obviously, there are rogue employers and rogue employees, but the law in situ is working. It is not breaking down.

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

I have often heard my hon. Friend speak about industrial tribunals, and I respect his view, although I do not share it. Is he suggesting that he would prefer the existing Truck Acts which cover this part of the Bill to remain in force without the built-in protection which he must acknowledge will be given to workers by limiting the deduction to 10 per cent. of pay?

Mr. Holt

My experience is that the law is known and understood by, and working for, the most humble in the land to the most eminent members of the Confederation of British Industry and the Institute of Directors. The Minister may argue that greater protection is being afforded to employees, and I believe that he sincerely thinks that. However, I cannot accept that, because I believe that the scenario put forward by the hon. Member for Bow and Poplar is much more realistic in this context. As I understand the Bill—I am willing to be corrected—the protection that the Government are affording is only that deductions will be limited to 10 per cent. of pay, and that if a person goes to a tribunal, that money must be repaid without compensation.

Ms. Short

In Committee and today we have talked as though the 10 per cent. protection will extend to all workers, but that is not so. It applies only to workers in retailing for cash shortages and stock deficiencies, not for lateness or absenteeism. Therefore, only a small group of workers will be protected by the 10 per cent. provision.

Mr. Holt

I accept that, and it is a reason why I am puzzled why the Government are introducing this element as such an enormous protection. In my 30 years in business, no employee has ever told me a tale of an employer removing money, without the employee having a right to go to court. Employees already have that right. We are only duplicating it or, worse still, weakening it.

Mr. Dave Nellist (Coventry, South-East)

There is a significant difference which I may develop if I am called to speak. Under the old law, an employer must take a worker to court and prove his guilt, but under the Bill a worker must run to an industrial tribunal and defend his innocence. That is completely different.

Mr. Holt

With respect, I think that that worked both ways. I understand that an employer will now be able to rely on an industrial tribunal.

I did not wish to develop my view on industrial tribunals at this point, but a tribunal is a lottery. All hon. Members who read my magnificent speech in December on industrial tribunals—at that time in the morning, there were not many listening—will know that the Minister accepted the Russian roulette aspect of industrial tribunals. Industrial tribunals cannot have an appeal made against them except on a point of law, whereas under the present law, if a deduction is under dispute, the full panoply of the law is available to both sides, and the case may end up in the other place or, perhaps, even in Europe. Under the Bill, that will be denied. Therefore, far from giving added protection to employees, the Minister is seeking to give extremely limited protection; it is subject to no penalty and it is a lottery. Once a case goes to an industrial tribunal, the outcome depends on how the chairman felt when he got up that morning and came to work. Either the employee or the employer will be lucky, because that is how the case will be decided. A decision will be made only on whether the deductions made up to that point were lawful, or were unlawful and must be repaid.

This seems to be legislation for the sake of legislation. The honest truth is that the Government merely intended to abolish the Truck Acts. That may have been argued and justified. However, to erect a smokescreen by suggesting that they are being replaced by something superior, fairer and nicer simply does not hold water. It does not bear examination. The Government's case is wafer-thin, and water is seeping through.

Even at this late stage I suggest that my hon. Friend the Minister has a deathbed repentance on this aspect of the Bill. Then, some of us could with much greater heart support other parts of the Bill which we favour. I seek to be fair and discriminating by supporting the parts which are good law and by not supporting those which are bad law. The Government have produced bad law on this aspect, and it will not be long before it will bring the whole Bill into disrepute. I do not want that.

In his intervention, the Minister made it clear that in reply he would seek to justify this element by saying that it gives additional benefit to employees by making industrial tribunals available—I promise that we shall talk more about industrial tribunals later—and by staggering repayments over two, three or more months—[Interruption.] Did I hear something about 10 o'clock tomorrow morning? We cannot expect the country to support Conservative Governments and Ministers—[HoN. MEMBERS: "Hear, hear."]—if they introduce bad laws for which there is no public support. There is no public support for the abolition of the Truck Acts from professional, managerial, trade union or working people. There is none. Apart from a place which I am not supposed to mention, I can find little support for these proposals.

Whenever I speak on this very serious subject, I try to introduce a light-hearted tone. The hon. Member for St. Helens, North (Mr. Evans) and I have debated this issue several times, and he knows that hon. Members should not be misled by my style. I have spoken to many of my right hon. and hon. Friends who are not all in the Chamber today, and I think that I reflect their views when I say that the Government have impaled themselves on something similar to the Shops Bill. The Government should listen to what their Back Benchers are saying, especially if those Back Benchers are in touch with industry and commerce.

I have yet to be shown any evidence to support this part of the Bill. My hon. Friend the Minister must make his case, or we shall be here for a long time. If he does not make his case, I shall carry on asking question after question, trying to find what justification there is for introducing such a deduction. Regardless of whether the employee is highly or lowly paid, the deduction is very immoral. It is immoral to take money away from people without justification or proof and without any recourse to a normal court. That part of the Bill does not merit my support. The Government are seeking not merely to throw out the baby with the bath water but to throw out the bath too.

Mr. Ken Eastham (Manchester, Blackley)

I rise to support the amendment, and am greatly encouraged by some of the comments of the hon. Member for Langbaurgh (Mr. Holt). In Committee, there were one or two exchanges on this issue, and perhaps our points have now sunk into Conservative minds. If the hon. Gentleman is joined by some of his colleagues tonight, there may be one or two dramatic changes to the Bill.

In the early stages of the Bill, we said that we thought that it was the Government's original intention to abolish wages councils altogether. But they realised that it was such an outrageous idea that they retained the Bid while nobbling its contents.

5.45 pm

The Truck Acts date back more than 150 years to 1831. The Government are making these alterations for the sake of change. They certainly will not benefit the workers and that is why, in Committee, Opposition Members resisted the Bill with great tenacity and conviction for two and a half months. The Minister will probably say that there will be a contract. That is true, but we object to the fact that the contract is to be solely on the employer's terms. We frequently pointed out that in such desperate times, with 4 million people unemployed, low-paid workers—who are the subject of this Bill—may be induced or forced to accept intolerable conditions just for the sake of the job.

As my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) pointed out, the employer's entitlement to make weekly deductions is quite outrageous. There is no onus on the employer to make a case for the deduction. We contend that the employer could be dishonest about his case for deciding to withhold part of an employee's weekly wage packet. Time and again we have said that if there is any dishonesty—something that we would not defend—the matter should be pursued through the courts. The police could be brought in and a case could be made. Thus the employer could prosecute in a court or dismiss the man. There are options other than the one that seems to have the Minister's favour.

For the first five or six weeks in Committee the Minister kept on saying that employees could go to an industrial tribunal. But during one sitting he suddenly said that he did not want too many appeals to be made to tribunals as that might clog up the works. He implied that the odd case might be all right, but that people should not pursue their rights too often.

Mr. Holt

I believe that that point coincided with a written question to the Minister from me. I asked him what provision he was making for additional courts or tribunals. He replied that he was making none, and suddenly the need for tribunals also waned.

Mr. Eastham

I am grateful to the hon. Gentleman for that intervention.

