HC Deb 12 February 2002 vol 380 cc79-96

'(1) This section applies to the jurisdictions listed in Schedule [Tribunal jurisdictions to which section [Complaints about grievances] applies].

(2) An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if—

  1. (a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies, and
  2. (b) the requirement has not been complied with.

(3) An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if—

  1. (a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 has been complied with, and
  2. (b) less than 28 days have passed since the day on which the requirement was complied with.

(4) An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if—

  1. (a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 has been complied with, and
  2. (b) the day on which the requirement was complied with was more than one month after the end of the original time limit for making the complaint.

(5) In such circumstances as the Secretary of State may specify by regulations, an employment tribunal may direct that subsection (4) shall not apply in relation to a particular matter.

(6) An employment tribunal shall be prevented from considering a complaint presented in breach of subsections (2) to (4), but only if—

  1. (a) the breach is apparent to the tribunal from the information supplied to it by the employee in connection with the bringing of the proceedings, or
  2. (b) the tribunal is satisfied of the breach as a result of his employer raising the issue of compliance with those provisions in accordance with regulations under section 7 of the Employment Tribunals Act 1996 (c. 17) (employment tribunal procedure regulations).

(7) The Secretary of State may for the purposes of this section by regulations—

  1. (a) make provision about the application of the procedures set out in Part 2 of Schedule 2;
  2. (b) make provision about what constitutes compliance with paragraph 6 or 9 of that Schedule;
  3. (c) make provision about circumstances in which a person is to be treated as having complied with paragraph 6 or 9 of that Schedule;
  4. (d) make provision for paragraph 6 or 9 of that Schedule to have effect in such circumstances as may be specified by the regulations with such modifications as may be so specified.

(8) The Secretary of State may by order—

  1. (a) amend, repeal or replace any of subsections (2) to (4);
  2. (b) amend Schedule [Tribunal jurisdictions to which section [Complaints about grievances] applies];
  3. 80
  4. (c) make provision for this section to apply, with or without modifications, as if—
    1. (i) any individual of a description specified in the order who would not otherwise be an employee for the purposes of this section were an employee for those purposes, and
    2. (ii) a person of a description specified in the order were, in the case of any such individual, the individual's employer for those purposes.

(9) Before making an order under subsection (8)(a), the Secretary of State must consult the Advisory, Conciliation and Arbitration Service.

(10) In its application to orders under subsection (8)(a), section 51(1)(b) includes power to amend this section.'.—[Alan Johnson.]

Brought up, and read the First time.

3.41 pm
The Minister for Employment and the Regions (Alan Johnson)

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

Mr. Speaker

With this it will be convenient to discuss the following: Amendment (a) to the proposed new clause, in line 43, leave out subsections (8) to (10).

Government amendments Nos. 47, 48 and 52.

Government new schedule 1—Tribunal jurisdictions to which section [Complaints about grievances] applies.

Alan Johnson

Clause 33 contains general powers for the Secretary of State to introduce regulations preventing complaints from being presented to tribunals before all or part of the relevant statutory procedures have been followed. It is an important clause that is designed to ensure that complaints are first raised internally before being taken to a tribunal. It also has implications for access to the tribunal system.

In Committee, I explained in detail how we planned to use these powers. I explained how we intended to set several simple criteria that tribunals would apply when deciding whether to admit a complaint. Given the issue's importance, I consider, on reflection, that there are advantages to providing more detail about the policy in primary legislation, which should narrow the role for secondary legislation. I am sure that hon. Members will appreciate the benefits of including more detail in the Bill.

Let me proceed by describing how the new clause works. As I said, its main purpose is to set new admissibility criteria that tribunals will apply to certain categories of complaints brought by employees. The criteria are set out in subsections (2), (3) and (4) of the new clause. I should mention first that the criteria would apply only in relation to tribunal complaints arising out of grievances. They would have no application to complaints arising out of disciplinary action.

There are three criteria. First, the employee must have completed step one of the statutory grievance procedure. That means that the employee must have set out the grievance in writing and sent a copy to the employer. Secondly, 28 days or more must have passed since step one had been completed. That minimum 28-day period gives time for the parties to discuss the grievance and try to resolve the problem. The third criterion deals with the special case in which an employee may have failed to meet the other criteria with an initial application. For example, the employee may have failed to send the step one letter to the employer. We do not want to deny the employee access to the tribunals in such circumstances. Instead, the employee would be given another chance to submit a valid application. That would often involve extending the normal period for making applications to tribunals, using the powers under clause 32.

We want to ensure, however, that the grievance is quickly brought to the employer's attention during any extended period. That should ensure that recollection of the events surrounding the grievance remains fresh. We therefore stipulate in subsection (4) that the step one action must have been completed within a period of no more than a month after the normal period for making applications to tribunals has ended. For most jurisdictions, the normal period for bringing complaints is three months. For those jurisdictions, the third criterion means that the step one action needs to be taken within four months of the event that gave rise to the grievance.

