REVERSAL OF BURDEN OF PROOF

HC Deb 09 March 1998 vol 308 cc231-5 5.45 am

Mr. Lansley

I beg to move amendment No. 45, in page 19, line 1, leave out 'any question arises' and insert 'an officer acting for the purposes of this Act makes a declaration, acting on the basis of his enquiries'.

Mr. Deputy Speaker

With this, it will be convenient to discuss the following amendments: No. 46, in page 19, line 17, after 'amount', insert 'to the extent that this is asserted in a declaration made by an officer acting for the purposes of this Act'. No. 47, in page 19, line 23, leave out 'unless the contrary is established' and insert 'if and to the extent that a declaration is made to this effect by an officer acting for the purposes of this Act'.

Mr. Lansley

I suspect that I have been invited to move the amendment in order to see what impact it has on my temper. In Committee, some of the Government's proposals on the reversal of the burden of proof tested Conservative Members' tempers considerably. We are not attempting to re-run that debate. The clause relates to civil and not criminal proceedings. There is, none the less, a well-established principle of the burden of proof falling on the plaintiff and of relative even-handedness in civil proceedings. To move away from that is undesirable.

The clause deals not only with proceedings brought under this legislation but with any civil proceedings in which it is asserted that the national minimum wage has not been paid or that someone qualifies for the national minimum wage.

Why have the Government gone down that path? They were quite clear in the notes on clauses, which said that those remunerated at a rate below the national minimum wage can more easily succeed in claims. There we have it. The Government have abandoned the principle of even-handedness in civil proceedings for efficiency reasons rather than for reasons of justice. The purpose of the amendments is to marry efficiency with justice.

The three amendments correspond to the three limbs of clause 26. Subsection (1) concerns the question whether a person qualifies for the national minimum wage; subsection (2) deals with deductions from wages; and subsection (3) deals with claims for additional remuneration, being the difference between the amount required to be paid in line with the national minimum wage and the amount that it is asserted was actually paid.

The structure of each subsection is the same. A presumption is made that the person qualifies, or that a deduction was made at below the minimum wage rate, or that a person was inadequately remunerated. That presumption stands unless the contrary position is established.

In Committee, the Minister was at pains to say that most employers will keep records, and will therefore have no difficulty in establishing whether the national minimum wage has been paid. I accept that. Similarly, in the great majority of cases, the question whether a person qualifies for the minimum wage, which is a legal issue, will be subject to arguments, and a prior presumption will not necessarily be the most significant factor.

However, in each case there will be difficult exceptions, and it is exceptions that make hard cases. Records may be lost, the nature of a contract may be disputed by the parties, and the value of benefits provided to an employee or a worker may be disputed. In those cases, why should there be a presumption in favour of the plaintiff rather than the defendant? In Committee, the Opposition tabled amendments designed to remove the reversal of the burden of proof and to restore neutrality. We may have won the argument, but we lost the vote.

The Minister was adamant that the information at issue in such disputes is in the hands of the employer, and that the employer must meet the tests. The Minister's intention was to level the playing field between employer and employee. He asserts that the worker requires the benefit of the presumption to achieve that. The amendments take account of that debate, and they demonstrate that we can achieve the objective more justly and equitably.

The worker is not on his own, impotent against a rogue employer, because he has the benefit of the enforcement mechanism that was set out in earlier clauses. The officer who is appointed by the Secretary of State can acquire by law all the employer's records. The amendments are designed to confine the exercise of the controversial presumption to being pursuant to the decision of that officer. That has the benefit of removing the difficulty of vexatious litigation by discontented employees who seek to exploit accidental or inadvertent lack of records or who use the scope of dispute over eligibility or levels of remuneration for their own purposes. The amendments would also serve to prevent the presumption of guilt by an employer from being transported into civil proceedings outside the purposes of the legislation, and would have the further benefit of enabling the officer in question to assist the court in arriving at a presumption about the extent of the additional remuneration that was payable. That is not otherwise defined in clause 26.

In its further views on the Bill on Report, the CBI expresses its reservations in principle about the reversal of the burden of proof. It echoes my point about the relative simplicity of arriving at some decisions. However, the CBI argues that, where arguments are less clear, its members are resolutely opposed to the reversal of the burden of proof.

Although the amendments do not restore the neutrality that the principles of natural justice might otherwise demand, they substantially circumscribe the circumstances in which the burden of proof is reversed. Reversal would apply only where a duly appointed officer had conducted inquiries, and it would be subject to challenge on the basis of the reasonableness of such a conclusion. The Minister made it clear that the officer acting on behalf of the Secretary of State would be subject to such a test of reasonableness, and there is benefit in that. The scope of the presumption against an employer would be limited and properly accountable. One hopes that the presumption against the employer would not be used arbitrarily.