Hon Members on both sides of the Committee then pursued the Minister about the provision being made for personnel, and so on. The Minister said that there would be other people. On another occasion. he suddenly mentioned ACAS, as though that might make up for the deficiencies in wages inspectors. We found it less than convincing that the Minister should say in one breath that someone could go to an appeal tribunal and then say in another that he did not want too many appeals as they might clog up the works. That did not show any great enthusiasm for justice for the workers.

The amendment makes a good case. If a worker goes to a tribunal, he may incur considerable personal expense. He will have to take time off work, and he probably will not be compensated for it. For all we know, the appeal tribunal may not be in his town, and he may have to pay the cost of travelling 10 or 15 miles in order to prove his innocence. Indeed, after spending time and money he may be found innocent, but he has no apparent right to be reinstated or compensated. Because of that, we are correct in saying that it is a worthy amendment and the Minister should give real consideration to it.

Mr. Holt

The hon. Gentleman made an interesting and valuable point about the fares that people have to pay. The hon. Gentleman realises that the fares are available to anyone going to a tribunal if he has to travel over six miles. These fares are paid out of public money. The money does not come from a respondent who may have flouted the law in getting an appellant to the tribunal in the first place.

Mr. Eastham

The hon. Gentleman has reminded me that people who have to travel a certain distance will receive compensation. Nowadays, it costs a small fortune to travel on public transport, even if one is travelling only three or four miles. There is a considerable penalty on those who must undertake two journeys.

When a worker proves that he has a legitimate claim, he should have certain rights. If the Minister were fair minded, he would say that there is justification for what we are saying and he is prepared to put that part of the Bill right. We do not like the Bill. We object to it clause by clause, but at least we are trying to make it more just than it is.

We contend that there should be penalties for an employer as well as an employee. I have never known anything as one-sided as the Bill. The Bill contains next to no penalties whatsoever for an employer. For those reasons, I hope that the Minister will be sympathetic and give serious thought to the matter.

Mr. Nellist

I have spent the best part of three months considering the Bill in a Committee Room. It is interesting that of all the Tory Members who sat silent during the Committee's consideration of the Bill, only a couple are now prepared to sit in the Chamber during the debate. Be that as it may, the central importance of proposed new clause 9 relates to part I of the Bill which deals with the right of an employer to make deductions. The tone and tenor of the Bill and of the Government's general approach to working people in British society are set in line 2 of clause 1 which states: An employer shall not make any deduction from any wages of any worker of his". That is the possessive nature of the kind of society the Tory Government would like to see. The hon. Member for Penrith and The Border (Mr. Maclean)—

Mr. Don Dixon (Jarrow)


Mr. Nellist

Yes, unamended. The hon. Member for Penrith and The Border introduced a description in Committee of the relationship between master and servant. He thought that the Bill epitomised that description. It is necessary for us to attempt to amend, at Report stage, the language and principles of that part of the Bill. My comrade the hon. Member for Bow and Poplar (Mr. Mikardo) said in Committee that the Tory Government are only interested in workers insofar as they are interested in the appendages at the end of their two arms. That description came out in the debate on that part of the Bill.

Unless we succeed in adding the new clause and making the consequent amendments to part I, employers will be given power to discipline workers by fining them. Clause 1 is one-sided. It gives power to employers to deduct the wages of workers, albeit with a maximum limit of 10 per cent., without even making mandatory the joint signature of an employer and a worker in an agreement that that is the case. No doubt we shall deal with that specific point later.

The Bill weakens the current position under the Truck Acts as to the power of employers to make deductions. Central to the arguments which other comrades have already deployed, it reverses the whole concept of what we, and, no doubt you, Mr. Deputy Speaker, were told at school—that under British law a person is innocent until he is taken to court and proved guilty. The Bill allows an employer to be the judge, jury and executioner. An employer may implement his decision by imposing a fine, saying. as a concession to a worker. "Go to an industrial tribunal, if you wish to do so, to prove and defend your innocence, because I, as an employer, have decided that you are guilty."

Ms. Clare Short

The position is even worse than that described by my hon. Friend. I am sure he agrees that it is possible for a worker to face a fine, go to a tribunal and prove his innocence but, because an employer can say that under the contract of employment the employer is entitled to impose a fine, he cannot have it overturned. Even if a worker proves his innocence, he can still be subjected to a fine.

Mr. Nellist

My hon. Friend is absolutely correct. I hope to return to the point later. To add to the point that she made, third parties could be involved, which could be established by the tribunal, but the power would exist for an employer to make the original deduction. As a result of information coming from embassies, certain immigration procedures, such as those which applies when people appear at airports and points of entry, have been tightened up. In most British legislation there is a concept that a person is innocent until he is proved guilty. The Bill turns that concept on its head.

Let us imagine that an employer discovers that there is a shortage of stock or a shortage of money in the till. There could be a number of reasons for that. It could be because of poor management or a lack of supervision of those working on the till or doing the stock checks. It could be due to the systems that are set up for stock control. It could even be due to the fact that too few workers are employed in a certain section and the work load causes stress and strain. The Bill does not attempt to deal with problems such as those. It merely gives an employer the immediate right of fining an employee whom he considers caused a problem. It could be that a third party, some other person, is responsible for the condition. In that event, an employer can say, "Go and prove your innocence in an industrial tribunal."

Ms. Clare Short

Is my hon. Friend aware of the report of the employment unit at the law centre of north Kensington entitled "Fingers in the Till"? The report demonstrates that many stock shortages are caused by incompetent organisation, such as when a shop reduces prices but fails to knock the values off the notional stock. The shop thinks that it has a shortage but it does not. It is perfectly possible that the shortages are no one's fault but are due to incompetent organisation.

Mr. Nellist

My hon. Friend has referred to the example I gave of the possibility of a stock or till shortage occurring. The Kensington law centre, citizens' advice bureaux and my own legal and advice service in Coventry are aware of cases. Labour Members of the Committee received a number of documents and affidavits. We were given thousands of examples of individual workers in the retail trade and the petrol industry who were fined for actions which were not of their own doing—a third party or incompetence was the main reason. Workers are offered that option to prove their innocence before an industrial tribunal.

Difficulties are associated with appearing before the tribunal. A worker would lose a day's pay by taking that opportunity to prove his innocence. He might have to pay for legal assistance. Character witnesses would lose wages. Even if the worker won his case, he would get back only the money that had been deducted in the first instance by the employer.

6 pm

In most cases, the worker is likely to be someone on low pay. In Committee, the Under-Secretary of State made some points about that. A low-paid worker in receipt of family income supplement whose employer deducted the maximum of 10 per cent. of the gross wage from net take-home pay, after tax and national insurance deductions, might appeal through the normal appeal channels. His net pay might then be below the family income supplement level and he would be worse off than workers in a similar position. According to the letter of 8 April, by the Under-Secretary of State for Employment—the hon. Member for Rossendale and Darwen (Mr. Trippier)—it would not be possible for that worker then to claim additional family income supplement.

The Government lay down definitions stating the level below which the income of a family which includes a certain number of children should ever fall; yet the Bill would allow an employer to make deductions from a worker's wages which could take him below the poverty line defined by the Government. and he would have no redress.