New schedule 1 to the new clause lists the jurisdictions to which the admissibility regime was intended to apply. However, the criteria will not apply to unfair dismissal, other than to cases involving constructive dismissal, because dismissal is a disciplinary matter. We also think that with the exception of constructive dismissal, the criteria should not apply to ex-employees. That exclusion will be covered by regulations under subsection (7) of the new clause. The regulations will also define those particular cases—extreme bullying and the threat of violence—in which an employee should not be obliged to complete even step one of the grievance procedure.

Mr. Philip Hammond (Runnymede and Weybridge)

Why is it unreasonable for an employee to complete step one even in such extreme cases? After all, it only involves writing a letter, which is hardly intimidating in any circumstances.

Alan Johnson

It depends on the circumstances. It would be wrong to insist that an employee write to an employer in cases involving, for instance, serious violence against an employee by an employer or racial or sexual harassment. We should not force the employee in those circumstances to open up a dialogue with the employer. However, that will be dealt with in regulations and those are subject to consultation.

The criteria are simple to understand and it should be relatively easy for tribunals and the parties to ascertain whether they have been met. There is limited scope for parties to dispute whether a case should be admitted. In most cases, there will be no need for tribunals to hold preliminary hearings to assess compliance.

Subsection (8) of the new clause gives the Secretary of State an order-making power to change the admissibility criteria if necessary. It is prudent to take that power in case experience shows that the criteria need to be amended. Subsection (9) requires the Secretary of State to consult the Advisory, Conciliation and Arbitration Service before exercising the power. The power also allows us to extend the regime to non-employees if necessary.

Amendments Nos. 47 and 48 deal with consequential matters. Amendment No. 47 ensures that clause 32, which is on time limits, includes a necessary reference to the new schedule. Amendment No. 48 deletes clause 33 and amendment No. 52 makes a consequential change to clause 51.

The group of amendments greatly improves the Bill and makes our intentions plain. It constructs a workable and sensible admissibility regime to ensure that most grievances are aired before they are taken to tribunals. The regulations will build in safeguards to ensure access to justice.

Mr. Hammond

I declare an interest as an employer. I hope that we will hear very full declarations of interest from hon. Members on both sides of the House either as employers or as recipients of the largesse of trade unions, in the form of sponsorship of their constituency parties.

As the Minister said, the purpose of the new clause is to include in the Bill—

Mr. Tony Lloyd (Manchester, Central)

On a point of order, Mr. Speaker. The hon. Gentleman invites hon. Members to declare an interest. That is a reasonable request and I am a member of a trade union. However, as there is no such thing as sponsorship, will you clarify whether it is necessary for members of trade unions to declare an interest?

Mr. Speaker

If a matter is recorded in the register, it should be declared. If it is not, it is up to hon. Members to decide what to do. I hope that that helps the hon. Gentleman.

Mr. Hammond

Thank you for that ruling, Mr. Speaker. As I understand it, following recent clarifications of the rules, it is not necessary for hon. Members to list sponsorship of their constituency parties in the register. However, as we will discuss amendments and new clauses that are a clear and well established part of the Trades Union Congress agenda, it will help people who are interested in the debate to know whether the hon. Members who propose them—

Mr. Speaker

Order. When those matters are before the House, hon. Members will decide what to do. At the moment, we are debating new clause 6 and the associated amendments, and the hon. Gentleman should stick to that subject.

Mr. Hammond

I am grateful to you, as ever, Mr. Speaker, for your guidance.

As the Minister advised the House, new clause 6 includes in the Bill measures that would otherwise have been provided in regulations under clause 33, which is now deleted. It is interesting that the Government have chosen to include in the Bill detailed procedures that would otherwise have been introduced by regulation. Many clauses leave matters to be disposed of by regulation, and the Government have chosen this one clause for special treatment—removing the regulation-making power and adding a fairly lengthy new clause that spells out in detail the procedure to be followed.

Interestingly, in its briefing to members of the Standing Committee the TUC suggested that it expected the Government to table amendments to clause 33. Conservative Members were somewhat surprised that no such amendments were forthcoming in Committee, but it seems that the TUC was ahead of Parliament in knowing the Government's intentions, and their agenda—or perhaps I should say the TUC's agenda—has now been revealed. In Committee, Conservative and Liberal Democrat Members urged the Government to reveal the details of the regulations that would arise from many clauses; so will the Minister explain why the provisions in clause 33 need to be spelled out while others do not?

Grouped with the new clause is new schedule 1, which is an interesting device because, subject to a minor amendment that the Government will move later, it is identical to schedule 3. The only plausible explanation is that the Government intend, at some point in the future, to amend one or other of the schedules through regulation so that different jurisdictions apply to two different parts of the Bill. That is an unsatisfactory way for a Government to proceed.

The original decision—that it would not be necessary for an employee to have gone through the entire statutory grievance procedure before being able to bring a case before a tribunal—was a concession to lobbying from the trade union movement. That is clear from the briefing that the TUC put out for Second Reading and to the Committee. Now, an employee will have had only to write a letter to his employer outlining his grievance and then to wait 28 days before instigating proceedings in a tribunal. It is not clear to Conservative Members that that will have the effect claimed by the Government of significantly reducing the number of cases that come before tribunals.

