Interpretation (Hansard, 8 July 2002)

§ Alan Johnson
I beg to move that this House agrees with the Lords in the said amendment.

§ Mr. Speaker
With this we may take Lords amendments Nos. 38 to 45, 61, 76, 77, 79 and 81 to 87.

§ Alan Johnson
The amendments, although not related, are all technical, which is why they have been grouped together.
Lords amendment No. 25 corrects an oversight on our part by including the equivalent of the Department of Trade and Industry in Northern Ireland, the Department for Employment and Learning, in the data-sharing provisions. The Department for Employment and Learning, like the DTI, may need access to high-level statistical information to assess how the schemes are working. The term "the Department" is defined in clause 16; our amendment simply includes the Department for Employment and Learning, as well as the Department for Social Development, in the data-sharing provisions.
Although many of the Bill's provisions do not extend to Northern Ireland, we expect that Northern Ireland will make its own provisions for paternity and adoption leave and pay. We also expect that the Inland Revenue will be responsible for the operation of those schemes, as it will be in Great Britain. Because the Inland Revenue's responsibilities are UK-wide, however, we have to legislate in a Westminster Bill to enable it to take on these responsibilities. Clause 16 is one of the provisions that must therefore extend to Northern Ireland.
The Department for Social Development in Northern Ireland has responsibilities equivalent to those of the Department for Work and Pensions in Great Britain, and the Department for Employment and Learning in Northern Ireland is the equivalent of the DTI in Great Britain. The same good reasons why the Inland Revenue and Departments in Great Britain may well need to exchange information on statutory paternity and adoption pay apply equally to the Inland Revenue and Departments in Northern Ireland. The amendment ensures that Departments in Northern Ireland will be able to take a joined-up approach to statutory paternity and adoption pay, in the same way as Departments in Great Britain.
Lords amendment No. 38 is a technical amendment that reverses the order of clauses 32 and 33. Clause 33 deals with the presentation of complaints to tribunals. It makes sense for it to precede clause 32, which is about consequential changes to time limits for making complaints to tribunals. Clause 32 also refers consequentially to schedule 4, but it is clause 33 that introduces that schedule.
Lords amendments Nos. 39 to 45 are minor technical amendments to clause 37, which allows employers to use a letter of engagement or a contract of employment to satisfy the requirement to provide employees with a written statement of employment particulars. As a written 615 statement must give a date by reference to which it operates, an alternative document intended to fulfil the same function must also give such a date. However, the original text of clause 37 refers only to the date of the document". That might have led to uncertainty, as the date of any particular contract of employment may not always be clear.
Lords amendments Nos. 39 to 44, taken together, clarify the position. They provide that when an alternative document is intended to fulfil the written statement requirements, the date by reference to which it operates for that purpose is the date on which it is given to the employee. New section 7B(2) of the Employment Rights Act 1996 serves no useful purpose once the date of the alternative document has been clarified by Lords amendments Nos. 39 to 44, and it is therefore removed by Lords amendment No. 45.
Lords amendment No. 61 provides that clauses 45 and 46, relating to fixed-term work, will come into force as soon as the Bill receives Royal Assent, thus allowing the fixed-term regulations to be laid immediately. That will give employers and employees more time to prepare for their coming into force, which should ensure compliance with the regulations. Lords amendments Nos. 76 and 81 to 84 are technical amendments to schedule 7. They simply ensure that the appropriate minor and consequential amendments concerning statutory paternity and adoption pay are made to the Social Security Administration Act 1992 and the Employment Rights Act 1996.
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On Report in the other place, Lord Sainsbury of Turville introduced five amendments—Nos. 77, 79 and 85 to 87—relating to clause 47, which deals with flexible working. They concern an exemption for the armed forces, and the provision by the Advisory, Conciliation and Arbitration Service of binding arbitration in cases where employer and employee cannot agree.
Lords amendments Nos. 85 to 87 relate to the proposed exemption of the armed forces from the flexible working provisions. As was explained in the Lords, the Bill as previously drafted applied those provisions to the armed forces, but because all members of the armed forces are—uniquely—liable to operational deployment at little or no notice if national interests so require, it was impractical to apply long-term flexible working arrangements, as envisaged in the new right to request. Accordingly, we concluded that the new provisions should not apply to them.
It is worth noting that the armed forces will continue to seek to comply with the spirit of the legislation, subject always to overriding operational requirements. They fully recognise the benefits of flexible working to individuals and their organisations.