The Under-Secretary of State held out a rather funny lifeline. In a letter written on 11 March, he stated that if it were proved before an industrial tribunal that a deduction was incorrectly made, it was possible for the worker to appeal to the independent Inland Revenue tax commissioners for a tax rebate on that deduction. A worker on £100 a week gross, which is a pretty high wage in the service sector, whose net take-home pay was £65 or £68 a week could lose up to £10 in deductions because the employer had accused him of being responsible for a till or stock shortage. That worker could go to the tax commissioners and attempt to claim £3.30 of that sum. What a farce. If an employer suspects that an employee is a thief, he should take the employee to court where the burden of proof should rest on the employer.

Mr. Martin Flannery (Sheffield, Hillsborough)

I am not an expert on the Bill and was not a member of the Committee. What I have heard is appalling and unbelievable. Do I understand that clause 9 as it stands turns the whole basis of British jurisprudence on its head? The whole of our law is based on a person being innocent until proved guilty. The clause does the very opposite. This clause alone is a massive step. I hope that the Bill does not turn the whole of British jurisprudence on its head. If the clause does that, it is almost a crime to put it before the House.

Mr. Nellist

I am sorry to disappoint my hon. Friend, but the clauses do not get any better. Until 1979, our youth were taught in schools that a person was innocent until proved guilty by a jury of 12 of his peers. My hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) eloquently summed up in fewer words than I have used what the clause does—it turns British jurisprudence on its head. People will be assumed to be guilty. They will need to prove their innocence before an industrial tribunal.

A full-time worker who has not worked continuously for two years or a part-time worker who has worked fewer than 30 hours a week and has not been in the job for five years can go back to the employer the day after winning the case in the industrial tribunal and, at the flick of a finger, the employer can sack him. The worker cannot go back to the industrial tribunal a second time to ask for his job back, because he would not qualify.

Mr. Dixon

If an employer sacked an employee, could it not take the whole of his lying-on pay to pay the rest of the fine?

Mr. Nellist

That is correct.

Most of the workers affected by the Bill earn £60, £70 or £80 a week. We are talking about an employer's power to deduct 10 per cent. from gross wages, which means £6, £7 or £8 a week. Unlike most Tory Members, many of whom count their income in tens or hundreds of thousands of pounds a year, the workers about whom we are talking have only one job. They are not like the right hon. and learned Member for Hexharn (Mr. Rippon) with his 35 jobs—one as a Member of Parliament, one as a QC in the law courts and one as director of a company and with 32 chairmanships under his belt. The right hon. and learned Gentleman might be able to afford to have deducted from his pay packet 10 per cent. of the income from one of those 35 jobs. A poorly paid worker in a time of mass unemployment—when 4.5 million people are denied the chance to work—tries to bring up his family on £60, £70 or £80 a week, yet an employer may have the power to deduct 10 per cent. of his wages without needing to prove that a crime has taken place. Labour Members oppose that.

On 11 February. the Paymaster General and Minister for Employment described this part of the Bill as providing a fairer set of statutory rights concerning deductions"—[Official Report. 11 February 1986; Vol. 91, c. 801.] The Bill does not mention that the deductions must be fair and reasonable. It turns the concept of justice upside down on its head. It allows employers to decide guilt and say to the workers, "You have the opportunity before an industrial tribunal to attempt to prove your innocence." The measure will be used mainly against low-paid workers—as my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said, mainly those in areas where trade unions are not yet predominant in industry. For all those reasons and for others, which no doubt my hon. Friends will give, I urge the House to adopt the new clause and the consequent amendments and to defeat this part of the Bill.

Mr. Pendry

I shall not take too long, because the points made by Labour Members and by the hon. Member for Langbaurgh (Mr. Holt) have shown that this part of the Bill and, indeed, the whole Bill, are nonsense. The hon. Member for Langbaurgh must not believe that the sanctity of marriage will necessarily be preserved by a Government as hellbent on deregulation as this one. The Under-Secretary of State might address his remarks to that.

I am glad that my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) is present and to make the point he did, and that we have a wider audience, although it is not much wider, than in Committee.

Dr. Norman A. Godman (Greenock and Port Glasgow)

It is a good audience.

Mr. Pendry

Yes, it is a good audience. My hon. Friends are beginning to understand—I do not blame them—the ramifications of the legislation. As a result of the debate on this and other clauses, the people outside the House will also begin to understand what will hit them.

The decency of my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) always shines through on these occasions. He began in Committee by referring to the Minister as a "chum". He has gone down a little and called him a "decent chap". I suspect that my hon. Friend, because he is decent and so perceptive, probably knows something that we do not know. I want therefore to finish my speech, soon so that I can hear the reply by the Under-Secretary of State to our points. It may be that, because last Thursday Rossendale went Labour for the first time in its history, the hon. Gentleman is a little shaken and is rocking a little. He might therefore listen more attentively to what people, especially his constituents, say.

I am pleased that my hon. friend the Member for Birmingham, Ladywood (Ms. Short) made it plain that this does not just affect low-paid workers. The clause affects a whole range of workers in this country. Of course, the Opposition are mostly concerned about low-paid workers, because a 10 per cent. deduction is bad enough for some workers—we think it is too much—but for the workers we represent, such as home workers, cleaners and many others, it is an unbearable burden for them to have to endure.

Ms. Clare Short

It is very important that we all remember that it is not just 10 per cent. There is a limit of 10 per cent. per week for workers in retailine, but for all other workers there is no limit. We must not mislead the public into thinking that it is only 10 per cent., bad as that is, because the sky is the limit.

Mr. Pendry

I was just about to make the point that that is the bottom line. The deduction is open-ended and the ramifications are such that, when the full force of our case is heard outside, I believe that the Government will be forced to think again and, not for the first time, will have to retrack their legislation in a short space of time.

As I have said, most of the points have already been made and it would be silly to go over them again. However, the workers involved in this part of the Bill are certainly proved guilty before they have even had a trial. The employers have it all their own way under the Bill at present.

Many of the points made in Committee have not been listened to clearly by the Minister. However, at times he did attempt to answer our points and said that he would reflect on them and come back to us. I hope that this is one occasion when the Minister will answer the forceful points made in Committee and on the Floor of the House much more positively and constructively.

The hon. Member for Langbaurgh (Mr. Holt) got it right again. I do not want to praise him too much because it could damn him with his colleagues. Unfortunately, he has made great points, but he has not voted with us in the Lobby. I hope that on this occasion he will have the courage. It is no good making those points and sounding reasonable if, at the end of the day, he does not join us in the Lobby. No doubt he will attract a great deal of attention in his local press.

Mr. Holt

I would just like to comment on the hon. Gentleman's point about the local press. We are discussing the Wages Bill, on which it might be thought that I was being a little bit naughty to my own side, on the same day as the Government announced the closure of Smith's Dock in my constituency.

Mr. Pendry

I am sure that that has reinforced the hon. Gentleman's position in supporting us on this occasion.