I should like to probe the Minister a little further on the provision in the new clause for the Secretary of State, by regulation, to exclude certain classes of case from the requirement to have taken the first step. As I told the House in my intervention on the Minister, the first step consists only of writing a letter. I find it difficult to imagine a case in which the obligation to write a letter to one's employer outlining the grievance was so traumatic that it would be better to provide that the employee shall go straight to an employment tribunal.

I can understand how the provision got into the Bill. The original thinking was that the complete statutory procedure would have to be gone through before recourse to an employment tribunal, so there would of course be cases in which a face-to-face confrontation between employer and employee would be inappropriate—for example, in cases involving violence or allegations of sexual harassment. However, I am unable to think of a single substantial class of case in which it would be inappropriate to impose on the employee a requirement only to write a letter. I shall be grateful if the Minister, using the considerable resources of ingenuity available to him, comes up with at least one convincing example, so that the House can understand the need for the power to exclude.

The matter is causing employers' organisations some degree of concern. That concern flows from a fact that will be a recurring theme this afternoon: that the Government are under obvious pressure from trade unions to concede yet more. Every time the Secretary of State is given a power by regulation to concede the agenda of the TUC, there is a danger that further concessions will be made in the wider horse trading that apparently goes on between the Government and the TUC.

The Opposition are concerned that a loophole is built into new clause 6 and that the Bill including new clause 6 will not have the impact that the Government desire, in terms of reducing the number of tribunal cases. We are aware of the need to monitor the effectiveness of the provisions to ensure that they deliver the benefit for which the Government, employers and responsible trade unions hope—of reducing the number of cases that go to employment tribunals without those involved even embarking on existing in-work procedures for dispute resolution.

I wish to draw the House's attention to new clause 6(6). The procedure outlined therein departs from, or goes beyond, what the Minister described to the Committee. Subsection (6)(a) is unlikely to apply: it is unlikely that an employee will bring to a tribunal a case in which the information that he lays is such as to disqualify him from bringing it on the face of the facts. Subsection (6)(b), if I understand the provision correctly, places on the employer the responsibility for drawing the employment tribunal's attention to the fact that the employee has failed to go through the correct procedures under the statutory procedure laid down in schedule 2.

Will the Minister clarify whether an employer's failure to draw the tribunal's attention at the appropriate point to the failure of the employee to exhaust, or at least embark on, the statutory procedure will preclude that matter being dealt with at a later stage? In other words, if the employer—perhaps through ignorance: he may be a small business man who is unfamiliar with the now increasingly complex body of law—fails to draw the tribunal's attention at the appropriate point during consideration of procedural matters to the fact that the employee has not written the requisite letter and waited the requisite 28 days, or whatever period regulations specify, will it be impossible for a subsequent finding against the employer to be set aside on the grounds that the employee did not follow the correct procedure? I hope that the Minister will clarify that. It would be a further burden on employers if at that stage they had to identify the problem, so as to avoid being subjected to a decision of wrongfulness in the light of the facts.

4 pm

Amendment No. 47 sets out a power to vary new schedule 1 from time to time. Perhaps the Minister will tell us what he has in mind in varying the schedule. He must have something in mind; otherwise there would be no point in introducing a new schedule that is identical to a schedule that is already in the Bill. It is clear that the Minister intends to introduce changes at some stage.

Amendment (a) seeks to delete subsections (8) to (10). The subsections give the Secretary of State a power to amend the grounds for exclusions of a claim. The Government appear to be seeking to have their cake and eat it. On the one hand, they want to put the detailed provision of the regulations in the Bill. Presumably they have been told to do so by the TUC. On the other hand, they want to retain a power fundamentally to amend, by changing the grounds on which claims to a tribunal would be excluded by regulation. Surely that is not the appropriate way in which to proceed. Having decided not to use regulation and to set out provisions in the Bill, the Government should get things right the first time. They should stick to their guns and exclude subsection (8).

Subsections (9) and (10) would be excluded by the amendment, because they depend on subsection (8). I look forward with interest to the Minister's response.

Brian Cotter (Weston-super-Mare)

I, too, should like to refer to a reference in the Register of Members' Interests. I am the managing director of a company, an interest to which I have referred before. I naturally have an interest in these matters.

I am pleased that the Government have decided to remove the controversial clause 33 and to replace it with a clause that seems far more sensible and will add greater clarity, which is what we were looking for. The Liberal Democrats tabled an amendment to clause 33 before we embarked on Report. We were concerned that the clause, as it stood, could act as a barrier to justice for tribunal applicants with valid cases.

We are concerned that it would be inappropriate to rule out claims altogether where they concern sexual harassment or racial abuse, for example. The hon. Member for Runnymede and Weybridge (Mr. Hammond) referred to the issue and wanted clarification, which I expect the Minister will give.

There may be cases where a woman is being exposed to sexual harassment or intimidation of some sort. She might feel so nervous and concerned that even sending a letter could pose a problem. If violence could be involved, for example, she might fear some form of retribution. She might be concerned about stirring things up. I am sure that the Minister will have some general thoughts about that.

The Minister has said that applicants will be required to send only written notice of the grievance to the employer and wait 28 days for a response before an application to a tribunal can be made. That is fair enough. I acknowledge that it would be reasonable to expect most employees to take the first step, but I still have concerns. That is why we tabled an amendment.