The amendments have been tabled in good faith in an attempt to respond to the debate in Committee. We respect the principle of even-handedness in civil proceedings and the amendments give to the employee every opportunity, through the use of an officer appointed by the Secretary of State, to have the presumption that the Minister seeks used in their favour but in accountable circumstances. I hope that my hon. Friends will support the amendments and that the Minister will accept them.

Mr. Ian McCartney

It is a pleasure to welcome the hon. Member for South Cambridgeshire (Mr. Lansley) to the Opposition Front Bench. He said he thought it had to do with his temper, but I beg to differ. Those of us who took part in the record Committee sitting remember that the hon. Gentleman went missing for some hours. A week later we found out from his local press that he had gone for an early bath. Perhaps the hon. Member for Daventry (Mr. Boswell) has kept him here tonight by putting him on the Front Bench. I had a bet with a close colleague that the hon. Gentleman would be on the Opposition Front Bench by the end of this Session. I shall share the winnings with him, although I cannot yet say whether the sum is equivalent to the national minimum wage. I wish the hon. Gentleman and the hon. Member for Buckingham (Mr. Bercow) well in future debates.

I again remind the House how clause 26 works. It reverses the burden of proof in three important situations. It is important to state the principle involved. The Government fought long and hard on this issue, as the overwhelming majority of people who will benefit from the minimum wage are in a weak position in terms of the employer-employee relationship. The overwhelming majority of them do not have information at their disposal as to whether a payment was received or whether it was appropriate. It was therefore crucial that we introduced proposals to ensure that employees in those circumstances were able with certainty to claim the minimum wage when it does apply.

First, clause 26 says that, if there is a question over whether an individual qualifies for the national minimum wage—whether he is a worker, as defined by the Bill—the presumption is that he does qualify. It will be for the alleged employer to prove that he does not. Again, that is particularly important because, for years, attempts have been made, through, for example, bogus self-employment, to prevent vulnerable employees from claiming their personal rights in the workplace.

Secondly, the clause says that, when a worker complains to an industrial tribunal for the recovery of a clause 15 underpayment, the tribunal will assume that the worker was indeed paid below the minimum wage, unless the employer can prove otherwise. It will be for the employer to prove that he did pay his worker the national minimum wage.

Again, that is important because all the information that is necessary to determine whether the employer did in fact pay appropriate wages lies with the employer. He maintains records. He has responsibility for records, national insurance contributions, the pay-as-you-earn scheme and all the other information that is needed to determine whether an appropriate wage has been paid. Good record keeping and maintenance are an absolute defence against any unfair allegation that a minimum wage was not paid when it was. That is not an onerous task.

Thirdly, clause 26 says that, if a worker goes to a civil court to claim back a clause 15 underpayment in a contract claim, it will again be for the employer to prove that he paid his worker the national minimum wage. It will be presumed that the worker was paid below the minimum unless it can be proved otherwise. Again, that is in place for the reasons that I gave earlier. Clause 26 does not reverse the burden of proof as to the amount of the underpayment. It will still be for the worker to establish that.

The three amendments relate to each of the circumstances where clause 26 reverses the usual burden of proof. In each case, they would mean that the burden of proof is reversed only if an enforcement officer is involved and makes a declaration relating to the worker's case. That would obviously undermine the whole purpose of clause 26. We have already made it clear that the reversal of the burden of proof is fundamental. It applies regardless of whether an enforcement officer is involved. It is there to protect the worker and we view it as one of the foundation stones for effective enforcement.

The clause relieves the individual from having to prove that he is entitled to the national minimum wage and that he has received less than that wage. If the employer wishes to assert that a person is not a worker, or that he is being paid the national minimum wage, it will be for the employer to prove it. The provision is deliberately designed to give the worker the benefit of any doubt as to the right of entitlement. It should remove grey areas behind which unscrupulous employers might otherwise hide, and make it more difficult for them to find loopholes through which to climb.

This is a deliberately strong measure and we will not allow it to be diluted. I urge the House to reject the amendments, if the hon. Member for South Cambridgeshire forces them to a vote.

Mr. Lansley

I am grateful to the Minister for his kind remarks and I am pleased if, in some small way, I have contributed to his net remuneration for performance on the Bill; the hours that he has put in on it must be reducing his hourly rate by the day. He may need the proceeds of his bet to take the rate up to the national minimum wage rate.

That said, I am disappointed by the way in which the Minister has responded to the debate. We have sought in the amendments to go a considerable way towards accepting the Government's argument in Committee, but to leave a modicum of protection for employers against arbitrary use of the power on behalf of an employee. I did not find in the Minister's speech any convincing explanation of why the officer acting on behalf of the Secretary of State cannot provide all the protection that is required for employees against the sort of employer the Minister has described.

It is the Opposition's desire to examine in detail the amendments tabled on Report, so I will not delay our proceedings by pressing this amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.