The hon. Member for Langbaurgh rightly said that the law should be a backstop for industrial relations. I should have thought that the Conservative party had learned its lesson. They began trying to introduce legislation in a heavy-handed way in the early 1970s and they had to shelve that legislation because it clearly did not work. My bet is that this legislation will be shelved in a similar way. I certainly wish to hear the Minister disprove that and perhaps he can make an early start by agreeing to the points that have been made by my hon. Friends in this debate.

6.15 pm
Mr. Richard Caborn (Sheffield, Central)

We should cast our minds back to the Second reading of the Bill, especially when we are dealing with part 1 in relation to the Truck Acts. The case argued by the Government was, at surface value, probably correct. The Truck Act of 1831 probably needed some amendment and refining and we probably needed a new act to be put on the statute book to give some support and protection to workers. In fact, we have seen a complete reversal of the Truck Acts and what they stood for.

The fundamental principles of the Truck Act of 1831 was "fair and reasonable". The Truck Acts stood for a certain amount of justice. That is not to say that we must keep the Truck Acts on the statute book for ever more. However, one would have hoped that the fundamental principles of the Truck Acts, which have been tried and tested, would have remained. I have worked in industry for a number of years and have had dealings with the Truck Acts. I know they have operated well and the employers and trade unions have taken on board the fundamental principles and tried to develop them in negotiations when the Truck Acts have been involved.

Many hon. Members, especially from the Opposition, who were not on the Committee, have been aghast at what is in section 1. Clause 1 of the Bill has turned natural justice on its head. A worker now has to prove his innocence after being found guilty. That moves away completely from the underlying position of the Truck Acts which clause 1 of the Bill is supposed to update.

Nobody in the House has defended the Government's position. It would be difficult for the alliance to defend the Government's position, because there are no alliance Members in the Chamber. They have not tabled any amendments to the Bill, let alone to clause 1. That is deplorable, when the alliance is always stating that it is a protector of workers' rights. Having said that, nobody has come to the defence of the Minister. In fact, he has been attacked by his own party for the position the Government have taken on clause 1.

When the Minister opposes the new clause, I have no doubt that the defence will rest on the industrial tribunals. Many points have been made as to how there are blockages in the industrial tribunals, and how difficult and expensive it is for people. In low-paid areas people may be fearful of going to industrial tribunals.

Many low-paid workers have been employed for less than two years. Also, the restrictions within those establishments could debar many people who could be caught under this part of the Bill from using the tribunals, even if they wanted to.

In Committee I think that I clearly illustrated what we are talking about. It was brought to my attention that in one of the country clubs in Sheffield—there are not many of them—the owner had sacked four employees. Not only had he sacked them, but he owed them between £150 and £200. They did not even know the reasons for their sacking. When they tried to extract the reasons from the owner, he said that they had been sacked for stealing and dishonesty. They were absolutely flabbergasted. There are a number of courses they can adopt. They can go to tribunals or the courts. However, that is the type of employer that many people will have to deal with. When natural justice is turned on its head, those people have greater licence than before. The principles that were originally emobdied in the Truck Acts should be adhered to in the Bill. However, they will be turned on their head, and there will be less protection for the workers than previously.

When we were discussing part I of the Bill in Committee, we brought fraud to the Minister's attention. That was reported in the Financial Times of 13 March, which showed that 40 per cent. of United Kingdom companies are now experiencing fraud, and in London alone there was £867 million-worth of fraud, which had been notified to the police and the fraud squad. We are trying to deal with fraud, yet in the Bill we are taking away a fundamental right and turning British justice on its head; we are attacking the lowest paid in our society, and taking away their protection.

I hope that Conservative Members have listened to the only constructive statement to have come from Conservative Benches, totally opposing part I and the removal of those basic principles. I hope that having done so, many of the colleagues of the hon. Member for Langbaurgh (Mr. Holt) will support new clause 9 in the Lobby.

Mr. Dixon

I shall confine my remarks to our amendments Nos. 43 and 44, which will protect workers.

My hon. Friend the Member for Sheffield. Hillsborough (Mr. Flannery) was astonished at part I. I should like to tell him that it gets worse. Throughout the Bill, we are talking about deductions. They mean fines. When the Bill is on the statute book, the employer will have the right to fine his employee without getting or submitting any evidence.

We are talking about part-time or low-paid workers, and many employees who are not covered by trade unions. If an employee has the audacity to go to an industrial tribunal, to prove his innocence, there is nothing to stop the employer sacking the individual. It is not just the individual. There might be a stock deficiency or cash shortage in the till, and two, three or four employees might be sharing the till or looking after the stock. Under the Bill, the employer has the right to fine the four employees 10 per cent. of their salaries for the stock deficiency or cash shortage. That is what the Bill is about.

We must accept that, in the working class movement, we have one or two rascals who might steal from the till. But the Conservative party might have one or two reasonable Members to support our amendment.

However, if someone stole, the rest of his workmates could be fined by the employer. That is one of the reasons why we have tabled amendment No. 43, which will protect the employee against being sacked if he has the audacity to take his employer to an industrial tribunal, simply to prove his innocence. Under amendment No. 43, a worker may present a complaint to a tribunal that the employer has not shown that the worker concerned was guilty of the act or omission complained of Under the Bill, the employer does not have to have any evidence. As my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) said, there could be a deficiency because of a fault in the till. If the employer found a deficiency, he could fine all his employees 10 per cent. of their wages.

Amendment No. 44 concerns industrial tribunals. If the worker goes ahead and takes the chance of getting the sack from his employer by going to an industrial tribunal to prove his innocence, and if he proves himself innocent, the only thing that the employer is obliged to do is to give the employee the 10 per cent. of his wages that he previously stole. There is no recompense, compensation or expenses. My hon. Friend the Member for Manchester, Blackley (Mr. Eastham) made that point. I think that the hon. Member for Langbaurgh (Mr. Holt) will agree with this. At times, people from Newcastle have to go to Darlington for industrial tribunals, and vice versa. Because one works in Newcastle, that does not mean that the tribunal will sit in Newcastle. It might be in Jarrow, Iangbaurgh or somewhere else.

We are talking about employees, some of whom are receiving the princely sum of £57 a week. They will have to find the fares to go to the industrial tribunal, take time off work and take the chance of getting the sack. If they require a witness, the witness will have to be prepared to sacrifice his wages and pay expenses to prove the employee's innocence. That is what we are dealing with in part I. It is only the tip of the iceberg, I remind my hon. Friend the Member for Hillsborough.

I believe that our amendments Nos. 43 and 44 give some safeguards. They do not make the Bill more palatable for people who have any concern about low-paid workers or other employees, but at least it is better than what we have at the moment. I hope that the hon. Member for Langbaurgh and one or two of his colleagues who have listened to the debate will join us in the Lobby. Not one person has defended part I or clause 5. One would have thought that those who supported the Minister in Committee would defend him tonight, but not one has done so. The only contribution from Conservative Benches has been an attack on this part of the Bill. I hope that some Conservative Members will join us in the Lobby.

Mr. Trippier

We have had the opportunity to debate at length the principal issue behind the amendments, which is the deduction from wages. We had some interesting and long debates in Committee. Wherever possible, I have tried to meet the concern of some Opposition Members. There is evidence of that on the Order Paper because we shall move amendments aimed at doing that.