In Committee, the Minister seemed to agree with me when he said: We recognise, however, that there will be rare cases in which the threat of violence or serious personal harassment may make it dangerous or intimidating for applicants to take step one action before making an application."—[Official Report, Standing Committee F, 18 December 2001; c. 196.]

I am sure that the Minister will explain what he meant by that and perhaps provide clarification. In addition, as the Law Society pointed out, the national minimum wage enforcement agency does not require workers who are not receiving the minimum wage to take up matters with their employer first, which might serve to increase their vulnerability. Yet detriment in relation to national minimum wage is apparently still covered by the new clause; section 24 of the National Minimum Wage Act 1998 is cited in the new schedule.

How will new clause 6 operate in conjunction with other statutory rights, such as the right to paid leave? Will the Minister repeat the assurance that he gave on Second Reading on the original clause 33 and clarify the application of new clause 6 to other measures? Can he explain who will be in a position to decide whether or not the exception is applicable, and whether applicants have a legitimate reason for taking action? Will that be for the tribunal to determine at a preliminary hearing and would it not cause further complications in tribunal proceedings? In such cases, will the second chance, which will allow the applicant to go back and complete the grievance procedure—referred to by the Minister on 18 December in Committee—apply to new clause 6? If so, does the Minister share the Law Society's concerns that such an action may sour relations between employees and employers?

Finally, can the Minister provide an assurance that applicants who do not give the correct legal label to a grievance in their written statement will not be prevented from pursuing their claim in an employment tribunal? How will that influence what is brought up in the original written statement, and how much influence will the written statement have on proceedings at the later tribunal? I look forward to the Minister's reply, but generally we welcome the fact that the problem raised in Committee has been addressed.

Mr. Mark Prisk (Hertford and Stortford)

Radical reform of employment tribunals is long overdue. Talking to the Federation of Small Businesses, the Institute of Directors and the CBI, I have learned that there has been an extraordinary increase in the number of cases taken to employment tribunals. In just 10 years, the figure has risen by 300 per cent., which cannot be good for industrial relations or the economy as a whole.

Rob Marris (Wolverhampton, South-West)

Would the hon. Gentleman care to tell the House about the decline in the number of days lost through strikes in the same 10-year period?

Mr. Prisk

I am not in a position to deal with that claim. I am concerned with the way in which industrial relations will work from now on. As an MP with a legal background, I am sure that the hon. Gentleman may like to add to his point later.

Mr. Mark Simmonds (Boston and Skegness)

Perhaps I can help my hon. Friend and, through him, the hon. Member for Wolverhampton, South-West (Rob Maths). In the financial year 1997–98, 254,000 days were lost as a result of strike action. In the first 10 months of last year, 325,000 days were lost, which is a significant increase since the Labour party came to power.

Mr. Prisk

I am grateful to my hon. Friend, not least in helping me to channel that information to the House. The fact that 130,000 cases were taken to employment tribunals in 2000 clearly needs to be addressed; that is the principle on which I welcome the Bill's aspirations. It is clear from the CBI and the Institute of Directors that the cost to business of those cases is now about £633 million. Beyond the cost alone, it cannot be right that cases are immediately brought to court; they should be dealt with in the workplace.

New clause 6 tries to rebalance the responsibilities in the workplace, and for that reason it is welcome, in principle. The Bill sets out clear and, in some cases, quite prescriptive requirements on employers for dealing with complaints, grievances and so on, as the Minister described at length on Second Reading and in Committee. It seems only right, therefore, that we should require employees equally to accept responsibility to begin a complaint or a grievance in the workplace, and not immediately to run to the courts.

I welcome the requirement that the employee should first write a letter—that seems common sense—and that there should be 28-day waiting period, which also makes sense. Before the Minister thinks that I am going too soft, however, I shall raise one or two concerns. My first relates to new clause 6 because the Secretary of State still has reserved powers to exclude certain individuals. I reiterate the concern expressed by the Federation of Small Businesses and the Institute of Directors that that power should not be overused. I hope that the Minister will reassure me and those employers representatives that the power will not be overexercised.

My second concern is that although responsibilities are being introduced for employees in an attempt to balance the responsibilities already sought for employers, those seem a little inadequate. There is merely a requirement that the employee should write a letter, as my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) rightly pointed out. It is not a requirement to meet, to sit down and to have an intelligent and reasonable dialogue to sort out the differences. The Bill is prescriptive in the requirements that it places on employers to act, yet the Government seem reluctant to introduce similarly prescriptive measures for employees. It is that slight imbalance which worries me.

If it is right to set out three steps for employers, surely it is right to set out at least two steps—to write and to meet—for employees. Although I understand the argument of the hon. Member for Weston-super-Mare (Brian Cotter) that in extreme cases individual members of an organisation might not want a face-to-face meeting, that is a rare example. Wherever possible, we should encourage employees to write, to meet and to have a dialogue.

Mr. Kevan Jones (North Durham)

As a full-time trade union official until last June, it is clear to me that the hon. Gentleman does not understand the process. If the employee wrote a letter and was then invited to a disciplinary hearing, and did not attend, and if the case reached an industrial tribunal, it would be deemed unfair anyway, so I do not understand where the hon. Gentleman is coming from.