§ Mr. George Osborne
(Tatton): I understand that the armed forces have overriding operational requirements, but does the Minister accept that many private businesses 616 also have such requirements, and that they cannot simply give time off to employees who want to take a holiday at a given moment?

§ Alan Johnson
The work and parents taskforce—which consisted of representatives not only of business, but of small businesses in particular—recommended that the right to request be extended as widely as possible. I accept that there are difficulties for businesses, but we and the taskforce successfully overcame them all in formulating these proposals. In the jargon of the day, the taskforce thought small first, and the legislation includes provisions that are aimed at helping small businesses in particular. However, we and the taskforce felt that allowing flexible working for parents of children up to the age of six was beneficial to businesses. In many cases, skills were lost from the workplace because women, in particular, could not combine the pressures of their domestic lives with their professional responsibilities.

§ Mr. Hammond
We have rehearsed this argument many times, but I still cannot understand how it benefits a firm that already operates good practice to impose such practice on its competitors. Surely we should encourage a climate in which good practice generates competitive advantage, thereby creating a virtuous spiral of employers competing with each other in offering such practice.

§ Alan Johnson
As the hon. Gentleman says, we have rehearsed this argument many times, and I agree with him completely in terms of work-life balance and people's ability to care for elderly parents, or to pursue hobbies. We are dealing with those issues through measures such as the work-life balance challenge fund. Employers For Work-life Balance—an organisation that was set up three years ago, and which is completely independent of Government—is also playing an important role. However, we decided that, for parents of small children, it would take a generation for best practice to work in the way that the hon. Gentleman suggests.
We decided that everyone has a stake in bringing children up properly and that wider social issues are involved. The introduction of a measure that is not a right to work flexibly, but a right to request to work flexibly—and that puts a duty on employers to consider such requests seriously—is a balanced approach. It will give thousands of parents the opportunity that they have not had before—or perhaps in some companies, such as those to which the hon. Gentleman referred, the courage and the confidence—to suggest to their employers that if they started work at 9.15 am rather than 9 am, they could drop their kids off at school, which would make their working lives much easier. We have a difference of view in relation to working parents, but the proposals were widely supported in two years of exhaustive consultation.

§ Mr. George Osborne
Surely the armed forces wish to be family-friendly employers. Since an employer may turn down a request for flexible working, why should not the armed forces face the same burden that the Government will put on private business?

§ Alan Johnson
As I said, the armed forces intend to comply with the spirit of the legislation. They raised some practical concerns in relation not to their civilian staff, who will be governed by the measures, but to their 617 military staff. Even in a case in which a member of staff has put forward a perfectly reasonable request, the armed forces may not have the luxury of granting it, because circumstances may mean that they cannot implement those arrangements. As hon. Members will know from discussions in Committee, we thought that we could apply the provisions to the armed forces, but in practice and after consultation with them it was felt that it would not be possible. That is why we have introduced the exemption.
Lords amendments Nos. 77 and 79 provide for ACAS conciliation and ACAS binding arbitration schemes for disputes concerning flexible working. The main priority of the flexible working provisions is to foster dialogue between parents and employers to find a flexible working pattern to suit them both. As part of that commitment, we always intended that there should be a binding arbitration scheme prepared by ACAS to deal with disputes regarding requests for flexible working that cannot be resolved in the workplace. The minor and technical amendments introduced in the Lords allow us to do this.
The provision for a scheme relating to flexible working also helps to ensure that as few cases as possible end up at employment tribunals. Because the arbitration is binding, those who opt to use the scheme also waive their right to have their case heard at a tribunal.