The amendments that we are now considering go too far. I do not want to drive a wedge between my hon. Friend the Member for Langbaurgh (Mr. Holt) and his new-found friendship with Opposition Members as a result of the debate thus far, but it seems to me to be absolutely extraordinary that there is more that divides them than unites them on this issue. First, Opposition Members who have spoken so far will agree that they are in favour of industrial tribunals. The hon. Member for Bow and Poplar (Mr. Mikardo) recognised their importance. My hon. Friend the Member for Langbaurgh does not like them at all. He has been consistent throughout—

Mr. Holt

I am happy to be chastised for what I am guilty of, but not for what I am not guilty of. If my hon. Friend cares to read my speech in December, he will see that I am in favour of industrial tribunals, but the completely reformed variety, which takes all the legalism out of it.

Mr. Trippier

All right. So we are getting a little clearer now. My hon. Friend is in favour of reformed industrial tribunals but in the main Opposition Members are in favour of industrial tribunals—

Ms. Clare Short


Mr. Trippier

I shall happily give way to the hon. Lady. She knows I always do.

We should not try to find some new form of cemented relationship between Opposition Members and my hon. Friend the Member for Langbaurgh on this issue. It is clear that Conservative Members and Opposition Members do not agree about industrial tribunals. We all know, if we were to put our hands on our hearts, that these tribunals protect the worker more than the employer in the vast majority of cases.

6.30 pm
Ms. Clare Short

The Opposition, and I assume the Minister, are in favour of the existence of industrial tribunals. However, we do not think that it is right that workers should be forced to go to industrial tribunals to get basic justice and to prove their innocence. We believe that there should be reasonable law and reasonable industrial practices.

The Opposition are worried—I believe that the hon. Member for Langbaurgh agrees with us on this—although there may be disagreement between the hon. Gentleman and the Opposition about part II of the Bill—about the increase in legalism, the use of lawyers and the high expense of going to industrial tribunals. The original intention of these tribunals was that they would provide a cheap and informal procedure.

Mr. Trippier

Industrial tribunals are cheap and informal procedures. I agree with the hon. Member for Birmingham, Ladywood (Ms. Short) that industrial tribunals are good, although my hon. Friend the Member for Langbaurgh does not appear to share that view. My hon. Friend the Member for Langbaurgh does not seem to believe in deductions; at least, that is what I understood from his speech. I presume that Opposition Members do not agree with the deductions either. That is very strange because the present legislation allows deductions to be made, conceivably up to a limit of 100 per cent. However, with this Bill we are building in added protection for the worker.

Opposition Members have suggested that the amendments we are considering will withdraw protection from the worker. That is not the case. Opposition Members have argued that the present legislation dating back to 1896 should continue. That is absolute nonsense. There is no logic in the argument that the present legislation should continue. It is clear from the first few clauses in this part of the Bill that we are desperately trying to protect the workers. We are especially trying to do that in relation to workers in the retail trade.

Part 1 of the Bill provides that deductions from wages or payments by workers to employers are lawful only if they are authorised by statute, by the contract of employment or by written agreement of the worker. No one has mentioned that last point so far in the debate.

Mr. Eastham

I did.

Mr. Trippier

I apologise to the hon. Gentleman, I could not have heard him say that.

In addition, there are special controls of deductions relating to cash shortages or stock deficiencies and the worker has a right to complain to a tribunal about an unlawful deduction. There should be such a right. We shall move the amendment today to strengthen those controls and to ensure that workers have a copy or a written explanation of the contractual terms authorising deductions. That point was drawn to my attention in Committee by the hon. Member for Bow and Poplar. The amendments will introduce a time limit on deductions relating to cash shortages or stock deficiencies and I readily accepted that point in Committee.

In Part 1 of the Bill, we already have a substantial body of controls based on the philosophy that it is best to allow the parties involved to sort out a regime for themselves to control deductions from wages, to ensure that the regime is clearly understood and enforced.

Dr. Godman

As the Minister will know, I was not a Member of the Standing Committee. However, I have been present throughout the debate today. The Minister used the phrase "added protection given to employees". How will the Minister publicise that protection? Will his Department produce and distribute a code of practice on that point?

Mr. Trippier

It is certainly our intention to increase awareness of the new proposals that will follow when the Bill reaches the statute book. In our Department, we consider ourselves to be pretty good at that. We will go to extreme lengths to ensure that people are aware of the new regime. That point was raised in Committee and I understand why the hon. Member for Greenock and Port Glasgow (Dr. Godman) should wish to raise it again. We are anxious to increase awareness not only for employees but for employers. Any changes will obviously make significant differences to the running of firms.

Ms. Clare Short

Will the Minister give way?

Mr. Trippier

I would like to deal with the specific point that the hon. Lady raised in her previous intervention. I shall deal with that point and then give way.

I must stress that 75 per cent. of cases which are intended to go to tribunals are settled before they reach a hearing. I understand that Opposition Members would always try to convince the House that it is more of a strain and inconvenience for workers to go to a tribunal than the employer. I can understand that and in some cases I believe that that is true. However, I have always argued that it is more of a strain on the employer. The evidence of the number of cases that are settled prior to an industrial tribunal bears that out.

I am also convinced from the consultation exercise that we undertook that the industrial tribunal is a disincentive to increasing employment in the private sector. I accept that my hon. Friend the Member for Langbaurgh made that point in Committee. Private sector firms obviously do not want to suffer the hassle and trouble of going to an industrial tribunal.

I believe on balance that it is more of a disincentive to the employer than it is to the worker.

Mr. Eastham

I am sure that the Minister will recall that, when we made our observations on this clause in Committee, we contended that employers did not need to go to tribunals. They could simply go to the police. If the staff were found to be breaking the law there could be an inquiry and the employer could have recourse to a proper court of law. Such an action would not cost the Minister's Department anything.

Mr. Trippier

The hon. Gentleman has missed the point that I was trying to make in Committee. There are many instances in which an employer may choose to discipline a member of his work force but he may not wish to go to the extent of dismissing that member of staff. The member of staff may have committed an offence that would be punishable in a court of law. However, the employer might choose not to pick up the telephone and call the police and all that that means. The hon. Member for Manchester, Blackley must have known employers who are decent in that way and I am sure that many hon. Members have acted in a similar manner to give someone another chance. An employer may sometimes choose not to call in the law. However, he may want to exercise the disciplinary powers that are available in the contract. That point has not been made so far in the debate—the powers must be in the contract. All hon. Members, irrespective of political persuasion, should welcome the fact that in some instances matters do not have to be taken to the police.

Ms. Clare Short

I believe that it was the hon. Member for Mid-Kent (Mr. Rowe) who suggested in Standing Committee that ACAS might be asked to draw up a recommended contract covering the Minister's points. Speaking from memory, I believe that the Minister said that he thought that that was a useful suggestion and that he would consider it. That suggestion paralleled the proposal from my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) that there should be a code of practice. I hope that the Minister will proceed with that point and not forget it.

Mr. Trippier

That is a fair point to make. I seem to remember the exchange of views that we had on these matters in Committee, and I will certainly bear that point in mind. If I did not make it crystal clear, and if this point is not obvious in the Hansard record of the Committee, I will say that it would be a good idea to have a draft form of contract prepared by ACAS. That point should be made known to increase awareness.