Mr. Prisk

The purpose of the new clause is to encourage employees to take responsibility. I do not claim to be a lawyer, but I do claim to have worked in small businesses.

Mr. Hammond

Perhaps my hon. Friend should point out that it is the hon. Member for North Durham (Mr. Jones) who does not understand what we are talking about. We are dealing with grievances, not discipline.

Mr. Prisk

I was too polite to do that, and I shall try to maintain that air of civility. My hon. Friend is right. Perhaps the hon. Member for North Durham will bear my hon. Friend's comments in mind.

There seems to be a strange omission from the Bill. It is fine to introduce a clearly defined and prescriptive set of proposals for employers, but there is a hesitancy to do the same with regard to employees. It would be helpful if the Minister could explain to the House why that omission exists. In conclusion, I welcome the purpose behind the new clause. What concerns me is that it seems, unusually for the Minister, to lack the confidence to see that through.

Mr. Simmonds

I, too, begin by declaring an interest: I am an employer in and outside the House.

I hope that the Government share my view that the main purpose of new clause 6 is to reduce the number of cases that go to a tribunal. I welcome more detailed provision for that in the Bill rather than through regulations. I should like the Minister to offer a cast-iron guarantee or to express belief that the new clause will reduce the number of applications that go to tribunals.

4.15 pm

Many employer organisations share my deep concern that the new clause will not have the impact that I described, and that an increasing number of cases will continue to go to appeals tribunals. The figures are staggering. In 1988–89, just over 29,000 tribunal applications were submitted; in 1997–98, the figure exceeded 80,000; in 2000–01, it was comfortably over 130,000. Clearly, the number of applications to tribunals has increased dramatically. I believe that that is a direct result of many policies that the Government have introduced since they came to power in 1997.

Norman Lamb (North Norfolk)

Does the hon. Gentleman agree that the number of new rights for employees expanded considerably when the Conservative Government were in power? That led to increases in the number of claims that were taken to tribunals.

Mr. Simmonds

I am not arguing against employees' rights. There is a balance to be struck between employees' rights and employers' responsibilities. However, since 1997, matters have accelerated and employment relations have been damaged. Personnel Today stated that the raft of legislative changes brought in under the Employment Relations Act 1999 is the chief factor behind the big rise in tribunal claims reported by ACAS". Nothing in the new clause will stop that acceleration.

I generally support the clause, but I share the concerns of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) about the open-ended list of exceptions. I should like the Minister to show us that our anxieties are not well founded.

I would go slightly further than my hon. Friend on subsection (6)(a). I cannot foresee any circumstances in connection with bringing proceedings in which an employee would inform a tribunal that he or she had not complied with the procedure, thereby barring themselves from obtaining a tribunal application. The provision is therefore superfluous.

The Minister did not enjoy receiving the letter from Judge Prophet; indeed, he provided a robust and speedy response, which he copied to us all for which I am grateful. He made a pertinent point about an employee who is dismissed and therefore entitled to redundancy payment. If the employer refuses to pay, how does the internal grievance procedure apply to someone who is no longer an employee? Is such a case one of the exceptions that the Minister proposes to make through regulations under the new clause, or will the employee have to write to the employer to express his grievance after he has been made redundant?

Ms Joan Walley (Stoke-on-Trent, North)

I shall speak briefly. I declare that I am a member of Unison and declare my constituency arrangements: my constituency Labour party has an agreement with the Union of Construction Allied Trades and Technicians.

I want to give credit to the Minister for having taken account of the representations made to him not only in Committee but on behalf of people in constituencies such as mine, who had a great fear that, if clause 33 as originally drafted had stood part of the legislation, people would not have been able to take their case straight to a tribunal, and would have been excluded. I wanted a great deal of consultation about the regulations that would have come into force if the original clause 33 had remained part of the Bill.

I pay tribute to my hon. Friend for the attention that he has paid to those of us who had concerns about this aspect of admissibility in respect of clause 33. He has been kind enough to listen to me, and said that this provision will now mean that people will not be excluded. I have listened to some of the comments made by Conservative Members, particularly in relation to people who have lost their jobs. The new clause, assuming that it will stand part of the Bill without being altered to a significant extent elsewhere—

Mr. Hammond

Several hon. Members have attempted to draw the Minister on which classes of people are to be excluded from this provision, so enabling them to apply to a tribunal without going through the procedures. If the hon. Lady has any inside information on that as a result of her correspondence with the Minister and her Labour party channels, would she be good enough to share it with us?

Ms Walley

I would be very happy to place in the Library a copy of the Minister's response to me. If, however, the hon. Gentleman thinks that I have any prior knowledge of this matter, he is mistaken. I am simply one of 659 Members who take a keen interest in the Bill.

My main concern about the original clause 33 related to cases of bullying, for example, in which people might feel that they could not raise the matter with their employer before taking it to an employment tribunal for fear of harassment. I was worried that such people might genuinely be prevented from taking their case forward, and the new clause takes considerable account of the representations that have been made on that issue.