§ Mr. Hammond
Can the Minister confirm for the record—because the bigger picture is sometimes not visible when we consider Lords amendments—that we are talking about arbitration on whether the proper procedures have been followed, not on the substance of the request for flexible working or the employer's decision that he cannot accede to it?

§ Alan Johnson
We are talking about whether the request was given serious consideration. Arbitration may also address questions of fact. We are not asking a tribunal or ACAS to second-guess an employer's decision.
I believe that the flexible working provisions lend themselves very well to an ACAS scheme. Disputes arising under the provisions will be relatively straightforward, concerning whether procedures have been contravened or if a decision by an employer to reject an application has been made on the basis of incorrect facts. Those are essentially factual rather than legal issues.
Lords amendment No. 79 will have the additional effect of ensuring that conciliation is also an option in the resolution of any disputes arising out of the flexible working provisions. Again, that is entirely consistent with a key approach of this Bill: ensuring that alternative avenues of dispute resolution are available and contributing towards keeping employment tribunals to a minimum.

§ Mr. Hammond
As the Minister said, these are largely technical and drafting amendments. I shall return to flexible working arrangements in view of the Minister's comments and the intervention of my hon. Friend the Member for Tatton (Mr. Osborne), but first I should like to deal with two minor points that the Minister will no doubt be able to resolve very simply.
Lords amendment No. 61 would insert into clause 55 two additional clauses, 45 and 46, to be excepted from the general rule that the provisions will come into force 618 on such day as the Secretary of State appoints by order. When will they come into force? Will it be immediately after Royal Assent?
Secondly, a substantial number of changes to schedule 8 are contained in Lords amendments Nos. 88 to 95. They would remove pieces of legislation that were originally listed as repeals and revocations in schedule 8. Have those changes been made necessary as a result of amendments to the Bill during its passage in the other place, or are they errors that are being corrected? It would be useful to know.
On flexible working arrangements, and the changes being made under the slightly misleading heading of "minor, technical and drafting" amendments to exempt the armed forces from the provisions, I do not have the reports of the Committee's proceedings with me, but it would not surprise me if, in Committee, Opposition Members had asked the Minister about arrangements for the armed forces. On the face of it, I agree with the Minister. I understand that in employment law, the armed forces are often a special case that must be dealt with differently. However, as my hon. Friend the Member for Tatton pointed out, the right that is being granted is a right only to request flexible working and to have one's request seriously considered. The employer, whether it is the Army, the Air Force, the Navy or, indeed, Smith and Jones auto repairs down the road, can properly consider the employee's request and reject it on the ground that it cannot reasonably be accommodated within the working arrangements of the business. In many cases, the armed forces might legitimately turn down a request for flexible working arrangements, certainly for front-line staff. It is not quite so obvious that a member of the armed forces who is assigned to London-based office duties or cooks the meals in Admiralty House would be subject to the same considerations.
My hon. Friend made a good point: it is not obvious, on the face of it, why the armed forces must be treated differently. Throughout the consideration of these relatively new provisions, Conservative Members have been concerned that this is the thin end of the wedge. The right to have a request for flexible working considered could become—as a result of negotiations between the Government and trade unions, for example—something more, such as a prima facie right to flexible working unless the employer demonstrated why he could not deliver it. In other words, the burden of proof would shift to the employer.
4.15 pm
If one adopts the conspiracy theorist approach—that the Government may have in mind moving the horizon, or removing the boundaries, in their forthcoming review of employment legislation—one can readily see why, at this stage, they might want to exclude the armed forces. There might not be a significant burden on the armed forces in considering a request from a person currently serving with the Royal Marines in Afghanistan and denying the request on the ground that it is not compatible with the working arrangements of that service man or woman. However, unless the armed forces were exempted, they could obviously be in some difficulty if the Government have it 619 in mind to extend the provisions further. Will the Minister consider that point? Can he reassure me and my hon. Friend?