Five principal issues are dealt with in this set of amendments and the new clause. First, it is proposed that all deductions for disciplinary purposes should be limited to 10 per cent. of gross wages.

Of course, the Government have introduced such limits to control deductions related to cash shortages and stock deficiencies, as that is the area of contemporary concern and abuse.

Mr. Mikardo


Mr. Holt

If a pieceworker botches up an entire lot that he has been given to manufacture, whatever it is, will he still be paid 90 per cent. and have only a disciplinary stricture of 10 per cent.?

Mr. Trippier

My hon. Friend could not be more wrong. I assume that my hon. Friend is talking about a pieceworker in manufacturing industry, not in the retail business. If it is in the contract that deductions can be made, the Bill's provision to limit deductions to 10 per cent. on pay day will not apply. That does not apply outside the retail sector. I shall try to develop that.

The hon. Member for Bow and Poplar said, sotto voce, that it is rubbish that evidence shows that there is abuse. I must assure him that that is the case. In the consultation exercise, to which I referred on a number of occasions in Committee, the evidence was clear. The hon. Gentleman gave the House examples of what could happen in certain instances, but there is no evidence that that has proved to be a problem. But, trying to be reasonable, as I have endeavoured to be with the hon. Gentleman throughout, if there were evidence that that was causing concern, obviously I would look at it. Incidentally, the situation that he described exists at the moment under the present law. I am sure that he understands that. I cannot put it any clearer. We are changing that situation but still building in the protection for the worker.

Mr. Mikardo

As we are legislating we should improve conditions and there is no improvement here. Under the present law and under the Bill, I repeat, a worker can have a deduction made for a shortage that does not exist or for a shortage that does exist for which he is not in the least responsible. What sort of a condition is that? Why are we not legislating to get rid of that gross injustice?

Mr. Trippier

As I have said, and as I know that the hon. Gentleman will recognise, we have tried desperately in the Bill to strike a fair balance. We must recognise on the one hand that employers who are concerned about cash deficiencies and stock shortages will not take on more people unless they have the power to deduct. Many would say that, rather than press ahead with running a business which is so much of an encumbrance and becoming incredibly bureaucratic, thanks to the Government introducing so much legislation which acts as a brake on enterprise, they will not go ahead. They will pack up. If they have any money left they will invest it in gilt-edged stocks in the stock exchange.

Mr. Nellist


Mr. Trippier

I am desperately trying to get on. I have allowed a number of interventions.

The hon. Member for Bow and Poplar referred to the Lord Chief Justice. The situation that the hon. Gentleman described is exactly the same. If the employer is to have the right of making deductions from pay taken away from him, he will not take on more workers. That is a lifeline for those businesses that are dealing with cash. We have given all sorts of examples of garage forecourts, cigarette kiosks and so on. If those who operate such businesses—hon. Members should be glad of them because they are serious employers—do not have the right to make deductions, they will simply say that because of the problems that they have experienced—there is evidence of them—they will simply not carry on running such businesses. That is the sad and tragic alternative.

6.45 pm

I still say that it is better to leave disciplinary procedures and general limits on disciplinary deductions to be determined between employers, workers and trade unions, again short of dismissing people. That is a good alternative. Under the Bill, a worker suffering a disciplinary deduction can complain to a tribunal if he has not agreed or consented to it and if it was not provided for in his contract. That is surely sufficient protection.

Mr. Michael J. Martin (Glasgow, Springburn)

The Minister mentioned industrial tribunals and the fact that workers can go to them. He must know that a tribunal can award against an employee going to it if it feels that the claim was not justified. Therefore, the Minister is not giving the full facts to the House when he says that a person can go to an industrial tribunal, when he knows that if he goes along that particular road he runs a risk of having to pay the employer's costs, legal fees and whatever other expenses have been incurred.

Mr. Trippier

I know that the hon. Gentleman would never wittingly seek to mislead the House, but he must make it clear that the number of instances where that has arisen are minuscule. To comply with the law as it is now—nothing to do with the Truck Acts—that complaint must be frivolous or vexatious. Only a handful of people have been treated in that way and both of us should be glad about that. However, the evidence that I have brought to the House today that 75 per cent. of claims are settled outside a tribunal is more compelling than anything I have heard from the Opposition.

Mr. Holt

My hon. Friend must realise that what he is doing will affect many millions of people for many years. We are talking at this moment about industrial tribunals and vexatious or frivolous aspects. Most of the cases where the appellant has been found guilty by the "tribunal" and forced to pay have been where there has been a pre-hearing assessment which has gone against the appellant but the appellant has nevertheless proceeded with the case to tribunal. I have not heard whether the pre-hearing assessment scene will be introduced into this and whether, if an employee feels that he has been unjustly treated, there will be a pre-hearing assessment. I have not read or seen any of that in the Bill.

Mr. Trippier

The simple answer is that it will be. There has to be a pre-hearing assessment and my hon. Friend is right to refer to it. That will be broadly welcomed. It is perhaps a little amazing that we did not discuss that at some length in Committee, but we did not. My hon. Friend is right and I am glad to give him that assurance.

As I said, a balance must be struck. The more employees and workers are tied up in statutory controls, limiting what they can agree to in their contract, the more likely it is that employers will be reluctant to take on workers or will resort to dismissals rather than deductions.

The balance is about right in the Bill, given that we are proposing some amendments which have been brought forward in a real attempt to meet the concerns expressed by Opposition Members. That I am anxious to do, but I strongly recommend that the House rejects these amendments.

Ms. Clare Short

In the spirit of the strange love-hate relationships that are developed in Committee stages, may I pay the Minister an inverted compliment by saying that he is not at his best today.

The Minister said that the Government were trying desperately to protect workers. That is just not true. The consensus is that the Truck Acts have inadequacies but provided better protection than what is being put in their place. The Minister's only argument—I do not believe it—is that employers say that if they are not given more powers to deduct pay, they will not take on more workers. I challenge the Minister to provide me with any evidence of his claim that employers have told the Department of Employment, "We can't take on any more workers unless we have more powers to deduct."

Employers have powers under existing law to deduct up to 100 per cent. of wages. Under the Bill they may deduct up to 100 per cent. of wages except in relation to stock shortages or cash defficiencies in the retail sector. The Minister cannot pretend that the Bill improves protection.

Mr. Trippier

I was not arguing that employers were saying that they should have wider powers to make deductions. We all agree that they have considerable powers at the moment. We are restricting those powers by limiting deductions in the retail sector to 10 per cent. We believe that it is abhorrent that workers could face deductions that were so substantial that their net take-home pay would be next to nothing. We believe that to be immoral; that is why we are introducing the legislation.

Ms. Short

As long as Hansard is not interfered with, it will show tomorrow what the Minister said. I wrote down his words as he said them, because this is the first time that he has introduced the argument. I do not believe his claim and my challenge stands. He said, "Employers will not take on more people unless they have power to deduct."

Employers already have the power to deduct money from workers' wages. The Government must justify their legislation, and part of the Minister's justification was to say that employers throughout the land were knocking at his door saying that they could not take on more workers unless they had the power to deduct money from their wages. I do not believe that employers have said that to the Minister.