Mr. Hammond

I am genuinely puzzled. The hon. Lady is outlining a scenario in which someone would be afraid to write a letter to their employer in case they suffered harassment for doing so, yet not be afraid of suffering harassment for applying to an employment tribunal. Surely the two are entirely comparable in terms of the risk to which the employee is exposed. Why is writing a letter more risky than applying to an employment tribunal?

Ms Walley

We are talking about a question of balance. The Government are absolutely right to concentrate on ensuring that the resolution of disputes can take place first and foremost in the workplace, and that the process should not have to go all the way to an employment tribunal. I accept that that is the Government's intention, and that is what I want to happen. I can, however, envisage certain scenarios in which people who had suffered sexual harassment or intimidation, for example, or who had been bullied, could have been prevented from taking their case forward under the original clause 33. I therefore want to record my praise for the Minister's having taken account of those concerns.

I have one further point, to which I hope my hon. Friend will reply. A slightly more complex set of arrangements is now being proposed, and people who cannot reach an employment tribunal in the first instance might be able to come back and make a second application. Perhaps organisations such as the citizens advice bureaux could find out how they might be able to advise and represent such people, because I would not want them to be excluded from access to the kind of representation that they might now need to reach an employment tribunal.

Mr. George Osborne (Tatton)

I shall speak briefly to new clause 6 and, particularly, to the amendment tabled by my hon. Friends. I want to begin by saying how much I enjoyed serving on the Standing Committee. It was a pleasure to watch two great professionals, the Minister for Employment and the Regions, the hon. Member for Hull, West and Hessle (Alan Johnson), and my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) proceed with the business. It was noticeable that, when junior Ministers took the place of the Minister of State, the standard of debate dropped considerably. I have probably done for the Minister's career, but there we go.

Like other Opposition Members, in general I welcome the fact that the Government are including in legislation what would otherwise be dealt with through statutory instruments and regulations. That is a good idea in principle, and I also welcome the attempt to require employees to go through a basic minimum procedure before heading straight for the employment tribunal. However, like other Opposition Members, I am extremely concerned to know the categories of people that might be excluded from that procedure.

Even those who have suffered the grossest sexual or racial abuse in the workplace should at least be able to record the incident on a piece of paper. Indeed, in Committee we discussed the benefit of conducting more of the procedure in writing, and I remember with fondness that the hon. Member for Wolverhampton, South-West (Rob Marris) supported us on that point. His support was welcome and it certainly cheered up a rather dull day.

I reinforce the point made by my hon. Friend the Member for Boston and Skegness (Mr. Simmonds). I assume that the purpose of new clause 6 and other such provisions is to reduce the number of cases going to employment tribunals. Indeed, the Government's regulatory impact assessment suggests that the Bill could reduce them by between 30,000 and 40,000. That would be greatly welcomed by Members on both sides of the House if it proves true, but, like many other people and outside organisations, I have my doubts.

The Bill will introduce a load of new employment rights, including paternity rights and rights for adoptive parents, which I welcome, but it will also introduce new rights for union learning representatives and a complicated new power relating to flexible working, which I do not welcome. I would not be at all surprised if the legislation increased the numbers going to employment tribunals, and it would be interesting to have on record the Minister's assessment of its likely impact on those numbers.

Alan Johnson

The hon. Member for Runnymede and Weybridge (Mr. Hammond) made the usual pantomime points about Trades Union Congress briefings, and so on. One minute, we in the Department of Trade and Industry are accused of being the provisional wing of the Confederation of British Industry, and the next he redresses the balance by saying that we take all our instructions from the TUC. Of course, we do neither. We listen carefully to both sides, and unlike the previous Conservative Government, who seemed to have an aversion to free and independent trade unions, we think that the trade union voice is important. We have listened to it carefully, but no more so than to other voice.

On admissibility, our response to "Routes to Resolution", which was published almost three months ago, made perfectly clear our belief that the provision should apply to grievances only. I shall deal with some questions that were asked on that point, particularly by the hon. Member for Hertford and Stortford (Mr. Prisk), but I should point out that, as the response to "Routes to Resolution" made clear, there was no debate about whether we would apply admissibility simply to step one of the grievance procedure.

In Committee, the debate concerned whether the provision should be included in the Bill or in regulations and whether clause 33 was drawn too widely in terms of its operation. Our view was that, on balance, it would help the House if we amended the Bill to clarify the admissibility clause, thereby preventing any hares from running in respect of its use and application.

4.30 pm

The hon. Member for Runnymede and Weybridge asked why we proposed to include two identical schedules. It was a prudent move. New schedule 1 is indeed identical to schedule 3, but there may be occasions in the future—although we do not envisage them now—when we want different jurisdictions to apply to the very new admissibility clause and to the measures in schedule 3. The two schedules are identical, but they may not always be, although we have no plans to change anything at this stage.

Mr. Hammond

Is the Minister seriously saying that he is including two identical schedules in case he wants to change one of them at some time in the future, but that he has absolutely no intention of doing so? That has staggering implications. Why not include two of every clause and every schedule in every Bill, just in case the Government want to change one of them by regulation at some future stage?