§ Mr. George Osborne
I thank my hon. Friend for giving way just before he concludes his remarks. May I put a point to the Minister, who has, as my hon. Friend said, exhibited some muddled thinking? The Minister tells us that the armed forces are special and that there are operational considerations. We all understand that, but surely those reasons would be taken into account in the provisions, which—as we understand the Minister's comments—will also apply to businesses. They, too, will be able to claim that there are special circumstances and that they cannot give an employee time off.

§ Mr. Hammond
My hon. Friend made his point succinctly. I am only sorry to disappoint him by telling him that I was not about to conclude my remarks.
It is easy for the Government always to decide that all these good ideas will not—apparently—impose serious burdens on private businesses or employers and are even good for them in some cases if they only were smart enough to realise it. Yet sectors under the Government's control, mysteriously, need to be exempted. We can see that from history: when sex discrimination legislation, for example, was introduced, the Government said, "Oh, but it can't apply to public services such as the police and the armed forces".
We are talking about a service for which the Government have direct responsibility. The senior commanders are, in effect, employers, and have privileged access to the Government and the ability to put their point across. Lo and behold, after arguing in Committee that there was no need to exempt the armed forces, the Minister has seen the light and decided that there is a need for such exemption. If Ministers were as close to, and received such direct communication from, the many hundreds of thousands of businesses that fear that they may be adversely affected by the measures, they might realise that there are equally pressing needs—not reasons of national security, but certainly reasons of business survival—that other employers would pray in aid.

§ Mr. Prisk
My hon. Friend mentioned the Minister's rather late-in-the-day approach. Is my hon. Friend also concerned about the extraordinary costs? As he will recall, in Committee, it was slipped out that the net extra cost would be £173 million? Does he agree that those costs should have been made explicit from the beginning?

§ Mr. Hammond
My hon. Friend is right: that is another £173 million on the additional burden of billions of pounds that the Government have imposed on business. It is a small sum compared with the total burden, but a significant one for individual businesses.

§ Rob Marris (Wolverhampton, South-West)
Will the hon. Gentleman give way?

§ Mr. Hammond
I am happy to do so. I wondered how long it would be before we provoked an intervention from the Labour Benches.

§ Rob Marris
Perhaps the hon. Gentleman can explain something, because there seems to be a contradiction in 620 what he says. When he intervened on the Minister, he said that the proposal represents best practice and that it will give business a competitive advantage, but he now seems to suggest that it represents a burden on business. I think that it is a good thing for business and that it should be made statutory. Can he make up his mind and tell the House which way he is going on this issue?

§ Mr. Hammond
The Minister's case is that this is a good thing for business and that the Government will therefore statutorily impose it on business.

§ Rob Marris
rose—

§ Mr. Hammond
Let me finish. The Minister's case seems wholly illogical. It is logical to say that this is a good thing for workers and therefore that we will statutorily impose it on business. In relation to another matter, it might be a good argument to say that it is a good thing for business and we will therefore statutorily impose it on workers. However, it cannot be logical and sensible to impose by statute something that is a good thing for the person who will be subject to it. What has happened to the concept of encouraging best practice to generate competitive advantage?
In Committee, we spoke at length about Investors in People. The Minister would readily acknowledge that employers who adopt best practice and achieve Investors in People awards gain a competitive advantage in the recruitment and retention of employees. That is a very important competitive aspect of business these days.

§ Rob Marris
Of course the Minister can reply for himself, but I do not remember his specifying that the proposal was a good thing for business; he referred to the work-life balance.
Given what the hon. Gentleman has just said, would he take the same line with health and safety at work? It is a good thing for employers that their workers do not get killed at work, but he seems to be saying, "We'll just leave that to best practice." I do not want to put words into his mouth—he will tell the House what he thinks—but there seems to be a clear analogy with health and safety.

§ Mr. Hammond
indicated dissent.