The Minister suggested that a balance had to be struck, and we agree with him. However, the balance in the Truck Acts was a much fairer and more just balance. The balance struck in the Bill is grossly unjust. Workers who are not guilty of any dishonesty and may even be able to prove that they are not guilty of dishonesty may be subject to deductions and fines. The only way for them to clear their reputation, let alone get their money back, is for them to lose time and money in going to an industrial tribunal. We have just heard that there is to be a pre-hearing assessment, which will mean two days off work instead of one.

Even if workers prove to a tribunal that they were innocent of any act or omission leading to a loss, but their contract states that they may be subject to a deduction if there is a loss, the tribunal will not be able to reverse the deduction. If the workers win, they will get back only the money deducted from their wages. There will be no compensation for the cost of going to the tribunal and no compensation for the hurt and damage to the characters of those who are accused of being liars. In addition, the employer will have the right to dismiss workers whom he has not employed for at least two years or five years—depending on whether they are employed full-time or parttime—if he is aggrieved by the fact that they took him to a tribunal.

The Bill is an outrage. It is unjust and it will lead to more deductions and fines in the worst organised sectors of our work force. It will also lead to increased conflict and a greater sense of injustice. The Minister should have left the old law alone if he could do no better than this Bill. We reject this part of the Bill and I hope that all my hon. Friends and decent Conservative Members will vote for the new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes 192, Noes 249.