Alan Johnson

We will consider that suggestion carefully. All I know at this stage is that we are moving into uncharted territory in respect of admissibility, and I think it prudent to ensure that the jurisdictions are separated.

The hon. Gentleman referred to subsection (6)(b), and the employer's challenge to the making of admissibility criteria at an early stage. We consider that reasonable. We do not want the questions to hang around until there is a full hearing at an employment tribunal; that would mean devoting extra time and resources to cases that would otherwise be inadmissible. Our approach is workable, and we think that it will ensure that preliminary issues are handled expeditiously.

The hon. Gentleman made a point about the step one letter that was made consistently by Opposition Members. They omitted one important consideration. Step one involves not just writing to the employer, but allowing a period of 28 days. Although there is no requirement for a hearing in new clause 6, we think that the 28-day period would enable employee and employer to discuss the grievance at the heart of the problem.

We intend the exceptions to be genuine exceptions. We want as few as possible, but we think it advisable for them to be made in some rare circumstances. It must be beyond doubt that the time will be used productively, and the letter must concern a case of serious sexual harassment, violence or intimidation. It must be clear that there is no possibility of the issue being resolved in 28 days, because the trust and the relationship have broken down completely—although the employee is still in the workplace. We will regulate for such exceptions, and consult on them.

Mr. Michael Weir (Angus)

How would this statutory procedure sit with companies' internal grievance procedures? I know from my long experience as a lawyer that when cases reach tribunals there is often a lot of discussion about the fairness of the internal procedure that was carried out initially. Would the statutory procedure override existing grievance procedures?

Alan Johnson

We seem to have moved on to disciplinary procedures. Given that an employee was allowed to be informed of the so-called offence that had been committed, to discuss it with the employer—unless it was an offence of gross misconduct—and was granted the right of appeal, internal disciplinary and grievance procedures would not breach the basic three and two-step criteria.

That brings me to a point raised by several hon. Members, including the hon. Members for Hertford and Stortford and for Boston and Skegness (Mr. Simmonds). They ask what effect the new clause will have and say that it does not go far enough. At present, 6 million workers have no recourse to any grievance or disciplinary procedures in the workplace. Some 600,000 workplaces have no procedures, and a further 340,000 have substandard procedures.

Mr. Simmonds

Does the Minister accept that a large proportion of those workplaces have voluntary systems that work very successfully?

Alan Johnson

I do not know what the hon. Gentleman means by voluntary systems. If they are voluntary, they are not recorded, and the employee does not know that he or she has recourse to them. I am referring to workplaces where there is no procedure whatever. There are reports in today's newspapers of an horrific case of someone who was dismissed and had no right of appeal because there was no internal procedure to allow that.

I fully accept that people are more aware of their rights. Thanks to this Government, they have more rights to be aware of—we do not apologise for that. Given article 13, which outlaws discrimination on grounds of sexual orientation and age, it is almost inconceivable that the number of tribunal cases will not rise. However, we estimate that between 30,000 and 40,000 cases that go to employment tribunals could be resolved in the workplace if the procedure existed to deal with complaints or grievances there.

Mr. Mark Field (Cities of London and Westminster)

I appreciate what the Minister says. However, the acid test of the Bill in terms of improving employees' rights will be if more cases go before employment tribunals. My concern is that that will be seen as a mark of success. I ran a small business before coming to this place, and I am not sure what our procedures were. They were certainly not written down in a massive booklet—not that there was any problem in that regard, I hasten to add. I may well have qualified as one of the 600,000 employers mentioned. There has been increasing awareness of employee rights, with more people rushing to use employment tribunals as a first rather than a last resort. That has to be the underlying concern, given all the waste that would result for business.

Alan Johnson

I do not know about people rushing to use employment tribunals as a first recourse. However, people who have no other outlet to resolve their problem will go to an employment tribunal and slap in their IT 1.

Business organisations, including the Confederation of British Industry and the Federation of Small Businesses, support this simple fact: having a basic procedure in the workplace must be preferable to airing problems at a full-blown employment tribunal.

Mr. Hammond

Let me go back five minutes. If someone submits his grievance in writing within 28 days—I am not talking about an exception case in which harassment or something similar has taken place—and the employer suggests meeting to sort it out, the employee is entitled to ignore that and go ploughing off to the tribunal anyway. Will the Minister confirm that the Government's original intention was that the entire statutory procedure should be exhausted before there was access to a tribunal? Will he confirm that he has backed down, watering down the proposals during the Bill's consideration to the point where an employee can ignore the employer offering a grievance meeting and go straight to a tribunal?

Alan Johnson

No. The hon. Gentleman is entirely wrong. It was never our intention that every case must exhaust the discipline and grievance procedure prior to being allowed into the employment tribunal procedure. The hon. Gentleman should read our response to the "Routes to Resolution" document published last November, in which we talked about grievances.

The other point being missed is mitigation. Elsewhere in the Bill there is the right for an employment tribunal to take action if it believes that either the employee or the employer has not followed the procedures. First, if the employer has not carried out the basic three-step procedure and there has been a dismissal, that dismissal is automatically deemed unfair. Secondly, if the employee or the employer, without good reason—one of the exceptions such as racial harassment or bullying, for example—did not go through the full procedure but came to the tribunal before completing stage two or three, the award can be mitigated by between 10 and 50 per cent. That is a salutary and sobering prospect for people who may be tempted to think, "The procedure's there, but I'll simply ignore it."