§ Rob Marris
The hon. Gentleman shakes his head, indicating that he broadly supports health and safety legislation. I am pleased to see that, as I am sure the House is, but there seems to be an analogy between the two issues. Which way is he going on this issue?

§ Mr. Hammond
The hon. Gentleman's analogy stretches the point. Legislation for health and safety in the workplace is primarily intended to protect employees, and it is obviously right that it should be imposed by statute. All I suggest to the Minister is that he should not seek to shelter behind the somewhat spurious argument that these measures are being imposed on business because they are good for business. The same argument was adduced in relation to union learning representatives.
It is suggested that business should not be worried because the proposal is good for business and therefore that those in business should be delighted that the 621 Government are imposing it on them. Business will consider those issues. There is a very competitive marketplace for skilled labour and all sorts of labour that is in short supply.

§ Rob Marris
Because of a Labour Government.

§ Mr. Hammond
No, because of the legacy left to the Government by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke).
A primary issue on the agenda of any business, certainly in large parts of the country where the supply of labour, good quality employees—

§ Mr. Speaker
Order. These are minor amendments, and the hon. Gentleman is straying into making a more general point. The best course of action would be to get back to the minor amendments and move on.

§ Mr. Hammond
I am grateful to you, Mr. Speaker. I could not resist being provoked by the Minister's remarks into widening the debate, but the points that needed to be made have been made. I shall be interested to hear whether the Minister can answer the specific questions that I have asked.

§ Alan Johnson
I hope to deal with all the specific questions. First, on Lords amendment No. 61, clauses 45 and 46 will, indeed, come into force as soon as the Bill receives Royal Assent, which may happen as early as tonight. We could then table the regulations, which would allow us to give businesses plenty of time to deal with fixed-term regulations.
The hon. Member for Runnymede and Weybridge (Mr. Hammond) asked a rather mischievous question about whether some of the other Lords Amendments were intended to deal with errors.

§ Mr. Hammond
Can the Minister tell the House whether there is any particular reason why clauses 45 and 46 will now come into effect on Royal Assent, rather than on a date to be specified by the Secretary of State? Is there a European Union deadline to comply with, or something of that nature?

§ Alan Johnson
There is, but we are going beyond that anyway, as we have announced that, instead of introducing these measures on 10 July, we will introduce them on 1 October to give businesses more time. The Commission understands that a proper period to consider the matter will ensure better compliance.
On the technical amendments, all that I can tell the hon. Member for Runnymede and Weybridge is that they put right inaccuracies that have crept into a few of the paragraphs that amend the Employment Rights Act 1996. For "inaccuracies", one should read "errors", but the Lords stage was the opportunity to tidy them up. We believe that the Lords were absolutely right in agreeing to those amendments.
The hon. Member for Hertford and Stortford (Mr. Prisk) raised in an intervention the issue of the cost assessment being sneaked in in Committee. I want to make it clear that the work and parents part of the Bill—the flexible working part—was subject to the taskforce report. That report came out after the Bill was published, 622 so it was not part of the original Bill. The cost assessment therefore came later. We published it as soon as we published the amendment, and, when we dealt with it in Committee, it was four or five days after the taskforce report had been published—

§ Mr. Prisk
Two days.

§ Alan Johnson
The hon. Gentleman says two days. I am sure that that is right.
The hon. Member for Tatton (Mr. Osborne) raised some issues about the Ministry of Defence, and made the point that it and the armed forces are no different to other parts of business. They are different. Their circumstances are very different, as they are constantly on call. If other parts of business have the same problems, the Bill allows them the opportunity and the flexibility to quote those as reasons why they cannot accept the proposals.