Division No. 178] [6.53 pm
Abse, Leo Banks, Tony (Newham NW)
Adams, Allen (Paisley N) Barnett, Guy
Alton, David Barron, Kevin
Anderson, Donald Beckett, Mrs Margaret
Archer, Rt Hon Peter Bell, Stuart
Ashdown, Paddy Bermingham, Gerald
Ashley, Rt Hon Jack Bidwell, Sydney
Ashton, Joe Blair, Anthony
Atkinson, N. (Tottenham) Boothroyd, Miss Betty
Bagier, Gordon A. T. Boyes, Roland
Bray, Dr Jeremy Kirkwood, Archy
Brown, Gordon (D'f'mline E) Lambie, David
Brown, Hugh D. (Provan) Lamond, James
Brown, R. (N'c'tle-u-Tyne N) Leadbitter, Ted
Brown, Ron (E'burgh, Leith) Leighton, Ronald
Bruce, Malcolm Lewis, Terence (Worsley)
Buchan, Norman Litherland, Robert
Caborn, Richard Livsey, Richard
Callaghan, Jim (Heyw'd & M) Lloyd, Tony (Stretford)
Campbell-Savours, Dale Lofthouse, Geoffrey
Canavan, Dennis McDonald, Dr Oonagh
Carlile, Alexander (Montg'y) McKay, Allen (Penistone)
Carter-Jones, Lewis McKelvey, William
Clarke, Thomas MacKenzie, Rt Hon Gregor
Clay, Robert Maclennan, Robert
Clelland, David Gordon McNamara, Kevin
Clwyd, Mrs Ann McTaggart, Robert
Cocks, Rt Hon M. (Bristol S) Madden, Max
Cohen, Harry Marek, Dr John
Conlan, Bernard Marshall, David (Shettleston)
Cook, Frank (Stockton North) Martin, Michael
Cook, Robin F. (Livingston) Mason, Rt Hon Roy
Corbyn, Jeremy Maxton, John
Craigen, J. M. Maynard, Miss Joan
Cunliffe, Lawrence Meacher, Michael
Cunningham, Dr John Meadowcroft, Michael
Dalyell, Tam Michie, William
Davies, Rt Hon Denzil (L'lli) Mikardo, Ian
Davis, Terry (B'ham, H'ge H'l) Millan, Rt Hon Bruce
Deakins, Eric Miller, Dr M. S. (E Kilbride)
Dewar, Donald Morris, Rt Hon A. (W'shawe)
Dobson, Frank Nellist, David
Dormand, Jack Oakes, Rt Hon Gordon
Douglas, Dick O'Brien, William
Dubs, Alfred O'Neill, Martin
Duffy, A. E. P. Orme, Rt Hon Stanley
Dunwoody, Hon Mrs G. Owen, Rt Hon Dr David
Eadie, Alex Park, George
Eastham, Ken Parry, Robert
Edwards, Bob (W'h'mpt'n SE) Patchett, Terry
Evans, John (St. Helens N) Pavitt, Laurie
Ewing, Harry Pendry, Tom
Faulds, Andrew Penhaligon, David
Field, Frank (Birkenhead) Pike, Peter
Flannery, Martin Powell, Raymond (Ogmore)
Foot, Rt Hon Michael Prescott, John
Forrester, John Radice, Giles
Foster, Derek Randall, Stuart
Fraser, J. (Norwood) Redmond, Martin
George, Bruce Rees, Rt Hon M. (Leeds S)
Gilbert, Rt Hon Dr John Richardson, Ms Jo
Godman, Dr Norman Roberts, Allan (Bootle)
Golding, John Roberts, Ernest (Hackney N)
Gourlay, Harry Robertson, George
Hamilton, James (M'well N) Robinson, G. (Coventry NW)
Hamilton, W. W. (Fife Central) Rogers, Allan
Hancock, Michael Rooker, J. W.
Hardy, Peter Ross, Ernest (Dundee W)
Harrison, Rt Hon Walter Ross, Stephen (Isle of Wight)
Hart, Rt Hon Dame Judith Rowlands, Ted
Healey, Rt Hon Denis Ryman, John
Heffer, Eric S. Sedgemore, Brian
Hogg, N. (C'nauld & Kilsyth) Sheerman, Barry
Holland, Stuart (Vauxhall) Sheldon, Rt Hon R.
Home Robertson, John Shields, Mrs Elizabeth
Howells, Geraint Shore, Rt Hon Peter
Hoyle, Douglas Short, Ms Clare (Ladywood)
Hughes, Dr Mark (Durham) Short, Mrs R.(W'hampt'n NE)
Hughes, Robert (Aberdeen N) Silkin, Rt Hon J.
Hughes, Roy (Newport East) Skinner, Dennis
Hughes, Sean (Knowsley S) Smith, (Isl'ton S & F'bury)
Hughes, Simon (Southwark) Snape, Peter
Janner, Hon Greville Spearing, Nigel
John, Brynmor Steel, Rt Hon David
Johnston, Sir Russell Stewart, Rt Hon D. (W Isles)
Jones, Barry (Alyn & Deeside) Strang, Gavin
Kaufman, Rt Hon Gerald Straw, Jack
Kennedy, Charles Thomas, Dr R. (Carmarthen)
Kilroy-Silk, Robert Thorne, Stan (Preston)
Kinnock, Rt Hon Neil Tinn, James
Torney, Tom Wilson, Gordon
Wallace, James Winnick, David
Wareing, Robert Wrigglesworth, Ian
Weetch, Ken Young, David (Bolton SE)
Welsh, Michael
White, James Tellers for the Ayes:
Wigley, Dafydd Mr. Don Dixon and Mr. Frank Haynes.
Williams, Rt Hon A.
Aitken, Jonathan du Cann, Rt Hon Sir Edward
Alexander, Richard Durant, Tony
Amess, David Dykes, Hugh
Ashby, David Edwards, Rt Hon N. (P'broke)
Aspinwall, Jack Eggar, Tim
Atkins, Rt Hon Sir H. Evennett, David
Atkins, Robert (South Ribble) Eyre, Sir Reginald
Atkinson, David (B'm'th E) Fallon, Michael
Baker, Rt Hon K. (Mole Vall'y) Farr, Sir John
Baker, Nicholas (Dorset N) Favell, Anthony
Baldry, Tony Finsberg, Sir Geoffrey
Banks, Robert (Harrogate) Fookes, Miss Janet
Batiste, Spencer Forman, Nigel
Bellingham, Henry Forth, Eric
Bendall, Vivian Fowler, Rt Hon Norman
Bennett, Rt Hon Sir Frederic Fox, Marcus
Benyon, William Fry, Peter
Best, Keith Gale, Roger
Bevan, David Gilroy Galley, Roy
Biffen, Rt Hon John Gardiner, George (Reigate)
Biggs-Davison, Sir John Gardner, Sir Edward (Fylde)
Blackburn, John Garel-Jones, Tristan
Blaker, Rt Hon Sir Peter Glyn, Dr Alan
Body, Sir Richard Goodhart, Sir Philip
Bonsor, Sir Nicholas Goodlad, Alastair
Boscawen, Hon Robert Gow, Ian
Bottomley, Mrs Virginia Gower, Sir Raymond
Bowden, A. (Brighton K'to'n) Grant, Sir Anthony
Braine, Rt Hon Sir Bernard Gregory, Conal
Brandon-Bravo, Martin Griffiths, Sir Eldon
Bright, Graham Griffiths, Peter (Portsm'th N)
Brinton, Tim Grist, Ian
Brittan, Rt Hon Leon Ground, Patrick
Brown, M. (Brigg & Cl'thpes) Grylls, Michael
Browne, John Hamilton, Hon A. (Epsom)
Bruinvels, Peter Hamilton, Neil (Tatton)
Bryan, Sir Paul Hampson, Dr Keith
Buck, Sir Antony Hanley, Jeremy
Budgen, Nick Harris, David
Bulmer, Esmond Harvey, Robert
Burt, Alistair Haselhurst, Alan
Butcher, John Havers, Rt Hon Sir Michael
Butler, Rt Hon Sir Adam Hawkins, C. (High Peak)
Butterfill, John Hawkins, Sir Paul (N'folk SW)
Carlisle, John (Luton N) Hawksley, Warren
Carlisle, Kenneth (Lincoln) Hayes, J.
Carlisle, Rt Hon M. (W'ton S) Hayhoe, Rt Hon Barney
Carttiss, Michael Hayward, Robert
Cash, William Heathcoat-Amory, David
Chalker, Mrs Lynda Heddle, John
Chapman, Sydney Hickmet, Richard
Chope, Christopher Hicks, Robert
Churchill, W. S. Higgins, Rt Hon Terence L.
Clark, Dr Michael (Rochford) Hind, Kenneth
Clark, Sir W. (Croydon S) Hogg, Hon Douglas (Gr'th'm)
Clarke, Rt Hon K. (Rushcliffe) Holland, Sir Philip (Gedling)
Clegg, Sir Walter Hordern, Sir Peter
Cockeram, Eric Howarth, Gerald (Cannock)
Colvin, Michael Howell, Ralph (Norfolk, N)
Conway, Derek Hubbard-Miles, Peter
Cope, John Hunt, David (Wirral W)
Couchman, James Hunter, Andrew
Cranborne, Viscount Hurd, Rt Hon Douglas
Critchley, Julian Irving, Charles
Crouch, David Jackson, Robert
Currie, Mrs Edwina Jones, Gwilym (Cardiff N)
Dickens, Geoffrey Jopling, Rt Hon Michael
Dicks, Terry Joseph, Rt Hon Sir Keith
Dorrell, Stephen Key, Robert
Dover, Den King, Roger (B'ham N'field)
Knight, Greg (Derby N) Shepherd, Richard (Aldridge)
Knight, Dame Jill (Edgbaston) Skeet, Sir Trevor
Knowles, Michael Smith, Tim (Beaconsfield)
Knox, David Soames, Hon Nicholas
Lang, Ian Speed, Keith
Latham, Michael Speller, Tony
Lawler, Geoffrey Spencer, Derek
Lawrence, Ivan Spicer, Jim (Dorset W)
Leigh, Edward (Gainsbor'gh) Squire, Robin
Lester, Jim Stanbrook, Ivor
Lilley, Peter Stanley, Rt Hon John
Lloyd, Ian (Havant) Steen, Anthony
Lloyd, Peter (Fareham) Stern, Michael
MacKay, Andrew (Berkshire) Stevens, Lewis (Nuneaton)
McLoughlin, Patrick Stewart, Andrew (Sherwood)
McNair-Wilson, M. (N'bury) Stewart, Ian (Hertf'dshire N)
Major, John Stokes, John
Maples, John Stradling Thomas, Sir John
Marlow, Antony Sumberg, David
Mates, Michael Taylor, John (Solihull)
Mather, Carol Taylor, Teddy (S'end E)
Maude, Hon Francis Temple-Morris, Peter
Mayhew, Sir Patrick Terlezki, Stefan
Mellor, David Thomas, Rt Hon Peter
Merchant, Piers Thompson, Patrick (N'ich N)
Miller, Hal (B'grove) Thornton, Malcolm
Miscampbell, Norman Thurnham, Peter
Moate, Roger Townend, John (Bridlington)
Neale, Gerrard Trippier, David
Neubert, Michael Trotter, Neville
Newton, Tony Twinn, Dr Ian
Onslow, Cranley van Straubenzee, Sir W.
Osborn, Sir John Vaughan, Sir Gerard
Ottaway, Richard Viggers, Peter
Pawsey, James Waddington, David
Percival, Rt Hon Sir Ian Walden, George
Porter, Barry Waller, Gary
Portillo, Michael Ward, John
Powell, William (Corby) Wardle, C. (Bexhill)
Powley, John Watson, John
Pym, Rt Hon Francis Watts, John
Rathbone, Tim Wells, Bowen (Hertford)
Rhodes James, Robert Wells, Sir John (Maidstone)
Rhys Williams, Sir Brandon Whitfield, John
Ridley, Rt Hon Nicholas Wiggin, Jerry
Robinson, Mark (N'port W) Wilkinson, John
Roe, Mrs Marion Winterton, Mrs Ann
Rossi, Sir Hugh Winterton, Nicholas
Rost, Peter Wolfson, Mark
Rowe, Andrew Wood, Timothy
Rumbold, Mrs Angela Yeo, Tim
Sackville, Hon Thomas
Sainsbury, Hon Timothy Tellers for the Noes:
Sayeed, Jonathan Mr. Donald Thompson and Mr. Mark Lennox-Boyd.
Shaw, Giles (Pudsey)
Shelton, William (Streatham)

Question accordingly negatived.

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