This is a crucial point, fundamental to human rights. As things stand, someone can simply sling in an IT 1 and there are no procedures in the workplace. Should we move from that to a procedure in which people are locked out of the system altogether and prevented from seeking justice at an employment tribunal?

We took that question extremely seriously, and business supports us here. For example, there is the CBI document—although perhaps some Conservative Members now consider the CBI to be the provisional wing of the DTI. The CBI said that it warmly welcomed proposals that would require employees to raise a problem with their employer. Most business people said that for them, the important thing was not to hear about a grievance in a courtroom but, that if someone still in their employment was worried, perhaps after having been passed over for promotion, they would talk to them first and air the grievance. That view has been reflected in new clause 6.

The hon. Member for Weston-super-Mare (Brian Cotter), whose general support I appreciate—

Mr. Hammond

The big tent.

Alan Johnson

For a moment I thought that the hon. Gentleman was insulting me; I think that my suit fits rather well.

The hon. Member for Weston-super-Mare asked how relevant the step one letter was to the tribunal's decision on the substance of the case. The letter will be relevant to the tribunal's decision on whether the complaint is covered by the grievance that the employee raised, but not to the decision on the substance of the complaint.

The hon. Gentleman also asked who would decide whether an exemption should apply. The tribunal will decide. I agree that that might require it to hold preliminary hearings, but we think that if we get the regulations right and the exceptions are clear, there will be less need for that to happen.

The hon. Member for Hertford and Stortford asked why the new clause did not require the employee to follow the three-step procedure. He made some curious points about why the employee gets three steps but the employer does not—

Mr. Prisk

The other way round.

Alan Johnson

Sorry, that is what I meant.

Both sides have to follow those steps or any award will be liable to serious mitigation of between 10 and 50 per cent.

This is not about one side or the other; it is about having a facility in the workplace to air grievances. Insisting that an employee had to follow the three steps before reaching a tribunal would cause a simple problem: we can imagine all the barriers that an unscrupulous employer would put up to stop the case going to a tribunal. He could ensure that, even with the extra three months that we have provided under clause 32, it was time-expired.

There is also a series of exemptions. The hon. Gentleman and I agree that certain situations need to be exempted, certainly from the full three-step procedure. We would have to have more exemptions, and there would be more preliminary hearings. The representatives of all sides of business whom we consulted shared the view that stage one of the grievance procedure was the important part.

Mr. Prisk

The Minister said earlier that the Government were sympathetic to the idea that during the 28-day period following the provision of a letter, more employers and employees should have hearings and discussions—that they should, in his phrase, use that period. Will he give businesses guidance on that?

4.45 pm
Alan Johnson

By the time we have finished, businesses will have guidance on all aspects of the Bill coming out of their ears. The proposals are very important, especially for small businesses. There are 600,000 workplaces with no discipline or grievance procedures. Those employers are under no obligation to put such procedures in the written statement that goes to every employee because they employ fewer than 20 people. We have changed that requirement also, but the matter will need careful guidance, which I certainly undertake to supply.

The hon. Member for Boston and Skegness asked how the admissibility regime would apply to a complaint by a redundant former employee. As I said when I moved the new clause, we do not envisage that the procedure will apply to former employees. For them, the relationship between employer and employee has been broken, so why should they write to a person who is no longer their employer? However, we believe that, with careful guidance, the step one procedure would help clarify and resolve constructive dismissal cases, without recourse to a full-blown tribunal.

My hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) also contributed to the debate. She was absolutely right to say that we must recognise that there could be circumstances in which it would be difficult for an employee to go even as far as writing a letter and waiting for the 28-day period.

The hon. Member for Tatton (Mr. Osborne) supplied some very welcome flattery, and that is always appreciated. However, I do not agree with him, for the reasons that I set out earlier.

I shall spend a second on amendment (a), in the name of the hon. Member for Runnymede and Weybridge. It deals with the necessary powers contained in new clause 6 that would allow the Bill to be amended by secondary legislation. New clause 6(8) provides the power to extend the scope of the clause to non-employees. We will debate that matter again in connection with new clause 2, so I shall not spend much time on it now, other than to suggest that Opposition Members are making a considerable mountain out of a molehill.

Proposed new subsection (8) provides the power to amend the admissibility criteria by order. We consider that to be prudent and sensible. We think that we have set sound and reasonable criteria that will encourage dialogue without delaying access to tribunals, but experience may show that the admissibility criteria could helpfully be recast.

For instance, it is conceivable that the 28-day period might be too short for proper dialogue to take place. We need to learn from experience about that, which is why we have given ourselves the power to deal with the matter in secondary legislation. In proposed new subsection (9), we have committed ourselves to consult the Advisory, Conciliation and Arbitration Service before making any changes in this area. Likewise, I would expect that we would consult widely before proposing any changes.

I therefore hope that the hon. Member for Runnymede and Weybridge will not press amendment (a), and that the House will endorse new clause 6 and the associated amendments.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

Forward to