§ Mr. George Osborne
rose—

§ Alan Johnson
I ask the hon. Member for Tatton to bide his time for a moment. The hon. Member for Runnymede and Weybridge suggested that the provision was related to the review of the Employment Relations Act 1999. As it is not part of the Employment Relations Act, it will not figure in the review of the operation of that Act. The hon. Member for Tatton will have an opportunity to argue that the provision has been such a roaring success that it ought to apply to the armed forces, however, when we review these measures in 2006, which was what the taskforce asked us to do, we will consider again whether to extend the provision, as I am sure that, in the meantime, it will have been a success.

§ Mr. George Osborne
The Minister says now that the armed forces are a completely different kettle of fish when it comes to this legislation. That is not what he said in Committee. Unlike my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), I have found the Hansard report of that Committee. The Minister was asked by my hon. Friend the Member for Boston and Skegness (Mr. Simmonds)—who, sadly, is not present to hear how perceptive his question was—whether the armed forces were different, and he replied that they were not. To paraphrase the Minister, he continued to say that they include many personnel who do not work on the front line, and that regulations will deal specifically with the problem of front-line troops, who would probably not have a request granted to them. Why has the Minister changed his mind so completely? Who has got at him?

§ Alan Johnson
The hon. Member for Tatton must have been dozing off. When he reads the Hansard report of this debate, he will read that, when I replied on this point about 10 minutes ago, I stated that I said in Committee that I initially thought that the armed forces could be included. Indeed, I well remember the hon. Member for Boston and Skegness (Mr. Simmonds) raising the issue as we belted through a series of amendments at 100 mph, and I remember saying precisely that. What I am saying again is what I said 10 minutes ago: our initial view was that the provision could be extended to the armed forces. Following consultation and discussion with colleagues in the MOD, we have decided that the exemption is right, but we will, of course, review that in 2006.

§ Mr. Hammond
I have just been rifling through the provisions to see whether there are any other exemptions in the Bill. The Minister will correct me if I am wrong, but I do not think that there are. Will he explain to the House why the position of service men is different, for example, from that of merchant seamen? It might seem obvious that merchant seamen should also be exempted from the flexible working provision. However, before we discussed this amendment, I would have expected him to have said that merchant seamen would not be exempt because their employers would rightly be able to deny a request for flexible working because of the nature of the work. Why is that argument used in the case of merchant seamen but not in the case of Royal Navy personnel?

§ Alan Johnson
The hon. Gentleman gave the answer himself. The armed forces are exempt because of their unique working conditions. Personnel are liable to be deployed operationally right across the world at little or no notice if the national interest requires that. They may also be required to be available at any time.
The position of the Merchant Navy and the fishing fleet is precisely as the hon. Gentleman suggested. Employees in those sectors can make claims for flexible working, but the employer can, if he believes that he cannot meet the terms, reject the request by referring to a number of reasons that are set out in the legislation. The armed forces are different. I genuinely believe that they are unique. As I said earlier, civilian members of the Army will be governed by the provisions, but the armed forces are in a particularly unique position—if one can have a particularly unique position.
The hon. Gentleman asked whether the provisions would be good for business. We think that they will he good for business. In a world of work that has changed almost unbelievably over the past 30 years, never mind the past 50, many businesses are dealing with other issues and do not necessarily focus their attention on how they are better able to improve staff morale and reduce absenteeism. That point was certainly made to the work and parents taskforce. The provisions will be good for business.
However, there is a point about individuals and we touched on it in Committee. Plenty of people in a time of low unemployment and a tight labour market—the so-called "war for talent"—have the skills and qualifications that allow them virtually to dictate their own terms and conditions. That point was made time and again in our consultation with companies. However, another group of people are not in that happy situation. We are trying to take people who are not particularly well qualified off benefit and into work, but such people might be feel less empowered to go to their employer to make suggestions. For example, we must legislate for parents with small children, because they often have a greater need for flexibility and for a job that will enable them to tackle social and financial exclusion. That group is important, too.
It is not a question of competitive advantage. We are seeking to bridge the productivity gap between this country and our main competitors, so the issue is the United Kingdom, rather than individual companies, having a better competitive advantage. For all those reasons, I hope that the House will agree to the Lords amendment.